Part 35 - Research and Development

Contracting

35.000 Scope of part.

35.001 Definitions.

35.002 General.

35.003 Policy.

35.004 Publicizing requirements and expanding research and development sources.

35.005 Work statement.

35.006 Contracting methods and contract type.

35.007 Solicitations.

35.008 Evaluation for award.

35.009 Subcontracting research and development effort.

35.010 Scientific and technical reports.

35.011 Data.

35.012 Patent rights.

35.013 Insurance.

35.014 Government property and title.

35.015 Contracts for research with educational institutions and nonprofit organizations.

35.016 Broad agency announcement.

35.017 Federally Funded Research and Development Centers.

35.017-1 Sponsoring agreements.

35.017-2 Establishing or changing an FFRDC.

35.017-3 Using an FFRDC.

35.017-4 Reviewing FFRDC’s.

35.017-5 Terminating an FFRDC.

35.017-6 Master list of FFRDC’s.

35.017-7 Limitation on the creation of new FFRDC’s.
Parent topic: Federal Acquisition Regulation

35.000 Scope of part.

(a) This part prescribes policies and procedures of special application to research and development

(R&D) contracting.

(b) R&D integral to acquisition of major systems is covered in part 34. Independent research and

development (IR&D) is covered at 31.205-18.

35.001 Definitions.

Applied research means the effort that (a) normally follows basic research, but may not be severable

from the related basic research; (b) attempts to determine and exploit the potential of scientific

discoveries or improvements in technology, materials, processes, methods, devices, or techniques;

and (c) attempts to advance the state of the art. When being used by contractors in cost principle

applications, this term does not include efforts whose principal aim is the design, development, or

testing of specific items or services to be considered for sale; these efforts are within the definition

of "development," given below.

Development, as used in this part, means the systematic use of scientific and technical knowledge in

the design, development, testing, or evaluation of a potential new product or service (or of an

improvement in an existing product or service) to meet specific performance requirements or

objectives. It includes the functions of design engineering, prototyping, and engineering testing; it

excludes subcontracted technical effort that is for the sole purpose of developing an additional

source for an existing product.

Recoupment, as used in this part, means the recovery by the Government of Government-funded

nonrecurring costs from contractors that sell, lease, or license the resulting products or technology

to buyers other than the Federal Government.

35.002 General.

The primary purpose of contracted R&D programs is to advance scientific and technical knowledge

and apply that knowledge to the extent necessary to achieve agency and national goals. Unlike

contracts for supplies and services, most R&D contracts are directed toward objectives for which the

work or methods cannot be precisely described in advance. It is difficult to judge the probabilities of

success or required effort for technical approaches, some of which offer little or no early assurance

of full success. The contracting process shall be used to encourage the best sources from the

scientific and industrial community to become involved in the program and must provide an

environment in which the work can be pursued with reasonable flexibility and minimum

administrative burden.
35.003 Policy.

(a) Use of contracts. Contracts shall be used only when the principal purpose is the acquisition of

supplies or services for the direct benefit or use of the Federal Government. Grants or cooperative

agreements should be used when the principal purpose of the transaction is to stimulate or support

research and development for another public purpose.

(b) Cost sharing. Cost sharing policies (which are not otherwise required by law) under Government

contracts shall be in accordance with 16.303, 42.707(a) and agency procedures.

(c) Recoupment. Recoupment not otherwise required by law shall be in accordance with agency

procedures.

35.004 Publicizing requirements and expanding research

and development sources.

(a) In order to obtain a broad base of the best contractor sources from the scientific and industrial

community, agencies must, in addition to following the requirements of part 5, continually search

for and develop information on sources (including small business concerns) competent to perform

R&D work. These efforts should include-

(1) Early identification and publication of agency R&D needs and requirements, including

publicizing through the Governmentwide point of entry (GPE) (see part 5);

(2) Cooperation among technical personnel, contracting officers, and Government small business

personnel early in the acquisition process; and

(3) Providing agency R&D points of contact for potential sources.

(b) See subpart 9.7 for information regarding R&D pools and subpart 9.6 for teaming

arrangements.

35.005 Work statement.

(a) A clear and complete work statement concerning the area of exploration (for basic research) or

the end objectives (for development and applied research) is essential. The work statement should

allow contractors freedom to exercise innovation and creativity. Work statements must be

individually tailored by technical and contracting personnel to attain the desired degree of flexibility

for contractor creativity and the objectives of the R&D.

(b) In basic research the emphasis is on achieving specified objectives and knowledge rather than on

achieving predetermined end results prescribed in a statement of specific performance

characteristics. This emphasis applies particularly during the early or conceptual phases of the R&D

effort.

(c) In reviewing work statements, contracting officers should ensure that language suitable for a

level-of-effort approach, which requires the furnishing of technical effort and a report on the results,
is not intermingled with language suitable for a task-completion approach, which often requires the

development of a tangible end item designed to achieve specific performance characteristics. The

wording of the work statement should also be consistent with the type and form of contract to be

negotiated (see 16.207 and 16.306(d)). For example, the work statement for a cost-reimbursement

contract promising the contractor’s best efforts for a fixed term would be phrased differently than a

work statement for a cost-reimbursement completion contract promising the contractor’s best

efforts for a defined task. Differences between work statements for fixed-price contracts and costreimbursement contracts should be even clearer.

(d) In preparing work statements, technical and contracting personnel shall consider and, as

appropriate, provide in the solicitation-

(1) A statement of the area of exploration, tasks to be performed, and objectives of the research or

development effort;

(2) Background information helpful to a clear understanding of the objective or requirement (e.g.,

any known phenomena, techniques, methodology, or results of related work);

(3) Information on factors such as personnel, environment, and interfaces that may constrain the

results of the effort;

(4) Reporting requirements and information on any additional items that the contractor is required

to furnish (at specified intervals) as the work progresses;

(5) The type and form of contract contemplated by the Government and, for level-of-effort work

statements, an estimate of applicable professional and technical effort involved; and

(6) Any other considerations peculiar to the work to be performed; for example, any design-to-cost

requirements.

35.006 Contracting methods and contract type.

(a) In R&D acquisitions, the precise specifications necessary for sealed bidding are generally not

available, thus making negotiation necessary. However, the use of negotiation in R&D contracting

does not change the obligation to comply with part 6.

(b) Selecting the appropriate contract type is the responsibility of the contracting officer. However,

because of the importance of technical considerations in R&D, the choice of contract type should be

made after obtaining the recommendations of technical personnel. Although the Government

ordinarily prefers fixed-price arrangements in contracting, this preference applies in R&D

contracting only to the extent that goals, objectives, specifications, and cost estimates are sufficient

to permit such a preference. The precision with which the goals, performance objectives, and

specifications for the work can be defined will largely determine the type of contract employed. The

contract type must be selected to fit the work required.

(c) Because the absence of precise specifications and difficulties in estimating costs with accuracy

(resulting in a lack of confidence in cost estimates) normally precludes using fixed-price contracting

for R&D, the use of cost-reimbursement contracts is usually appropriate (see subpart 16.3). The

nature of development work often requires a cost-reimbursement completion arrangement (see

16.306(d)). When the use of cost and performance incentives is desirable and practicable, fixed-price
incentive and cost-plus-incentive-fee contracts should be considered in that order of preference.

(d) When levels of effort can be specified in advance, a short-duration fixed-price contract may be

useful for developing system design concepts, resolving potential problems, and reducing

Government risks. Fixed-price contracting may also be used in minor projects when the objectives of

the research are well defined and there is sufficient confidence in the cost estimate for price

negotiations. (See 16.207.)

(e) Projects having production requirements as a follow-on to R&D efforts normally should progress

from cost-reimbursement contracts to fixed-price contracts as designs become more firmly

established, risks are reduced, and production tooling, equipment, and processes are developed and

proven. When possible, a final commitment to undertake specific product development and testing

should be avoided until-

(1) Preliminary exploration and studies have indicated a high degree of probability that development

is feasible and

(2) The Government has determined both its minimum requirements and desired objectives for

product performance and schedule completion.

35.007 Solicitations.

(a) The submission and subsequent evaluation of an inordinate number of R&D proposals from

sources lacking appropriate qualifications is costly and time-consuming to both industry and the

Government. Therefore, contracting officers should initially distribute solicitations only to sources

technically qualified to perform research or development in the specific field of science or

technology involved. Cognizant technical personnel should recommend potential sources that appear

qualified, as a result of-

(1) Present and past performance of similar work;

(2) Professional stature and reputation;

(3) Relative position in a particular field of endeavor;

(4) Ability to acquire and retain the professional and technical capability, including facilities,

required to perform the work; and

(5) Other relevant factors.

(b) Proposals generally shall be solicited from technically qualified sources, including sources that

become known as a result of synopses or other means of publicizing requirements. If it is not

practicable to initially solicit all apparently qualified sources, only a reasonable number need be

solicited. In the interest of competition, contracting officers shall furnish copies of the solicitation to

other apparently qualified sources.

(c) Solicitations shall require offerors to describe their technical and management approach, identify

technical uncertainties, and make specific proposals for the resolution of any uncertainties. The

solicitation should require offerors to include in the proposal any planned subcontracting of

scientific or technical work (see 35.009).
(d) Solicitations may require that proposals be organized so that the technical portions can be

efficiently evaluated by technical personnel (see 15.204-5(b)). Solicitation and evaluation of

proposals should be planned to minimize offerors’ and Government expense.

(e) R&D solicitations should contain evaluation factors to be used to determine the most technically

competent (see 15.304), such as-

(1) The offeror’s understanding of the scope of the work;

(2) The approach proposed to accomplish the scientific and technical objectives of the contract or

the merit of the ideas or concepts proposed;

(3) The availability and competence of experienced engineering, scientific, or other technical

personnel;

(4) The offeror’s experience;

(5) Pertinent novel ideas in the specific branch of science and technology involved; and

(6) The availability, from any source, of necessary research, test, laboratory, or shop facilities.

(f) In addition to evaluation factors for technical competence, the contracting officer shall consider,

as appropriate, management capability (including cost management techniques), experience and

past performance, subcontracting practices, and any other significant evaluation criteria (e.g.,

unrealistically low cost estimates in proposals for cost-reimbursement or fixed-price incentive

contracts). Although cost or price is not normally the controlling factor in selecting a contractor to

perform R&D, it should not be disregarded in arriving at a selection that best satisfies the

Government’s requirement at a fair and reasonable cost.

(g) The contracting officer should ensure that potential offerors fully understand the details of the

work, especially the Government interpretation of the work statement. If the effort is complex, the

contracting officer should provide potential offerors an opportunity to comment on the details of the

requirements as contained in the work statement, the contract Schedule, and any related

specifications. This may be done at a preproposal conference (see 15.201).

(h) If it is appropriate to do so, solicitations should permit offerors to propose an alternative contract

type (see 16.103).

(i) In circumstances when a concern has a new idea or product to discuss that incorporates the

results of independent R&D work funded by the concern in the private sector and is of interest to the

Government, there should be no hesitancy to discuss it; however, the concern should be warned that

the Government will not be obligated by the discussion. Under such circumstances, it may be

appropriate to negotiate directly with the concern without competition. Also, see subpart 15.6

concerning unsolicited proposals.

(j) The Government may issue an exploratory request to determine the existence of ideas or prior

work in a specific field of research. Any such request shall clearly state that it does not impose any

obligation on the Government or signify a firm intention to enter into a contract.
35.008 Evaluation for award.

(a) Generally, an R&D contract should be awarded to that organization, including any educational

institution, that proposes the best ideas or concepts and has the highest competence in the specific

field of science or technology involved. However, an award should not be made to obtain capabilities

that exceed those needed for successful performance of the work.

(b) In R&D contracting, precise specifications are ordinarily not available. The contracting officer

should therefore take special care in reviewing the solicitation evaluation factors to assure that they

are properly presented and consistent with the solicitation.

(c) When a small business concern would otherwise be selected for award but is considered not

responsible, the SBA Certificate of Competency procedure shall be followed (see subpart 19.6).

(d) The contracting officer should use the procedures in subpart 15.5 to notify and debrief offerors.

(e) It is important to evaluate a proposed contractor’s cost or price estimate, not only to determine

whether the estimate is reasonable but also to provide valuable insight into the offeror’s

understanding of the project, perception of risks, and ability to organize and perform the work. Cost

or price analysis, as appropriate (see 15.404-1(c)), is a useful tool.

35.009 Subcontracting research and development effort.

Since the selection of R&D contractors is substantially based on the best scientific and technological

sources, it is important that the contractor not subcontract technical or scientific work without the

contracting officer’s advance knowledge. During the negotiation of a cost-reimbursement R&D

contract, the contracting officer shall obtain complete information concerning the contractor’s plans

for subcontracting any portion of the experimental, research, or development effort (see also

35.007(c)). Also, when negotiating a fixed-price contract, the contracting officer should evaluate this

information and may obtain an agreement that protects the Government’s interests. The clause at

52.244-2, Subcontracts, prescribed for certain types of contracts at 44.204(a), requires the

contracting officer’s prior approval for the placement of certain subcontracts.

35.010 Scientific and technical reports.

(a) R&D contracts shall require contractors to furnish scientific and technical reports, consistent

with the objectives of the effort involved, as a permanent record of the work accomplished under the

contract.

(b) Agencies should make R&D contract results available to other Government activities and the

private sector. Contracting officers shall follow agency regulations regarding such matters as

national security, protection of data, and new-technology dissemination policy. Reports should be

sent to theNational Technical Information Service (NTIS) 5285 Port Royal Road Springfield, VA 22161.

When agencies require that completed reports be covered by a report documentation page,
Standard Form (SF) 298, Report Documentation Page, the contractor should submit a copy with the

report.

35.011 Data.

(a) R&D contracts shall specify the technical data to be delivered under the contract, since the data

clauses required by part 27 do not require the delivery of any such data.

(b) In planning a developmental program when subsequent production contracts are contemplated,

consideration should be given to the need and time required to obtain a technical package (plans,

drawings, specifications, and other descriptive information) that can be used to achieve competition

in production contracts. In some situations, the developmental contractor may be in the best position

to produce such a technical package.

35.012 Patent rights.

For a discussion of patent rights, see agency regulations and part 27.

35.013 Insurance.

Nonprofit, educational, or State institutions performing cost-reimbursement contracts often do not

carry insurance. They may claim immunity from liability for torts, or, as State institutions, they may

be prohibited by State law from expending funds for insurance. When this is the case, see 28.311 for

appropriate clause coverage.

35.014 Government property and title.

(a) The requirements in part 45 for establishing and maintaining control over Government property

apply to all R&D contracts.

(b) In implementing 31 U.S.C.6306, and unless an agency head provides otherwise, the policies in

paragraphs (1) through (4) following, regarding title to equipment (and other tangible personal

property) purchased by the contractor using Government funds provided for the conduct of basic or

applied scientific research, apply to contracts with nonprofit institutions of higher education and

nonprofit organizations whose primary purpose is the conduct of scientific research:

(1) If the contractor obtains the contracting officer’s advance approval, the contractor shall

automatically acquire and retain title to any item of equipment costing less than $5,000 (or a lesser

amount established by agency regulations) acquired on a reimbursable basis.

(2) If purchased equipment costs $5,000 (or a lesser amount established by agency regulations) or

more, and as the parties specifically agree in the contract, title may-

(i) Vest in the contractor upon acquisition without further obligation to the Government;
(ii) Vest in the contractor, subject to the Government’s right to direct transfer of the title to the

Government or to a third party within 12 months after the contract’s completion or termination

(transfer of title to the Government or third party shall not be the basis for any claim by the

contractor); or

(iii) Vest in the Government, if the contracting officer determines that vesting of title in the

contractor would not further the objectives of the agency’s research program.

(3) If title to equipment is vested in the contractor, depreciation, amortization, or use charges are

not allowable with respect to that equipment under any existing or future Government contract or

subcontract.

(4) If the contract is performed at a Government installation and there is a continuing need for the

equipment following contract completion, title need not be transferred to the contractor.

(c) The absence of an agreement covering title to equipment acquired by the contractor with

Government funds that cost $1,000 or more does not limit an agency’s right to act to vest title in a

contractor as authorized by 31 U.S.C.6306.

(d)

(1) Vesting title under paragraph (b) of this section is subject to civil rights legislation,

42 U.S.C.2000d. Before title is vested, the contractor must agree thatNo person in the United States or its outlying areas shall, on the ground of race, color, or national

origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to

discrimination under this contemplated financial assistance (title to equipment).

(2) By signing the contract, the contractor accepts and agrees to comply with this requirement.

(e) The policies in paragraphs (b)(1) through (b)(3) and paragraph (d) of this section are

implemented in the Government Property clauses.

35.015 Contracts for research with educational institutions

and nonprofit organizations.

(a) General.

(1) When the R&D work is not defined precisely and the contract states only a period during which

work is conducted (that is, a specific time for achievement of results is not required), research

contracts with educational institutions and nonprofit organizations shall-

(i) State that the contractor bears primary responsibility for the research;

(ii) Give-

(A) The name of the principal investigator (or project leader), if the decision to contract is based on

that particular individual’s research effort and management capabilities; and
(B) The contractor’s estimate of the amount of time that individual will devote to the work;

(iii) Provide that the named individual shall be closely involved and continuously responsible for the

conduct of the work;

(iv) Provide that the contractor must obtain the contracting officer’s approval to change the

principal investigator (or project leader);

(v) Require that the contractor advise the contracting officer if the principal investigator (or project

leader) will, or plans to, devote substantially less effort to the work than anticipated; and

(vi) Require that the contractor obtain the contracting officer’s approval to change the phenomenon

under study, the stated objectives of the research, or the methodology.

(2) If a research contract does provide precise objectives or a specific date for achievement of

results, the contracting officer may include in the contract the requirements set forth in paragraph

(a)(1) of this section, if it is necessary for the Government to exercise oversight and approval over

the avenues of approach, methods, or schedule of work.

(b) Basic agreements.

(1) A basic agreement should be negotiated if the number of contracts warrants such an agreement

(see 16.702). Basic agreements should be reviewed and updated at least annually.

(2) To promote uniformity and consistency in dealing with educational institutions and nonprofit

organizations, agencies are encouraged to use basic agreements of other agencies.

35.016 Broad agency announcement.

(a) General. This paragraph prescribes procedures for the use of the broad agency announcement

(BAA) with Peer or Scientific Review (see 6.102(d)(2)) for the acquisition of basic and applied

research and that part of development not related to the development of a specific system or

hardware procurement. BAA’s may be used by agencies to fulfill their requirements for scientific

study and experimentation directed toward advancing the state-of-the-art or increasing knowledge

or understanding rather than focusing on a specific system or hardware solution. The BAA technique

shall only be used when meaningful proposals with varying technical/scientific approaches can be

reasonably anticipated.

(b) The BAA, together with any supporting documents, shall-

(1) Describe the agency’s research interest, either for an individual program requirement or for

broadly defined areas of interest covering the full range of the agency’s requirements;

(2) Describe the criteria for selecting the proposals, their relative importance, and the method of

evaluation;

(3) Specify the period of time during which proposals submitted in response to the BAA will be

accepted; and

(4) Contain instructions for the preparation and submission of proposals.
(c) The availability of the BAA must be publicized through the Governmentwide point of entry (GPE)

and, if authorized pursuant to subpart 5.5, may also be published in noted scientific, technical, or

engineering periodicals. The notice must be published no less frequently than annually.

(d) Proposals received as a result of the BAA shall be evaluated in accordance with evaluation

criteria specified therein through a peer or scientific review process. Written evaluation reports on

individual proposals will be necessary but proposals need not be evaluated against each other since

they are not submitted in accordance with a common work statement.

(e) The primary basis for selecting proposals for acceptance shall be technical, importance to agency

programs, and fund availability. Cost realism and reasonableness shall also be considered to the

extent appropriate.

(f) Synopsis under subpart 5.2, Synopses of Proposed Contract Actions, of individual contract

actions based upon proposals received under the BAA is not required. The notice published pursuant

to paragraph (c) of this section fulfills the synopsis requirement.

35.017 Federally Funded Research and Development

Centers.

(a) Policy.

(1) This section sets forth Federal policy regarding the establishment, use, review, and termination

of Federally Funded Research and Development Centers (FFRDC’s) and related sponsoring

agreements.

(2) An FFRDC meets some special long-term research or development need which cannot be met as

effectively by existing in-house or contractor resources. FFRDC’s enable agencies to use private

sector resources to accomplish tasks that are integral to the mission and operation of the sponsoring

agency. An FFRDC, in order to discharge its responsibilities to the sponsoring agency, has access,

beyond that which is common to the normal contractual relationship, to Government and supplier

data, including sensitive and proprietary data, and to employees and installations equipment and

real property. The FFRDC is required to conduct its business in a manner befitting its special

relationship with the Government, to operate in the public interest with objectivity and

independence, to be free from organizational conflicts of interest, and to have full disclosure of its

affairs to the sponsoring agency. It is not the Government’s intent that an FFRDC use its privileged

information or access to installations equipment and real property to compete with the private

sector. However, an FFRDC may perform work for other than the sponsoring agency under the

Economy Act, or other applicable legislation, when the work is not otherwise available from the

private sector.

(3) FFRDC’s are operated, managed, and/or administered by either a university or consortium of

universities, other not-for-profit or nonprofit organization, or an industrial firm, as an autonomous

organization or as an identifiable separate operating unit of a parent organization.

(4) Long-term relationships between the Government and FFRDC’s are encouraged in order to

provide the continuity that will attract high-quality personnel to the FFRDC. This relationship should

be of a type to encourage the FFRDC to maintain currency in its field(s) of expertise, maintain its

objectivity and independence, preserve its familiarity with the needs of its sponsor(s), and provide a
quick response capability.

(b) Definitions. As used in this sectionNonsponsor means any other organization, in or outside of the Federal Government, which funds

specific work to be performed by the FFRDC and is not a party to the sponsoring agreement.

Primary sponsor means the lead agency responsible for managing, administering, or monitoring

overall use of the FFRDC under a multiple sponsorship agreement.

Sponsor means the executive agency which manages, administers, monitors, funds, and is

responsible for the overall use of an FFRDC. Multiple agency sponsorship is possible as long as one

agency agrees to act as the "primary sponsor." In the event of multiple sponsors, "sponsor" refers to

the primary sponsor.

35.017-1 Sponsoring agreements.

(a) In order to facilitate a long-term relationship between the Government and an FFRDC, establish

the FFRDC’s mission, and ensure a periodic reevaluation of the FFRDC, a written agreement of

sponsorship between the Government and the FFRDC shall be prepared when the FFRDC is

established. The sponsoring agreement may take various forms; it 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. Notwithstanding its form, the

sponsoring agreement shall be clearly designated as such by the sponsor.

(b) While the specific content of any sponsoring agreement will vary depending on the situation, the

agreement shall contain, as a minimum, the requirements of paragraph (c) of this subsection. The

requirements for, and the contents of, sponsoring agreements may be as further specified in

sponsoring agencies’ policies and procedures.

(c) As a minimum, the following requirements must be addressed in either a sponsoring agreement

or sponsoring agencies’ policies and procedures:

(1) A statement of the purpose and mission of the FFRDC.

(2) Provisions for the orderly termination or nonrenewal of the agreement, disposal of assets, and

settlement of liabilities. The responsibility for capitalization of an FFRDC must be defined in such a

manner that ownership of assets may be readily and equitably determined upon termination of the

FFRDC’s relationship with its sponsor(s).

(3) A provision for the identification of retained earnings (reserves) and the development of a plan

for their use and disposition.

(4) A prohibition against the FFRDC competing with any non-FFRDC concern in response to a

Federal agency request for proposal for other than the operation of an FFRDC. This prohibition is

not required to be applied to any parent organization or other subsidiary of the parent organization

in its non-FFRDC operations. Requests for information, qualifications or capabilities can be

answered unless otherwise restricted by the sponsor.

(5) A delineation of whether or not the FFRDC may accept work from other than the sponsor(s). If

nonsponsor work can be accepted, a delineation of the procedures to be followed, along with any
limitations as to the nonsponsors from which work can be accepted (other Federal agencies, State or

local governments, nonprofit or profit organizations, etc.).

(d) The sponsoring agreement or sponsoring agencies’ policies and procedures may also contain, as

appropriate, other provisions, such as identification of-

(1) Any cost elements which will require advance agreement if cost-type contracts are used; and

(2) Considerations which will affect negotiation of fees where payment of fees is determined by the

sponsor(s) to be appropriate.

(e) The term of the agreement will not exceed 5 years, but can be renewed, as a result of periodic

review, in increments not to exceed 5 years.

35.017-2 Establishing or changing an FFRDC.

To establish an FFRDC, or change its basic purpose and mission, the sponsor shall ensure the

following:

(a) Existing alternative sources for satisfying agency requirements cannot effectively meet the

special research or development needs.

(b) The notices required for publication (see 5.205(b)) are placed as required.

(c) There is sufficient Government expertise available to adequately and objectively evaluate the

work to be performed by the FFRDC.

(d) The Executive Office of the President, Office of Science and Technology Policy, Washington, DC

20506, is notified.

(e) Controls are established to ensure that the costs of the services being provided to the

Government are reasonable.

(f) The basic purpose and mission of the FFRDC is stated clearly enough to enable differentiation

between work which should be performed by the FFRDC and that which should be performed by

non-FFRDC’s.

(g) A reasonable continuity in the level of support to the FFRDC is maintained, consistent with the

agency’s need for the FFRDC and the terms of the sponsoring agreement.

(h) The FFRDC is operated, managed, or administered by an autonomous organization or as an

identifiably separate operating unit of a parent organization, and is required to operate in the public

interest, free from organizational conflict of interest, and to disclose its affairs (as an FFRDC) to the

primary sponsor.

(i) Quantity production or manufacturing is not performed unless authorized by legislation.

(j) Approval is received from the head of the sponsoring agency.
35.017-3 Using an FFRDC.

(a) All work placed with the FFRDC must be within the purpose, mission, general scope of effort, or

special competency of the FFRDC.

(b) Where the use of the FFRDC by a nonsponsor is permitted by the sponsor, the sponsor shall be

responsible for compliance with paragraph (a) of this subsection.

(1) The nonsponsoring agency shall provide the documentation required by 17.503(e) to the

sponsoring agency.

(2) When a D&F is required pursuant to 17.502-2(c), the nonsponsoring agency shall prepare the

D&F and provide the documentation required by 17.503(e) to the sponsoring agency.

(3) When permitted by the sponsor, a Federal agency may contract directly with the FFRDC, in

which case that Federal agency is responsible for compliance with part 6.

35.017-4 Reviewing FFRDC’s.

(a) The sponsor, prior to extending the contract or agreement with an FFRDC, shall conduct a

comprehensive review of the use and need for the FFRDC. The review will be coordinated with any

co-sponsors and may be performed in conjunction with the budget process. If the sponsor

determines that its sponsorship is no longer appropriate, it shall apprise other agencies which use

the FFRDC of the determination and afford them an opportunity to assume sponsorship.

(b) Approval to continue or terminate the sponsorship shall rest with the head of the sponsoring

agency. This determination shall be based upon the results of the review conducted in accordance

with paragraph (c) of this subsection.

(c) An FFRDC review should include the following:

(1) An examination of the sponsor’s special technical needs and mission requirements that are

performed by the FFRDC to determine if and at what level they continue to exist.

(2) Consideration of alternative sources to meet the sponsor’s needs.

(3) An assessment of the efficiency and effectiveness of the FFRDC in meeting the sponsor’s needs,

including the FFRDC’s ability to maintain its objectivity, independence, quick response capability,

currency in its field(s) of expertise, and familiarity with the needs of its sponsor.

(4) An assessment of the adequacy of the FFRDC management in ensuring a cost-effective operation.

(5) A determination that the criteria for establishing the FFRDC continue to be satisfied and that the

sponsoring agreement is in compliance with 35.017-1.

35.017-5 Terminating an FFRDC.

When a sponsor’s need for the FFRDC no longer exists, the sponsorship may be transferred to one or

more Government agencies, if appropriately justified. If the FFRDC is not transferred to another
Government agency, it shall be phased out.

35.017-6 Master list of FFRDC’s.

The National Science Foundation (NSF) maintains a master Government list of FFRDC’s. Primary

sponsors will provide information on each FFRDC, including sponsoring agreements, mission

statements, funding data, and type of R&D being performed, to the NSF upon its request for such

information.

35.017-7 Limitation on the creation of new FFRDC’s.

Pursuant to 10 U.S.C. 4126, the Secretary of Defense, the Secretary of the Army, the Secretary of

the Navy, the Secretary of the Air Force, the Secretary of Homeland Security, and the Administrator

of the National Aeronautics and Space Administration may not obligate or expend amounts

appropriated to the Department of Defense for purposes of operating an FFRDC that was not in

existence before June 2, 1986, until—

(a) The head of the agency submits to Congress a report with respect to such center that describes

the purpose, mission, and general scope of effort of the center; and

(b) A period of 60 days, beginning on the date such report is received by Congress, has elapsed.