prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: The defense lab enterprise consists of 63 labs, warfare centers, and engineering centers across the Departments of the Army, Navy, and Air Force, as shown in Figure 1 below  About 50,000 federally employed scientists and engineers work at these defense labs to support warfighter needs and develop transformative capabilities  Defense labs are managed and operated within the military service chain of command  DOD budgets for technology and product development activities under its research, development, test, and evaluation budget, which DOD groups into seven budget activity categories for its annual budget estimates  Air Force and Army labs rely on appropriated funding provided from the service—often referred to as mission funding—or from customers (or some combination thereof)  Customers, such as program offices, provide funding to defense labs for technology development activities and related research  The Air Force and Army funding structure is in contrast to Navy research and development activities, which operate under the Navy Working Capital Fund—a revolving fund that finances Department of the Navy activities on a reimbursable basis  Under this funding model, the Navy employs a Capital Investment Program to obtain capital assets, including minor military construction projects for labs  The program provides the framework for planning, coordinating, and controlling Navy working capital funds and expenditures to obtain capital assets  Figure 2 illustrates the varying funding models used by the military service labs  In addition to its labs, DOD sponsors other entities to provide for its technology development needs  Specifically, these include: FFRDCs are operated by universities, other not-for-profit or nonprofit organizations, or private firms under long-term contracts and provide special research and development services that generally cannot be readily satisfied by government personnel or private contractors  For example, the Massachusetts Institute of Technology Lincoln Laboratory develops key radar and electronic warfare technologies for integrated air and missile defense systems  In addition, the Software Engineering Institute operated by Carnegie Mellon University provides cybersecurity solutions for defense entities  While DOD sponsors 10 FFRDCs in total, it designates 3 FFRDCs as research and development labs, which maintain long-term competencies in key technology areas  In addition to these, DOD sponsors 2 systems engineering and integration FFRDCs and 5 studies and analysis FFRDCs  UARCs provide specialized research and development services similar to FFRDCs and also operate under long-term contracts  However, unlike FFRDCs, DOD requires that UARCs be affiliated with a university  Generally, UARCs may not compete against industry in response to a competitive Request for Proposals for development or production that involves engineering expertise  DOD currently sponsors 13 UARCs  Key DOD offices provide oversight to the defense labs: The Under Secretary of Defense for Research and Engineering (USD(R&E))—the principal advisor to the Secretary of Defense for research, engineering, and technology development activities and programs—serves as DOD’s chief technology officer  The powers and duties of this office include establishing policies and providing oversight for DOD’s research, engineering, and technology development activities  The Defense Laboratories Office—within the Office of the USD(R&E)—supports DOD’s research and engineering mission by helping to ensure comprehensive department-level insight into the activities and capabilities of the defense labs  This office carries out a range of core functions related to the defense labs, including analysis of capabilities, alignment of activities, and advocacy  Congress has granted authorities that address hiring, infrastructure, and technology transition challenges to defense labs since 1995  These authorities provide defense lab directors with certain flexibilities within the established legal framework to manage their operations  While Congress has provided a number of authorities, in this report we focus on four authorities that our prior work on best practices in science and technology management and expedited lab hiring has shown are, or have the potential to be, the most crucial for supporting innovation within DOD labs  Laboratory Initiated Research Authority  This authority provides lab directors with the means to fund some of the research projects that the lab will pursue  The authority provided in Section 219 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, as implemented, provides lab directors with a means to fund projects they consider to be a priority in four allowable categories: (1) basic and applied research, (2) technology transition, (3) workforce development, and (4) revitalization, recapitalization, or repair or minor construction of lab infrastructure  These projects include those not specifically tied to defined requirements, outside of the normal 2-year budget planning process  The authority directs the Secretary of Defense to establish mechanisms under which lab directors may use an amount of funds equal to not less than 2 percent and not more than 4 percent of all funds available to the defense lab for projects under the four allowable categories  Further, lab directors are permitted to obtain additional funding by charging customers a fixed percentage fee that may not exceed 4 percent of costs  Direct Hire Authorities  These authorities provide lab directors with a streamlined and accelerated hiring process  Congress has enacted four types of direct hire authorities since 2008, which help labs compete with private industry and academia for high-quality scientific, engineering, and technical talent  Specific types of direct hire authorities include hiring: (1) candidates with advanced degrees; (2) candidates with bachelor’s degrees; (3) veterans; and (4) students currently enrolled in graduate or undergraduate science, technology, engineering, and mathematics (STEM) programs , Laboratory Enhancement Pilot Program  This authority provides methods for effective lab management operations  Section 233 of the National Defense Authorization Act for Fiscal Year 2017 established a pilot program for lab directors to propose alternative and innovative methods that might lead to more effectively managing labs, and authorized lab directors to waive any regulation, restriction, requirement, guidance, policy, procedure, or departmental instruction that would affect implementation of these methods, unless such implementation would be prohibited by a provision of an existing statute or common law  Micro-purchase Authority  This authority facilitates the purchasing process for labs  The FAR states a preference for government agencies to purchase and pay for micro-purchases of supplies or services using the government-wide commercial purchase card up to and at the micro-purchase threshold, but micro-purchases may be conducted using any of the simplified acquisition methods  This facilitates the ability of lab officials to quickly and easily acquire needed items for their activities and reduce the administrative costs associated with such small purchases  While the FAR micro-purchase was generally $3,500 during our review, Congress increased it to $10,000 for activities of the science and technology reinvention labs in Section 217 of the National Defense Authorization Act for Fiscal Year 2017  As we found in June 2018, the federal government spends approximately $137 billion annually government-wide on research and development (R&D) to help further agencies’ missions, including at federal labs  From fiscal years 2015 to 2017, DOD, Energy, and NASA represented three of the top four federal agencies with the highest annual federal R&D spending, accounting for about 66 percent of total federal R&D spending on average, as shown in Figure 3  While the labs primarily support the agencies that directly fund them, DOD, Energy, and NASA research entities also collaborate extensively to support activities of shared interest  For example, DOD and NASA research centers have collaborated to develop hypersonic vehicle capabilities  Further, Energy’s national labs help provide critical national security capabilities for DOD and support NASA’s deep space mission radioisotope requirements  In 2017, Energy reported performing about $2 6 billion of work per year from fiscal years 2011 through 2015 for other federal agencies and other customers, including DOD  Most defense labs have used the selected authorities since 2008, but their use has sometimes been limited for a variety of reasons  According to lab directors, this is because of DOD legal and policy restrictions and stakeholder concerns  For example: Use of the laboratory initiated research authority was limited by DOD’s military construction funding and financial management policies  Use of the direct hire authority was limited, in part, by personnel- related delays, security clearance challenges, and military hiring restrictions  Use of the laboratory enhancement pilot program was limited by stakeholder uncertainty about how to use this authority effectively  Use of the increased micro-purchase authority was limited by stakeholder concerns about the authority’s potential effect on small businesses  We found that most defense labs have used the laboratory initiated research authority  Twenty-three of 31 of respondents to our survey— about 74 percent—reported obligating funds under this authority  However, we found that most labs are not using the full 4 percent of all funds available to each lab, or charging customers the full fixed percentage fee of 4 percent of costs, as allowed by law  Specifically, we found that, as of September 2018: Navy labs reported charging customers a percentage fee of about 2 percent of costs as of fiscal year 2018  Prior to this, Navy labs only charged a 1 percent fixed fee on these costs  Because Navy labs are working capital funded organizations, they can use payments from customers for goods delivered or services performed  Army labs reported using between 2 and 3 percent of all funds available to the lab for projects under the four allowable categories and charging customers a fixed fee of between zero and 3 percent of costs to fund such activities  Only the Air Force Research Laboratory reported using the full 4 percent of all funds available to the lab  According to agency officials, the lab is using 3 percent of all funds available to the lab and is allowing individual technology directorates the option to use the additional 1 percent of funds available  In fiscal year 2018, three of the lab’s nine technology directorates chose to use this additional 1 percent  However, the lab has not charged customers a fixed percentage fee on their costs at all  As figure 4 shows, in fiscal year 2017, the aggregate fixed percentage fee charged by labs in each of the military departments totaled under the full 4 percent allowed by law for each funding source  Decisions to charge lower percentages are decisions to forego additional potential funding, although agencies have various reasons why this can happen, as we will discuss later  In total, DOD reported that this authority provided almost $300 million to labs in fiscal year 2017 and funded more than 1,750 projects across the four allowable categories, as Figure 5 illustrates  We previously found, in June 2017, that the laboratory initiated research authority provides defense lab directors with limited flexibility to initiate science and technology projects  These projects include those that are not road mapped or tied to defined requirements outside of the normal 2- year budget planning process, and are focused on both near- and long- term needs  For this review, defense lab officials we interviewed stated that the laboratory initiated research authority enables their scientists and researchers to pursue projects not necessarily tied to requirements and provides necessary funds for workforce development and lab infrastructure projects  Further, as shown in Figure 6, lab directors we surveyed generally view the authority as both fostering innovation and increasing efficiency across the four allowable categories on which funds can be used  In accordance with the one of the statutory purposes for the use of the funds, lab directors have developed new, innovative technologies using this authority  For example, DOD reported that: In fiscal year 2017, the Naval Surface Warfare Center, Crane Division, developed and fielded a solution to an urgent requirement for defeating small unmanned aerial vehicles that attack Navy assets or surveil naval activities  The center delivered this technology to the warfighter in May 2017 just 7 weeks after the Navy submitted the requirement  The Army Research Laboratory used the authority to fund a project that eventually developed a material that could increase the speed and lower the power needs of future generations of computer chips, thereby supporting Army networks  The Navy invested more than $700 thousand in laboratory initiated research authority funds to commission a Ballast Water Research Lab at Naval Surface Warfare Center, Carderock Division  Through the use of this new facility, engineers will be able to study ways to treat ballast water to prevent introduction of non- native aquatic species into a new environment that can be disastrous for the marine life that already inhabit that environment, and ensure that the Navy is able to meet various port regulations around the world for its ships  The Air Force Research Laboratory invested funds in fiscal year 2017 to renovate an existing facility to provide high performance computing capability to aid the rapid development of “game-changing” technologies and weapon systems  Officials at the Army’s Space and Missile Defense Command Technical Center noted they used the laboratory initiated research authority for the first time in fiscal year 2018 because the current executive director, who assumed the position in 2017, prioritized implementing this authority  Most of the Center’s planned investments are focused on workforce development and laboratory infrastructure projects; officials cited a high energy laser technology lab as one of the projects being supported by the revitalization, recapitalization, or minor military construction portion of this authority  Although the majority of defense labs reported using the laboratory initiated research authority, interviews we conducted throughout our review, along with other DOD reports, identified certain obstacles that have, at times, impeded wider usage  DOD-wide military construction funding restrictions  DOD restrictions limit the amount of laboratory initiated research authority funds that labs can spend on lab infrastructure  DOD’s limit is $6 million for the revitalization and recapitalization projects that can be funded under the laboratory initiated research authority  Lab officials stated that this amount is often insufficient to construct advanced lab facilities  Air Force Research Laboratory officials indicated that it is nearly impossible to construct lab facilities for less than $6 million  Officials at the Army’s Aviation and Missile Research, Development and Engineering Center echoed this sentiment and noted that they have primarily used funds to renovate existing buildings rather than fund new lab facility construction  In January 2017, the Defense Science Board identified lab infrastructure challenges, including that the average age of research and development facilities was nearly 50 years  Further, the Board reported that the labs are usually not successful in competing against broader service needs for military construction funds  Air Force does not charge customers a fixed percentage fee of costs  The Air Force Research Laboratory reported that it is not charging customers the allowable fixed percentage fee of costs to fund science and technology activities because it does not have a mechanism in place to do so  Air Force Research Laboratory officials estimated the lab would collect approximately $3 million a year if the lab charged customer activities the maximum allowable fee (4 percent)  Air Force financial management officials stated that the service’s accounting system does not currently have an automated capability to transfer the allowable percentage fee of costs to a central account at the Air Force Research Laboratory  This lack of capability, officials noted, creates a significant administrative burden for charging these fees  The officials stated that they have not yet estimated the cost to add an automated capability  Although it is possible for the Air Force Research Laboratory to charge customer work orders manually—outside of the Air Force’s accounting system—officials with the Office of the Assistant Secretary of the Air Force for Financial Management and Comptroller perceive that the resources (time and people) required to manage such a process would be cost prohibitive  However, according to these officials, the Air Force has not assessed the costs required to improve the accounting system to do so, nor has it identified the potential benefits any improvements would provide  Federal internal control standards state that changes in condition affecting an entity and its environment often require changes to the entity’s internal control system, as existing controls may not be effective for meeting objectives (or addressing risks) under changed conditions  Further, these standards state that any internal control deficiencies require further evaluation and remediation by management  By not assessing the potential costs and benefits related to the options for collecting these allowable fees, the Air Force could be missing out on a potential source of funding to support its needs  DOD lacks clear guidance on how the Navy should use the initiated research authority for some infrastructure investments within the Capital Investment Program  In our review of DOD documentation, we found that, among the military departments, Navy labs funded recapitalization and revitalization projects using the laboratory initiated research authority the least  As recently as early 2017, a DOD-commissioned study found that defense labs face substantial infrastructure deficiencies that it has not yet identified funding to address  In fiscal year 2017, Navy labs invested $7 3 million in lab recapitalization projects, compared to $32 9 million and $53 7 million at the Air Force and Army, respectively  Navy lab officials told us that their ability to fund lab recapitalization and revitalization projects using funds available under the laboratory initiated research authority is limited because they have not been provided with clear guidance as to whether and how to use the laboratory initiated research authority within the Capital Investment Program of the Navy Working Capital Fund  Some Navy lab officials stated that they have found ways to use the initiated research authority for certain infrastructure investments  These officials stated that they used authority outside of the Capital Investment Program of the Navy Working Capital Fund, for instance, for projects below applicable thresholds because using the authority within the Program creates a bureaucratic and financial burden for them  For example, officials at two separate warfare centers—Naval Surface Warfare Center, Crane Division, and the Naval Air Warfare Center, Aircraft Division, noted that they did not expend funds in either fiscal year 2016 or fiscal year 2017 for recapitalization and revitalization projects  Both cited the Capital Investment Program as a significant barrier to their desired use of the laboratory initiated research authority  Officials from the Office of Budget, within the Office of the Assistant Secretary of the Navy for Financial Management and Comptroller agreed that, to date, clarifying guidance on the use of the laboratory initiated research authority within the Capital Investment Program has not been issued, effectively limiting the extent to which the labs can use it for infrastructure needs  According to these officials, the Office of the Secretary of Defense (OSD) Comptroller—in coordination with the Office of Financial Policy and Systems within the Office of the Assistant Secretary of the Navy for Financial Management and Comptroller—is responsible for developing the clarifying guidance their office has sought  This persistent lack of guidance on whether or how Navy labs should use the laboratory initiated research authority within the context of the Capital Investment Program presents an opportunity cost  Namely, the Navy’s labs have missed out on, and continue to miss, opportunities to invest in needed improvements to its aging lab infrastructure  The Army requires its laboratories to apply similar percentages to what is refers to as “Army direct appropriations” and “customer funds ” The Army requires that the percentage fee applied to direct appropriations not vary from the percentage fee applied to customer funds by more than 1 percent  The Army implemented this policy to maximize the laboratory initiated research authority’s effect on its 17 laboratories  However, the Office of the USD(R&E) reported in March 2018 that the policy was having a significant limiting effect on the breadth and scope of activities executed under this authority  Similarly, we found that the policy may, in practice, create a disincentive for Army lab directors to use the authority  In their responses to our survey, Army lab directors, representing key capability areas, acknowledged their concern about the percentage fee they assessed on customer funds affecting their ability to increase or maintain their customer bases  Further, some Army lab directors reported assessing a lower percentage fee on customer funds than allowed, which could help retain customers that might otherwise be driven away with higher assessed fees to carry out activities  As a result, these labs generally are setting a lower percentage fee on their directly appropriated funds, thereby lowering the overall laboratory initiated research funding available to them  Nonetheless, the Army has not assessed its policy to determine whether changes are needed to eliminate these disincentives  Continuing to operate without such an assessment could result in Army labs using the laboratory initiated research authority to fund fewer self-initiated projects—with the downstream effect that fewer new technologies for warfighters are available  The Navy applies a consistent fixed percentage fee of costs across its labs  Within the Navy, senior leadership has set the fixed percentage fee of costs the labs charge on customer funds at 2 percent  A senior Navy science and technology official stated that Navy leadership set a uniform fixed percentage fee to charge to customer activities across the Navy lab enterprise, in part, to ensure the labs were not inadvertently competing against one another for customer funds  For example, without a uniform rate, a Navy warfare center could offer a lower fee to entice a customer to use it rather than another center  The use of a fixed percentage fee facilitates program offices selecting warfare centers on the basis of best available match in capabilities  On the other hand, the Navy’s fixed 2 percentage fee of costs does limit—by half, as compared to the maximum 4 percent allowable—the amount of fees that Navy labs can collect  Consequently, several Navy lab directors told us that they would like to have the ability to increase the fixed percentage fee of costs above the Navy’s 2 percent to provide their labs with additional resources they said they need for innovation-related investments  Among the lab directors that responded to our survey, 30 of 31 replied that their lab had used at least one of the four types of direct hire authorities previously discussed since fiscal year 2014  Officials view direct hire authority as allowing the labs to compete with private industry for qualified applicants  Lab directors reported they generally believe that each type of direct hire is extremely or very useful for fostering innovation and increasing efficiency, as shown in Figure 7  Selected Officials’ Testimony on the Value of Direct Hire Authority: The U S  Army Engineer Research and Development Center “was able to meet this important goal [of annually hiring more than 160 new researchers] in large part because of its direct hiring authorities, which save time, effort, and costs, and allow the organization to more effectively hire the best and brightest minds available ” – Dr  Jeffrey P  Holland, Past Director, U S  Army Engineer Research and Development Center, in testimony before the Senate Committee on Armed Services (Emerging Threats and Capabilities Subcommittee), May 3, 2017  “The Air Force’s ability to recruit, retain, and develop the STEM workforce is vital toward building the future Air Force; Congress has been greatly supportive of these efforts…the addition of direct hire for candidates has been extremely useful in hiring qualified scientists and engineers in less than half the time of traditional hiring methods ” – Jeffrey Stanley, Air Force Deputy Assistant Secretary— Science, Technology and Engineering in testimony before the House Committee on Armed Services (Emerging Threats and Capabilities Subcommittee), March 14, 2018  Although participation in the laboratory enhancement pilot program is open to the DOD labs—and 19 of the 31 lab directors, or 61 percent, that responded to our survey reported they were participating—to date, only the Navy has formally established a pilot program for its labs  The Army and Air Force have not yet used this relatively new authority  A senior Navy science and technology official told us the Navy took important steps to facilitate the implementation of that service’s pilot program  According to the Navy official: The Office of the Deputy Assistant Secretary of the Navy for Research, Development, Test and Evaluation led the effort across the Navy labs, compiling—from each lab’s submission—a single list of proposals to forward to Navy leadership that would apply to all participating Navy labs  The Navy pursued a three-phased approach with its pilot program, with Phase 1 primarily focused on contracting and acquisition policy- related matters  Senior Navy research and development officials perceived these matters as being the easiest from which to obtain buy-in from Navy policy officials and attorneys, as well as Navy leadership  Phase 2 will include proposals related to Information Technology systems for research and development networks, while Phase 3 will most likely address personnel issues  Navy research and development officials deferred proposals— including information technology network enhancements—that might require extensive discussions with policy officials and attorneys stakeholders across the Navy  These proposals were pushed back to allow time for those stakeholders to see how the pilot program was being implemented and executed by the labs  None of the Army and Air Force labs has yet established a laboratory enhancement pilot program  Consistent with Army policy, the Medical Research and Materiel Command and the Space and Missile Defense Command Technical Center submitted proposals; however, they have yet to establish a pilot program  The Army’s Research, Development and Engineering Command, with input from its subordinate labs and engineering centers, developed a list of lab enhancement proposals but, as of September 2018, had yet to formally submit these final proposals to Army leadership for approval  These include initiatives in business operations, contracting, finance, information technology, and personnel management  A senior Army science and technology acknowledged that organizations across the military department have concerns about providing the labs with too much autonomy to use this new authority  Air Force Research Laboratory officials said they previously submitted a list of approximately 30 proposals to the Defense Laboratories Office in September 2017, but ultimately pulled back those requests because of stakeholder concerns within the Air Force  Specifically, officials with the Office of the Deputy Assistant Secretary of the Air Force for Science, Technology, and Engineering stated that the Air Force Materiel Command, to which the lab is a subordinate organization, had not seen the proposals before they were submitted  In addition, these officials identified concerns about how various stakeholders throughout the Air Force—such as those from financial management and personnel—would react to these proposals  These proposals could potentially sidestep the stakeholders’ oversight function of related lab activities  A senior Air Force Research Laboratory official stated that the lab re-submitted its proposals to the Air Force Materiel Command and that Air Force leadership was still reviewing them at the time of this report  Twenty-six of 31 labs directors—84 percent—reported having used the $10,000 micro-purchase threshold authority granted by Congress in 2016  However, we found that contracting and small business management officials’ concerns with this authority have created implementation challenges at some defense labs  For instance, a senior Navy official indicated that multiple stakeholders from across the Navy—including its Office of Small Business Programs—raised concerns about the authority’s potential impact on small businesses as micro-purchasing allows defense labs to bypass small business set asides  Several labs reported similar stakeholder concerns that prevented implementation of the micro-purchase threshold increase  At the same time, however, lab officials we interviewed expressed the view that the increased threshold will be beneficial, consistent with their opinions about the laboratory enhancement pilot program  For example, officials at the Naval Research Laboratory stated that increasing the threshold to $10,000 allows their scientists and engineers to directly purchase necessary equipment and materials through simplified procedures  They identified examples of projects that had been delayed by as much as several months because scientists and engineers used other than simplified acquisition procedures to purchase a relatively inexpensive piece of equipment, such as a specialized microscope, because the cost was above the previous threshold of $3,500  Similarly, the Army’s Armament Research, Development and Engineering Center reported that the micro-purchase threshold increase enables the lab to use simplified acquisition procedures for more items  As a result, they noted that the new authority increases efficiency by reducing contracting time and cost for those additional items  The Navy’s Space and Naval Warfare Systems Center Atlantic similarly reported that requirements, which were previously procured using other than simplified acquisition procedures, took up to 60 to 90 days to procure, while it took as little as 3 to 4 days under this new authority, which enabled its scientists and engineers to purchase materials needed for critical, time sensitive projects  However, lab officials acknowledged that the $10,000 micro-purchase threshold authority—like the laboratory enhancement pilot program—is too new to fully understand how it will increase efficiency and foster innovation over the long term  DOD sponsors several research centers, which are governed through noncompetitive agreements, including contracts  These centers provide the department with access to scientific experts employed by universities and other non-profit organizations  Scientists employed by these external to DOD research centers—specifically, three lab FFRDCs and 13 UARCs—execute DOD-funded science and technology development projects in emerging technical areas  DOD staff oversee these centers using routine oversight of funded research tasks and comprehensive reviews, which help DOD determine whether the centers’ funding should continue  DOD and research center officials told us that their ability to authorize work at the FFRDCs that DOD sponsors is limited by legislative restrictions on the staffing levels at these centers, as well as by infrastructure modernization challenges they face  DOD sponsors three research and development FFRDC labs that were established under noncompetitive procedures  Two of the three lab FFRDCs are operated by universities and one is operated by a nonprofit company  DOD also has contracts with 13 UARCs that fulfill a similar scientific role as the lab FFRDCs, while also differing from them in other respects  These differences are described in more detail in table 1  DOD’s contractor-operated research centers received about $1 3 billion annually in DOD funding in fiscal year 2016 and fiscal year 2017, according to DOD data  The two largest research and development FFRDCs, the Lincoln Laboratory and the Software Engineering Institute, received about 67 percent of total research center funding from DOD in 2017  UARCs received an average of $27 million in DOD funding, which was a 15 percent decrease from 2016  Research centers may also receive work and funding from other federal departments and private companies after obtaining DOD sponsor approval  Appendix II provides an overview of DOD FFRDC and UARC funding in fiscal years 2016 and 2017  DOD Sponsorship and Contract Awards: We reported in 2014 that FFRDCs in the federal government are defined through the sponsoring agreement between the agency and the contractor retained to operate the FFRDC  A written agreement of sponsorship between the government and the FFRDC must be prepared when the FFRDC is established, which may be included in a contract between the government and the FFRDC, or in another legal instrument under which an FFRDC accomplishes effort, or it may be in a separate written agreement  Historically, DOD sponsors retain contractors for many years or decades as FFRDC operators  We found that research centers undertake DOD-sponsored projects and, in some limited instances, scientific projects initiated by centers that are overseen by DOD staff  Individual sponsors enter into noncompetitive contracts with FFRDCs and UARCs  DOD uses noncompetitive contracts to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center  Scientific Project Funding: We found that project sponsors provide funding to existing contracts  For example, the government issues orders for requirements under Lincoln Laboratory’s indefinite delivery indefinite quantity base contract as funding sponsors approve new projects  Individual project sponsors, along with the primary sponsor, oversee how project funds are spent by the centers  Project sponsors decide whether they will continue to work with these entities based on perceived performance success  This effectively provides an incentive for FFRDCs and UARCS to perform successfully  This work and review cycle is described in Figure 9 below  FFRDCs and UARCs also partner with DOD government-operated labs to plan and execute technology development projects  For example, according to Navy officials, Naval Surface Warfare Center, Carderock Division collaborated with Navy-sponsored UARCs, such as Penn State’s Applied Research Laboratory, to help develop Navy submarine propeller and propulsion designs  Self-initiated Projects: Research center officials said that DOD provides some research centers with limited funds to self-initiate innovative projects  This funding helps the centers ensure that development projects are not limited to just satisfying near-term DOD requirements  Instead, future generations of DOD technologies can be funded  For example, officials at Johns Hopkins University Applied Physics Laboratory proactively conducted work on advanced naval defense technologies in response to similar technology development in adversary countries  Although Navy sponsors did not fund this initial work, they subsequently provided funding in this area after Hopkins’ research identified a risk reduction strategy for the Navy, according to the Johns Hopkins officials  This allowed the UARC to move relatively quickly on a new science and technology project idea  DOD uses 13 UARCs and three lab FFRDCs to obtain direct access to scientific expertise in emerging technical areas, supplementing research conducted at DOD’s government-owned and operated labs  These research centers provide DOD with additional scientific capabilities and the ability to expand quickly into new technical fields  Hiring Scientific Personnel: Although FFRDCs are largely federally funded, they are generally operated, managed, and 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  The contractor operating the FFRDC exercises primary control over its FFRDC’s business concerns, such as personnel policies and compensation  DOD-funded research centers have flexibility in hiring scientists that leverage a parent institution’s expertise in emerging scientific fields  For example, leadership officials at the Army Institute for Soldier Nanotechnologies UARC at MIT and the Software Engineering Institute FFRDC at Carnegie-Melon University noted that projects they have conducted for DOD have benefitted from university experts in fields such as dark matter physics and artificial intelligence  Personnel Compensation: Research center officials we spoke with noted that their workforce policies permit them to flexibly hire, fire, and compensate staff as needed  Although employee salaries are established separately from the government schedule, they are approved by the government  Further, officials noted that university centers typically offer salaries in line with the labor market, but do not attempt to compete on a salary basis with relatively high, unaffordable private sector company salaries  Instead, they compete on the basis of other factors, such as offering scientists the opportunity to work for a prestigious university conducting science and technology research


Report 2:  Research Center Infrastructure: As with personnel matters, research centers have discretion to manage infrastructure in accordance with the policies and procedures of their parent institutions  While one center, Lincoln Laboratory, is located on government property, others primarily reside on property owned or leased by their parent institutions  According to agency officials, DOD contributes funding for the use and repair of these facilities through their contracts with research centers  Officials noted that Lincoln Laboratory uses military construction funding to pay for new buildings as it is located on government property  Trusted Advisor Role: FFRDCs and UARCs function as trusted advisors for the government and operate in the public interest with objectivity and independence  FFRDCs are independent, private-sector, non-profit organization units required to be free from personal or organizational conflicts of interest, as the FFRDCs answer to the government customer  As a result, DOD’s lab FFRDCs perform tasks that are closely associated with the performance of inherently governmental functions and have access to sensitive and proprietary data  Research center officials noted challenges limiting their work providing scientific expertise to DOD  FFRDCs are also limited in executing infrastructure investments  Limitation on Available Work Hours: DOD FFRDCs are limited by an annual ceiling set by Congress on the amount of staff years of technical effort (STE) that may be funded for defense FFRDCs  We previously found in October 2008 these limits were imposed in response to concerns that DOD was inefficiently using its FFRDCs  We found that the STE workload limitation aimed to ensure that FFRDC work was appropriate and limited resources were being used for DOD’s highest priorities  As a result, Software Engineering Institute officials said they decline many DOD programs’ requests for assistance due to the annual work hour limitation  Further, officials at the Office of the Secretary of Defense’s Studies and FFRDC Management Office reported that this limit significantly constrains the use of DOD’s FFRDCs and that DOD customer demand for their services is significantly greater than the annual STE limit  OSD officials indicated that FFRDC related work must be deferred to later years when these limits are reached, since there are no other legally compliant alternatives capable of fulfilling these requirements  Infrastructure: FFRDC officials we interviewed identified infrastructure challenges—including aging facilities and equipment—as hindering their research and development efforts  For example, many buildings at the Massachusetts Institute of Technology (MIT) Lincoln Laboratory are over 60 years old; MIT considers over half of them to be in substandard condition  According to an MIT official, these facilities, located on government property, were not structurally designed for modern research and have relatively poor vibration isolation, resulting in inefficient workarounds or work that could not be performed  Officials from the Defense Laboratories Office noted that the MIT Lincoln Laboratory is unique among DOD’s FFRDCs in that it is operated on government- owned property  A 2013 study, conducted on behalf of the White House Office of Science and Technology Policy, found that lab infrastructure project funding proposals must compete with hospitals, barracks, runways, and roads and, therefore, tend to be lower on the priority list for military construction funding  A 2017 Defense Science Board report and DOD officials we spoke with indicated this continues to be true  While contract research centers have significant flexibility to execute infrastructure work, they are still affected by limited availability of military construction funding  Officials at another center noted that in some instances, DOD sponsors have been unable or slow to provide required secure facilities and equipment within needed time frames  Delays of this nature can affect the research centers’ ability to deliver the technologies or related services needed by DOD  The Department of Energy (Energy) primarily relies on contractor- operated FFRDCs to operate its labs, while the majority of NASA labs and centers are government-operated  Energy’s national labs form the core of the agency’s scientific work and mission  This is in contrast to DOD-funded labs, which constitute a relatively small aspect of DOD’s overall mission  We have previously found that Energy’s labs can use funding for minor infrastructure improvements  NASA centers can also approve and fund certain facility projects, in accordance with NASA policies, and they have encountered significant challenges with aging infrastructure  Also, in some cases, energy and space research centers have significant challenges with hiring replacement staff and competing with private sector employers for staff  Energy’s labs can hire scientific personnel with the flexibility of private companies, while NASA centers were previously provided hiring flexibilities by Congress in 2004 to facilitate staff hiring  While Energy and NASA’s research entities follow their specific governance models, there are broad characteristics common across these agencies as well as DOD  Table 2 illustrates that while research centers are largely government-owned, the government is not always the operator  As we have reported, Department of Energy national labs are primarily operated by for-profit, non-profit and university FFRDC contractors using management and operating contracts, which are competed on a limited basis  Energy’s funding sponsors and headquarters officials are required to reevaluate FFRDC performance in increments not to exceed 5 years by federal acquisition regulations, which inform future decisions to renew the agreement  In 1990, we designated Energy’s contract management—including both contract administration and project management—a high-risk area because of Energy’s inadequate management and oversight of contractors, leaving the department vulnerable to fraud, waste, abuse, and mismanagement  In 2009, we subsequently narrowed the focus of Energy’s high-risk designation to the National Nuclear Security Administration and Office of Environmental Management, which together oversee four national labs  Further, in our 2017 High Risk report, we found that these two agencies had made progress in addressing our contract management concerns, but we identified continued problems with the agencies having sufficient capacity to mitigate contract and project management risks  Also, we found that they had demonstrated little progress in addressing contract management challenges, particularly in the area of financial management  The Department of Energy uses performance-based management and operating contracts, which have been subject to limited competition, with universities, non-profit companies and for-profit companies to operate the national labs on government-owned property  These contractor-operated FFRDCs provide the vast majority of Energy’s science and technology capacity, rather than supplementing the work of government-operated labs like DOD’s FFRDCs  Energy has depended on the expertise of private organizations to execute its science and technology work since the Manhattan Project produced the first atomic bomb during World War II  The Spallation Neutron Source is an experimental research facility at Oak Ridge National Laboratory—a government-owned contractor-operated laboratory  The Spallation Neutron Source includes the world’s most powerful pulsed-neutron sources and provides information about the structure and properties of materials that cannot be obtained by other means  The Spallation Neutron Source is a user facility whereby researchers from universities, national laboratories, and industry submit proposals, which are peer- reviewed and must compete for time at the user facility  The primary focus of each lab varies based on its expertise and facilities  Energy largely oversees its lab contractors through its headquarters program offices, which include the National Nuclear Security Administration, Office of Science, the Office of Fossil Energy, as well as co-located government field offices  Office of Science-sponsored labs primarily support scientific research for energy and physical sciences, while the National Nuclear Security Administration-sponsored (NNSA) labs primarily focus on nuclear weapons and related science and technologies  Energy also oversees its lab contractors’ activities through on-site Energy oversight offices that work alongside lab management at each FFRDC  Some labs specialize in earlier-phase science, while other labs work on later-phase nuclear weapons technologies in addition to earlier-phase science  As Figure 10 shows, these labs are spread across the United States  Energy has only one government-operated and government-owned lab, the National Energy Technology Laboratory  Key differences between Energy’s contractor-operated and government-operated governance models are described in table 3  Energy’s FFRDCs use their own personnel systems, which Energy officials stated provide more flexibility for hiring and retaining qualified staff  Management within these FFRDCs can move staff in or out of scientific areas more quickly than government labs can, thereby providing greater agility to meet Energy’s needs in emerging science areas  For example, Energy’s lab oversight staff at Oak Ridge National Laboratory told us that use of lab contractors’ human resources management systems allows for workforce flexibilities to meet Energy’s needs  While these contractors have leeway in managing their human resources systems, Energy’s headquarters maintains oversight—through its contracting officers—over employee compensation  Energy’s FFRDC contractors manage and operate nearly all of the department’s government-owned national lab facilities—including day-to- day management of government-controlled facilities and real property  Lab operators used funding to complete minor construction projects, which cost $10 million or less  This funding comes from a percentage of science and technology projects’ funding, requires local Energy oversight office approval, and has streamlined project management requirements  In contrast, major infrastructure upgrades are funded through relatively long and complex line-item funding processes, and projects over $50 million are subject to more rigorous project management requirements  Energy’s labs use a small portion of their funding to initiate discretionary projects for science and technologies that will benefit sponsors in the long-term by maintaining the scientific and technical vitality of the laboratories  To maintain and enhance lab expertise, the National Defense Authorization Act for Fiscal Year 1991 authorized Energy’s contractor-operated labs receiving funding for national security programs to use a percentage of lab funds to perform lab-directed R&D of a creative and innovative nature  The actual percentages allowed to be used for lab-directed R&D are subject to Energy’s approval  Energy’s entities sponsor most national lab projects based on their needs and lab expertise  Typically, earlier foundational science projects are funded through a process whereby funding sponsors issue calls for proposals to Energy’s national labs  Interested scientific teams at labs provide proposals to conduct these projects for sponsor consideration  Sponsors then assess proposals for scientific merit and decide which teams receive funding to execute their projects  NNSA provides funding for later-phase nuclear technology development projects to its labs after agreement is made regarding objectives and deliverables for specific projects, according to Lawrence Livermore National Laboratory officials  Despite their flexibilities with regard to hiring and infrastructure decisions compared to government operated labs, Energy’s lab leadership and government oversight officials noted human resource and facilities related challenges, such as: Sufficiently compensating staff located in high-cost of living areas  For example, the labor market of the San Francisco area, where several Department of Energy national labs are located, is highly competitive for employers  Commercial firms offer salaries and compensation that typically exceed those of government-funded, contractor-operated labs, although Energy’s contractors have more pay flexibility than is allowed for Energy’s government employees  Obtaining government clearances in a timely manner  Energy’s NNSA oversight officials and lab management staff, in particular, cited this challenge, which they stated has led to a backlog of people needing clearances  Government hiring freeze constraining overall hiring  Officials at Energy’s government-operated National Energy Technology Laboratory reported that as a result of a government hiring freeze, the lab has increasingly hired private contractor staff to the point that more than half of the total lab staff is now comprised of contractor employees  Major infrastructure challenges at Energy labs  Energy reported in July 2018 that over half of all national lab buildings are in either substandard or inadequate condition  The Energy Inspector General also identified infrastructure modernization as one of Energy’s top management challenges  This finding followed a mandated commission’s report in 2015 that facilities and infrastructure across Energy’s national lab network were hampered by high levels of deferred maintenance and excess facilities  The majority of NASA’s science and technology facilities are operated within the governance framework of government-operated research centers, similarly to most DOD labs  While government-operated, they have been granted additional legislative flexibilities for hiring employees beyond those normally available to government entities  NASA locates its science and technology staff at four government- operated research centers, one contractor-operated FFRDC, and at five NASA centers assisting space and space flight development  These centers and the Jet Propulsion Laboratory—NASA’s sole sponsored FFRDC—execute NASA’s research missions including technology development in exploration and aeronautics  The differences between these two governance approaches are described in Table 4  NASA also works with Johns Hopkins University Applied Physics Lab, a UARC, to develop major space flight missions  The NASA Glenn Research Center—a government- operated laboratory—is currently developing solar electric propulsion technologies intended to allow manned and unmanned spacecraft to be propelled far beyond earth orbit using solar power  This project is developing large, flexible, radiation-resistant solar arrays that can be unfurled to capture solar energy powering fuel-efficient electrostatic thrusters  Scientists expect a system-level flight test within the next decade to demonstrate key technologies supporting NASA’s Lunar Orbital Platform-Gateway project, a platform to mature necessary short- and long-duration deep space exploration capabilities  Headquarters, including funding sponsors providing oversight for their individual projects  Title 51, Chapters 201 and 203 of U S  Code and technology efforts with DOD and other organizations, including use of NASA lab and test facilities  Operated by university contractor having sole source contract  Not permitted to compete against industry, except for operation of an FFRDC  property (originally part of DOD)  5-year contract renewable to 10 years total  Headquarters, including funding sponsors providing oversight for their individual projects  Title 51, Chapters 201 and 203 of U S  Code; 10 U S C  § 2304 (c) (3)(B) ; Federal Acquisition Regulation § 35 017 based NASA oversight staff  sponsors seeking FFRDC assistance with NASA approval  “Lab” as used in this context refers to science and technology organizations equivalent to NASA Research Centers, DOD UARCs and FFRDCs  Mission leadership officials at NASA Headquarters—including the Associate Administrators for Aeronautics Research, Human Exploration, Science and Space Technology—oversee NASA’s research centers as well as the Jet Propulsion Laboratory  These officials are responsible for technology programs providing funds to research centers and the Jet Propulsion Laboratory to support their specific mission areas  NASA’s science and technology project portfolios are based on the requirements and priorities established by NASA’s leaders in collaboration with key stakeholders in academia and industry among others  In planning their science and technology work, NASA’s Glenn Research Center officials noted that NASA research center directors consider the capabilities and resources—including staff and facilities—of other research centers to minimize redundant work  NASA depends on a highly skilled civil servant and contractor workforce to plan and execute its missions  Congress provided NASA with additional human resource authorities beyond those otherwise allowed for federal government personnel through the NASA Flexibility Act of 2004  We found in September 2008 that NASA sought this flexibility to ensure that it could hire and retain the workforce it desired  This law consisted of multiple provisions to address a range of human capital challenges and to strengthen all levels of the workforce  The provisions included incentives—including compensation—to allow NASA to compete successfully in the labor market with the private sector and reshape its workforce more effectively to support the Agency’s mission  NASA also employs a significant contractor workforce across its different centers  Glenn Research Center officials we interviewed stated their portfolio of science and technology projects—and funding—mostly aligns with NASA’s top requirements and priorities  They, along with NASA sponsors, create technology roadmaps and investment plans to determine their future projects  NASA policy requires that NASA’s scientific teams offer proposals for potential research and science and technology projects  This is similar in some ways to how many DOD and Energy centers must find sponsors willing to fund specific technology development projects, rather than receiving technology development funding for a given year  These proposals are reviewed by peer review teams, who identify for selecting officials those proposals they believe have the most scientific merit  Ames Research Center officials said they believe this process can foster innovation, encourage employees to keep skills honed, and mitigate complacency  Glenn Research Center officials said that while most of the work they conduct is for sponsored applied research or advanced technology development, about 2 percent of their science and technology budget is spent on early-stage scientific innovation  Recommended projects of this nature proposed by the research center are typically approved by headquarters officials, according to these Glenn officials  NASA provides technical grants for basic research and applied science to university scientists nationwide on a competitive basis, and also funds similar research done internally at research centers  As with DOD and Energy’s research centers, NASA officials have identified some key operating challenges, including: Aging infrastructure and facilities  The NASA Inspector General listed infrastructure area as one of the top five management and performance challenges facing NASA  Further, the Inspector General identified deficiencies with facilities planning and reported that about 80 percent of facilities at three of four NASA research centers are over 50 years old, while about half of the facilities at the Jet Propulsion Laboratory and the fourth research center are that old  Infrastructure projects and upgrades of $1 million or less are undertaken by research center management instead of at the NASA headquarters level  Construction above this threshold has significantly more requirements and is approved by NASA headquarters  Glenn Research Center officials indicated it is difficult to obtain funding for projects that exceed the minor infrastructure threshold, in part, due competition with major construction of facilities proposals from across the agency for limited funds  As a result, they put most of their efforts into sustaining existing infrastructure  Workforce shortages in key technical areas  As we found in May 2018, NASA has experienced workforce challenges on several major projects such as the Mars 2020 and Europa Clipper projects  Also, over 40 percent of NASA’s workforce is either eligible to retire now or will be eligible in the next 5 years  NASA headquarters officials noted that NASA’s workforce is aging because NASA has a low attrition rate—about 4 percent annually—and high numbers of staff stay several years beyond retirement  Further, in 2017, the NASA Inspector General found gaps in NASA’s workforce planning for specific capability areas and how workforce plans would meet future needs, and recommended that NASA establish standardized guidance defining the data and analyses for these planning efforts  NASA concurred with and identified its plan to implement this recommendation  However, NASA has not implemented this recommendation, according to the NASA Inspector General’s latest semiannual report to Congress  Congress provided DOD lab directors with key authorities to foster targeted, timely investments in the most pressing technology areas  Lab directors have used these authorities—such as laboratory initiated research and direct hire authorities—to varying degrees, but more needs to be done to facilitate innovation and efficiency  Specifically, service specific obstacles in the Air Force, Navy, and Army impede lab directors from capitalizing on laboratory initiated research authority to a greater extent  Service leadership can take actions to better understand and potentially remove barriers to more fully use laboratory initiated research tools  We are making the following three recommendations to DOD: The Secretary of the Air Force should assess the potential costs and benefits of implementing accounting system improvements that would allow the Air Force Research Laboratory to charge customers a fixed percentage fee on provided science and technology activities to the extent allowed under the laboratory initiated research authority  (Recommendation 1) The Secretary of the Navy should clarify whether and how to use the laboratory initiated research authority within the Capital Investment Program  (Recommendation 2) The Secretary of the Army should assess existing Army policy for laboratory initiated research authority and determine whether to implement changes to eliminate disincentives for lab usage of the authority  (Recommendation 3) We provided a draft of this report to DOD, Energy, and NASA for review and comment  Energy and NASA did not provide any comments on the draft report  In DOD’s written comments, reproduced in appendix III, DOD concurred with our three recommendations  Further, in its response to our third recommendation, DOD stated that the Army plans to initiate a study by January 2, 2019, regarding its use of the laboratory initiated research authority  According to DOD, the Army’s study will identify potential opportunities for policy improvements  We are sending copies of this report to the appropriate congressional committees and offices; the Secretary of Defense; the Secretaries of the Army, Navy, and Air Force; the Secretary of Energy; and the NASA Administrator  In addition, the report will be made available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions concerning this report, please contact me at (202) 512-4841  Contact points for our offices of Congressional Relations and Public Affairs may be found on the last page of this report  Staff members making key contributions to the report are listed in appendix IV  This report examines (1) how the Department of Defense (DOD) labs have used selected legislative authorities to foster innovation and efficiency and identify what barriers impede their use; (2) identifies and describes governance models used by selected DOD-sponsored federally funded research centers and university affiliated research centers; and (3) identifies and describes governance models used non-defense labs, specifically at the Department of Energy (Energy) and National Aeronautics and Space Administration (NASA)  To address the first objective, we selected four specific authorities for our review based on previous work identifying science and technology best practices and expedited lab hiring: Laboratory Initiated Research Authority  The authority provided in Section 219 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, as implemented, provides lab directors with flexibility to fund projects in four allowable categories: basic and applied research; technology transition; workforce development; and revitalization, recapitalization, or repair or minor military construction of lab infrastructure  Laboratory Enhancement Pilot Program  Section 233 of the National Defense Authorization Act for Fiscal Year 2017 established a pilot program for lab directors to propose alternative and innovative methods that might lead to more effectively managing and operating labs and authorized lab directors to waive any regulation, restriction, requirement, guidance, policy, procedure, or departmental instruction that would affect implementation of these methods unless such implementation would be prohibited by a provision of an existing statute or common law  Direct Hire Authority  Four types of direct hire authorities authorized by Congress since 2008 are intended to provide a streamlined and accelerated hiring process to allow the labs to successfully compete with private industry and academia for high-quality scientific, engineering, and technician talent  Micro-purchase Authority  The Federal Acquisition Regulation states a preference for government agencies, to purchase and pay for micro-purchases of supplies or services using the government-wide commercial purchase card up to and at the micro-purchase threshold, but micro-purchases may be conducted using any of the simplified acquisition methods  While the FAR micro-purchase threshold was generally $3,500 at the time of our review, Congress increased this threshold to $10,000 for activities of DOD science and technology reinvention laboratories in Section 217 the National Defense Authorization Act for Fiscal Year 2017  Although Congress has provided additional legislative authorities to defense lab directors to address hiring, infrastructure, and technology transition challenges, the authorities that we covered in our review are the ones that our prior and current work have shown are currently, or have the potential to be, the most critical for supporting science and technology reinvention laboratories’ innovation mission within DOD labs  DOD lab leaders use these authorities to flexibly fund projects intended to facilitate research and development; propose alternative and innovative methods that might lead to more effective lab management; directly hire personnel at DOD labs including students currently enrolled in science, technology, engineering, and mathematics (STEM) programs; and expand critical science and technology purchases using simplified acquisition methods  To identify the extent to which DOD laboratories have used these authorities as well as to identify what potential barriers existed to using these authorities, we administered a survey to 44 STRL directors (or their equivalent) to collect information on the use of these specific authorities, their perceptions about the effectiveness of those authorities, and their perceptions about any barriers to using these authorities  The members of the population surveyed were the 44 defense laboratories defined as science and technology reinvention laboratories  For the purposes of our review, we defined laboratories as inclusive of Air Force technical directorates (10), Army warfare centers (17), and Navy warfare centers (17)  We emailed questionnaires to the laboratories beginning in late March 2018, and survey data collection ended in early May 2018, with 31 labs returning completed questionnaires, for an overall response rate of 71 percent at the laboratory level  We took steps to minimize the potential errors that the practical difficulties of conducting any survey may introduce  Nonresponse error can result when a survey fails to capture information from all population members selected into a survey sample  Of the 13 questionnaires not returned, 4 were Army warfare centers, and 9 were Air Force research directorates  Throughout the data collection period, we made multiple follow-up attempts by email and phone to those labs not yet responding  The Air Force Research Laboratory (AFRL) provided a single survey response for the entire laboratory enterprise  Not all returned questionnaires may have answers to every question applicable to a respondent  However, this question-level nonresponse did not exceed one for any of the questions applicable to all 31 labs  Because we selected the entire population of laboratories for our survey, our estimates are not subject to sampling error  We developed our list of the 44 labs in our population in consultation with DOD, and are confident that none were left out, so our or survey has no known sources of coverage error  We conducted pretests of the draft questionnaire with 3 laboratories in the population and made revisions to reduce the possibility of measurement error from differences in how questions were interpreted and the sources of information available to respondents  After reviewing the answers received, we also followed up as necessary with respondents to clarify apparent inconsistencies or other possible misreports, and made changes to responses where corrections were needed  A second, independent analyst checked the accuracy of all computer analyses to minimize the likelihood of errors in data processing  To obtain additional information on this objective, we reviewed relevant legislation which established or amended these authorities and reviewed applicable DOD and service policy documentation  Further, we collected military service related information on the usage of two authorities, such as: Spending data on the use of the laboratory initiated research authority  We gathered this information from DOD-mandated reports to Congress on the use of this authority and military service officials  We determined these data to be reliable based on reviews of agency documentation collected and interviews with agency officials  Data on the usage of direct hire authorities by the service laboratories  We collected direct hire data from each of the military services including the number of direct hire authority candidates hired as well as the number of direct hire positions the laboratories were authorized to hire  We determined these data to be reliable based on reviews of agency documentation collected and interviews with agency officials  We also used select findings from our May 2018 report where we evaluated DOD’s use of hiring authorities, including direct hire authority  More information about the scope and methodology of our prior work can be found in that report  In addition, we also collected information on military service proposals to utilize the laboratory enhancement pilot program authority  To obtain further information on department- and service-level involvement in and perspectives of defense laboratory authorities and challenges, we interviewed officials responsible for the management, execution, and oversight of DOD’s science and technology enterprise, including military service labs  At the Office of the Secretary of Defense and military department headquarters level, those responsible for the management and oversight of science and technology activities, we met with officials from the: Office of the Assistant Secretary of Defense for Research and DOD Defense Laboratories Office; Office of the Deputy Assistant Secretary of the Army for Research and Office of the Deputy Assistant Secretary of the Air Force for Science, Technology, and Engineering; Office of the Assistant Secretary of the Air Force for Financial Office of the Deputy Assistant Secretary of the Navy for Research, Development, Test, and Evaluation; and Office of the Budget, within the Office of the Assistant Secretary of the Navy for Financial Management and Comptroller We also met with military department lab officials responsible for the management and execution of science and technology activities from the: Army Research, Development and Engineering Command; Army Research Laboratory; Army Aviation and Missile Research, Development, and Engineering Air Force Research Laboratory; Naval Research Laboratory; Naval Surface Warfare Center, Headquarters; and Naval Surface Warfare Center, Carderock Division To identify and describe governance models used by selected DOD- sponsored federally funded research centers (FFRDCs) and university affiliated research centers (UARCs), we focused our review on the 3 FFRDCs designated as research and development labs as well as all 13 UARCS sponsored by DOD entities  We reviewed appropriate sections of the FAR language related to FFRDCs and UARCs, DOD guidance for working with FFRDCs and UARCs, relevant contracts, and performance assessments  Further, we met with officials from the office of the Deputy Director, OSD Studies and Federally Funded Research & Development Centers Management and Office to discuss overall FFRDC and UARC management, policies, and challenges facing FFRDCs and UARCs  We interviewed officials at selected research and development FFRDCs and UARCS to discuss their experience conducting DOD research and interactions with their customers, such as defense program executive offices  We met with officials at the two major research and development lab FFRDCs—The Lincoln Laboratory at the Massachusetts Institute of Technology (MIT) and the Software Engineering Institute at Carnegie Mellon University  We also selected a university affiliated research center sponsored by the Army and Navy: The Applied Physics Laboratory at Johns Hopkins University and the Institute for Soldier Nanotechnologies also at the MIT  To identify and describe governance models by non-defense labs, we selected Energy and NASA to focus our efforts  We identified 17 Energy national labs and 4 NASA research centers conducting basic and applied research similar to DOD labs  These agencies, along with DOD, represent 3 of the top 4 agencies in terms of average federal research and development spending from fiscal years 2015 to 2017  In our August 2016 GAO Technology Readiness Assessment Guide, we drew heavily from DOD, NASA, and Energy for best practices, terminology, and examples  This contributed to our decision to focus on Energy and NASA’s research entities in this laboratory governance review  We did not include the fourth agency—the National Institutes of Health—in our review because it is not as similar to DOD  We also reviewed relevant Energy and NASA guidance as well as relevant FAR sections  At Energy, we met with officials from the National Nuclear Security Administration which is semi-autonomous entity within Energy responsible for managing the nation’s nuclear weapons and nuclear security  We also met with Officials from the Office of Science, a program office responsible for supporting energy related fundamental science and research  To gain further insights on operating structures, funding arrangements, and their overall experience we met with lab leadership at selected Energy labs which were chosen based on initial discussions with agency officials and our review of past GAO work: Oak Ridge National Laboratory, Lawrence Berkeley National Laboratory, Lawrence Livermore National Laboratory, and National Energy Technology Laboratory (the sole Energy government owned and operated laboratory) We also met with leadership from Battelle Memorial Institute, which is the sole or joint contract manager for five Energy national labs including Oak Ridge National Laboratory  In addition, Battelle is an integrated subcontractor at Lawrence Livermore National Laboratory  At NASA, we met with officials with NASA’s Science Mission Directorate and Mission Support Directorate to discuss overall research center management and operations  We also leveraged ongoing and recently completed work at GAO to gain additional insight on NASA’s operations such as human capital management  Almost all of NASA’s research, space, and space flight centers conduct research and development activities  However, we focused our review on four research centers where NASA primarily conducts its aeronautics research, which has substantial overlap with DOD activities  To gain additional insight into the experience of lab leaders at NASA research centers, we met with officials at NASA’s Glenn Research Center and Ames Research Center  In addition, we also met with officials at the NASA Jet Propulsion Center, which is the only NASA-sponsored FFRDC  We conducted this performance audit from July 2017 to December 2018 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  Office of the Secretary of Defense (OSD) In addition to the contact named above, Christopher R  Durbin (Assistant Director); Charlie Shivers, III (Analyst-in-Charge); Emily Bond; Lorraine Ettaro; Carl Ramirez; Sylvia Schatz; Sean Seales; Brian Smith; and Robin Wilson made significant contributions to this report 

ground_truth: Federal agencies use heavy equipment such as cranes and forklifts to carry out their missions, but there is no government-wide data on federal agencies' acquisition or management of this equipment. GAO was asked to review federal agencies' management of heavy equipment. This report, among other objectives, examines: (1) the number, type, and costs of heavy equipment items that are owned by 20 federal agencies and (2) the heavy equipment that selected agencies recently acquired as well as how they decided whether to purchase or lease this equipment. GAO collected heavy equipment inventory data as of June 2017 from the 24 agencies that have chief financial officers responsible for overseeing financial management. GAO also selected three agencies (using factors such as the heavy equipment fleet's size) and reviewed their acquisitions of and guidance on heavy equipment. These agencies' practices are not generalizable to all acquisitions but provide insight into what efforts these agencies take to acquire thousands of heavy equipment items. GAO also interviewed officials at the three selected agencies. Of the 24 agencies GAO reviewed, 20 reported owning over 136,000 heavy equipment items such as cranes, backhoes, and forklifts, and spending over $7.4 billion (in 2016 dollars) to acquire this equipment. The remaining 4 agencies reported that they do not own any heavy equipment. The three selected agencies GAO reviewed in-depth—the Air Force within the Department of Defense (DOD), and the Fish and Wildlife Service and the National Park Service within the Department of the Interior (Interior)—spent about $360 million to purchase about 3,500 heavy equipment assets in calendar years 2012 through 2016 and over $5 million to lease heavy equipment from fiscal years 2012 through 2016. Officials from all three agencies stated that they consider mission needs and the availability of equipment leases when deciding whether to lease or purchase heavy equipment. Federal regulations provide that agencies should consider whether it is more economical to lease or purchase equipment when acquiring heavy equipment, and federal internal control standards require that management clearly document all transactions in a manner that allows the documentation to be readily available for examination. However, in reviewing selected leases and purchases of heavy equipment from these three agencies, GAO found that officials did not consistently conduct or document lease-versus-purchase analyses. Officials at the Air Force and Interior said that there was a lack of clarity in agency policies about when they were required to conduct and document such analyses. Without greater clarity on when lease-versus-purchase analyses should be conducted and documented, these agencies may not be spending funds on heavy equipment effectively. The Department of the Interior and the Air Force should clarify the circumstances in which lease-versus-purchases analyses for heavy equipment acquisitions are to be conducted and documented. The Departments of the Interior and Defense concurred with these recommendations.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: Agencies generally acquire equipment from commercial vendors and through GSA, which contracts for the equipment from commercial vendors  In acquiring heavy equipment from a commercial vendor or GSA, agencies can purchase or lease the equipment  Generally, agencies use the term “lease” to refer to acquisitions that are time-limited and therefore distinct from purchases  The term “lease” is used to refer to both long-term and short-term leases  For example, the three agencies we reviewed in-depth use the term “rental” to refer to short-term leases of varying time periods  According to Air Force officials, they define rentals as leases that are less than 120 days while FWS and NPS officials said they generally use the term rental to refer to leases that are a year or less  For the purposes of this report, we use the term “rental” to refer to short-term leases defined as rentals by the agency and “long-term lease” to refer to a lease that is not considered a rental by the agency  (See fig  1 ) In 2013, GSA began offering heavy equipment through its Short-Term Rental program, which had previously been limited to passenger vehicles, in part to eliminate ownership and maintenance cost for infrequently used heavy equipment  Under this program, agencies can request a short-term equipment rental (less than a year) from GSA, and GSA will work with a network of commercial vendors to provide the requested heavy equipment  Unlike for some other types of federal property, there are no central reporting requirements for agencies’ inventories of heavy equipment  However, each federal agency is required to maintain inventory controls for its property, which includes heavy equipment  Agencies maintain inventory data through the use of agency-specific databases, and each agency can set its own requirements for what data are required and how these data are maintained  For example, while an agency may choose to maintain data in a headquarters database, it could also choose to maintain data at the local level  As another example, an agency may decide to track and maintain data on the utilization of its heavy equipment (such as the hours used) or may choose not to have such data or require any particular utilization levels  The Federal Acquisition Regulation (FAR) governs the acquisition process of executive branch agencies when acquiring certain goods and services, including heavy equipment  Under the FAR, agencies should consider whether to lease equipment instead of purchasing it based on several factors  Specifically, the FAR provides that agency officials should evaluate cost and other factors by conducting a “lease-versus-purchase” analysis before acquiring heavy equipment  Additionally, DOD’s regulations require its component agencies to prepare a justification supporting lease-versus-purchase decisions if the equipment is to be leased for more than 60 days  Twenty agencies reported data on their owned heavy equipment, including the (1) number, (2) types, (3) acquisition year, and (4) location of agencies’ owned heavy equipment in their inventories as of June 2017  The 20 agencies reported owning over 136,000 heavy equipment items  DOD reported owning most of this heavy equipment—over 100,000 items, about 74 percent  (See app  I for more information on agencies’ ownership of these items ) The Department of Agriculture reported owning the second highest number of heavy equipment items—almost 9,000 items, about 6 percent  (See fig  2 ) Four agencies—the Nuclear Regulatory Commission, the Department of Housing and Urban Development, the Office of Personnel Management, and the Agency for International Development—reported owning five or fewer heavy equipment items each  The 20 agencies reported owning various types of heavy equipment, such as cranes, backhoes, and road maintenance equipment in five categories: (1) construction, mining, excavating, and highway maintenance equipment; (2) airfield-specialized trucks and trailers; (3) self-propelled warehouse trucks and tractors; (4) tractors; and (5) soil preparation and harvesting equipment  Thirty-eight percent (almost 52,000 items) were in the construction, mining, excavating, and highway maintenance category (see fig  3)  Fifteen of the 20 agencies reported owning at least some items in this category  Twenty-four percent (over 33,000 items) were in the airfield- specialized trucks and trailers category, generally used to service and re-position aircraft on runways  DOD reported owning 99 percent (over 32,000) of these items, while 9 other agencies, including the Department of Labor and the National Aeronautics and Space Administration, reported owning the other one percent (317 items)  Twenty-two percent (over 29,000 items) were in the self-propelled warehouse trucks and tractors category, which includes equipment such as forklift trucks  All 20 agencies reported owning at least one item in this category, and five agencies—the Agency for International Development, Department of Housing and Urban Development, the Environmental Protection Agency, the Nuclear Regulatory Commission, and the Office of Personnel Management—reported owning only items in this category  (For additional information on agencies’ ownership of heavy equipment in various categories, see app  I ) The twenty agencies reported acquiring their owned heavy equipment between 1944 and 2017, with an average of about 13 years since acquisition (see fig  4)  One heavy equipment manager we interviewed reported that a dump truck can last 10 to 15 years, whereas other types of equipment can last for decades if regularly used and well-maintained  The 20 agencies reported that over 117,000 heavy equipment items (86 percent) were located within the United States or its territories  Of these, about one-fifth (over 26,000) were located in California and Virginia, the two states with the most heavy equipment (see fig  5)  Of the equipment located outside of the United States and its territories, 94 percent was owned by the Department of Defense  The rest was owned by the Department of State (714 items in 141 countries from Afghanistan to Zimbabwe) and the National Science Foundation (237 items in areas such as Antarctica)  The twenty agencies reported spending over $7 4 billion in 2016 dollars to acquire the heavy equipment they own (see table 1)  However, actual spending was higher because this inflation-adjusted figure excludes over 37,000 heavy equipment items for which the agencies did not report acquisition cost or acquisition year, or both  Without this information, we could not determine the inflation-adjusted cost and therefore did not include the cost of these items in our calculation  The Army owns almost all of these items, having not reported acquisition cost or acquisition year, or both, for 36,589 heavy equipment items because, according to Army officials, the data were not available centrally but may have been available at individual Army units and would have been resource- intensive to obtain  The heavy equipment items reported by the 20 agencies ranged in acquisition cost from zero dollars to over $2 million in 2016 dollars, with an average acquisition cost in 2016 dollars of about $78,000, excluding assets with a reported acquisition cost of $0  Of the items which we adjusted to 2016 dollars and for which non-zero acquisition costs were provided: 94 percent cost less than $250,000 and accounted for 57 percent of the total adjusted acquisition costs (See fig  6 ) 6 percent of items cost more than $250,000 and accounted for 43 percent of the adjusted acquisition costs  (See fig  6 ) High-cost items included a $779,000 hydraulic crane acquired by the National Aeronautics and Space Administration in 1997 ($1 2 million in 2016 dollars), a $1 4 million ultra-deep drilling simulator acquired by the Department of Energy in 2009 ($1 6 million in 2016 dollars), and several $2 2 million well-drilling machines acquired by the Air Force in 2013 ($2 3 million in 2016 dollars)  In calendar years 2012 through 2016, the Air Force, FWS, and NPS purchased almost 3,500 pieces of heavy equipment through GSA and private vendors at a total cost of about $360 million to support mission needs  (See table 2 ) These agencies also spent over $5 million on long- term leases and rentals during this time period  The Air Force spent over $300 million to purchase over 2,600 heavy equipment assets in calendar years 2012 through 2016 that were used to support and maintain its bases globally  For example, according to Air Force officials, heavy equipment is often used to maintain runways and service and reposition aircraft on runways  While the majority of Air Force heavy equipment purchased in this time period is located in the United States, 41 percent of this heavy equipment is located outside the United States and its territories in 17 foreign countries to support global military bases  The Air Force could not provide complete information on its heavy equipment leases for fiscal years 2012 through 2016  Specifically, the Air Force provided data on 33 commercial heavy equipment leases that were ongoing as of August 2017 but could not provide cost data for these leases because this information is not tracked centrally  Additionally, the Air Force could not provide any data on leases that occurred previously because, according to Air Force officials, lease records are removed from the Air Force database upon termination of the lease  Officials said that rentals are generally handled locally and obtaining complete data would require a data call to over 300 base contracting offices  Air Force officials stated that rentals are generally used in unique situations involving short- term needs such as responding to natural disasters  For example, following Hurricane Sandy, staff at Langley Air Force Base in Virginia used rental equipment to clean up and repair the base  Although Air Force did not provide complete information on rentals, data we obtained from GSA’s Short-Term Rental program indicated that Air Force rented heavy equipment in 46 transactions not reflected in the Air Force data we received totaling over $3 7 million since GSA began offering heavy equipment through its Short-Term Rental program, which had previously been limited to passenger vehicles, in part program in 2013  FWS spent over $32 million to purchase 348 heavy equipment assets from calendar years 2012 through 2016  FWS used its heavy equipment to maintain refuge areas throughout the United States and its territories, including maintaining roads and nature trails  FWS also used heavy equipment to respond to inclement weather and natural disasters  Most of the heavy equipment items purchased by FWS were in the construction, mining, excavating, and highway maintenance equipment category and include items such as excavators, which were used for moving soil, supplies, and other resources  FWS officials reported that they did not have any long-term leases for any heavy equipment in fiscal years 2012 through 2016 because they encourage equipment sharing and rentals to avoid long-term leases whenever possible  FWS officials provided data on 228 rentals for this time period with a total cost of over $1 million  Information regarding these rentals is contained in an Interior-wide property management system, the Financial Business Management System (FBMS)  FWS officials told us that they have not rented heavy equipment through GSA’s program because they have found lower prices through local equipment rental companies  NPS spent over $27 million to purchase 471 heavy equipment assets from calendar years 2012 through 2016  NPS uses heavy equipment— located throughout the United States and its territories—to maintain national parks and respond to inclement weather and natural disasters  For example, NPS used heavy equipment such as dump trucks, snow plows, road graders, and wheel loaders to clear and salt the George Washington Memorial Parkway in Washington, D C , following snow and ice storms  Most of the heavy equipment items purchased by NPS were in the construction, mining, excavating, and highway maintenance equipment category and include items such as excavators, which are used for moving soil, supplies, and other resources  NPS reported spending about $360,000 on 230 long-term leases and rentals in fiscal years 2012 through 2016, not including rentals through GSA’s Short-Term Rental program, which had previously been limited to passenger vehicles, in part program  As with FWS, NPS leases and rentals are contained in FBMS, which is Interior’s property management system  Data we obtained from GSA’s Short-Term Rental program, which had previously been limited to passenger vehicles, in part program indicated that NPS rented heavy equipment in 26 transactions totaling over $200,000 since GSA began offering heavy equipment through its Short-Term Rental program, which had previously been limited to passenger vehicles, in part program in 2013, for a potential total cost of over $560,000 for these long-term leases and rentals  As mentioned earlier, the FAR provides that executive branch agencies seeking to acquire equipment should consider whether it is more economical to lease equipment rather than purchase it and identifies factors agencies should consider in this analysis, such as estimated length of the period that the equipment is to be used, the extent of use in that time period, and maintenance costs  This analysis is commonly referred to as a lease-versus-purchase analysis  While the FAR does not specifically require that agencies document their lease-versus-purchase analyses, according to federal internal control standards, management should clearly document all transactions and other significant events in a manner that allows the documentation to be readily available for examination and also communicate quality information to enable staff to complete their responsibilities  As discussed below, we found that most acquisitions we reviewed from FWS, NPS, and the Air Force did not contain any documentation of a lease-versus-purchase analysis  Specifically, officials were unable to provide documentation of a lease-versus-purchase analysis for six of the eight acquisitions we reviewed  FWS officials were able to provide documentation for the other two  Officials told us that a lease-versus- purchase analysis was not conducted for five of the six acquisitions and did not know if such analysis was conducted for the other acquisition  According to agency officials, the main reason why analyses were not conducted or documented for these six acquisitions is that the circumstances in which such analyses were to be performed or documented were not always clear to FWS, NPS, and Air Force officials  In addition to the FAR, Interior has agency guidance stating that bureaus should conduct and document lease-versus-purchase analyses  This July 2013 guidance—that FWS and NPS are to follow—states that requesters of equipment valued at $15,000 or greater should perform a lease-versus- purchase analysis when requesting heavy equipment  According to the guidance, this analysis should address criteria in the FAR and include a discussion of the financial and operating advantages of alternate approaches that would help contracting officials determine the final appropriate acquisition method  At the time the guidance was issued, Interior also provided a lease-versus-purchase analysis tool to aid officials in conducting this analysis  Additionally, in April 2016, Interior issued a policy to implement the July 2013 guidance  The 2016 policy clarifies that program offices are required to complete Interior’s lease-versus-purchase analysis tool and provide the completed analysis to the relevant contracting officer  Within Interior, bureaus are responsible for ensuring that procurement requirements are met, including the requirements and directives outlined in Interior’s 2013 guidance and 2016 policy on lease-versus-purchase analyses, according to agency officials  Within FWS, local procurement specialists prepare procurement requests and ensure that procurement requirements are met and that all viable options have been considered  Regional equipment managers review these procurement requests, decide whether to purchase or lease the requested equipment, and prepare the lease-versus-purchase analysis tool if the procurement specialist has indicated that it is required  Within NPS, local procurement specialists are responsible for ensuring that all procurements adhere to relevant requirements and directives, including documenting the lease- versus-purchase analysis  Of the three FWS heavy equipment acquisitions we reviewed for which the 2013 Interior guidance was applicable, one included a completed lease-versus-purchase analysis tool; one documented the rationale for purchasing rather than leasing, although it did not include Interior’s lease- versus-purchase analysis tool; and one did not include any documentation related to a lease-versus-purchase analysis  (See table 3 ) Regarding the acquisition for which no documentation of a lease-versus- purchase analysis was provided—a 12-month lease of an excavator and associated labor costs for over $19,000—FWS officials initially told us that a lease-versus-purchase analysis was not required because the equipment lease was less than $15,000, and Interior’s guidance required a lease-versus-purchase analysis for procurements of equipment valued at $15,000 or greater  However, we found the guidance did not specify whether the $15,000 threshold includes the cost of labor  We also found that Interior’s guidance did not specify if a lease-versus-purchase analysis was required if the total cost of a rental is less than the purchase price  FWS officials acknowledged that Interior guidance is not clear and that it would be helpful for Interior to clarify whether these leases require a lease-versus-purchase analysis  NPS officials were unable to provide documentation of a lease-versus- purchase analysis for the single heavy equipment acquisition we reviewed—the purchase of a wheeled tractor in 2015 for $43,177  According to these officials, they could not do so because of personnel turnover in the contracting office that would have documented the analysis  In addition, they told us that they believe that such analyses are not always completed for heavy equipment acquisitions because responsibility for completing these analyses is unclear  Specifically, they told us that it was unclear whether the responsibility lies with the official requesting the equipment, the contracting personnel who facilitate the acquisition, or the property personnel who manage inventory data  However, when we discussed our findings with Interior and NPS officials, NPS officials were made aware of the 2016 Interior policy that specifically requires program offices—the officials requesting the equipment—to complete the lease-versus-purchase analysis and provide documentation of this analysis to the contracting officer  As a result, NPS officials told us at the end of our review that program office officials will now be required to complete the lease-versus-purchase analysis tool and document this analysis  According to Air Force officials responsible for managing heavy equipment, financial or budget personnel at individual bases are responsible for conducting lease-versus-purchase analyses, also called economic analyses, to support purchase and lease requests  Air Force fleet officials told us that they then review these requests from a fleet perspective, considering factors such as whether the cost information provided in the request is from a reputable source, expected maintenance costs, and whether a requesting base has the capability to maintain the requested equipment  However, they said they do not check to ensure that a lease-versus-purchase analysis was completed or review the analysis  Equipment rentals can be approved at individual bases  In our review of four Air Force heavy equipment acquisitions, we found no instances in which Air Force officials documented a lease-versus- purchase analysis (see table 4)  For the acquisitions that we reviewed, Air Force officials told us they did not believe a lease-versus-purchase analysis was required because the new equipment was either replacing old equipment that was previously approved or could be deployed  Accordingly, the Air Force purchased two forklifts in 2013 without conducting lease-versus-purchase analyses because the forklifts were replacing old forklifts that were authorized in 1997 and 2005  Furthermore, Air Force officials told us that both of these forklifts could be deployed and indicated that lease-versus-purchase analyses are not required for deployable equipment  However, the Air Force does not have guidance that describes the circumstances that require either a lease-versus-purchase analysis or documentation of the rationale for not completing such analysis  Although we identified several instances in which officials in the three selected agencies did not document lease-versus-purchase analyses, officials from these agencies stated that they consider mission needs and equipment availability, among other factors, when making these decisions  For example, Air Force officials told us following Hurricane Sandy, staff at Langley Air Force Base in Virginia used rental equipment to clean and repair the base because the equipment was needed immediately to ensure the base could meet its mission  Moreover, availability of heavy equipment for lease or rental, which can be affected by factors such as geography and competition for equipment, is a key consideration  For example, FWS officials told us that the specialized heavy equipment sometimes needed may not be available for long-term lease or rent in remote areas such as Alaska and the Midway Islands, so the agency purchases the equipment  In addition, some agency officials told us that they may purchase heavy equipment even if that equipment is needed only sporadically if there is likely to be high demand for rental equipment  For example, following inclement weather or a natural disaster, demand for certain heavy equipment rentals can be high and equipment may not be available to rent when it is needed  While we recognize that mission needs and other factors are important considerations, without greater clarity regarding when to conduct or document lease-versus-purchase analyses, officials at FWS, NPS, and Air Force may not be conducting such analyses when appropriate and may not always make the best acquisition decisions  These agencies could be overspending on leased equipment that would be more cost- effective if purchased or overspending to purchase equipment when it would be more cost-effective to lease or rent  Moreover, without documenting decisions on whether to purchase or lease equipment, they lack information that could be used to inform future acquisition decisions for similar types of equipment or projects  Air Force guidance requires that fleet managers collect utilization data for both vehicles and heavy equipment items, such as the number of hours used, miles traveled, and maintenance costs  The Air Force provided us with utilization data for over 18,000 heavy equipment items and uses such data to inform periodic base validations  Specifically, Air Force officials said that every 3 to 5 years each Air Force base reviews the on- base equipment to ensure that the installation has the appropriate heavy equipment to complete its mission and reviews utilization data to identify items that are underutilized  If heavy equipment is considered underutilized, the equipment is relocated—either moved to another location or sent to the Defense Logistics Agency for reuse or transfer to another agency  According to Air Force officials the Air Force has relocated over 700 heavy equipment items based on the results of the validation process and other factors such as replacing older items and agency needs since 2014  Similarly, FWS guidance for managing heavy equipment utilization sets forth minimum utilization hours for certain types of heavy equipment and describes requirements for reporting utilization data  FWS provided us with utilization data on over 3,000 heavy equipment items  According to officials, condition assessments of heavy equipment are required by FWS guidance every 3 to 5 years  According to FWS officials, condition assessments inform regional-level decision making about whether to move equipment to another FWS location or dispose of the equipment  In contrast, NPS does not require the collection of utilization data to evaluate heavy equipment use and does not have guidance for managing heavy equipment utilization  However, NPS officials told us that they recognize the need for such guidance  NPS officials shared with us draft guidance that they have developed, which would require collection of utilization data for heavy equipment such as hours or days of usage each month  According to NPS officials, they plan to send the guidance to the NPS policy office for final review in March 2018  Until this guidance is completed and published, NPS is taking interim actions to manage the utilization of its heavy equipment  For example, NPS officials stated that they have asked NPS locations to collect and post monthly utilization data, discussed the collection of utilization data at fleet meetings, and distributed job aids to support this effort  During the course of our review, NPS officials provided us with some utilization data for about 1,400 of the more than 2,400 NPS heavy equipment items  Specifically, for the 1,459 heavy equipment items for which NPS provided utilization data, 541 items had utilization data for each month  For the remaining 918 items, utilization data were reported for some, but not all months  The federal government has spent billions of dollars to acquire heavy equipment  There is no requirement that agencies report on the inventory of this equipment, as there is no standard definition of heavy equipment  When deciding how to acquire this equipment, agencies’ should conduct a lease-versus-purchase analysis as provided in the FAR, which is a critical mechanism to ensure agencies are acquiring the equipment in the most cost-effective manner  Because FWS, NPS and the Air Force were unclear when such an analysis was required, they did not consistently conduct or document analyses of whether it was more economical to purchase or lease heavy equipment  In the absence of clarity on the circumstances in which lease-versus-purchase analyses for heavy equipment acquisitions are to be conducted and documented, the agencies may not be spending funds on heavy equipment cost- effectively  We are making two recommendations—one to the Air Force and one to the Department of the Interior  The Secretary of the Air Force should develop guidance to clarify the circumstances in which lease-versus-purchase analyses for heavy equipment acquisitions are to be conducted and documented  (Recommendation 1) The Secretary of the Interior should further clarify in guidance the circumstances in which lease-versus-purchase analyses for heavy equipment acquisitions are to be conducted and documented  (Recommendation 2) We provided a draft of this report to the Departments of Agriculture, Defense, Energy, Homeland Security, Housing and Urban Development, the Interior, Justice, Labor, State, and Veterans Affairs; General Services Administration; National Aeronautics and Space Administration; National Science Foundation; Nuclear Regulatory Commission; Office of Personnel Management; and U S  Agency for International Development  The departments of Agriculture, Energy, Homeland Security, Housing and Urban Development, Justice, State and Veterans Affairs, as well as the General Services Administration, National Aeronautics and Space Administration, National Science Foundation, Nuclear Regulatory Commission, Office of Personnel Management; and U S  Agency for International Development did not have comments  The Department of Labor provided technical comments, which we incorporated as appropriate  In written comments, reproduced in appendix III, the Department of Defense stated that it concurred with our recommendation and plans to issue a bulletin to Air Force contracting officials  In written comments, reproduced in appendix IV, the Department of the Interior stated that it concurred with our recommendation and plans to implement it  If you or members of your staff have any questions about this report, please contact me at (202) 512-2834 or RectanusL@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  Major contributors to this report are listed in appendix V  Specialized Trucks and Trailers 37   Self-Propelled Warehouse Trucks and Tractors 1,733 3                                       Specialized Trucks and Trailers 7   Self-Propelled Warehouse Trucks and Tractors 2,925 134                                     Specialized Trucks and Trailers   Self-Propelled Warehouse Trucks and Tractors 146             7       - 109       Self-Propelled Warehouse Trucks and Tractors 575 64 40                       4                   Nuclear Regulatory Commission Office of Personnel Management Social Security Administration United States Agency for International Development Grand Total         This report addresses: (1) the number, type, and cost of heavy equipment items that are owned by the 24 CFO Act agencies; (2) the heavy equipment items selected agencies have recently acquired and how selected agencies decided to purchase or lease this equipment; and (3) how selected agencies manage the utilization of their heavy equipment  To identify the number, type, and cost of heavy equipment owned by federal agencies, we first interviewed officials at the General Services Administration to determine whether there were government-wide reporting requirements for owned heavy equipment and learned that there are no such requirements  We then obtained and analyzed data on agencies’ spending on equipment purchases and leases from the Federal Procurement Data System–Next Generation (FPDS-NG), which contains government-wide data on agencies’ contracts  However, in reviewing the data available and identifying issues with the reliability of the data, we determined that data on contracts would not be sufficient to answer the question of what heavy equipment the 24 CFO Act agencies own  We therefore conducted a data collection effort to obtain heavy equipment inventory information from the 24 CFO Act agencies, which are the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, the Interior, Justice, Labor, State, Transportation, the Treasury, and Veterans Affairs; Environmental Protection Agency; General Services Administration; National Aeronautics and Space Administration; National Science Foundation; Nuclear Regulatory Commission; Office of Personnel Management; Small Business Administration; Social Security Administration; and Agency for International Development  Because there is no generally accepted definition of heavy equipment, we identified 12 federal supply classes in which the majority of items are self- propelled equipment but not passenger vehicles or items that are specific to combat and tactical purposes, as these items are generally not considered to be heavy equipment  (See table 5 ) We then vetted the appropriateness of these selected supply classes with Interior, FWS, NPS, and Air Force agency officials, as well as with representatives from a fleet management consultancy and a rental company, and they generally agreed that items in selected federal supply classes are considered heavy equipment  Federal supply classes are used in FPDS- NG and are widely used in agencies’ inventory systems  Overall, about 90 percent of the heavy equipment items that agencies reported were assigned a federal supply class in the agency’s inventory data  In discussing heavy equipment categories in the report, we use the category titles below  To identify points of contact at the 24 CFO Act agencies, we obtained GSA’s list of contact information for agencies’ national utilization officers, who are agency property officers who coordinate with GSA  As a preliminary step, we contacted these individuals at each of the 24 CFO Act agencies and asked them to either confirm that they were the appropriate contacts or provide contact information for the appropriate contact and to inform us if they do not own heavy equipment  Officials at 4 agencies—Department of Education, Department of the Treasury, General Services Administration, and Small Business Administration— indicated that the agency did not own any items in the relevant federal supply classes  Officials at 16 of these agencies indicated that they would be able to respond on a departmental level because the relevant inventory data are maintained centrally, while officials at 4 agencies indicated that we would need to obtain responses from officials at some other level because the relevant inventory data are not maintained centrally  (See table 7 for a list of organizations within the 20 CFO Act agencies that indicated they own relevant equipment and responded to our data collection effort ) After identifying contacts responsible for agencies’ heavy-equipment inventory data, we prepared data collection instruments for requesting information on heavy equipment and tested these documents with representatives from 4 of the 20 CFO Act agencies that indicated they own heavy equipment to ensure that the documents were clear and logical and that respondents would be able to provide the requested data and answer the questions without undue burden  These agency representatives were selected to provide a variety of spending on federal supply group 38 equipment as reported in FPDS-NG, civilian and military agencies, and different levels at which the agency would be responding to the data collection effort (e g , at the departmental level or at a sub- departmental level)  Our data collection instrument requested the following data on respondent organizations’ owned assets in 12 federal supply classes as of June 2017: Respondents provided data on original acquisition costs in nominal terms, with some acquisitions occurring over 50 years ago  In order to provide a fixed point of reference for appropriate comparison, we present in our report inflation-adjusted acquisition costs using calendar year 2016 as the reference  To adjust these dollar amounts for inflation, we used the Bureau of Labor Statistic’s Producer Price Index by Commodity for Machinery and Equipment: Construction Machinery and Equipment (WPU112), compiled by the Federal Reserve Bank of St  Louis  We conducted the data collection effort from July 2017 through October 2017 and received responses from all 20 agencies that indicated they own heavy equipment  In order to assess the reliability of agencies’ reported data, we collected and reviewed agencies’ responses regarding descriptions of their inventory systems, frequency of data entry, agency uses of the data, and agencies’ opinions on potential limitations of the use of their data in our analysis  We conducted some data cleaning, which included examining the data for obvious errors and eliminating outliers  We did not verify the data or responses received; the results of our data collection effort are used only for descriptive purposes and are not generalizable beyond the 24 CFO Act agencies  Based on the steps we took, we found these data to be sufficiently reliable for our purposes  To determine the heavy equipment items that selected agencies recently acquired and how these agencies decided whether to purchase or lease this equipment, we first used data from the FPDS-NG to identify agencies that appeared to have the highest obligations for construction or heavy equipment, or both, and used this information, along with other factors, to select DOD and Interior  At the time, in the absence of a generally accepted definition of heavy equipment, we reviewed data related to federal supply group 38—construction, mining, excavating, and highway maintenance equipment—because (1) we had not yet defined heavy equipment for the purposes of our review; (2) agency officials had told us that most of what could be considered heavy equipment was in this federal supply group; and (3) our analysis of data from usaspending gov showed that about 80 percent of spending on items that may be considered heavy equipment were in this federal supply group  In meeting with officials at these departments, we learned that agencies within each department manage heavy equipment independently, so we requested current inventory data for Interior bureaus and the DOD military departments and selected three agencies that had among the largest inventories of construction and/or heavy equipment at the time, among other criteria: the U S  Air Force (Air Force); the Fish and Wildlife Service (FWS); and the National Park Service (NPS)  We then used information from our data collection effort—which included the number, type, cost, acquisition year and other data elements—to determine heavy equipment items that these agencies acquired during 2012 through 2016  We interviewed agency officials to determine what lease data were available from the three selected agencies  We assessed the reliability of these data with agency official interviews and reviewed the data for completeness and potential outliers  We determined that the data provided were sufficiently reliable for the purposes of documenting leased and rental heavy equipment  We also obtained data from GSA’s Short- Term Rental program, which had previously been limited to passenger vehicles, in part program for August 2012, when the first item was rented under this program, to February 2017, when GSA provided the data  We used these data to identify selected agencies’ rentals of heavy equipment through GSA’s Short-Term Rental program, which had previously been limited to passenger vehicles, in part program and associated costs  We interviewed officials from GSA’s Short-Term Rental program to discuss the program history as well as the reliability of their data on these rented heavy equipment items  We determined that the data were sufficiently reliable for our purposes  To determine how the three selected agencies decide whether to purchase or lease heavy equipment, we interviewed fleet and property managers at these selected agencies and asked them to describe their process for making these decisions as well as to identify relevant federal and agency regulations and guidance  We reviewed relevant federal and agency regulations and guidance regarding how agencies should make these decisions, including: Federal Acquisition Regulation, Office of Management Budget’s A-94, Guidelines and Discount Rates for Benefit- Cost Analysis of Federal Programs, Defense Federal Acquisition Regulation Supplement, Air Force Manual 65-506, Air Force Guidance Memorandum to Air Force Instruction 65-501, and Interior’s Guidance On Lease Versus Purchase Analysis and Capital Lease Determination for Equipment Leases  We also reviewed the Standards for Internal Control in the Federal Government for guidance on documentation as well as past GAO work that reviewed agencies’ lease-versus-purchase analyses  To determine whether the three selected federal agencies documented lease-versus-purchase decisions for selected acquisitions and adhered to relevant agency guidance, we selected and reviewed a non-generalizable sample of 10 heavy equipment acquisitions—two purchases each from the Air Force, FWS, and NPS, and two leases each from the Air Force and FWS  Specifically, we used inventory data obtained through our data collection effort, described above, to randomly select two heavy equipment purchases from each selected agency using the following criteria: calendar years 2012 through 2016; the two federal supply classes most prevalent in each selected agency’s heavy equipment inventory, as determined by the data collection effort described above; and for NPS and FWS, acquisition costs of over $15,000  In addition, we used lease data provided by the Air Force and FWS to randomly selected two heavy equipment leases per agency  Because NPS could not provide data on heavy equipment leases, we did not select or review any NPS lease decisions  To select the Air Force and FWS leases we used the following criteria: fiscal years 2012 through 2016; for the Air Force, which included federal supply classes in the lease data provided, the two federal supply classes most prevalent in the lease data and for FWS, which did not include federal supply class in the lease data provided, the two federal supply classes most prevalent in the purchase data; and for FWS, leases over $15,000  After selecting these acquisitions, we determined that one FWS lease and one NPS purchase we selected pre-dated Interior’s 2013 guidance on lease-versus-purchase analysis and excluded these acquisitions from our analysis for a total of eight acquisitions  In reviewing agencies’ documentation related to these acquisitions, we developed a data collection instrument to assess the extent to which agencies documented lease-versus-purchase analyses and, in the case of FWS and NPS, adhered to relevant Interior guidance  We supplemented our review of these acquisition decisions with additional information by interviewing officials at the three selected agencies and requesting additional information to understand specific circumstances surrounding each procurement  Our findings are not generalizable across the federal government or within each selected department  To determine how selected agencies manage heavy equipment utilization, we interviewed officials at the three selected agencies to identify departmental and agency-specific guidance and policies and to determine whether utilization requirements exist  We reviewed guidance identified by these officials, including Interior and Air Force vehicle guidance, both of which apply to heavy equipment, and FWS’s Heavy Equipment Utilization and Replacement Handbook  We also compared their practices to relevant Standards for Internal Control in the Federal Government  For the selected agencies with guidance for managing heavy equipment—Air Force and FWS—we reviewed the guidance to determine if and how selected agencies measured and documented heavy equipment utilization  For example, we reviewed whether selected agencies developed reports for managing heavy equipment utilization such as Air Force validation reports and FWS conditional assessment reports  We also reviewed Air Force, FWS, and NPS utilization data for heavy equipment but we did not independently calculate or verify the utilization rate for individual heavy equipment items because each heavy equipment item (backhoe, forklift, tractor, etc ,) has different utilization requirements depending on various factors such as the brand, model, or age of equipment  However, we did request information about agency procedures to develop and verify utilization rates  We assessed the reliability of the utilization data with agency official interviews and a review of the data for completeness and potential outliers  We determined that the data were sufficiently reliable for the purposes of providing evidence of utilization data collection for heavy equipment assets  We also visited the NPS George Washington Memorial Parkway to interview equipment maintenance officials regarding the procurement and management of heavy equipment and to document photos of heavy equipment  We selected this site because of its range of heavy equipment and close proximity to the Capital region  We conducted this performance audit from October 2016 to February 2018 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  In addition to the individual named above, John W  Shumann (Assistant Director), Rebecca Rygg (Analyst in Charge), Nelsie Alcoser, Melissa Bodeau, Terence Lam, Ying Long, Josh Ormond, Kelly Rubin, Crystal Wesco, and Elizabeth Wood made key contributions to this report 


Report 2: The routine activities of most federal agencies are funded annually by one or more of the regular appropriations acts  When action on the regular appropriations acts is delayed, a continuing appropriations act, also sometimes referred to as a continuing resolution or CR, may be used to provide interim budget authority  Since the federal fiscal year was shifted to October 1-September 30 beginning with FY1977, all of the regular appropriations acts have been enacted by the beginning of the fiscal year in only four instances (FY1977, FY1989, FY1995, and FY1997), although CRs were not needed for interim funding in one of these fiscal years  CRs were enacted for FY1977 but only to fund certain unauthorized programs whose funding had been excluded from the regular appropriations acts  The Antideficiency Act (31 U S C  1341-1342, 1511-1519) generally bars the obligation or expenditure of federal funds in the absence of appropriations  The interval during a fiscal year when appropriations for a particular project or activity are not enacted into law, either in the form of a regular appropriations act or a CR, is referred to as a funding gap or funding lapse   Although funding gaps may occur at the start of the fiscal year, they may also occur any time a CR expires and another CR (or the relevant regular appropriations bill) is not enacted immediately thereafter  Multiple funding gaps may occur within a fiscal year  In 1980 and early 1981, then-Attorney General Benjamin Civiletti issued opinions in two letters to the President that have been put into effect through guidance provided to federal agencies under various Office of Management and Budget (OMB) circulars clarifying the limits of federal government activities upon the occurrence of a funding gap  The Civiletti letters state that, in general, the Antideficiency Act requires that if Congress has enacted no appropriation beyond a specified period, the agency may make no contracts and obligate no further funds except as "authorized by law " In addition, because no statute generally permits federal agencies to incur obligations without appropriations for the pay of employees, the Antideficiency Act does not, in general, authorize agencies to employ the services of their employees upon a lapse in appropriations, but it does permit agencies to fulfill certain legal obligations connected with the orderly termination of agency operations  The second letter, from January 1981, discusses the more complex problem of interpretation presented with respect to obligational authorities that are "authorized by law" but not manifested in appropriations acts  In a few cases, Congress has expressly authorized agencies to incur obligations without regard to available appropriations  More often, it is necessary to inquire under what circumstances statutes that vest particular functions in government agencies imply authority to create obligations for the accomplishment of those functions despite a lack of current appropriations  It is under this guidance that exceptions may be made for activities involving "the safety of human life or the protection of property " As a consequence of these guidelines, when a funding gap occurs, executive agencies begin a shutdown of the affected projects and activities, including the furlough of non-excepted personnel  The general practice of the federal government after the shutdown has ended has been to retroactively pay furloughed employees for the time they missed, as well as employees who were required to come to work  Under current practice, although a shutdown may be the result of a funding gap, the two events should be distinguished  This is because a funding gap may result in a shutdown of all affected projects or activities in some instances but not in others  For example, when a funding gap is of a short duration, agencies may not have enough time to complete a shutdown of affected projects and activities before funding is restored  In addition, the Office of Management and Budget has previously indicated that a shutdown of agency operations within the first day of a funding gap may be postponed if it appears that an additional CR or regular appropriations act is likely to be enacted that same day  To avoid funding gaps, proposals have previously been offered to establish an "automatic continuing resolution" (ACR) that would provide a fallback source of funding authority for activities, at a specified formula or level, in the event that timely enactment of appropriations is disrupted  Funding would become available automatically and remain available as long as needed so that a funding gap would not occur  Although the House and Senate have considered ACR proposals in the past, none has been enacted into law on a permanent basis  As illustrated in Table 1 , there have been 20 funding gaps since FY1977  The enactment of a CR on the day after the budget authority in the previous CR expired, which has occurred in several instances, is not counted in this report as involving a funding gap because there was no full day for which there was no available budget authority  For example, between FY2000 and FY2018, "next-day" CRs were enacted on 21 occasions  A majority of the funding gaps occurred between FY1977 and FY1995  During this period of 19 fiscal years, 15 funding gaps occurred  Multiple funding gaps have occurred during a single fiscal year in four instances: (1) three gaps covering a total of 28 days in FY1978, (2) two gaps covering a total of four days in FY1983, (3) two gaps covering a total of three days in FY1985, and (4) two gaps covering a total of 26 days in FY1996  Seven of the funding gaps commenced with the beginning of the fiscal year on October 1  The remaining 13 funding gaps occurred at least more than one day after the fiscal year had begun  Ten of the funding gaps ended in October, four ended in November, three ended in December, and three ended in January  Funding gaps have ranged in duration from 1 to 34 full days  Six of the 8 lengthiest funding gaps, lasting between 8 days and 17 days, occurred between FY1977 and FY1980—before the Civiletti opinions were issued and for which there was no government shutdown  Between 1980 and 1990, the duration of funding gaps was generally shorter, typically ranging from one day to three days  In most cases these occurred over a weekend with only limited impact in the form of government shutdown activities  Notably, many of the funding gaps that have occurred since FY1977 do not appear to have resulted in a "shutdown " Prior to the issuance of the Civiletti opinions, the expectation was that agencies would not shut down during a funding gap  Continuing resolutions typically included language ratifying obligations incurred prior to the resolution's enactment  For example, the first CR for FY1980 provided All obligations incurred in anticipation of the appropriations and authority provided in this joint resolution are hereby ratified and confirmed if otherwise in accordance with the provisions of the joint resolution  Thus, while agencies tended to curtail some operations in response to a funding gap, they often "continued to operate during periods of expired funding " In addition, some of the funding gaps after the Civiletti opinions did not result in a completion of shutdown operations due to both a funding gap's short duration and an expectation that appropriations would soon be enacted  For example, during the three-day FY1984 funding gap, "no disruption to government services" reportedly occurred, due to both the three-day holiday weekend and the expectation that the President would soon sign into law appropriations passed by the House and Senate during that weekend  Some of the funding gaps during this period, however, did have a broader impact on affected government operations, even if only for a matter of hours  For example, in response to the one-day funding gap that occurred on October 4, 1984, a furlough of non-excepted personnel for part of that day was reportedly implemented  It should be noted that when most of these funding gaps occurred, one or more regular appropriations measures had been enacted, so any effects were not felt government-wide  For example, the three funding gaps in FY1978 were limited to activities funded in the Departments of Labor and Health, Education, and Welfare Appropriations Act  Similarly, 8 of 13 regular appropriations acts had been enacted prior to the three-day funding gap in FY1984  The most recent funding gaps—two in FY1996, one in FY2014, one in FY2018, and one in FY2019—all resulted in widespread cessation of non-excepted activities and furlough of associated personnel  The legislative history of these funding gaps are summarized below  The two FY1996 funding gaps occurred between November 13 and 19, 1995, and December 15, 1995, through January 6, 1996  The chronology of regular and continuing appropriations enacted during that fiscal year is illustrated in Figure 1   In the lead-up to the first funding gap, only 3 out of the 13 regular appropriations acts had been signed into law, and budget authority, which had been provided by a CR since the start of the fiscal year, expired at the end of the day on November 13  On this same day, President Clinton vetoed a CR that would have extended budget authority through December 1, 1995, because of the Medicare premium increases contained within the measure  The ensuing funding gap reportedly resulted in the furlough of an estimated 800,000 federal workers  After five days, a deal was reached to end the shutdown and extend funding through December 15  Agencies that had been zeroed out in pending appropriations bills were funded at a rate of 75% of FY1995 budget authority  All other agencies were funded at the lower of the House- or Senate-passed level of funding contained in the FY1996 full-year appropriations bills  The CR also included an agreement between President Clinton and Congress regarding future negotiations to lower the budget deficit within seven years  During the first FY1996 funding gap and prior to the second one, an additional four regular appropriations measures were enacted, and three others were vetoed  The negotiations on the six remaining bills were unsuccessful before the budget authority provided in the CR expired at the end of the day on December 15, 1995  Reportedly, about 280,000 executive branch employees were furloughed during the funding gap between December 15, 1995, and January 6, 1996  A CR to provide benefits for veterans and welfare recipients and to keep the District of Columbia government operating was passed and signed into law on December 22, 1995  The shutdown officially ended on January 6, 1996, when the first of a series of CRs to reopen affected agencies and provide budget authority through January 26, 1996, was enacted  This funding gap commenced at the beginning of FY2014 on October 1, 2013  None of the 12 regular appropriations bills for FY2014 was enacted prior to the beginning of the funding gap  Nor had a CR to provide budget authority for the projects and activities covered by those 12 bills been enacted  On September 30, however, an ACR was enacted to cover FY2014 pay and allowances for (1) certain members of the Armed Forces, (2) certain Department of Defense (DOD) civilian personnel, and (3) other specified DOD and Department of Homeland Security contractors ( H R  3210 ; P L  113-39 , 113 th Congress)  At the beginning of this 16-day funding gap, more than 800,000 executive branch employees were reportedly furloughed  This number was reduced during the course of the funding gap due to the implementation of P L  113-39 and other redeterminations of whether certain employees were excepted from furlough  Prior to the resolution of the funding gap, congressional action on appropriations was generally limited to a number of narrow CRs to provide funding for certain programs or classes of individuals  Of these, only the Department of Defense Survivor Benefits Continuing Appropriations Resolution of 2014 ( H J Res  91 ; P L  113-44 ) was enacted into law  On October 16, 2013, the Senate passed H R  2775 , which had been previously passed by the House on September 12, with an amendment  This amendment, in part, provided interim continuing appropriations for the previous year's programs and activities through January 15, 2014  Later that same day, the House agreed to the Senate amendment to H R  2775   The CR was signed into law on October 17, 2013 ( P L  113-46 ), thus ending the funding gap  At the beginning of FY2018, none of the 12 regular appropriations bills had been enacted, so the federal government operated under a series of CRs  The first, P L  115-56 , provided government-wide funding through December 8, 2017  The second, P L  115-90 , extended funding through December 22, and the third, P L  115-96 , extended it through January 19, 2018  In the absence of agreement on legislation that would further extend the period of these CRs, however, a funding gap began with the expiration of P L  115-96 at midnight on January 19  A furlough of federal personnel began over the weekend and continued through Monday of the next week, ending with enactment of a fourth CR, P L  115-120 , on January 22  At the beginning of FY2019, 5 of the 12 regular appropriations bills had been enacted in two consolidated appropriations bills  The remaining seven regular appropriations bills were funded under two CRs  The first CR, P L  115-245 , provided funding through December 7, 2018  The second CR, P L  115-298 , extended funding through December 21, 2018  When no agreement was reached on legislation to further extend the period of these CRs, a funding gap began with the expiration of P L  115-298 at midnight on December 21, 2018  Because of this funding gap, federal agencies and activities funded in these seven regular appropriations bills were required to shut down  The funding gap ended when a CR, P L  116-5 , was signed into law on January 25, 2019, which ended the partial government shutdown and allowed government departments and agencies to reopen  The funding gap lasted 34 full days 

ground_truth: The Antideficiency Act (31 U.S.C. 1341-1342, 1511-1519) generally bars the obligation of funds in the absence of appropriations. Exceptions are made under the act, including for activities involving "the safety of human life or the protection of property." The interval during the fiscal year when appropriations for a particular project or activity are not enacted into law, either in the form of a regular appropriations act or a continuing resolution (CR), is referred to as a funding gap or funding lapse. Although funding gaps may occur at the start of the fiscal year, they may also occur any time a CR expires and another CR (or the regular appropriations bill) is not enacted immediately thereafter. Multiple funding gaps may occur within a fiscal year. When a funding gap occurs, federal agencies are generally required to begin a shutdown of the affected projects and activities, which includes the prompt furlough of non-excepted personnel. The general practice of the federal government after the shutdown has ended has been to retroactively pay furloughed employees for the time they missed, as well as employees who were required to come to work. Although a shutdown may be the result of a funding gap, the two events should be distinguished. This is because a funding gap may result in a total shutdown of all affected projects or activities in some instances but not others. For example, when funding gaps are of a short duration, agencies may not have enough time to complete a shutdown of affected projects and activities before funding is restored. In addition, the Office of Management and Budget has previously indicated that a shutdown of agency operations within the first day of the funding gap may be postponed if a resolution appears to be imminent. Since FY1977, 20 funding gaps occurred, ranging in duration from 1 day to 34 full days. These funding gaps are listed in Table 1. About half of these funding gaps were brief (i.e., three days or less in duration). Notably, many of the funding gaps do not appear to have resulted in a "shutdown." Prior to the issuance of the opinions in 1980 and early 1981 by then-Attorney General Benjamin Civiletti, while agencies tended to curtail some operations in response to a funding gap, they often "continued to operate during periods of expired funding." In addition, some of the funding gaps after the Civiletti opinions did not result in a completion of shutdown operations due to both the funding gap's short duration and an expectation that appropriations would soon be enacted. Some of the funding gaps during this period, however, did have a broader impact on affected government operations, even if only for a matter of hours. Two funding gaps occurred in FY1996, amounting to 5 days and 21 days. The chronology of regular and continuing appropriations enacted during FY1996 is illustrated in Figure 1. At the beginning of FY2014 (October 1, 2013), none of the regular appropriations bills had been enacted, so a government-wide funding gap occurred. It concluded on October 17, 2013, after lasting 16 full days. During FY2018, there was a funding gap when a CR covering all of the regular appropriations bills expired on January 19, 2018. It concluded on January 22, 2018, after lasting two full days. The most recent funding gap occurred during FY2019, when a CR covering federal agencies and activities funded in 7 of the 12 regular appropriations bills expired on December 21, 2018. It concluded on January 25, 2019, after lasting 34 full days. For a general discussion of federal government shutdowns, see CRS Report RL34680, Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by Clinton T. Brass.