A History of the Department of Defense

Federally Funded Research and

Development Centers

June 1995

OTA-BP-ISS-157

GPO stock #052-003-01420-3
Recommended Citation: U.S. Congress, Office of Technology Assessment, A History of

the Department of Defense Federally Funded Research and Development Centers,

OTA-BP-ISS-157 (Washington, DC: U.S. Government Printing Office, June 1995).
iii

oreword

he 104th Congress, like its recent predecessors, is grappling with the

role of modeling and simulation in defense planning, acquisition, and

training, a role that current and contemplated technological developments will intensify. The Department of Defense (DoD) Federally

Funded Research and Development Centers (FFRDCs), some closely tied to

defense modeling and simulation, are also a topic of recurrent congressional

concern owing to their unique institutional status. The 104th’s emphasis on private sector solutions suggests that this Congress in particular will seek to address the FFRDCs. This Office of Technology Assessment Background Paper

has been prepared to help Congress do so.

The DoD FFRDCs trace their lineage to ad hoc, not-for-profit, universitybased organizations created during World War II to address specific technological problems. Some performed studies and analyses on topics such as antisubmarine warfare, but the majority were laboratories engaged in the

development of radar, the proximity fuze, and other war-winning weapons including nuclear weapons. These centers proved useful in bridging the organizational, compensation-related, and cultural gaps between science and the

military, and more were created during the Cold War. The laboratories continued to predominate in some respects, but centers devoted to study and analysis

grew and entered the public consciousness as “think tanks,” and other centers

embarked upon a new role—system integration. In all three capacities, the

Federal Contract Research Corporations (FCRCs), as they were then known,

provided services that the federal government could neither create in-house or

buy in the open market, either because of severe concerns regarding conflict of

interest, the safekeeping of competitition-sensitive information, and other

hazards of the open marketplace, or simply because the open market did not

offer what was needed.

In the present day, the for-profit world offers a fuller range of intellectual

services than it did at the onset of the Cold War, and the centers’ federal government sponsors are precluded from assigning to an FFRDC work that could

be done as effectively outside. Annual ceilings limit the total amount of Defense department work done in the centers. For these and other reasons there

remain only ten DoD FFRDCs, out of over 70 that have existed at one time or

another. Yet the FFRDCs, by virtue of their long-term partnership with the federal government and their arm’s length relationship to their sponsors and to
iv

other businesses alike, continue to play a unique role in today’s rapidly changing national security community. This role includes, but is by no means limited

to, the centers’ decades long series of contributions to combat modeling and

simulation.

This Background Paper is the second of several publications in the OTA’s

assessment of defense modeling and simulation, requested during the 103rd

Congress by Representatives Ronald V. Dellums (Chairman) and Floyd

Spence (Ranking Minority Member) of the House Committee on Armed Services, Senators Sam Nunn (Chairman) and Strom Thurmond (Ranking Minority Member) of the Senate Committee on Armed Services, and Senators Jeff

Bingaman (Chairman) and Bob Smith (Ranking Minority Member) of its Subcommittee on Defense Technology, Acquisition, and Industrial Base. Much

seminal work in defense modeling and simulation has been, and is being, conducted at FFRDCs.

In undertaking this assessment, OTA sought and received the assistance of a

broad range of individuals and organizations. We gratefully acknowledge their

contributions of time and intellectual effort. OTA also appreciates the cooperation and assistance of the Department of Defense. As with all OTA publications, the content of this background paper is the sole responsibility of the Office of Technology Assessment and does not necessarily represent the views of

our advisors or reviewers.

ROGER C. HERDMAN

Director
v

dvisory Panel

George Rathjens, Chair

Professor of Political Science

Massachusetts Institute of

Technology

Donald Blumenthal

Consultant

Lawrence Livermore National

Laboratory

Jerome Bracken

Adjunct Professor of Operations

Research

Yale University

Edward C. Brady

Managing Partner

Strategic Perspectives, Inc.

David R. Cheriton

Professor of Computer Science

Stanford University

Paul K. Davis

Corporate Research Manager

The RAND Corporation

Col. Trevor N. Dupuy*

President

The Dupuy Institute

John Englund

President

Analytic Services, Inc.

Joseph P. Fearey

Project Scientist for Corps Battle

Simulation

Jet Propulsion Laboratory

Amoretta M. Hoeber

President

AMH Consulting

John D. Kettelle

Consultant

Frank Lanza

President and Chief Operating

Officer

Loral Corporation

Creve Maples

Principal Investigator

Sandia National Laboratory

Jed Marti

Senior Computer Scientist

Sarcos Research, Inc.

Duncan Miller

Senior Staff

MIT Lincoln Laboratory

Stuart H. Starr

Director of Plans

The MITRE Corp.

Lawrence D. Stone

Senior Vice President

Metron, Inc.

Jack Thorpe

Corporate Vice President

Science Applications 

International Corp.

Verena S. Vomastic

Research Analyst

Institute for Defense Analyses

Jordan Weisman

President

Virtual World Entertainment

___________________

*Deceased June 5, 1995.

Note: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panel members. The panel

does not, however, necessarily approve, disapprove, or endorse this background paper. OTA assumes full responsibility for the background

paper and the accuracy of its contents.
vi

roject Staff

Peter Blair

Assistant Director

Industry , Commerce, &

International Security Division

Alan Shaw

Program Director

International Security and

Space Program

ADMINISTRATIVE STAFF

Jacqueline Robinson Boykin

Office Administrator

N. Ellis Lewis

Administrative Secretary

Don Gallagher

Secretary

PRINCIPAL STAFF

Brian McCue

Project Director

Michael Callaham

Senior Analyst

Darian Unger

Intern (April - August 1994)

CONTRACTORS

Christopher Lawrence

Arlington, VA

Elizabeth Sheley

Alexandria, VA

Linda Voss

Arlington, VA
Contents

Summaryl

A History of the Department of Defense

Federally Funded Research and

Development Centers 7

■ FFRDC Nomenclature 10

■ Categories 12

The Development of the Research Centers 12

■ Establishment of Operations Research Centers at the End of World War II 14

■ Establishment of Laboratories at the End of World War II 17

■ Formalization of FFRDCs 18

■ Conclusion 20

The Growth of Research Centers from the Korean Conflict

to the early 1960s 20

■ Army 20

■ Navy 22

■ Air Force 23

■ Office of the Secretary of Defense 26

■ Conclusion 27

Conflict and Transition for the Research Centers in the

1960s to Mid-1970s 27

■ Social Changes 27

■ Criticisms of Federal Research Centers 28

■ Conclusion 33

The Emergence of Unified Policy Regarding DoD

FFRDCs 33

The Transition to the Present 35

Profiles of the Existing DoD FFRDCs 37

■ Study and Analysis Centers 39

■ Laboratories 44

■ Engineering and Technical Direction Centers 47

vii
viii

APPENDICES

A List of Current FFRDCS for FY 1995 49

B Number of Federal Research Centers

Each Year 51

C List Of All Identified DoD Federal

Research Centers 53

D Ceiling Limits for FFRDCs 57

E Abbreviations 63

REFERENCES 65
ummary

etween the onset of World War II and 1991, more than 70

centers were created that came to be known collectively as

Department of Defense (DoD) Federally Funded Research and Development Centers (FFRDCs). The maximum in existence at any one time was 43, in 1972. An ongoing

sequence of DoD reviews has affirmed a continuing need for

some FFRDCs. Other FFRDCs have been either discontinued because they were no longer required or, far more commonly, decertified as FFRDCs and allowed to continue, whether on a not-forprofit basis or not, without the FFRDC mantle. Currently, there

are 10 DoD FFRDCs. These can be categorized as study and analysis centers, systems engineering and integration centers, and

laboratories. DoD study and analysis FFRDCs have had a special

role in combat modeling and simulation. Their history over the

past 50 years is the focus of this background paper, which forms

part of the Office of Technology Assessment (OTA) study of defense modeling and simulation. To provide perspective, some information on other DoD FFRDCs is included.

FFRDCs, formerly called Federal Contract Research Centers

(FCRCs), grew out of the semi-academic laboratories and research groups created by the federal government for defense research during World War II. In some cases the lineage traces all

the way back to the war. The Massachusetts Institute of Technology’s (MIT’s) wartime Radiation Laboratory led to the peacetime Lincoln Laboratory, at first a federal research center, then an

FCRC, and finally an FFRDC. The Navy’s wartime Operations

Research Group eventually turned into the Center for Naval Anal-

| 1
2 | A History of the Department of Defense Federally Funded Research and Development Centers

yses. In still other cases, the lineage is collateral:

the RAND Corporation and the Institute for Defense Analyses, to many the archetypal FFRDCs,

are study and analysis centers created after the

war.

Federally funded research centers grew out of

the need to obtain objective assessments of military problems or programs of increasing technical

complexity. To carry out this function, integral to

the mission of the federal government, FFRDCs

received long-term access to a broad range of information from both the federal government and

industry. To keep their assessments free from the

institutional pressures of either sector, FFRDCs

were established as private not-for-profit organizations, independently operated either by universities or by not-for-profit corporations established for this purpose. To maintain their special

working relationship with the federal government

and industry, FFRDCs agreed to terms and conditions more restrictive those accepted by other organizations doing business with the federal government. The substance of these agreements was

that FFRDCs not make profit, not compete for

federal work, not work for commercial clients, not

manufacture products, and not carry out functions

performed by DoD. They follow their sponsoring

agreements’ mission statements, and their sponsors do not assign work that could be carried out

as effectively by for-profit companies except on a

very limited basis to maintain expertise and continuity within the FFRDCs. More detailed aspects

of these agreements arise from federal laws and

procurement regulations.

The dynamic between the independent federal

research centers and their sponsoring agencies has

included conflicts. However, the centers have

striven to maintain free research, independent

from conflicts of interest including their sponsor’s

interests, while sponsors have wanted immediately useful outputs from their research centers. In a

larger context, costs and competition have at times

become issues. The pay differential between federal research center workers and their federal government counterparts, an intentional feature at the

outset, led to situations in which people found

themselves working side by side on a project at

very different salary levels and to a wider belief

that federal centers were an expensive way for the

federal government to accomplish its work even

though they were not-for-profit. On the centers’

side was the argument that at least in some cases

the federal government ought to have a way of obtaining something other than the lowest bidder’s

least-cost work. This discussion opens the vexing

issue of how to assess the quality of federal government work.

When the disciplines developed in these research centers became established parts of academic curricula, for-profit companies were able to

offer the federal government services similar to

those of the FFRDCs. The for-profit world of consultants, often associated with the Washington

Beltway in the vernacular through such terms as

“highway helpers,” has flourished in the postwar

era. Some see the DoD FFRDCs, especially those

devoted to study and analysis, as dinosaurs that

have had their day and now should make way for

the new breed, the for-profits. Those who see a

continuing role for the FFRDCs look on them as

having developed a new role. While no longer monopolists of the methods they pioneered, they are

now patient intellectual capital, more able than the

for-profit companies to maintain expertise in

specific areas regardless of the vicissitudes of

year-to-year contracting, and able to develop new

tools and skills in a way that would prove difficult

absent a long-term partnership between the federal government and the research entity. FFRDCs

also afford the federal government a means of integrating proprietary information provided by

multiple for-profit companies.

Federal study and analysis centers (then known

as Federal Contract Research Centers) came into

the public eye in the 1950s when their long-range

and strategic-planning studies sometimes took issue with established military policy. However,

staff involved in such work never exceeded 1 percent of the FCRC population. The point at issuethe relationship between military and civilian

experts in the formulation of defense policyhas

undergone constant reassessment to this day. This

reassessment has extended well beyond the
Summary 3

CNA IDA PAF Arroyo NDRI LMI LL SEI Aerospace MITRE C3

I

Founded a 1942

Sponsor Navy

Type S&A

Owner CNA

Staff fc 500

Location c V A

FY 1994 totald $50M

FY 1994 DoD $50M

1956 1946

DoD USAF

S&A b S&A

IDA <------—

800 <---------

V A

b 

<------------

$108M <------—

$108M $24M

1984 1984

Army DoD

S&A S&A

RAND --------->

1,100 —------>

CA, DC ------------>

$108M --------->

$20M $24M

1961

OSD

S&A

LMI

300

V A

$36M

$30M

1951

USAF

Lab

MIT

2,300

M A

$328M

$275M

1984

ARPA

Lab

CMU

300

P A

$33M

$30M

1960

USAF

S E

Aerospace

3,600

C A

$379M

$363M

1958

DoD

S E

MITRE

3,700

MA, VA

$590M

$450M

KEY: Aerospace = Aerospace Corp., ARPA= Advance Research Projects Agency; Arroyo = Arroyo Center; CA = California, CMU = Carnegie-Mellon

University; CNA = Center for Naval Analyses, DC = Washington, DC; IDA = Institute for Defense Analyses, Lab = laboratory; LL = Lincoln Laboratory;

LMI = Logistics Management Institute; MA= Massachusetts; MIT= Massachusetts Institute of Technology; MITRE C3I Corp.; NDRI = National Defense Research Institute; OSD = Office of the Secretary of Defense; PA-Pennsylvania; PAF = Project Air Force, RAND = RAND Corp.; S&A = study and

analysis center; SE = systems engineering; SE I = Software Engineering; USAF = U.S. Air Force; VA = Virginia.

a Because of CNA’s unbroken Iink to its wartime predecessor, the Operations Research Off Ice, its wartime starting date IS shown: a hiatus separates

Lincoln Laboratory from its wartime predecessor, the Radiation Laboratory. NDRI was formed out of an existing division at RAND Corp., whose work

effectively dates back to the 1960s, if not earlier.

b Most of IDA IS a study and analysis FFRDC, but part of the center functions as a laboratory and is not in Virginia.

c Lincoln Laboratory has, for some purposes, been considered government-owned because it occupies government-owned land

d Staff levels are rounded to the nearest 100. SEI, the only DoD FFRDC with a congressionally set celling on staff, is Iimited to 250 full-time-equivalent

members of its technical staff.

NOTE: Project Air Force, the Arroyo Center, and the National Defense Research Institute are part of RAND Corporation.

FFRDCs, which now constitute a very small part

of the industry that carries out studies and analyses for the DoD.

The close relationship between FFRDCs and

the federal government requires FFRDCs to have

access to classified information. Though Cold

War compartmentalization did in some cases deny

this information to FFRDC study efforts that

could have benefitted from it, FFRDCs performed

an important function in limiting the need to distribute classified information widely to industry,

as they could provide specifications for system

development or study scope without revealing the

sensitive information that drove the specifications. In some cases, an FFRDCs’ access to classified information has led to reconsideration of its

relationship with a university sponsor. Because of

universities’ perception that the presence of classified information runs counter to a desired atmosphere of open inquiry, there has been a trend towards FFRDCs as independent not-for-profit

corporations rather than university-sponsored cen

ters.

Though the federal research centers were established by various federal government agencies including DoD, they evolved in an environment

lacking in unified federal government regulations

and policies. On the one hand, they enjoyed no

protection for their special function. On the other,

they were regulated by individual sponsoring

agencies acting without a comprehensive policy

framework specific to the research centers. Like

all federal contractors, these centers were subject

to the policies, explicit or implicit, of the acquisition regulations. Issues such as whether the assets

of a research center belonged to the federal government or the center, the disposal of those assets

in the event of the closure of the center, and who

decided whether the results of studies should be

accessible outside the sponsoring agency, were

typically resolved on a case-by-case basis. For

some of these issues, larger public values might

outweigh the interests of the sponsoring agencies.

The Office of Federal Procurement Policy published a government-wide FFRDC policy in 1984,
4 I A History of the Department of Defense Federally Funded Research and Development Centers

subsequently codified in the Federal Acquisition

Regulations, in sponsoring agreements between

the federal government and individual FFRDCs

and in FFRDC contracts with the federal government. In the 1990s, the DoD supplemented these

regulations with a Management Plan for FFRDCs.

Today the FFRDCs inhabit a world much different from that of their predecessors in the late

1940s and 1950s. The FFRDCs history and current status are summarized in table S-1. Epochal

change brings into question the continued need for

Cold War and whether their continued presence

amid private sector competition is in the national

interest. By law, FFRDCs are to be used only to

meet special research or development needs that

cannot be met as effectively by existing federal

government or contractor resources. Some of the

frequent questions raised are answered inbox S-1.

Re-examination of the centers’ origins and history

provides an opportunity to revisit the value of

these research centers as a national resource. Discussion of specific policy options lies beyond the

institutions created during World War II and the scope of this OTA background paper.

Q: What does “FFRDC” stand for? Is that the same thing as “FCRC”?

A: “Federally Funded Research and Development Center. “ “FCRC” stood for “Federally Chartered

Research Center,” a term that grew into use without statutory definition and was supplanted by

““FFRDC” after that term became formally defined.

Q: How many DoD FFRDCs are there?

A: Ten. They are the Center for Naval Analyses, the Institute for Defense Analyses, The Aerospace

Corporation, MITRE C3

I, Lincoln Laboratory, the Software Engineering Institute, the Logistics Management Institute, Project Air Force, the Arroyo Center, and the National Defense Research Institute. The

last three are all parts of RAND Corporation. Generally speaking, the centers can be divided into those

concentrating on study and analysis, those concentrating on engineering and technology, and laboratories, as shown in table S-1.

Q: What about the Applied Physics Laboratory Los Alamos, the Concepts Analysis Agency the

Naval Research Laboratory and all these other places of which 1 have heard?

A: APL, like the Systems Development Corporation and many others, is a former DoD federal research center. Many former FFRDCs have continued to exist and to do business with the federal government, either on a for-profit or not-for-profit basis, without being FFRDCs Los Alamos National Laboratory, like others, is a Department of Energy (DOE) FFRDC and not a DoD FFRDC. CAA and NRL, like

many other centers and laboratories, are in federal government research operations.

Q: Are FFRDCs the same thing as GOCOs---government-owned, contractor-operated entities?

A: No. Of the current DoD FFRDCs only Lincoln Laboratory occupies a significant amount of federal

government-owned or -leased space, and even it is not always counted as a GOCO. Some DOE

FFRDCs are GOCOs
Summary I 5

Q: What makes FFRDCs unique?

A: Because FFRDCs are not allowed to compete for federal government work, and are restricted in

many other ways, federal government sponsors establish long-term partnership relationships with their

FFRDCs enabling the FFRDCs to provide continuity of effort and to be trusted with close access to

federal government officials and highly sensitive data. Consequently the FFRDCs are able to address

long-term problems of considerable complexity and to analyze technical questions with a high degree

of objectivity borne of having renounced any possibility of selling products to the federal government or

forming partnerships with those who do, while remaining outside of the federal government itself.

Q: Why not just bring the FFRDC work in-house and let federal government employees do it?

A: At their inception, one of the reasons—in addition to organizational independence—for creating

the federal research centers was that the terms of federal government employment could not attract the

needed scientific talent. In the present day, any move to bring FFRDCs in-house would run counter to

decades of effort by Administrations and Congresses of both majority parties with widely disparate outlooks, to let as much work as possible be done in the private sector. The FFRDCs honest-broker status

depends at least as much on their insulation from their customers as it does on their insulation from the

rest of the private sector. A federal government employee or military person could find it difficult to pass

judgment on equipment or procedures designed at the behest of his or her own boss or commanding

officer. This insulation, in some cases intentionally reinforced by physical distance, also protects the

FFRDCs from being drawn into the heated exercise of day-to-day federal government.

Q: Do FFRDCs get budget line-items?

A: Some do; some don’t. Line-item funding is less than a tenth of total DoD FFRDC funding. The bulk

of DoD FFRDC funding comes out of the appropriations for the DoD programs on which the FFRDCs

work.

Q: How is it decided how much FFRDC work is needed?

A: Beyond the small fraction of their revenue that is a line item, Congress sets a ceiling on the total

amount of DoD-appropriated money that can be spent at the FFRDCs The Office of the Director of

Defense Research and Engineering (DDR&E) decides how this ceiling is partitioned among the centers,

and the centers’ sponsors assign the work. Nonsponsors within DoD who would like to have work done

at an FFRDC must find the money within their own budgets and then persuade the FFRDC’s sponsor to

assign the work.

Q: Do FFRDCs compete with private industry?

A: Although not-for-profit, FFRDCs are themselves a part of the private sector. Many people think that

DoD FFRDCs compete with for-profit industry in the sense that work that otherwise might be competed

winds up being done by FFRDCs Strictly speaking, that should not happen because the centers’ charters forbid them from being assigned work that could be done as effectively outside. People being only

human, budgets being tight, time being short, and contracting regulations being onerous, it is certainly

possible that from time to time FFRDCs receive work because it is cheaper, easier, or quicker to give it

to them rather than to compete a contract among all comers. Perhaps for this reason, some people

have the mistaken impression that FFRDCs actually bid against other companies on competitive DoD

contracts as well as contracts let by other parts of the private sector. These people may also have confused FFRDC bidding on DoD contracts, which would violate the centers’ charters and the law, with

(continued)
6 I A History of the Department of Defense Federally Funded Research and Development Centers

something else. For example, some FFRDCs can and have bid on state and local government work or

work for foreign countries. The DoD FFRDCs or their “parent organizations” (universities or, increasingly,

not-for-profit corporate entities designed for the purpose of possessing FFRDCs all do some work that

is outside their FFRDC’s mission, but which draws on the expertise created in performing that mission.

Such work is also subject to restrictions analogous to those imposed on FFRDC work.

Q: If FFRDCs are not-for-profit, how are they able to charge a fee?

A:Some of the federal research centers have charged the federal government fees, above and beyond the cost of doing the work contracted, to provide capital funds for the organization and funds for

other activities: the Defense Acquisition Regulations explicitly provide for such fees, and recent legislation limits the uses to which they can be put. Some centers charge fees to cover ordinary and necessary costs of doing business that are not otherwise reimbursable, but that the federal government explicitly recognizes must be incurred. They also make possible a small but important amount of

independent research.

Q: If these FFRDCs were invented in the Cold War and some of them even started under other

names during World War II, do we still need them? Why hasn’t anyone addressed this?

A: This question has actually come up repeatedly. The need for each individual FFRDC is formally

re-evaluated every five years. Over the years more than 60 DoD FFRDCs have in one way or another

ceased to be FFRDCs (though most have lived on in other forms), suggesting that the Department of

Defense is in fact capable of weeding out unnecessary FFRDCs while continuing to make use of others, and of the FFRDC role in general. Congress has addressed the question of continued need for

FFRDCs several times. ’

SOURCE: Office of Technology Assessment, 1995

1 Producing or causing to be produced such efforts as the Office of the Director of Defense Research and Engineering’s, Report of

the Defense Science Board Task Force on Federal Contract Research Center Utilization (Washington, DC. February 1976) and their

subsequent Management of the Federal Contract Research Centers (Washington, DC: Department of Defense, June 1976); the

Executive Office of the President, Office of Management and Budget, OFPP Policy Letter 84-1 to the Heads of Executive Departments

and Establishments, Subject: Federally Funded Research and Development Centers (Washington, DC: letter April 4, 1984, printed in

the Federal Register volume 49, no. 71, April 1, 1984); Competition: Issues in Establishing and Using Federally Funded Research and

Development Centers (U.S. General Accounting Office, Washington, DC: 1988), and several other investigations including at least

three (by the General Accounting Office, the DoD Inspector General, and the Defense Science Board) current with this Office of

Technology Assessment effort.
A History of the

Department of Defense

Federally Funded Research and

Development Centers

his background paper is a brief history of the Department

of Defense (DoD) Federally Funded Research and Development Centers (FFRDCs), with a focus on those that are

study and analysis centers. As part of the Office of

Technology Assessment’s (OTA) combat modeling and simulation assessment, this background paper primarily addresses those

study and analysis centers that are involved in supporting or creating DoD models and simulations. DoD laboratories and system

engineering FFRDCs such as MITRE Corporation and The Aerospace Corporation are discussed only briefly to provide context.

The Department of Energy (DOE) laboratories are not discussed

to any extent, even though they are partially funded by DoD and

some do considerable model and simulation work. This paper

covers the period from World War II and the development of operations research, the discipline that helped lead to the creation of

study and analysis centers, until the issuance of the revised

Federal Acquisition Regulations (FAR) in 1990 that addressed

FFRDCs. Budget data and the status of DoD FFRDCs presented

in this report are reported through FY 1994.

The federal research centers that came to be known as FFRDCs

are a varied group of facilities with differing individual characteristics founded at different times. They have no prescriptive definition, although a descriptive definition was attempted in 1967.

The basis for their creation during World War II and the Cold War

is described in this paper, with a history of their evolution and

growth. The federal research centers grew along with the development of the disciplines of operations research, systems analysis, system engineering, and broader multi-disciplinary studies

and analyses. The role of these centers and their relationship with

the federal government has evolved over the decades since their | 7
8 | A History of the Department of Defense Federally Funded Research and Development Centers

inception. Lists of these centers appear in the appendices. The 10 current DoD FFRDCs are profiled in the last section.

The development of the federal research centers began during World War II. More scientists

were used in this war effort than in preceding

wars. In the West, scientists developed the atomic

bomb, the proximity fuse, better radar and sonar,

and fundamentally kept the Western allies in a

state of overall technological superiority, even

when compared to the very impressive German

scientific and engineering establishment.

But in the U.S. at the war’s end, most scientists

were interested in returning to their research in the

traditional university environments. The rapid epochal changes in technology, the advent of new

disciplines like operations research, and the developing threat from the Soviet Union created a desire on the part of the military and the Atomic Energy Commission (AEC) to retain a number of

these scientists for national needs.

Federal research centers were a logical development. Reasons for their creation include:

1. to attract the best scientific minds;

2. to provide an atmosphere conducive to freedom

in research, usually a university-type atmosphere;

3. to provide independent and unbiased analysis;

4. to provide continuity;

5. to isolate the centers from the concerns of a

profit motive;

6. to allow the centers to assemble stable, interdisciplinary teams of people; and

7. to develop the appropriate sciences and techniques (49,50,59).

There have been approximately 150 of these organizations certified, chartered, or funded by

agencies in the federal government since World

War II (83). (A list of all known DoD-sponsored

FFRDCs is provided in appendix C.) Of these,

more than 70 are DoD-sponsored FFRDCs. Originally, they were simply termed “research centers”

(52) These were research organizations the federal

government took an active role in helping to establish. They were often given seed money and

were guaranteed a certain level of work. The structure and nature of each of the centers was unique,

as was its contracting relationship with the federal

government.

The nature and purpose of FFRDCs have

evolved over the years. The reasons for their establishment in the late 1940s are not the reasons

for their continuance to the present. Their origins

are in World War II and in the highly charged Cold

War atmosphere after the War. These institutions

have evolved, some have dissolved, and the surviving successful FFRDCs are those that have:

 a function that cannot be carried out as effectively by a federal government agency or a forprofit company;

 a special relationship with the sponsoring federal government agency, based upon:

a) independence of the FFRDC, but commitment by the FFRDC to the objectives (not

always the policies) of the sponsor;

b) responsiveness of the FFRDC, but not the

daily response of an extended staff;

c) a pattern of cooperation that establishes a

long-term partnership relationship, as opposed to the “arm’s length” relationship required in for-profit contracts; and

d) significant investment over time by the federal government in the FFRDCs capabilities.

 a set of restrictions that makes this relationship

safe: not-for-profit, not a producer of products,

and not in competition with for-profit industry;

and

 a body of scientific or technical expertise that

cannot be recruited, sustained, and managed

within the civil service.

Over time, this became the pattern, with all

FFRDCs defined and characterized by the existence of their sponsoring agreements.

Some see the FFRDCs’ emergent ability to provide a “quick response capability” for the federal

government as the great advantage of FFRDCs

(86). In contrast, the RAND Corporation was deliberately located in California so that it would not

be interrupted with daily requests from the federal

government. The 1990 Federal Acquisition Regu-
A History of the Department of Defense Federally Funded Research and Development Centers | 9

lations (FAR) may have been the first official codification of this added quick-response mission for

FFRDCs. FAR Clause 35.017 states, “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.” (17) The federal research centers’ ability to

provide quick response to their sponsoring agencies acquired added importance as a shortcut to a

contracting process seen by many to have become

more complex, slower, and less flexible since the

passage of the Competition in Contracting Act

(CICA) in 1983.

Through their acceptance of constraints not

commonly applied to other organizations,

FFRDCs are subject to special federal government procurement and contracting regulations.

This feature can make them very attractive to the

DoD officer or civilian manager who needs work

done quickly. Like other companies operating under a long-term, broadly-scoped contract,

FFRDCs can provide responses to requests in

weeks or months. They are not intended to replace

in-house action officers or respond to daily requests, but they do not take months to change the

direction of their research, or to shift to an urgent

line of work. Inherent in the competitive contracting process with for-profit industry is a delay of

several months before contract award. In dealing

with for-profit companies, DoD uses in some

cases the “Basic Ordering Agreement” mechanism to establish multi-year contractual relationships. Once a BOA is in place, individual tasks

can be (and are) assigned rapidly, with little further paperwork. This omnibus contract approach

was ratified and affirmed by Section 2304a

(“Tasks and delivery order contracts”) of the Federal Acquisition Streamlining Act of 1994. But

for-profit companies must compete for, and recompete for, their BOAs.

The Competition in Contracting Act permits

the federal government to use sole-source procedures to establish or sustain an FFRDC. DoD is

now forbidden by law from establishing any new

FFRDCs, but the FAR spells out the procedures

for doing so, and other agencies may create new

FFRDCs. The most recent FFRDC to be established was the Tax Modernization Institute, sponsored by the Internal Revenue Service in FY 1993.

The most recent FFRDC established by DoD was

the Institute for Advanced Technology, sponsored

by the Army in FY 1991, but “decertified” as an

FFRDC in November 1993 (52).

Some of the recently established FFRDCs, like

the Software Engineering Institute (established

February 1984) and the Internal Revenue Servicesponsored Tax Modernization Institute, were established by a competitive solicitation. Under

CICA, the federal government could have made

either a sole-source award, after providing sufficient justification. The renewal of contracts to

FFRDCs is almost always done in sole-source

awards, but must be justified in accordance with

the CICA procedures.

The goal of the FFRDC system has been to obtain top quality without incurring needless expense. This goal differs from that of most federal

government procurement, which is to incur the

lowest expense consistent with satisfactory quality. Neither approach is perfect, though each reflects precedents in the world of business: major

corporations may buy many goods and wagegrade services on a least-cost basis, but they usually pay whatever is necessary for top-quality professional services such as legal representation or

architecture.

There being no such thing as a “lowest acceptable price” or a “highest acceptable quality,” very

low price and very high quality are only of concern insofar as they are warning signs of unacceptably low quality and unbearably high price, respectively. Absent any known way for the federal

government to choose “best buys” in the midrange

of the price-quality tradeoff while maintaining adequate safeguards against waste, fraud, and abuse,

the federal government normally follows its wellknown policy of buying from the lowest bidder.

The federal government tempers this policy by

specifying a base level of quality that it deems acceptable, so as to avoid obliging itself to buy
10 I A History of the Department of Defense Federally Funded Research and Development Centers

Expenditure ceiling

Quality

minimum

$

Quality

SOURCE: Off Ice of Technology Assessment, 1995.

shoddy goods just because the price is 1OW.

l

When, as in the case of the FFRDCs the federal

government permits itself to chose the highest

quality instead of the lowest price, it must likewise temper this policy by placing a ceiling on expenditure. This ceiling plays the same role at its

end of the price-quality trade-off that the lowestacceptable-quality barrier plays at the opposite

end.

In the case of buying the products of FFRDCs

the ceiling is on the annual total expenditure, not

on the cost of each buy as illustrated in figure 1-1.

Congress annually sets a ceiling on total expenditure of DoD-appropriated funds at FFRDCs

(See also appendix D.) This ceiling does not apply

to non-DoD work by the FFRDCs Being below

the current demand, the ceiling limits the availability of the FFRDCs to do work and the flexibility of the federal government program managers

to award them work. The ceilings, through limiting expenditure, indirectly limit staff levels and

therefore the size of the FFRDC system as a

whole. One DoD FFRDC, the Software Engineering Institute, is also subject to a congressionally

imposed ceiling on staff, specifically.

This history follows the development of federal

research centers through four stages of their development. The initial stage was the wartime laboratories and operation research efforts. This phase

culminated after the war with the establishment of

a study and analysis center for each branch of the

service. The second phase was a period of growth

from the conflict in Korea until the early 1960s,

corresponding to the darkest days of the Cold War

and the heightened threat to U.S. interests from

the Soviet Union and the People’s Republic of

China. At the end of this period, the phrase “federal contract research center” was invented to provide a label for these 66 centers (43 sponsored by

DoD). The third period covers a time of intense

change in the social and political culture of the

country, when the FCRCs came under scrutiny

and criticism, expanded seriously into nondefense

work, and ended with many of them falling into

disfavor. This period of turmoil ended in the

mid- 1970s, with approximately 40 FFRDCs surviving, but fewer than 10 sponsored by DoD. The

final stage carries the FFRDCs to the present, with

limited changes in their number and types, steady

use, declining employment of late, and growing

missions. They have become integrated with the

communities they serve, with their role and missions more clearly defined.

❚ FFRDC Nomenclature

The federal research centers have their roots in operations research done for the military by civilian

scientists during World War II. At first they were

simply called research centers. From 1961 to 1967

(and sometimes after 1967) the research centers

established before 1961 and additional centers

were called Federal Contract Research Centers

FCRCs Then in 1967 they were called Federally Funded Research and Development Centers

FFRDCs All these terms were labels for diverse

entities that were neither federal government

agencies nor for-profit companies, but somewhere

in between. FFRDCs range from RAND’s Project

1As notoriously occurred during the Civil War, when equipment supplied by lowest bidders simply disentegrated in the field.
A History of the Department of Defense Federally Funded Research and Development Centers | 11

Air Force, the prototype analytical “think tank”;

through MITRE, a large systems engineering and

technical integration organization similar to many

for-profit companies; to the large nuclear laboratories, where the facilities are owned by the federal government.

What differentiated these centers from other

federal government centers or for-profit defense

research companies was a combination of nonfederal government personnel and federal government sponsorship. The federal government encouraged the establishment of these centers and

intended to fund them over a period of time and to

take an interest in supporting their survival for national needs. Facilities could be owned either by

the contractor or the federal government. Work

could be varied. But the original conception that

germinated these centers was the federal government’s World War II need to harness independent

scientific inquiry to solve federal government

(specifically military) problems. By 1960, a second theme had emerged: the need for private support whose objectivity was strengthened by separation from industry, and by other restrictions.

The defining trait of an FFRDC is a sponsoring

agreement with the federal government, clearly

identifying the entity as an FFRDC and placing

limitations on competition with non-FFRDCs.

The federal government’s commitment to the existence of an FFRDC implies that there will be a

long-term stable financial relationship. Ultimately, FFRDCs become FFRDCs because the federal

government says they are. Clause 35.017-8 of the

Federal Acquisition Regulations states that the

National Science Foundation (NSF) will maintain

a master federal government list of FFRDCs (17).

This list was formally established in 1967 (73) and

is the final record of which organizations are

FFRDCs (10). The agencies themselves determine which contracts and sponsoring agreements

will be written as FFRDCs and report the information annually to the National Science Foundation

(11).

Each DoD FFRDC is governed by six documents:

 the OFPP Policy Letter 84-1,

 the Federal Acquisition Regulations,

 the FFRDC Defense Management Plan, issued

by the Director of Defense Research and Engineering (DDR&E) August 1992, and revised

13 September 1994,

 the individual sponsoring agreement for each

FFRDC,

 the individual charter for each FFRDC, and

 the individual contract(s) with each FFRDC.

In addition, DoD FFRDCs are subject to:

 Internal Revenue Service regulation as taxexempt organizations,

 state not-for-profit corporation law,

 Departmental regulations, and

 specific provisions in annual DoD Authorization and Appropriation Acts.

In its report, Federal Funds for Science, Vol. I,

produced in 1952, the National Science Foundation clearly identified “research centers” as separate entities different from federal government entities, laboratories, universities, for-profit

corporations, and other not-for-profit corporations. The report enumerated 23 in 1950 to 1951

and 24 in 1951 to 1952. The 12 mentioned in the

text of that report were all later considered FCRCs

and FFRDCs, including RAND. In the sixth annual report, a “List of Research Centers” for the fiscal years 1956 through 1958 appeared as an appendix. There were 46 centers listed, including

one that had been deactivated since FY 1956. The

list also appeared in the subsequent report, and

then was not shown in the next two reports. Almost the same list reappeared in the FY

1960-1962 report in the same format and was

titled “Federal Contract Research Centers.”

The Federal Council for Science and Technology named the FCRCs Federally Funded Research

and Development Centers in 1967, but the acronym FCRC remained in general usage for a number of years (56). The difference between the last

list of “Federal Research Centers” and the first list

of “Federal Contract Research Centers” was that

five were removed from the FY 1957-1959 list, including three that were later returned to the list,

while 19 new ones were added. Substantially the

same list, relabeled “Master List of Federally
12 | A History of the Department of Defense Federally Funded Research and Development Centers

Funded Research and Development Centers,” appears in the FY 1967-1969 report. “FFRDC” was

simply a convenient label to apply to that heterogeneous collection of research centers that were

clearly not federal government laboratories nor

traditional free-market for-profit contractors. For

the purposes of this background paper, the term

“FFRDC” will only be used when referring to an

organization that was officially considered an

FFRDC after 1967. Otherwise organizations will

be referred to as “federal research centers.” Since

contractor-operated laboratories and “think

tanks” existed before the term “FFRDC” came

into use, the definition the federal government

created in 1967 was more descriptive than prescriptive. It described the majority but not all of

them and applied to organizations that were not

considered FFRDCs.

At present 39 FFRDCs exist, according to the

master federal government listing of the National

Science Foundation for FY 1995. Of these, 10 are

DoD-sponsored FFRDCs (53). A list of all current

FFRDCs is provided in appendix A.

❚ Categories

The federal research centers comprise three types

of entities with different functions:

 laboratories,

 study and analysis centers, and

 system engineering and technical direction

centers.

The first centers founded were scientific research laboratories working in the traditional

sciences on technical issues. Some of these laboratories were large federal government-owned,

contractor-operated facilities like Los Alamos

National Scientific Laboratory and Oak Ridge

National Laboratory. They included facilities

funded by the Atomic Energy Commission (later

the Department of Energy) as well as a number of

pure science efforts. The laboratories provided

considerable technical support and engineering

services in addition to their research orientation.

The next centers founded were DoD study and

analysis centers, which pioneered a new discipline

called operations research to produce study and

analysis of problems not traditionally addressed

by scientists. Over time, the range of their work

increased, and operations research became just

one of many study and analysis tools they used.

These centers became what people commonly refer to as “think tanks” such as RAND.

The system engineering and technical direction

centers were later creations developed for systems

integration. These centers did not grow directly

out of organizations that functioned in World War

II; the first emerged in 1958 from the need to

integrate the complex technologies that were being used in modern defense systems. Representative of these centers are The Aerospace Corporation and the MITRE C3I center. The system

engineering and technical direction centers were

to provide technical support in defining, developing, procuring, deploying, and operating complex

systems. In effect, they provided the technical

depth, systems engineering approach, and corporate memory that the federal government needed

to effectively deal with the industrial companies

that actually developed and produced the systems.

The ownership of these varied centers is discussed in box 1-1.

THE DEVELOPMENT OF THE RESEARCH

CENTERS

At the start of World War II, virtually all of the

scientific talent of the country resided in universities and private industry. The United States military did not have a large, research-oriented scientific establishment, but had a growing need for

scientific knowledge. In the total-war environment of World War II, Allied nations harnessed

the resources of their entire population and economy, including technical and scientific knowledge.

Through arrangements with academia, the U.S.

military established centers of excellence that developed radar, artillery fuses, atomic weapons,

and a new and esoteric discipline of applied math-
A History of the Department of Defense Federally Funded Research and Development Centers 113

Research facilities available to the federal government can be categorized in terms of their ownership and operation. Facilities can be owned or operated by the federal government or the contractor as

government-owned, government-operated (GOGO); government-owned, contractor-operated (GOCO);

or contractor-owned, contractor-operated (COCO) facilities. A 1969 survey of 723 research and development installations showed that among the FFRDCs the facilities could be owned by the contractor or

the federal government and the major items of equipment could be owned by the contractor or the

federal government or Ieased. 1 FFRDCs cannot be GOGOs, some are GOCOs (especially those working for the Department of Energy), and some are entirely owned by the contractor organization. A 1982

search by the Executive Office Information Center found no statutory definitions of "GOCO" or “FFRDC.”

However, in the statutory definition of what constituted a federal agency, “GOCO” was specifically exeluded. 2

A 1982 letter from the Executive Office of the President, Office of Science and Technology Policy,

referred to a 1978 congressional inventory of research, development, test and evaluation (RDT&E) facilities and compared them to the NSF list of FFRDCs The 1978 congressional inventory classified 779

federal government research facilities as follows:

Government-owned, government-operated 608

Government-owned, contractor-operated 5 4

Contractor-owned, contractor-operated 1 8

Government-leased, government-operated 99

The letter compared the 35 FFRDCs on the NSF list, stating that 30 FFRDCs were also listed as GOCOs, with 26 GOCOs listed that were not considered FFRDCs (The mathematical discrepancy of 56 in

the comparison versus 54 GOCOs as the total number on the inventory list was not explained, but IS

possibly related to some FFRDCs being defined as more than one facility). Only five FFRDCs were not

GOCOS:

3 the Institute of Defense Analyses, the Center for Naval Analyses, The Aerospace Corporation,

the C3

I Division at MITRE Corporation and Project Air Force at the RAND Corporation.4 None of these

five are laboratories in the traditional sense and all are considered either study and analysis centers or

systems integration organizations.

None of the 10 current DoD FFRDCs are considered GOCOs, although there are FFRDC GOCOs

outside of the DoD. Nine of the 10 DoD FFRDCs operate principally in contractor-owned facilities. Lincoln Laboratory has been considered a GOCO and operates in government-owned and leased facilities.

SOURCE Office of Technology Assessment, 1995

1 National Science Foundation, Directory of Federal R&D Installations, for the Year Ending June 30, 7969 (Washington, DC National Science Foundation, 1970).

2 Joe Clark, “Memorandum for the File, Subject: GOCO and FFRDC Facilities” a letter from the Executive Office Of the President,

Office of Science and Technology Policy, Washington, DC Jan. 22, 1982).

3 Joe Clark, “Memorandum for the File, Subject: GOCO and FFRDC Facilities” a letter from the Executive Office Of the President,

Office of Science and Technology Policy, Washington, DC Jan. 22, 1982).

4 Identified in a “Diary Note, ” Subject: Federally Funded Research and Development Centers FFRDCs and government-owned

contractor-operated facilities, Jan 12, 1982, signed by Norman W. Friedman of NSF and attached to the letter of Jan 22, 1982 by Joe

Clark.
14 | A History of the Department of Defense Federally Funded Research and Development Centers

ematics, operations research. The desire by the defense establishment to maintain and expand operations research was one of the underlying

reasons for the establishment of the first three

study and analysis centers, RAND, the Operations

Research Office (ORO), and the Operations Evaluation Group (OEG).

The organization that indirectly fostered operations research in the United States was the National Defense Research Committee (NDRC) established in June 1940. The NDRC, through the

efforts of its chairman, Vannevar Bush, coordinated all scientific research among the different

services during World War II. Several of its members traveled to England where they met with the

new British operational research groups to discover how scientists were contributing to operations.

This information was used to apply operations research to the problems of combating U-boats (78).

The U.S. military laboratories at this time were

structured toward hardware development and testing. Pure science and new technologies were still

the province of universities and some private

companies. To integrate the efforts of scientists

and the military in World War II, a civilian organization called the Office of Scientific Research

and Development (OSRD) was set up with Bush,

a respected scientist and engineer, as the head of

the organization. The organization reported directly to the President of the United States, received its funds directly from congressional appropriations committees, and was relatively

unrestricted in the manner in which it spent its

budget. OSRD supported individual scientists

and major research efforts through awarding them

contracts (68). It established the pattern of contracting with civilian scientists to provide support

to the military on technical and scientific questions and contracting out for scientific studies

instead of developing in-house capabilities.

❚ Establishment of Operations Research

Centers at the End of World War II

At the end of World War II, operations research

had proved to be of value to the British Royal Air

Force and Navy and to a lesser extent the British

Army. It had also definitely proved useful to the

U.S. Navy and Army Air Forces. Operations research establishments were in place in all three

services in England. The U.S. military services,

through the OSRD, contracted extensively with

outside institutions and individuals to obtain operations research during the war (68). At the end

of World War II, OSRD was closed down, as

Bush, himself, had recommended. While it had

accomplished its mission, he felt it was losing its

flexibility with considerable time being spent on

contractual concerns and procedures. Bush

wanted to establish a new comprehensive civilian

organization, the National Research Foundation,

with scientific support for the military carried out

by one division of this organization (77).

Navy

At the end of World War II, the Naval Operations

Research Group (ORG), originally ASWORG,

had a staff of approximately 80 scientists and an

annual budget of $800,000. The Navy, under the

strong encouragement of Fleet Admiral Ernest Joseph King, Chief of Naval Operations and Commander in Chief of the United States Fleet, did not

want the organization dissolved. The Navy moved

quickly to ensure its uninterrupted continuance

and approached MIT to sponsor it. MIT was reluctant to sponsor this collection of unseen individuals located 500 miles away from campus, but did

so nonetheless on November 1, 1945. The group’s

name was changed to the Operations Evaluation

Group (OEG) to assuage the sensitivities of the

Navy’s Office of Naval Research, which had direct responsibility for the Navy’s “research.” OEG

maintained its structure of a central office in the

Pentagon and field teams among the major commands, but the entire staff was reduced to about 25

scientists and a budget of $300,000. The contract

was for three years. The Office of Naval Research,

independent of OEG, commenced funding private

contractors to conduct a wide array of small research projects to explore human behavior and

many other promising areas.

OEG, in its first year of operation, tried to

spend its time writing up what it had done during

the war. It wrote and issued studies (some 55 is-
A History of the Department of Defense Federally Funded Research and Development Centers | 15

sued in 1946) and prepared basic methodology

texts on operation research. But instead of being

left alone to write about past glories, the office

found itself with more new assignments and tasking than it could handle and began a slow and

steady expansion. By the start of the Korean conflict, OEG had a staff of approximately 60 people,

including almost 40 scientists, with an annual

budget averaging over $500,000. As a result of

budgetary restrictions, almost all of its field programs were placed in abeyance (78).

Air Force

Near the end of World War II, General H. H. “Hap”

Arnold, commanding general of the Army Air

Forces, along with other senior officials and consultants in the War Department, was convinced of

the need to keep intact part of the scientific corps

that had been mobilized during World War II. On

December 1, 1945, a new headquarters was

created for the Air Force, led by the Deputy Chief

of Air Staff for Research and Development. Its

first head was Major General Curtis LeMay. The

Air Force was particularly concerned about the

areas where military policy, planning, and

technology interacted. It created an entirely new

organization, based upon the concept of independent scientific analysis. In a conference on

October 1, 1945, the Air Force fully faced the

constraints on the service it wanted:

 The project needed to be attached to an existing

firm to get off to a good start.

 The founders did not believe that a university

would want a highly classified project.

 A high-talent scientific group could not be assembled within federal government because of

the salary and personnel practices of the civil

service.

 It would be difficult to recruit scientists in a

project directly administered by the military.

The Air Force wanted to locate the project away

from Washington, DC so as to insulate the staff

from routine requests that would interfere with research. A letter contract for $10 million was issued to the Douglas Aircraft Company on March

2, 1946 to conduct “a program of study and research on the broad subject of intercontinental

warfare, other than surface, with the object of recommending to the Army Air Forces preferred

techniques and instrumentalities for this purpose.” Project RAND, as it was called (an acronym for research and development), was created

to address issues of interest to the Air Force. The

first product was a report issued May 2, 1946

called, “Preliminary Design of an Experimental

World-Circling Spaceship” (61, p. 77; 68). This

report was prepared with a team of 50 analysts (18,

p. 23).

RAND also subcontracted some of its work out

to other Air Force manufacturers like Boeing and

Northrop. In May 1947, Project RAND moved

from the Douglas Aircraft Company to its own offices in Santa Monica. (See explanation box 1-2.)

By early 1948, RAND had grown to some 200

staff, including mathematicians, engineers, aerodynamicists, physicists, chemists, economists,

and psychologists (61, p. 4).

RAND in 1948 also conducted expanded research on the air-defense problem, but the Air

Force decided that the kind of research that RAND

was willing and able to perform would not meet

program requirements and schedules for the type

of research required. The Air Force, Army, and

Navy requested that MIT establish a laboratory for

air defense. The old wartime Radiation Laboratory had been closed, but ongoing work at MIT and

the Air Force Cambridge Research Laboratory

formed the nucleus for creating Lincoln Laboratory (75). Lincoln Laboratory work was often of an

experimental nature, while RAND continued

background and analytic work in this area (68, pp.

89,90).

Army

The Army, excluding the Army Air Forces, had no

specific research programs to protect at the end of

World War II. They simply sent the scientists they

had employed back into civilian life and maintained no research not related to hardware development.

However, an April 30, 1946 memorandum by

General Dwight D. Eisenhower, then Army Chief
16 I A History of the Department of Defense Federally Funded Research and Development Centers

In the case of RAND, the federal government originally contracted the work to a private firm, Douglas Aircraft Corporation. This arrangement was greatly facilitated by the close personal relationship between General H. H. “Hap” Arnold, Commanding Officer of the Army Air Corps, and the president of

Douglas. One of General Arnold’s sons was married to Donald Douglas’s daughter, The federal government expected all firms to participate and develop an interest in the work of Project RAND at Douglas.

Not surprisingly, Douglas Aircraft’s competitors viewed Project RAND with some suspicion. During its

first two years of operation, people within the industry became concerned that this research organization being part of one of the major manufacturers might create a conflict of interest. Furthermore, Douglas Aircraft Corporation itself was interested in releasing Project RAND from its control, as they felt the

federal government, in its attempt to appear to be completely even-handed, had not awarded Douglas

contracts that might have been awarded otherwise.

It was therefore agreed that a new not-for-profit corporation should be established, separate from

any manufacturer. The Ford Foundation provided the initial funding, and the RAND Corporation was

officially established as an independent not-for-profit corporation, chartered in California with its own

board of directors in November 1948. Its articles of incorporation were dated May 14, 1948, but the

contract between the Air Force and RAND was not established until November 4, 1948. Up until then, of

course, the work was still being done by the Douglas personnel, who then transferred to the RAND

Corporation. Project RAND remained the major contract of the new corporation for some time. At the

time that RAND was created as an independent corporation in 1948, it had approximately 300 employees. 1

There was a strong feeling by 1948, both within private industry and in the Department of Defense,

that study and analysis agencies should not be tied to a major private corporation.2

SOURCE: Off Ice of Technology Assessment, 1995

1 Gregg Herken, Counsels of War (New York, NY. Oxford University Press, 1987), p. 74.

2 Bruce L R, Smith, The RAND Corporation, Case Study of a Nonprofit Advisory Corporation (Cambridge, MA Harvard University

Press, 1966)

of Staff, discussed the establishment of a civilian in Chevy Chase, Maryland-had no connection to

research organization outside the Army. Eisenhower recommended that the Army contract extensively for scientific and industrial services.

The effort was further developed by soldiers such

as Lieutenant General A. C. McAuliffe, who

headed the Army’s research and development program after the war. In June 1948 the General Research Office was created, an organization similar

to RAND. It commenced operations in September

and was renamed the Operations Research Organization (ORO) in December (77).

ORO was established under contract with

Johns Hopkins University, but its offices----originally at Ft. McNair in Washington, DC, and then

Johns Hopkins University. The Army provided

ORO with a senior military advisor, usually a colonel, who had a small staff. This office was setup

in July 1948 and continued until June 1, 1972. In

June 1952, when ORO moved to Chevy Chase,

Maryland, its staff totaled 220 (66).

The decision to establish ORO as part of a university was certainly shaped by the ideas of Bush.

Johns Hopkins University was chosen because it

was conveniently located, enjoyed an excellent

reputation, and had several years of experience

running the Applied Physics Laboratory for the

Navy (77). By tying the research organization to

a university, the Army intended to:
A History of the Department of Defense Federally Funded Research and Development Centers | 17

 provide an atmosphere that would attract the

best minds to ORO,

 create an atmosphere of intellectual independence, and

 create a university atmosphere conducive to

good scientific research.

In contrast to the approach of the Air Force,

which resolved some internal conflicts in setting

up an organizational structure for RAND that provided for independent analysis, the Army did not

develop a larger vision for their research organization. Many researchers at ORO, in their original

conception of their mission, saw themselves as

scientists who were to explore all aspects of warfare and its long-range implications, while the

Army appeared to be primarily interested in seeking ways to apply operations research to questions

concerning logistics and supply. Also, the Army

did not seem to be interested in applying operations research to the use of weaponry in combat.2

In fact, in the early 1960s, the background studies

that led the Army to develop and deploy the Hawk

air-defense missiles came from an Air Force study

done by RAND. This study was then handed over

to the Army by the Air Force (68, p. 109). This difference in viewpoint was the start of the troubled

relationship between the Army and ORO that

would persist throughout ORO’s history

(87,66,77).

❚ Establishment of Laboratories at the

End of World War II

The first contractor-operated federal research laboratories established came primarily out of the

need to develop the atomic bomb during World

War II. OSRD also established other laboratories

for purposes other than atomic bomb research.

MIT became involved in the war effort in 1940

when the NDRC established the Radiation Laboratory, the forerunner of Lincoln Laboratory, to

further improve radar. The Johns Hopkins University Applied Physics Laboratory was established

in 1942 to conduct research related to anti-aircraft

firing. It did fundamental research and development and provided technical oversight for the design, production, and use of the proximity fuse

and anti-air guided missiles. The Ordnance Research Laboratory was established in 1945, under

the management of Pennsylvania State University.

In the development of the atomic bomb, the

federal government had a strong desire to obtain

access to the best research minds from the universities and, therefore, established the nuclear research laboratories at or in conjunction with universities. These projects were handled by a

contracting organization called the Manhattan Engineering District, and the entire atomic bomb research program was referred as the Manhattan

Project.

Established under the Manhattan Project were

the Argonne National Laboratory, the Oak Ridge

National Laboratory, and the Los Alamos National Scientific Laboratory, the Lawrence Radiation

Laboratory, and Sandia National Laboratory. The

Argonne National Laboratory evolved from the

University of Chicago’s Metallurgical Laboratory. It was under the auspices of the Metallurgical

Laboratory that the first nuclear chain reaction occurred in 1942 under a stadium in the city of Chicago as part of the Manhattan Project. The Oak

Ridge National Laboratory was also established

under the University of Chicago, with its control

reverting to an association of universities after

World War II. The Los Alamos National Laboratory, located in New Mexico, was and still is operated by the University of California. It began operation in 1943 developing nuclear explosives for

military purposes (49) and was the site of the first

nuclear explosion. Even though it is reported as a

university-operated laboratory, its has no association with the daily campus life and research

activities of the university and is effectively a

2 This conclusion was reached by comparing the discussions on the work OEG and RAND did to the actual list of reports prepared by ORO

and SORO. Interestingly enough, a review of the reports issued by the British operational research establishments shows a considerable amount

of analysis of weapons effectiveness, both from an engineering viewpoint and an applications viewpoint.
18 | A History of the Department of Defense Federally Funded Research and Development Centers

large independent not-for-profit corporation. The

Lawrence Radiation Laboratory was administered

by the University of California and housed the cyclotron invented by Dr. Ernest O. Lawrence (49).

This laboratory was the father of two current

FFRDCs, the Lawrence Livermore (27, p. 59)3

and Lawrence Berkeley National Laboratories. In

1945, a subsidiary of Western Electric Company,

Sandia Corporation, established a separate organization at the Los Alamos Laboratory. Sandia

Corporation was a not-for-profit company established as a service to the federal government (49).

After World War II, some of these highly classified university laboratories were transferred to research facilities that were separate from their universities. In the case of Oak Ridge, management

was transferred to Monsanto Chemical Company

in 1945: later the Union Carbide and Carbon

Company was awarded the contract to operate the

facility and did so for many years until replaced by

the present incumbent, Martin Marietta (49).

Also, Oak Ridge Associated Universities were

formed in 1946 to provide a vehicle for academic

institutions to participate in federal atomic energy

research in association with Oak Ridge National

Laboratories. Most of these universities were

from the southeastern United States, certainly

nearer to Oak Ridge, Tennessee, than was the University of Chicago (51). Another consortium, the

Associated Universities Incorporated, managed

the Brookhaven National Laboratory, starting in

1947.

❚ Formalization of FFRDCs

The earliest located official definition of an

FFRDC is in a memorandum from the chairman

to the members of the Federal Council for Science

and Technology, dated November 1, 1967. This

definition was updated, revised, and issued by the

Office of Management and Budget on April 4,

1984, and registered in the Federal Register on

April 11, 1984 (73). The definition in the 1984

memorandum is as follows:

(1) FFRDCs do not have a prescribed organizational structure. They can range from the

traditional contractor-owned/contractoroperated or Government-owned/contractoroperated (GOCO) organizational structures

to various degrees of contractor/Government

control and ownership. In general, however,

all of the following criteria should be met before an activity is identified as an FFRDC:

(a) Performs, analyzes, integrates, supports (non-financial) and/or manages

basic research, applied research, and/or

development. (Activities primarily engaged in routine quality control and

testing, routine service activities, production, mapping and surveys, and information dissemination, even though

otherwise meeting the requirements of

paragraph 5.c., are specifically excluded from FFRDC designation).

(b) Performance of the functions in

5.c.(1)(a) is either upon the direct request of the Government or under a

broad charter from the Government, but

in either case the results are directly

monitored by the Government. However, the monitoring shall not be such as

to create a personal services relationship, or to cause disruptions that are

detrimental to the productivity and/or

quality of the FFRDCs’ work.

(c) The majority of the activity’s financial

support (70% or more) is received from

the Government with a single agency

usually predominating in that financial

support.

(d) In general, most or all of the facilities

are owned by the Government or

3 Edward Teller lobbied for the establishment of a second nuclear weapons facility (the Lawrence Livermore Laboratory) because of his

continuing feuds with Robert Oppenheimer. This would be a case of a research center being established because of personal and professional

animosity.
A History of the Department of Defense Federally Funded Research and Development Centers | 19

funded, under contract, by the Government.

(e) The activity is operated, managed and/

or administered by either a university or

consortium of universities, other notfor-profit organization or industrial

firm as an autonomous organization, or

as an identifiable separate operating

unit of a parent organization.

(f) A long term relationship evidenced by

specific agreement exists or is expected

to exist between the operator, manager,

or administrator of the activity and its

primary sponsor.

(2) In addition to the above criteria, the relationship between the activity and the Government should exhibit the following characteristics in order to qualify for FFRDC

identification:

(a) The activity (organization and/or facilities) is brought into existence at the initiative of a Government agency or bureau to meet some special research or

development need which, at the time,

cannot be met as effectively by existing

in-house or contractor resources.

(b) Work from other than a sponsoring

agency is undertaken only to the extent

permitted by the sponsoring agency and

in accordance with the procedures of

the sponsoring agency.

(c) The activity, whether the operator of its

own or a Government-owned facility,

has access, beyond that which is common to the normal contractual relationship, to Government and/or supplier

data, employees, and facilities needed

to discharge its responsibilities efficiently and effectively, whether the data

is sensitive or proprietary or not.

(d) The primary sponsor undertakes the responsibility to assure a reasonable continuity in the level of support to the activity consistent with the agency’s need

for the activity and the terms of the

sponsoring agreement.

(e) The activity is required to conduct its

business in a responsible manner befitting its special relationship with the

Government, to operate in the public interest free from organizational conflict

of interest, and to disclose its affairs (as

an FFRDC) to the primary sponsor.

(73)

This definition was modified slightly and condensed so as to be included in the Federal Acquisition Regulations, clause 35.017, which also defines “FFRDC.” It is a derivation of the above

definition and reads in part:

(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 facilities.

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 facilities 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) FFRDCs 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,
20 | A History of the Department of Defense Federally Funded Research and Development Centers

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

(4) Long-term relationships between the Government and FFRDCs 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 (17).

❚ Conclusion

The post-war period started with a large number

of federal research laboratories continuing after

World War II. These were mostly engineering and

scientific centers, many associated with the development of nuclear weapons, except one was a

study and analysis center. By 1950, there were 23

federal research centers, three were study and

analysis centers: ORO, RAND, and OEG. RAND

and OEG (renamed Project Air Force and the Center for Naval Analyses, respectively) survive to

this day.

THE GROWTH OF RESEARCH CENTERS

FROM THE KOREAN CONFLICT TO THE

EARLY 1960s

With the conflict in Korea and the Cold War environment of the 1950s and early 1960s, federal research continued growing steadily. Defense budgets after the Korean conflict were reduced but

stable, with spending on strategic weapons, mostly through the Air Force, growing considerably.

The think tanks were supported by a positive view

of what they could accomplish.

Prior to World War II, total federal spending on

research and development was estimated to be

$100 million a year. By 1950, this figure had

grown to $1.1 billion and continued to grow

throughout the 1950s and into the 1960s until in

1963 the budget was placed at $12.4 billion. This

growth was attributed at the time to:

...the importance of scientific and technical

work to the achievement of major public purposes. Since World War II the national defense

effort has rested more and more on the search for

new technology. Our military posture has come

to depend less on production capacity in being

and more on the race for shorter lead times in the

development and deployment of new weapons

systems and of countermeasures against similar

systems in the hands of potential enemies (9, p.

1).

❚ Army

At the start of the conflict in Korea in 1950, the

Army’s ORO had been in existence for two years

and was able to conduct operations research in its

traditional field environment, much as had the

British groups during World War II (77). The war

provided ORO with the laboratory for their work,

and they quickly organized and sent field teams to

Korea.

Ellis Johnson, the head of ORO, thought the

conflict in Korea offered an excellent laboratory

for operations research. ORO personnel, though

many of them had never seen service, visited the

theater. Johnson personally led a team of four into

the battle area and within a few months the ORO

contingent grew to eight teams of 40 analysts.

Over 100 ORO staff, subcontractors, and consultants worked in Japan and Korea during and immediately after the war. One hundred and thirteen

of ORO’s staff members and consultants received

the Korean Service Medal of the United Nations

Command for work in the combat zone. The ORO

analysts were also able to establish close working

relationships with the operational researchers

from Great Britain and Canada. All this provided

ORO with an understanding of military affairs,

experience with applying methodologies to operations, and the opportunity to test and develop

new methodologies. The field representatives in

Korea did extensive evaluations of close air support, utilization of indigenous manpower, effectiveness of leaflets, and a range of other items.

They had a number of notable successes, including convincing the Air Force that it should use
A History of the Department of Defense Federally Funded Research and Development Centers | 21

B-29s for tactical bombing at night (87).4 The

ORO researchers also conducted a systematic data

collection on the causes of enemy tank losses by

trying to conduct a ground check on every tank destroyed. This resulted in a number of post-war

studies on tank losses and the causes. S. L. A.

Marshall, well-known author of Men Against

Fire, worked as a consultant for ORO and created

a primer of Chinese tactics during the war. The

primer was immediately distributed down to the

platoon level in the Eighth Army. A number of

ORO researchers, in the desire to collect field

data, came under hostile fire. In one case an ORO

researcher was shot down behind enemy lines and

had to be rescued (66,77,87).

One of the elements encountered in the conflict

in Korea was the use of psychological warfare by

both sides. The psychological interest motivated

the Army to establish the Human Resources Research Office (HumRRO) in 1951 with a contract

administered by George Washington University.

It was formed specifically to conduct research on

human factors, or the study of how people behave

as part of a system including tactical matters,

training techniques, and man-machine interfaces.

Its staff consisted of a large number of social scientists and psychologists. While some human factors research was conducted by ORO, the majority

passed to HumRRO and later the Special Operations Research Office (SORO), another federal research center founded by the Army to study social

science issues and counterinsurgency warfare

(66).

ORO aided in the establishment in 1953 of the

Combat Operations Research Group (CORG) at

headquarters, Continental Army Command, Ft.

Monroe, Virginia. This organization was extensively supported by a private corporation, Technical Operation Inc., starting in 1955. In the early

1960s this group was reorganized and tied to the

Combat Developments Command in Ft. Belvoir,

Virginia (66). The Combat Developments Command served as a major seed organization for the

U.S. Army Concepts Analysis Agency (CAA).

The Army formed CAA on January 15, 1973 to

bring its research analysis in house, absorbing the

functions of the existing Strategy and Tactics

Analysis Group (STAG), the descendent of Combat Developments Command (79, pp. ii,3; 80,

p. i-1; 86). The Stanford Research Institute (SRI)

was established in 1956 to provide support for the

Combat Development Experimentation Center

(CDEC) at Ft. Ord, California (77). This not-forprofit organization was never considered a federal

research center.

In 1957, the Special Operations Research Office was formed as a contract agency under The

American University in Washington, D.C. It was

intended to specialize in what is now referred to as

low-intensity conflict or guerrilla warfare (81).

At the turn of the decade, the Army’s senior

analysis center, ORO, was dissolved and a new organization was established in June 1961. This

change was done so as to be able to fire the ORO

director, Dr. Johnson. ORO’s administrative organization, Johns Hopkins University, was not willing to remove Johnson under pressure from the

Army. It was mutually agreed then that Johns

Hopkins and the Army would terminate the contract, and the Army established a new organization called the Research Analysis Corporation

(RAC) (77,68). On September 1, 1961, there was

a new contract between the Army and RAC, with

ORO’s research program, personnel, physical assets, leases and contracts for supplies and services

transferred to RAC. All ORO personnel maintained their salaries and conditions of employment. There were some resignations, but the organization was unimpaired in its ability to continue

performing (77,68, pp.271-273,25). A senior

ORO staff member quipped that RAC stood for

“Relax and Cooperate” (68, p. 272).

In May of 1963, the five agencies—of which

only three were classified as federal research centers: CORG (supported by Technical Operations

Inc.), CDEC (supported by SRI), RAC, SORO

4 This is unusual in that an Army research center is providing recommendations on tactical air support to the Air Force (via the Army).
22 | A History of the Department of Defense Federally Funded Research and Development Centers

and HumRRO—had over 400 technical personnel

and conducted most of the Army-wide studies in

operations research and study and analysis (66, p.

6). The Army also had a developing in-house capability and was contracting to the developing private industry contractors. In FY 1962, 20 different

study contractors and 50 research studies of an operations research nature were sponsored by 11

Army agencies to support their in-house operations. Their in-house operations consisted of at

least 20 groups scattered among nine commands.

They employed approximately 200 civilian and

military personnel and ranged in size from 2 to 40

professionals. Like the study contractors, the inhouse groups worked mostly in specific study

areas with the mission of the command to which

they reported (66).

❚ Navy

The Navy became heavily involved in providing

air support, interdiction, and shore bombardment

in the conflict in Korea. The Navy’s Operations

Evaluation Group (OEG) primarily focused on

determining ways to make air and shore bombardment and interdiction missions more effective.

The number of scientists grew from just below 40

to just below 60 by the war’s end. One died in

combat.

After the end of the conflict in Korea and a period of consolidation, OEG resumed slow expansion. As a result of the rapidly changing technologies and the Cold War, OEG’s staff rose to a peak

of about 70 scientists in 1959 and 140 total staff

in 1961, when it was absorbed by the Center for

Naval Analyses (78).

Much like RAND, OEG also began to serve as

a central point for the creation and spinning off of

other federal research centers. The Navy’s first attempt at long-range planning was the founding of

the Operations Research Group (ORG) in June

1953, which was primarily oriented toward longterm military planning issues related to technological developments. It was staffed with OEG

scientists with field experience on a rotational basis and its director was also the director of OEG.

The Office of Naval Research (ONR), the federal

government agency that originally objected to

OEG calling itself ORG after World War II,

wanted an organization for its own operations research group tasked to look at ONR problems

only, which it then called ORG. In particular ONR

wanted the organization to review long-term problems and solutions. The ORG was sponsored by

MIT and located in the same offices as its customer, ONR. Its small staff never exceeded eight scientists, and it became an appendage of OEG, its

achievements not considered noteworthy by

many. The organization was dissolved on April

20, 1957, with a small group continuing until December 31, when its contract expired.

There had been considerable talk of creating a

“Navy RAND” in the early and mid-1950s. On

January 1, 1956, again as a spin-off from OEG, the

Naval Warfare Analysis Group (NAVWAG) was

established under contract with MIT. For its first

four years, NAVWAG had the same director as

OEG, who was also the director of ORG. Some

personnel from OEG were used to seed the organization. It was a very small organization located

in the Pentagon, starting with a staff of two. It

grew to a staff of 14, with 10 scientists, before being absorbed in 1962 by the Center for Naval

Analyses. In 1960 and 1961 it had a budget of

approximately $230,000 (78).

Finally, OEG created a third spin-off group, the

Technical Advisory Group (TAG), later named the

Applied Science Division (ASD). It was established in November 1959, again under contract

with MIT. It was oriented toward basic research

and, over three years, grew to a staff of approximately 60 people with 30 scientists and a budget

of $800,000 a year.

It was intended that OEG, NAVWAG, and ASD

would exchange personnel as required for their

missions. In 1959, the Navy established a longrange studies project headed by the Institute of

Naval Studies (INS) in Cambridge, Massachusetts. For its support, it contracted with the Institute for Defense Analyses (IDA) (78). At the close

of 1961, the Navy decided that ASD, being located near the Navy’s Institute of Naval Studies
A History of the Department of Defense Federally Funded Research and Development Centers | 23

(INS), should support INS and severed the ASD

connection with OEG.

Finally, in 1961, in response to a formal recommendation from IDA, DoD began looking at combining all these small OEG-influenced research

centers into one organization. The Smithsonian

Institution was selected as the contracting agency,

but that approach ended when the Chief Justice of

the United States, who was on the Smithsonian

Board, objected strongly. Finally, a contract arrangement was established with the Franklin

Institute, a not-for-profit scientific and educational institute that had been involved in sponsoring

scientific research for over a century. The Franklin

Institute assumed control of the newly established

Center for Naval Analyses (CNA) on July 1, 1962.

It combined all the functions and personnel of

OEG, NAVWAG, INS, and ASD, taking over the

contracts from MIT and IDA.

With the new center, the Marine Corps received

its own operations research section in December

1961. Up until that time, the Corps had only one

analyst at OEG (13, p. 16). The director of the division was located in the Marine headquarters and

only reported administratively to CNA. In 1966,

the INS along with the ASD was relocated from

Cambridge, Massachusetts, to Washington, D.C.

to be physically combined with the rest of CNA.

With the advent of a systems analysis division

and a cost analysis group, the CNA was a full-service support facility that integrated all of the

Navy’s civilian operations research staff under

one roof. In 1962 the staff of the OEG was 56 scientists (18 in the field) and 42 support personnel

with a fiscal year budget of $1,625,000. NAVWAG had 10 scientists and 3 support personnel

with a fiscal year budget of $221,500. ASD had 12

scientists and 6 support personnel with a budget

of $800,000, and INS had 43 scientists (42 in

Cambridge, 1 in Newport) and 14 support personnel with a budget of $1,500,000. This effectively

created a research organization of 186 people with

121 scientists and a FY 1962 budget over $4 million.

❚ Air Force

The conflict in Korea was not a major area of work

for the newly established RAND. RAND was

more focused on strategic issues of the future and

did not become as involved in the conflict in Korea as the Army and Navy operations research organizations did, partly because the Air Force, unlike the Navy, had a well developed doctrine on

interdiction and strategic bombing from World

War II. Also, RAND itself was less interested in

providing immediate operations research support

and more interested in studying long-term problems. RAND’s own histories make no mention of

the conflict in Korea (59,60).

While RAND continued to expand during this

period, it also fostered several spin-off organizations. In 1950 RAND began a study by a team of

psychologists on how groups operating complex

machines work under stress, which led to an air

defense training system in 1953 that was put into

operation throughout the Air Defense Command.

A whole division, which grew to twice the size of

the rest of RAND, supported this new, large semiautomatic air defense control system. The Systems Development Division provided routine

technical services, computer programs, and training for this system (59, p. 17).

Because it differed in its basic purpose from

RAND, the Systems Development Division became, on December 1, 1957, the Systems Development Corporation (SDC), an independent notfor-profit entity. The original proposal created a

for-profit organization, but was rejected by the Air

Force due to concerns about conflicts of interest

(68, pp. 114-119). Lincoln Laboratory had been

established in 1951 to develop an air defense system that became the Semi-Automatic Ground Environment (SAGE) system. RAND’s support of

the training aspect of this effort (arguably an early

instance of distributed interactive combat simulation if not of virtual realitysee OTA background

papers Virtual Reality and Distributed Interactive

Combat Simulation) was continued by SDC.

SAGE pioneered the use of a digital computer as
24 | A History of the Department of Defense Federally Funded Research and Development Centers

a real-time control system as well as to simulate

combat: in training, radar operators and weapon

controllers reacted to simulated targets presented

to them as real targets (84, p. 10). After becoming

independent of RAND, SDC continued to grow to

many times the size and budget of its parent organization. At one point, SDC employed about 90

percent of the nation’s computer programmers

(18, p. 131). SDC survives to the present day.

RAND also helped create Analytic Services,

Inc. (ANSER) in 1958 for reasons similar to those

for which RAND separated from the Douglas Aircraft Corporation. Back in 1951, the Air Force had

established the Assistant for Evaluation (later

changed to the Director of Development Planning). The office was primarily responsible for estimating the technical feasibility of new weapons

and planning the Air Force’s research and development objectives. The office suffered from understaffing from its inception and was unable to

obtain the right type of personnel through the civil

service system or the military. RAND initially

provided a number of technical people on loan.

The office contracted work out to companies such

as the Cornell Aeronautical Laboratory and

Corvey Engineering and not-for-profit firms including the Stanford Research Institute.

Eventually the Air Force decided it needed a

central study group, and Corvey Engineering was

issued the contract. Meanwhile, Corvey Engineering was purchased by Melpar Inc., a manufacturing firm that developed and sold test equipment

to the Department of Defense. Melpar was a subsidiary of the Westinghouse Air Brake Company.

In September 1957, Melpar Inc., received a contract to create a Scientific Analysis Office using

the Corvey Engineering personnel. Even though

Melpar tried to physically and organizationally

separate the people, this arrangement was ill-received by others in private industry and by the Air

Force’s own Air Research and Development

Command because of the potential conflicts of interest. It was a situation analogous to the relationship between RAND and Douglas. The Air Force

then requested RAND take over the office. RAND

felt that this was a staff research function that did

not fit RAND’s mission and informally recommended that the Air Force use its own in-house

technical capability, the Operations Analysis Office, an operations research group of approximately 200 people. Apparently concerns over performance, responsiveness, and objectivity predisposed

the Air Force against another department in its

own organization. So, RAND instead agreed to

help establish ANSER, using the core of the personnel from the short-lived Melpar Scientific

Analysis Office. ANSER was founded in July

1958 as a not-for-profit research corporation also

incorporated in California.

On July 12, 1961, ANSER became independent of RAND except for two RAND members on

the ANSER board of trustees. ANSER was considerably smaller than RAND, with 40 professionals. It was located in Virginia, within convenient distance of the office it was supporting. It

conducted cost-effectiveness studies and technical evaluations of weapon systems and subsystems and provided technical advice to the Directorate of Development Planning.

In addition, a number of RAND personnel left

to establish other organizations. Notable among

these are the for-profit firm Planning Research

Corporation (PRC), General Electric’s TEMPO

Division, and the not-for-profit Hudson Institute

(68), founded by Herman Kahn in 1961 as a breakaway organization from RAND. In interviews

Herman Kahn expressed concern that RAND was

losing its vitality and becoming a captive of its client (27, pp. 89,189). He claimed RAND had become the “loyal opposition” while he was the

“disloyal opposition” (68, p. 306). The Hudson

Institute was a federal research center for a time

during the 1960s, but was no longer listed as one

by June 1, 1968 (52). (In 1983, after a competition

among several institutions, the Department of the

Navy would select the Hudson Institute as the

contracting company for the Center for Naval

Analyses, taking over from the University of

Rochester (12).)

Two not-for-profit federal research centers, The

Aerospace Corporation and MITRE Corporation,

were established by the Air Force to provide systems integration and managerial assistance to particular Air Force commands to serve as a bridge
A History of the Department of Defense Federally Funded Research and Development Centers | 25

between the Air Force and industry. The Air Force

lacked the in-house technical resources to design

or specify systems in enough detail to conduct

meaningful competitions for procurement and

monitor the efforts of the chosen contractors.

On February 10, 1954, the Air Force Strategic

Missiles Evaluation Committee (SMEC) reported

that an intercontinental missile could be developed by 1960. (A study released by RAND two

days earlier had stated a similar conclusion.) The

Air Force decided that the systems engineering

and technical oversight of the development of

such a complex, high-risk system should be provided by an independent organization rather than

an industrial manufacturer participating in the

project. As such, the Ramo Wooldridge Corporation was contracted in 1954 as the systems engineering contractor. The division doing this work

grew to become, in December 1957, the Space

Technologies Laboratory (STL) of Ramo Wooldridge (1, pp. 12,13). The Air Force gave STL access to both federal government plans and contractor-proprietary data. The first Atlas launch

was in June 1957, with successful launches of the

Atlas and Thor missiles occurring before the end

of the year (1, p. 15), well ahead of the SMEC

forecast.

Ramo Wooldridge was financially backed by

Thompson Products, a supplier for the automotive

and aircraft industry. In 1958 Thompson Products

and Ramo Wooldridge merged to become TRW

Inc., with the STL as an independent but wholly

owned subsidiary, creating a potential seeming

conflict of interest analogous to that created by

Douglas Aircraft’s original ownership of RAND.

There was a hardware exclusion clause in the

Ramo Wooldridge contract, but no such clause existed for Thompson Products (1, p. 15). The Senate Armed Services Committee and a subcommittee of the House Committee on Government

Operations investigated potential conflicts of interest between 1957 and 1959, with the House

subcommittee recommending in a September

1959 report (1, p. 16) that STL be converted into

a not-for-profit institution like RAND. When the

Air Force, at Congress’s request, set out to create

a federal research center, it discovered that TRW

did not want to relinquish STL. The Air Force requested that an organizing committee of private

citizens establish a new not-for-profit corporation

with a board of trustees. That not-for-profit became The Aerospace Corporation.

The Aerospace Corporation was established on

June 3, 1960, as a not-for-profit organization under the laws of California. It was to be responsible

for advanced planning, initial system design,

technical evaluation of proposals, and technical

oversight of hardware development and operation. On June 9, The Aerospace Corporation received a $1 million contract, effective July 1. On

June 10, the Air Force gave Aerospace an advance

of $5 million. This relieved the organization of

having to obtain capital funds from other sources

such the Rockefeller Foundation or the Ford

Foundation. Aerospace consisted of a board of directors, a contract, and a major responsibility to

integrate space and missile programs. It did not

have a staff or facilities. At the end of the first

month, it had 15 staff; a week later, 126 staff; and,

at the end of six months, more than 1,700 (1, pp.

19,21). Most of this staff was recruited from private industry. The president from 1960 to 1977,

Dr. Ivan A. Getting, had previously been director

of the Fire Control and Army Ground Forces Division at MIT’s Radiation Laboratory. Several other

prominent Aerospace figures came from this

World War II-era organization (1, p. 7). Other vice

presidents and department heads came from the

Naval Research Laboratory, RAND, Raytheon,

and STL. Seventy-five percent of its staff came

from STL.

To provide continuity until the work could be

taken over, Aerospace gave STL a subcontract.

Aerospace awarded subcontracts to other industrial firms for specific research tasks. To faciliate

operations, the Air Force inserted clauses in Aerospace’s contracts with the manufacturers that gave

Aerospace right of access to the contractor’s facilities, personnel, and information. Its original facilities were purchased from STL, eventually expanding to offices in Florida and California. By

the end of 1962, The Aerospace Corporation

employed 4,275 people, 1,463 of whom were engineers and scientists. Most of the technical staff
26 | A History of the Department of Defense Federally Funded Research and Development Centers

came from industry, only a few from universities

and the federal government (2, p. 1).

The other systems integration research center

was MITRE Corporation, formed in 1958 out of

the Computer Systems Division of the MIT’s Lincoln Laboratory. It was established to assume the

responsibility for the operational implementation

phase of the SAGE (Semi-Automatic Ground Environment) system. The SAGE system was part of

the continental air defense system in the late

1950s and 1960s. The purpose of the system was

integration of ground elements—radar, communications, computers and control centers—with a

new generation of interception weapons. The Air

Force did not have the needed systems-integration

expertise in-house and did not wish, for reasons of

potential conflicts of interest, to give the work to

a for-profit contractor. MIT viewed the implementation work as extraneous to the desired scientific mission of Lincoln, and therefore the Air

Force was obliged to create a new FCRC, MITRE.

MITRE’s first contract was with the Air Defense

System Integration Division. MITRE eventually

became involved with most of the major strategic

air programs of the 1960s, 1970s, and 1980s, including North American Air Defense Command

(NORAD) headquarters, Ballistic Missile Early

Warning System (BMEWS), Airborne Warning

and Control System (AWACS), and the Strategic

Defense Initiative (SDI).

In 1959, MITRE got a second contract, to perform work on air traffic control systems for the

Federal Aviation Administration (FAA). Air traffic control and continental air defense share many

technologies in common, and in a Cold War environment the two functions overlapped. In 1966

MITRE began work with National Aeronautics

and Space Administration (NASA) on its mission

control centers (44).

❚ Office of the Secretary of Defense

The Office of the Secretary of Defense (OSD) began creating federal research centers starting in

1956 in an effort to support its Weapons Systems

Evaluation Group (WSEG), a defense agency established Fall 1947 as an adjunct of the Joint

Chiefs of Staff to assess objectively the claims for

competing weapons systems by the different services. There was considerable concern in the early

and mid-1950s that this organization was not performing effectively, so the Institute for Defense

Analyses (IDA) was created to act as a technical

backstop to WSEG and to facilitate the recruitment of high-caliber scientific manpower. WSEG

was to provide tasks for the Weapon Systems

Evaluation Division (WSED) of IDA, arrange for

access to information, provide military personnel

to assist, and provide a board to review completed

work and arrange for distribution and publication.

There was considerable cross-over in assignments. For example, the same person served as the

Director of WSED and the Director of Research

for WSEG. This arrangement led to some confusion over who was ultimately responsible for the

finished work, IDA or the federal government,

and reflected wider uncertainty over whether contractors could have detachment and objectivity. It

also resulted in an investigation by Congressman

Chester Earl Holifield (D-CA) (68). As a result,

late in 1962 members of DoD and IDA restructured the WSEG/WSED working relationship so

that there were no more dual federal government

and company positions and the WSEG review

board was not actively involved in daily IDA

work. These changes were strongly opposed by

many professional military. They felt that the

changes effectively eliminated military control

over WSEG’s studies, operations, and reports.

They were concerned that the group’s work would

be less responsive to actual needs and security requirements. Another serious concern was that the

changes would degrade the influence of the professional officer in the defense decision-making

process. This controversy was part of the developing struggle over whether the civilian expert or

professional military would be making the decisions on systems and weapons that were to be used

by the military. The objections resulted in a revised decision that partially reasserted WSEG’s

control of WSED, but as part of the changes, the
A History of the Department of Defense Federally Funded Research and Development Centers | 27

WSED (IDA) was physically located outside of

the Pentagon (68).

IDA’s mandate soon expanded. In 1958, at the

request of the Secretary of Defense, IDA established an Advanced Research Projects Division to

support the newly created Advanced Research

Projects Agency (ARPA, later Defense Advanced

Research Projects Agency, now again simply

ARPA) in DoD. In 1960, the Division was reconstituted as the Research and Engineering Support

Division to undertake technical studies for all the

offices of the Director of Defense Research and

Engineering, including ARPA. At about the same

time, IDA founded its Princeton-based Communications Research Division, whose mission was

to carry out a long-range program of studies in

communications, particularly research in mathematics, to support the work of the National Security Agency.

In 1961, the Logistics Management Institute

(LMI) was created to serve as a research aid to the

Assistant Secretary of Defense for Installations

and Logistics (68). It was listed by the National

Science Foundation that year as an FCRC and

then disappeared from the listings until 1984,

when it officially resurfaced as an FFRDC (52).

❚ Conclusion

Twenty-three federal research centers existed in

1950, three of them study and analysis centers.

The number of centers grew, especially in DoD. In

1962, when the name “FCRC” was established,

there were 66 of these centers, with an all-time record 43 DoD centers. The research centers had differentiated into three basic types: 1) laboratories,

2) study and analysis centers, and 3) engineering

and technical direction centers. Only six of the 43

DoD FCRCs have survived as FFRDCs until the

present day (along with LMI, which became an

FFRDC in 1984). The study and analysis centers

went beyond operations research into a wide range

of areas and began to take on non-DoD work.

They had a clear impact on what was being discussed and how it was discussed within DoD.

Much of this growth was a response to the pressures of the Cold War environment. In some cases

(e.g., that of Aerospace), expediency in establishing a functional operation outweighed other considerations. Also, the Soviet launch of the first satellite, Sputnik, in 1957 propelled the United

States to commit considerable additional effort to

R&D, from which the centers directly benefited.

CONFLICT AND TRANSITION FOR THE

RESEARCH CENTERS IN THE 1960S TO

MID-1970s

❚ Social Changes

Many societal forces, including changes in society’s faith in the power of science and attitude toward the military, affected the federal research

centers in the 1960s. During World War II and the

conflict in Korea, these factors generally favored

the mission of the think tanks. In the 1960s, however, they changed.

This shift can be seen in the media of the 1960s.

In the early 1950s, RAND had established an office of communications and public relations and

had even gone as far as to buy general corporate

advertising in 1957 through 1961 in various scientific and trade journals (61,68).5 In the minds of

many, “RAND” had become synonymous with

“think tanks,” even though there were a number of

these in existence in the 1960s (61).6 RAND was

5 The purpose of this advertisement campaign was to increase the visibility of RAND. It originated in concern that RAND was losing out to

private industry when recruiting new staff. Instead of providing recruiting ads that directly competed with commercial company’s recruitment

efforts (and could have raised complaints), the RAND ad campaign provided statements from RAND’s division chiefs that illuminated the work

and philosophies of RAND personnel.

6 Providing some indication of the changes in the visibility of RAND over time, there is a “selected bibliography” of articles written on

RAND in the back (pp. 104-106) of The RAND Corporation, 40th Year. It records eight articles written on the corporation in the 1950s. It records

71 articles written from 1960 through 1970, and only 14 since 1970. While this is certainly not a definitive list, research indicates a considerable

expansion in the awareness and interest in think tanks during the 60s and early 70s, and then less of an interest as they become passé.
28 | A History of the Department of Defense Federally Funded Research and Development Centers

the object of a protest-style folk song by song

writer Malvina Reynolds in 1961 (68). The stereotype of a strategic advisor for nuclear strategy was

caricatured by Stanley Kubrick’s Dr. Strangelove

from the movie of the same name. He was supposedly a strategist from the “Bland Corporation”

(27).

In the late 1950s and early 1960s, the Department of Defense began to refocus on conventional

warfare. As the budget began to expand in the

1960s, there came an emphasis on making the

equipment more cost effective. This position was

clearly stated by Secretary of Defense McNamara

at his swearing in on January 21, 1961 and led to

cost analysis of systems becoming part of the

work of all the think tanks. The Operations Evaluation Group (OEG) had already added economists

to its staff in the 1950s (68). ORO began its costanalysis efforts in the late 1950s (77). RAND

played a role, with a whole department dedicated

to developing a new budgeting system for the Department of Defense. All the services began using

the RAND-developed Program Planning and

Budgeting System (PPBS) (68), which was extended to all of the federal government by directive from President Lyndon B. Johnson in August

1965 (18, p. 64).

The conflict in Vietnam and the opposition

thereto had a profound impact on the thinking of

military people, politicians, and the populace in

general that influences policy and decisions yet

today. Opposition to U.S. involvement in Vietnam

led to a critical and often hostile view of the military by many civilians and redefined the relationship between the military and the civilian worlds.

As opposition to U.S. involvement in Vietnam

and anything military heightened on college campuses throughout the United States, many

FFRDCs found their connections to an educational institution a liability (and vice versa). There

were even concerns about being able to protect the

research on campus.7 The relationship with

SORO, and its successor CRESS, at the American

University declined in the late 1960s, with animosity coming from the school’s professors and

protests by the students (25). In the fall of 1967,

the Students for a Democratic Society (SDS) organized protests to sever Princeton’s ties with IDA.

Similar protests were conducted by students at the

University of Michigan and were an issue during

the 8-day student revolt at Columbia University

(18, pp. 146,147). On August 24, 1970, the Army

Mathematics Center at the University of Wisconsin was bombed with 1,700 lb of nitrogen fertilizer soaked in fuel oil. The blast killed one researcher, injured three others, and destroyed a building

wing, seriously disrupting the center’s research

program. The letter to the media by the bombers

accused the center of being “a vital cog in the machinery of U.S. imperialism.” The Army Mathematics Center was probably one of the least important DoD centers. It primarily conducted basic

mathematics research, stimulated scientific contacts between military mathematicians and their

civilian counterparts, and provided a training service in applied mathematics. After the bombing it

was removed from the list of FFRDCs but continued to operate with support from the Army (18, p.

151). There were a number of demonstrations

against CNA at the University of Rochester campus (13, p. 20), a factor in the migration away from

University administration. As of June 1968, 10 of

16 DoD FFRDCs were administered by universities (52, p. 97). As of FY 1995, only 2 out of 10

DoD FFRDCs are administered by universities,

both laboratories (53).

❚ Criticisms of Federal Research Centers

Criticism of federal research centers also came

from private industry, which objected to competing with organizations funded and established by

their own federal government. The Congressional

Record of June 2, 1960 on “Competitive Private

7 One independent government research consultant studying causes of political violence had his graduate student assistants help him make

copies of all the files from the study, which were being stored in the library at San Diego University, for fear of violence to that building. Interview with Professor Ivo Feierhabend, San Diego University, March 1983.
A History of the Department of Defense Federally Funded Research and Development Centers | 29

Enterprises in Space,” for example, provided criticism of federal research centers as nationalized industry competing directly with private enterprise

on a subsidized, nontax basis. It is not entirely

possible to refute this criticism. Federal research

centers were clearly established for the purpose of

doing research and analysis for the federal government in an environment where there was a stable

research facility, no market pressure, no conflictof-interest questions, and the capability to produce the kind of the independent analysis unlikely

to come from either a federal government agency

or a for-profit private company.

Having a research and advisory center as part of

a manufacturer and commercial competitor for

hardware had led to conflict-of-interest problems,

causing RAND to separate from Douglas, Aerospace to be created to replace TRW, and also providing the impetus behind the creation of ANSER

Inc. independent from Melpar. In the early 1960s,

IDA also opened itself up for this type of criticism

when it had employees “on loan” from industry

working on its staff (68).

There is also criticism, not well documented,

that many federal research centers are simply not

fully productive and are not always cost effective.

The organizations themselves, on the other hand,

are required to document their accomplishments,

which include cost saving and improvements in

effectiveness. In addition, the federal government

regularly evaluates and documents the effectiveness and cost management of the centers. The fees

that these organizations receive have come under

attack at various times as being inconsistent with

a not-for-profit organization, despite explicit provision for such fees in the Defense Acquisition

Regulations (16). Some of the federal research

centers charged the federal government fees,

above and beyond the cost of doing the work contracted, to provide capital funds for the organization and funds for other activities.

Congressional Criticism

By the early 1960s, Congress was clearly wary of,

if not actually opposed to, federal government

support of not-for-profit corporations. A paper

prepared in 1958 for a subcommittee of the U.S.

House of Representatives Committee on Government Operations suggested that the issuance of

contracts for research needed to be examined. It

stated, “While the evidence is not entirely clear, it

does seem to be true that contracting methods and

specifications appropriate to the administration of

traditional functions of the federal government

have been carried over by brute force and sheer

awkwardness into the area of scientific research

contracting, in which they protect adequately the

interests neither of the federal government nor the

contractor.” (9, p. 81).

A federal government committee appointed by

President John F. Kennedy in 1961, under the Director of the Bureau of the Budget, David Bell, examined the usefulness of contracting for work, reviewed the contracting procedures, and sought to

determine what limitations within the federal government result in the use of contractors. The committee looked into aspects of federal government

contracting for scientific evaluations and advice,

research engineering services, and technical and

administrative management services. The committee’s report (often referred to as “The Bell Report”) was made public on April 30, 1962 and was

the first comprehensive consideration of the issues related to contracting for services and expertise. Only in passing did it specifically address

federal research centers (9,68).8

One of the primary recommendations of the report was that the federal government needed to

raise federal salaries to be able to “obtain and hold

first-class scientists, engineers, and administrators” (9). No recommendations were made related

to any specific federal research center or to re8 The director of the Bureau of the Budget, and the leader of the effort was David E. Bell, so this report is usually called the Bell Report, even

though those words appear nowhere on the report.
30 | A History of the Department of Defense Federally Funded Research and Development Centers

search centers in general. Concerning the issue of

compensation, the report stated: “We have carefully considered the question whether standards

should be applied to salaries and related benefits

paid by research and development contractors doing work for the federal government. We believe

it is desirable to do so in those cases in which the

system of letting contracts does not result in cost

control through competition.”

The Bell Report acknowledged the criticism

that the new not-for-profit contractors doing systems engineering and technical direction work

were intruding in areas traditionally done by private business. (The American Federation of Government Employees had submitted a statement in

August 1961 to the 87th Congress, House Committee on Armed Services, expressing concern

over the adverse effects of contracting federal

government work to private business (9, p. 78).)

The report concluded that, “The present intermingling of the public and private sectors is in the national interest because it affords the largest opportunity for initiative and the competition of ideas

from all elements of the technical community.

Consequently, it is our judgment that the present

complex partnership between Government and

private institutions should continue.” 

The report validated the original rationale for

creating federal research centers as independent

sources of analysis with the caveat of strong leadership. It noted that:

Not-for-profit organizations (other than universities and contractor-operated Government

facilities), if strongly led, can provide a degree

of independence, both from Government and

from the commercial market, which may make

them particularly useful as a source of objective

analytical advice and technical services....Contractor-operated Government facilities appear

to be effective, in some instances, in securing

competent scientific and technical personnel to

perform research and development work where

very complex and costly facilities are required

and the Government desires to maintain control

of these facilities (9).

The high salaries of employees of federal research centers have come under congressional

scrutiny more than once. IDA and RAND, in particular, had a reputation for paying the highest salaries of the think tanks and contrasted sharply

with their civil service counterparts. For example,

in 1957 and 1958, IDA provided a major share of

ARPA’s initial working staff, for ARPA at that

time had only a skeleton civil service staff. Thus

IDA personnel and ARPA personnel were working at identical jobs with IDA personnel getting

paid more (68). Aerospace and MITRE, using engineering and technical personnel with a high

commercial marketability, were paying higher salaries than the think tanks (68, pp. 287,288).

Criticism of federal research centers in Congress in the late 1950s was primarily focused on

problems related to one program or one corporation. A general analysis of the use of federal research centers does not appear to have been conducted prior to the Bell Report.

One corporation singled out was The Aerospace Corporation, established to help integrate

the Air Force’s Ballistic Missile and Space Program in the late 1950s, the most expensive defense

program undertaken up to that time. For this and

other reasons, it was the one federal research center that came under repeated congressional scrutiny in the late 1950s and early 1960s. The issue of

salaries raised in the U.S. House of Representatives in the early 1960s was almost entirely focused on Aerospace Corporation.

In May 1961, the House Committee on Government Operations held a hearing on the formation of The Aerospace Corporation. This hearing

addressed such items as salary scales, conflicts of

interest, facilities, fees, and patent rights. It also

discussed the concerns of private industry over

systems engineering agents as “meddlers in the

weapon-building process and as piratic employers

of scarce or highly prized scientific personnel”

and the concerns of federal government critics

who thought these agencies were taking on tasks

that should be performed by the federal government (9, p. 80).

The House Committee on Appropriations held

hearings on Department of Defense Appropriations for 1962. On the establishment of Aero-
A History of the Department of Defense Federally Funded Research and Development Centers | 31

space Corporation, one witness stated, “My comment is, with the present rules and regulations,

you could not set up an organization like the Aerospace Corp. within the Government in the time

available to set it up. We needed it right away. It

would be infeasible to have done it within the

Government.” (9, p. 77)

The House Committee on Appropriations in

June 23, 1961 reported that:

....to a considerable extent the use of contracts with not-for-profit organizations is merely

a subterfuge to avoid the restrictions of civil service salary scales.

It is noted that the buildup of these organizations has not been accompanied by corresponding reductions in the number of military and civilian personnel on the Government rolls...

Military and civilian personnel on the payroll

should be competent to do the jobs assigned to

them or they should be removed from the payroll. (9, p. 78).

The committee found Aerospace’s salaries excessive, its overhead too high, and its planned

staff too large (9, p. 78). Aerospace salaries also

came up at a House of Representatives’ Committee on Post Office and Civil Service Manpower

Utilization in the Federal Government in 1961 (9,

p. 82). The Defense Appropriations Subcommittee of the House Appropriations Committee

stated, “The Committee feels that the salaries paid

by the Aerospace Corporation are excessive, that

its overhead costs are too high, and that it plans to

employ too large a staff.” The Committee reduced

the funding for Aerospace, and placed a ceiling on

the Aerospace program element that could only be

raised with the consent of the Committee (1, p.

198).

Whether or not this is a valid basis for criticism,

the federal research centers were designed to attract the best and the brightest people available using salary above the wage scale the federal government offers as an incentive. Furthermore, the

space program was expanding rapidly and reduction in personnel could not be expected.

On the other hand, the House of Representatives Committee on Science and Astronautics

commissioned a staff study on Aerospace and related organizations in 1963 to review whether or

not they merited their special relationship with industry and the federal government. The study

found that Aerospace provided the following

functions:

 technical direction and management of engineering systems (especially missile and space

systems),

 technical troubleshooting,

 judgment of technical aspects of industrial proposals,

 origination and development of scientific and

technical ideas and plans,

 laboratory research, and

 confidential technical advice (2, p. 2).

In 1964 Congress, concerned about the growth

of the research centers, placed a ceiling on the total

funds for FCRCs. This ceiling was enforced starting in 1967 (85, p. 313,314), though Aerospace

had had a ceiling since 1961, as described above.

An intense examination of Aerospace was conducted in 1964 and 1965 by the Special Investigations Subcommittee of the House Armed Services

Committee, chaired by Congressman Porter

Hardy (D-VA). The Committee reviewed cost

items, acquisition of property, construction of

buildings, the fee, the cost of moves, salaries,

compensation, sick leave policy, and other matters. No evaluation of the technical performance

of Aerospace was attempted. The Air Force

strongly supported Aerospace during this investigation. Hearings resulted in a law requiring congressional authorization before Aerospace could

purchase builidings or real estate, regardless of

which Aerospace funds were used (85, p. 198).

Because Aerospace already had built a number of

facilities, the need for more did not arise until the

1970s, when approval of a new building took two

years to obtain (85, pp. 203,204).

A ceiling placed on MITRE in 1964 applied

only to Air Force work. Another ceiling, placed in

1968, applied to all DoD work. In that year

MITRE’s board of directors amended its certificate of incorporation to allow MITRE to do work
32 | A History of the Department of Defense Federally Funded Research and Development Centers

outside the federal government. DoD policy encouraged diversification outside DoD (43, pp.

126,252).

The Military Services

During the late 1960s and early 1970s the Army

and Air Force both became increasingly dissatisfied with their FFRDCs. The Army decreased its

support to SORO (renamed the Center for Research in Social Systems (CRESS)), HumRRO,

and RAC. Further budget cuts resulted in CRESS

seriously decreasing its staff. HumRRO became a

private company. RAC was sold to General Research Corporation, a private company, after the

Army informed RAC that it would no longer be

supported as an FFRDC. The Army formed the

U.S. Army Concepts Analysis Agency (CAA)

(77,86,32)9 in the early 1970s to replace RAC

with its own in-house research organization (77),

implying that the independence of the advisory organization was no longer an issue. The Army offered to bring part of the RAC staff in-house, but

RAC decided to pursue selling itself to an outside

company (20, p. 11). By September 1972, the

Army sponsored no FFRDCs (52) but did continue to contract with some Air Force-sponsored

FFRDCs.

The Air Force, for its part, decided that RAND

was not responsive to its needs. (OTA notes that

this complaint is stated openly in the RAND official 25-year history.) (68,59,60) As early as 1952,

an Air Force study voiced complaints about

RAND isolating itself from real weapons development by avoiding involvement in evaluations

and by its refusal to participate in analysis that

could lead to the granting of a contract to an industrial firm. Doing so would have directly involved

RAND in evaluating other firms weapon system’s

proposal and compromised its independent “unbiased” position that was its reason for separating

from Douglas Aircraft four years earlier (68).

However, this role is regularly filled by Aerospace

and MITRE.

RAND’s failure to support the Air Force’s position on the B-70 bomber was particularly annoying to some members of the Air Force. The effect

was that RAND’s budget in 1961 was initially cut

in half, to $7 million. While this money was restored in the DoD budget before it went to Congress, the cut heralded a long, difficult period for

the company’s relationship with the Air Force.

RAND’s relationship with the Strategic Air Command, in particular, was troubled during the late

1950s and early 1960s (68).

Also, the Air Force felt that its unique lawyerclient relationship with RAND had been compromised by the extensive work RAND was doing for

the OSD and other organizations. RAND shrank

from a peak of 1,100 employees in 1963, with perhaps 900 involved in Air Force work (59), to

approximately 1,000 employed, but only approximately 400 involved in Air Force projects in 1973

(60).

In the end, the Army shut down CRESS, RAC,

and HumRRO, and the Air Force’s participation

in RAND was cut in half by the early 1970s. This

entire shift in relationship with the Army and the

Air Force occurred over seven years (roughly

1965 to 1972).

Though the Navy did not have such dramatic

shifts in relationships with its research centers,

there were, nonetheless, changes. With the increased U.S. involvement in Vietnam, in 1964

CNA’s OEG resumed its interdiction studies. As

the U.S. Navy’s largest combat role in the Vietnam

war was interdiction and air strikes, the operational analysis focused on these efforts as well as on

the Navy’s “brown water” riverine force interdicting supplies in the Mekong Delta. A separate division was established for Southeast Asia studies,

9 Charles A. H. Thomson, in his 1975 history of RAC, mentions that the U.S. Army was setting up an organization that would take over some

of the functions of RAC. That this organization was the U.S. Army Concepts Analysis Agency was confirmed in interviews in February 1994

with Howard Whitley, the Special Assistant for Model Validation at CAA and with Colonel William A. Lawrence (ret.), who was assigned to

CAA when it was established in January 1973.
A History of the Department of Defense Federally Funded Research and Development Centers | 33

and a field representative program was set up. The

office’s work on assembling statistics of air and

other operations was published widely and distributed monthly. Although the ability to measure

the effectiveness of the air operations suffered

from the same difficulties as it had during the conflict in Korea, there being no reliable method of

determining the effectiveness of an interdiction

campaign, the considerable collection of data

served as material for analysis for some years

thereafter.

CNA focused its attention on analyzing the rising naval threat from the Soviet Union, the first

challenge to the U.S. Navy’s supremacy since

World War II. CNA worked with the Navy on its

exercises to determine what lessons could be

learned from these simulated combats. The OEG

itself declined from its Vietnam peak of approximately 80 scientists (now called analysts) to a low

of about 55 in 1977 and climbed to approximately

65 (about the same number as were employed in

World War II) during the early 1980s. More significantly, after 1970 the fraction of analysts on field

assignments increased rapidly to over half of the

organization. It had never been much more than 30

percent before (78).

In 1967 the Navy was still having difficulty in

its relationship with the Franklin Institute. The

Navy complained about both lack of timeliness,

quality, and realism in the CNA studies and management changes executed by the Franklin Institute. Another search went out for a new not-forprofit contract agent. RAND and the Stanford

Research Institute (SRI) were seriously considered, but the Navy decided that a university would

serve best. The University of Rochester was selected, even though it laid down a series of conditions, such as set-asides of 23 percent of CNA’s

budget for CNA-initiated research and 5 percent

of the budget for University of Rochester research

on matters of possible use to the Navy. The contract went into effect on August 1, 1967. It included wider distribution of CNA studies and a

higher visibility in naval councils for the CNA director. Finally, it better integrated visiting officers

into the work of CNA, including arranging for

3-year assignments (78).

In 1969, Secretary of Defense Melvin Laird encouraged Aerospace, and the DoD FCRCs generally, to increase work in nondefense programs,

even though DoD was not intending to reduce its

funding. Partially in response to requests from

Congress that the technologies and knowledge developed in the defense industry be transferred to

help address domestic problems, he wanted the civilian economy to benefit from some of the technology developed for military and space uses (2).

❚ Conclusion

The period spanning the 1960s to mid-1970s

started with 43 DoD FCRCs (the most DoD

FFRDCs ever) in 1961. During this period of

marked changes in public attitude towards the

military, the DoD underwent the McNamara revolution and “civilianization,” with an expansion of

the FCRCs’ unique disciplines beyond the centers

both within DoD and private industry. This period

also saw the expansion of the study and analysis

centers into civilian work and the creation of a

large number of FFRDCs for non-DoD work. By

1969 the number of FFRDCs had reached its maximum of 74, but only 16 were certified by the

DoD. The official status of many of these

FFRDCs changed (although most remained in operation), so that by 1975 there were only 39

FFRDCs left, with only 9 DoD FFRDCs: the

RAND Corporation, IDA, CNA, Lincoln Laboratory, MITRE Corporation, The Aerospace Corporation, APL, ARL, and ANSER.

THE EMERGENCE OF UNIFIED POLICY

REGARDING DoD FFRDCS

The period from the mid-1970s to the present saw

changes in the military that influenced the missions of the FFRDCs. In 1972 the nature of the development of nuclear weapon systems was redefined with the signing of the ABM treaty and the

SALT interim agreement on defensive arms with

the Soviet Union. The U.S. military’s active role

in the Vietnam war effectively ended in 1973 and
34 | A History of the Department of Defense Federally Funded Research and Development Centers

decisively ended in 1975. With the end of conscription in 1973, the U.S. military became an allvolunteer force for the first time in over 30 years.

During this time, the defense budget declined.

As a result of continued concern over the size

and number of FFRDCs, the Director of Defense

Research and Engineering (DDR&E) requested a

yearlong series of studies by which to produce and

evaluate a unified policy concerning the FFRDCs

(then still called FCRCs by the DoD). A report

from a special Defense Science Board Task Force

on Federal Contract Research Center Utilization

was presented to the Director of DDR&E, Malcolm Currie, in February 1976. The report, a

whole-hearted endorsement of the FCRCs, stated

that system of congressionally set ceilings was

outdated and inefficient, that no further controls

were needed, that the FCRC salaries were not excessive, and that the quality of the FCRC work

was good. The report noted that some of the earlier

salary discrepancies had been lessened by the

growth of federal salaries during the 1950s (55, p.

13). The report closed with a series of recommendations, the first of which stated:

The Federal Contract Research Centers supporting Defense Department agencies are so valuable a resource, because of their perspective, the

quality of their work, and the responsiveness they

can exhibit because of their special relationship to

their sponsorship, that they should be retained and

protected in essentially their present roles. This

recommendation is meant to be read as a strong

endorsement of the current Defense policy in use

of the FCRCs (55, p. 30).

While Dr. Currie was preparing his management plan for Congress, three out of the four Committees with FCRC budget and ceiling oversight

took negative budgetary action, even though the

Defense budget as a whole was being increased,

and despite Dr. Currie’s promise in February to

provide Congress with a comprehensive plan before the end of the session. Dr. Currie forwarded

his management plan for FCRCs to Congress on

June 15, 1976 (19, pp. 1,2).

The actions outlined in the report included reduction of the number of centers from nine to six,

by decertifying the remaining part of the Applied

Physics Laboratory, the Applied Research Laboratory, and ANSER. The report recommended the

continued certification of the remaining laboratory, Lincoln, on the grounds that “MIT views its

DoD work as a matter of public responsibility and

service and feels that the visibility of their ’line

item,’ PE 65705F, to the Services and Congress is

desireable and good.” The report called for

MITRE’s DoD C3 work to be made a separate

FFRDC in Bedford, Massachusetts, and that the

rest of MITRE’s work to be migrated to its

McLean, Virginia, operation. MITRE Bedford

and Aerospace would then be limited to doing

only DoD work. Responsibility for IDA would be

transferred from WSEG to DDR&E, and a separate Project Air Force would be created at RAND

in a split similar to that mandated for MITRE (55,

p. 35). The recommendations of this plan were accepted by Congress and largely, but not totally,

implemented—MITRE’s work for the Defense

Communications Agency stayed in McLean.

MITRE and RAND had the most extensive

non-DoD programs, their Air Force work being

less than half of their total effort. Forty-six percent

of RAND’s 1975 professional labor-hours and 37

percent of MITRE’s were devoted to nondefense

work (55, p. 35). MITRE’s work had extended

overseas in 1973, in a contract with the United

Kingdom (55, p. 147), although MITRE was not

the first federal research center to undertake work

for a foreign customer. The report also pointed out

that the failure of the funding ceilings to keep pace

with inflation had forced the research centers into

a situation in which they were obliged to reduce

staff or seek other sources of work. Those that had

diversified had fared well but endured criticism

from those who felt that they were “poaching” beyond the FFRDC preserve. Other serious problems had been caused by abrupt reductions in

funding, especially late in the fiscal year, resulting

in layoffs, degradation of morale, and impairment

of the FFRDCs’ ability to find and retain quality

staff (56, p. 4).

The number of DoD FFRDCs reached its nadir

of six in 1978 when the Navy decertified the sec-
A History of the Department of Defense Federally Funded Research and Development Centers | 35

ond of the two Applied Physics Laboratories

(APL) near the end of 1977 (the first was already

decertified in 1975) and the Applied Research

Laboratory (ARL), and the Air Force decertified

ANSER on October 1, 1976. In the case of the laboratories, they were simply declared no longer to

be FFRDCs. The federal government continued

contracting with them, but without the special

FFRDC status. In addition, the MITRE and

RAND corporations set up their FFRDC portions

separate from the rest of the company. MITRE

formed its C3I Division and RAND renamed Project RAND Project Air Force. Both C3I and Project

Air Force became FFRDCs. Aerospace was asked

no longer to diversify outside of defense work and

to divest itself of its existing non-DoD work.

MITRE in Bedford was similarly restricted, but

the MITRE office in Washington was not.

This changing environment was described by

the DDR&E in its report of June 1976 (56). It summarized the status of the nine existing FFRDCs

(called FCRCs throughout the report). Their

budget was $297 million, ranging from a high of

$82 million for Aerospace to a low of $2 million

for ANSER, and their total employment was

4,500. In its review of the study and analysis centers, it noted that their annual workload was

around $40 million, 15 percent of all DoD expenditures on studies and analyses. A Defense Science Board task force had recently strongly endorsed the DoD FFRDCs. The DDR&E

concluded that, while the industrial base capable

of performing some of the tasks done by FFRDCs

had grown markedly since their founding, the

need for FFRDCs still existed and that FFRDCs

provided “high quality, essential services” (56).

THE TRANSITION TO THE PRESENT

The number of FFRDCs remained stable from

1978 until 1984, when four new FFRDCs were established. Of these, three were essentially reorganizations of existing efforts and one was an entirely new entity (the Software Engineering Institute).

The other three FFRDCs were LMI, NDRI

(RAND) and the Arroyo Center (RAND). LMI

had been in existence since 1961, and had been

listed once by the National Science Foundation as

an FCRC. The NDRI and Arroyo Center both

evolved directly out of existing programs at

RAND (61, p. 44).

The other significant event that occurred at that

time was the 1983 passage of the Competition in

Contracting Act (CICA). This act had provisions

that clearly identified the FFRDCS and set procedures for issuance of contracts to them without

competitive procurement. While these limitations

did little to change the DoD business of FFRDCs,

CICA did clarify their procedures. CICA made it

more difficult, in some respects, to issue small

study contracts in a timely manner to private

firms, making the use of FFRDCs more attractive

to the federal government managers. On the other

hand, CICA also made non-DoD work by

FFRDCs much harder to arrange.

In 1984 the Office of Federal Procurement

Policy (OFPP) Policy Letter 84-1 was issued, codifying rules for establishing FFRDCs. The Federal Acquisition Regulations were modified in

1990 so as to bring them into conformity with

OFPP 84-1.

As explained in the Introduction, the FFRDC

system represents a departure from the federal

government’s usual pattern of buying from the

lowest bidder, and requires a ceiling on expenditure for reasons analogous to those that necessitate

tempering the lowest-bidder rule with a caveat regarding what constitutes acceptable quality. In the

last 10 years, four different ceiling systems have

been used to limit expenditure of DoD-appropriated funds at FFRDCs, indirectly limiting staff

levels and therefore the size of the FFRDC system

as a whole:

 Prior to FY 1991, the individual centers’ DoD

sponsors set ceilings on their individual centers’ DoD use;

 Congress imposed center-by-center ceilings in

FY 1991 and FY 1992;
36 I A History of the Department of Defense Federally Funded Research and Development Centers

DR&E set individual ceilings on the DoD use

of DoD FFRDCs in FY 1993; and

Congress now places a financial ceiling on the

DoD use of DoD FFRDCs and DDR&E apportions this ceiling among the centers; the FY

1994 and FY 1995 ceilings were set in this way

and are shown in appendix D (31).

At present, the ceiling is below the current demand and limits the availability of the FFRDCs to

do work and the flexibility of federal government

program managers to award them work.

The 10 FFRDCs that existed or were created in

1984 are the same 10 that exist today. There was

only one DoD FFRDC created after 1984, the

Institute for Advanced Technology, sponsored by

the Army and contracted through the University

of Texas. It was created in FY 1991 and decertified

after FY 1992. An abortive attempt was made to

create a DoD FFRDC in connection with the Strategic Defense Initiative.

The work and missions of the study and analysis centers are different in emphasis from what

they were when the centers were originally established. Descriptions of their missions today provide a different emphasis to the reasons FFRDCs

exist. They are said to provide:

● continuity,

■ ability to work with sensitive and classified

data,

■ responsiveness, and

■ objectivity.

These reasons differ from the reasons for the

centers’ creation: the exploratory research mission has lost center stage, though it continues and

arguably brings benefits disproportionate to its

size. Instead of being free-wheeling think tanks

operating in a university-like environment, the

study and analysis federal research centers now

strive to be reservoirs of knowledge, objectivity,

and experience, on tap to support the military’s

ongoing mission. In some respects, this transition

occurred because the federal research centers have

completed the original mission assigned to them.

Their success in developing new methodologies is

demonstrated by the existence of a private indusa The actual numbers used are provided in appendix B

SOURCES: National Science Foundation, Federal Funds for Science,

Federal Funds for Research, Development, and Other Scientific Activities, and Federal Funds for Research and Development, vols. I through

XLII (Washington, DC: 1952-1994).

try capable of taking on at least part of their function.

As their missions were accomplished, the

FFRDCs declined from the 43 DoD FCRCs reported in 1961 to the 6 that existed from 1978 to

1983. The annual NSF reports list federal research

centers from 1950 to the present. Figure 1-2 shows

the total number of centers reported for each fiscal

year with separate counts for DoD, Department of

Energy, and other centers. The data used for this

graph are provided in appendix B.

The record of R&D obligations for FFRDCs is

also provided by the NSF reports. However total

expenditures or total receipts can exceed R&D obligations by 20 percent or more and only R&D obligations are reported by NSF. Figure 1-3 shows

obligated DoD funding for each center. As can be

seen from this graph, Aerospace, MITRE, and

Lincoln Laboratory operate at an entirely different

level of effort from that of the study and analysis

centers. Figure 1-4 summarizes the disparity. The
A History of the Department of Defense Federally Funded Research and Development Centers 137

c

I

---------------------------- ------ ----- --

1oo- ----- -------- ------------------------ --- - -u--

o

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

KEY: Aerospace =Aerospace Center; Arroyo = Arroyo Center; CNA = Center for Naval Analyses; IDA = lnstitute for DefenseAnalyses, LL = Lincoln

Laboratory; LMI = Logistics Management Institute; Mitre = Mitre Corporation; NDRI = National Defense Research institute, PAF = Project Air Force;

SEI = Software Engineering Institute.

SOURCES. National Science Foundation, Federal Funds for Science, Federal Funds for Research, Development, and Other Scientific Activities, and

Federal Funds for Research and Development, vols. I through XLII (Washington, DC. 1952 through 1994).

higher line on this graph is the sum of the funding

of the two system engineering centers and the two

laboratories. The bottom line on this graph is the

sum of the funding of the six study and analysis

centers.

The centers continued existence, over 50 years

after their creation, is attributable to their filling a

useful niche that may not be filled as well by the

federal government or private industry. What independent research the FFRDCs still do is now

one of many aspects of their services, as opposed

to their reason for existence (the notable exception

being Lincoln, a laboratory). The surviving study

and analysis FFRDCs have evolved from the conflict between the centers’ desire for independent,

basic research and their clients’ desire for concrete

useful results.

PROFILES OF THE EXISTING DOD

FFRDCs

The FFRDCs can be differentiated from private

industry and federal government laboratories by

SOURCES: National Science Foundation, Federal Funds for Science,

Federal Funds for Research, Development, and Other Scientific Activities, and Federal Funds for Research and Development, vols. I through

XLII (Washington, DC. 1952 through 1994)
38 I A History of the Department of Defense Federally Funded Research and Development Centers

FFRDCs differ in how their assets are to be disposed of if the FFRDC closes. For example, RAND’s

corporate charter specifically provides that upon the dissolution of the corporation, all assets will be

distributed at the direction of the Ford Foundation for scientific, educational, and charitable purposes. If

the Ford Foundation has ceased to exist, then the Superior Court of California will dispose of RAND’s

assets. Neither of these agencies have any official relationship with the Department of Defense. Up until

1962, the System Development Corporation assets devolved back to RAND. I

By contrast, in the later Aerospace Corporation charter, the Air Force specifically insisted that after

settlements of all debts and obligations Aerospace’s assets would devolve upon the federal government and would be disposed of by the Air Force in the event of the company’s dissolution. MITRE’s

original charter provided for the reversion of the assets as directed by the President of the United

States.

The 1962 Bell Report briefly addressed the issue of ownership of facilities and other property of federal research centers with the statement that, “We should think it equitable, where the Government has

provided facilities, funds to obtain facilities, substantial working capital, or other resources to a contractor, it should, upon dissolution of the organization, be entitled to a first claim upon such resources. ” 2

The OFPP Policy Letter 84-1, states that any new FFRDCs must have its assets devolve back to the

federal government in the event of dissolution. These assets can include facilities, cash reserves, and

intellectual property. Ownership of the assets of the corporations that evolved from existing FFRDCs

(i.e., RAND, MITRE, and CNA) is not addressed by the Policy Letter.

SOURCE: Office of Technology Assessment, 1995.

1 Bruce L. R. Smith, The RAND Corporation, Case Study of a Nonprofit Advisory Corporation (Cambridge, MA: Harvard University

Press, 1966).

2 Bureau of the Budget, Report to the President on Government Contracting for Research and Development (Washington, DC

U.S. Government Printing Office, 1962).

their combination of civilian personnel and feder- Abbott and Associates, established by a division

al government sponsorship. The specifics of their

organizational structure, their relationship with

their host, and ownership of their assets varies

considerably. (See box 1-3.)

A number of independent not-for-profit corporations are not federal research centers. These include such organizations as Stanford Research

Institute (SRI), Systems Development Corporation (SDC), the Hudson Institute (for parts of its

history), Battelle Laboratories, and Technical Operations Inc. Also, several not-for-profit and forprofit organizations were created when federal research centers were closed out by the federal

government. These included HumRRO; General

Research Corporation, the successor to RAC; and

manager of CRESS (25,26,66,68,77).

Most FFRDCs are industrially funded, meaning that within the financial ceilings imposed on

their DoD work, the FFRDCs actual work is

funded by the individual agencies within DoD that

wish to use their services. This funding is passed

through to the FFRDC via one contract (typically)

that the sponsoring agency holds with the FFRDC.

There are some notable exceptions to the pattern. IDA, for example, holds three separate contracts. RAND holds a contract for each of its four

FFRDCs (including one non-DoD FFRDC, the

Critical Technologies Institute). MITRE C3

I has

two major DoD contracts, one with the Air Force

and one with the Army. Furthermore, Project Air
A History of the Department of Defense Federally Funded Research and Development Centers | 39

Force is funded as a line item in the congressionally appropriated budget for DoD. The Arroyo Center at RAND is also partially funded through a line

item in the DoD budget. Line item funding is an

attempt to separate the funding decisions from the

immediate departments for which the FFRDC is

doing studies, but the recommendation and demand for the level of work to be requested for the

DoD budget still comes from the sponsoring

agency.

Attached at the end of each of the following descriptions of the 10 FFRDCs is a chart showing

the funding for that FFRDC from 1981 through

1994 in millions of 1987 dollars. Where data were

available, each bar on the graph shows DoD and

non-DoD funding. These figures were obtained

from each FFRDC. The only other public source,

NSF, only reports R&D money for the FFRDCs.

While R&D money usually includes the majority

of the money spent for FFRDCs in a year, it can

differ from the real financial picture. For several

years the Arroyo Center’s primary source of funding was Operations and Maintenance money, and

therefore no funding was reported by NSF, nor

was Arroyo listed in their reports as an FFRDC.

The funding figures in this report are not all

comparable. In some cases (such as that of IDA)

they represent all the annual income for that

FFRDC, whether from DoD or other agencies.

This figure can also include interest from any financial reserve the company maintains. In some

cases (such as that of CNA) it includes only DoD

funding. Obtaining funding figures is complicated by centers, e.g., CNA and LMI, that no longer issue complete financial reports in their annual

reports.

❚ Study and Analysis Centers

Center for Naval Analyses

Having evolved directly from ASWORG, the

Center for Naval Analyses (CNA) has been in existence since 1942, making it the oldest DoD federal research center.

In May 1983, the Navy informed the University

of Rochester that is was opening the contract it

held with them to competition. As a result, the

not-for-profit Hudson Institute (once a federal research center) took over management of the CNA

on October 1, 1983 (78). In 1990, it was decided

that CNA could function as an independent entity,

and on October 1, 1990, CNA begin to contract directly with the Navy. In 1993, CNA restructured

as the CNA Corporation with two divisions: CNA

as the FFRDC sponsored by the Department of the

Navy, and a new operating unit, the Institute for

Public Research (IPR). CNA also does work outside of DoD (13, pp. 36,41), its primary non-DoD

customer being FAA. CNA’s non-DoD work

makes up less than 10 percent of its effort

(15,30).10 IPR provides analytical and support

services to non-Navy clients (but can include DoD

clients.) This work is handled outside of the

FFRDC umbrella.

Figure 1-5 shows DoD funding for CNA and

the FFRDC division of CNA after incorporation

in current and constant dollars.

Institute for Defense Analyses

The Institute for Defense Analyses was originally

owned by a loose holding company. Five, and later eight, universities contributed to form this company incorporated in Delaware as a not-for-profit

organization. IDA’s early mission broadened until

the IDA group that supported its founding sponsor, WSEG, was only one of five IDA working divisions. Over the years, IDA has modified its

structure in response to sponsor needs and requests in addition to the Systems Evaluation Division and the Science and Technology Division

(successors to the divisions originally created to

support WSEG and ARPA, respectively), IDA has

established divisions to provide cost analyses, assessment of computing and information systems

10 This figures does not include IPR revenue.
40 I A History of the Department of Defense Federally Funded Research and Development Centers

40

3 0

2 0

1 0

0

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE: Center for Naval Analyses, 1995.

and technology, and strategy and force assessments, as well as operation evaluations. It now has

nine divisions: six supporting OSD as a whole

(including ARPA), and three supporting the NSA.

IDA became the principal advisory agency servicing the OSD as a whole.

In December 1992, IDA had a staff of 832, including 425 research staff members. Of these research staff members, 62 percent held doctorates

and another 29 percent had master’s degrees. The

composition of the research staff was 27 percent

mathematics, statistics, and operations research;

24 percent engineering; 21 percent physical

sciences; 13 percent computer sciences; 11 percent economics and social and political science;

and 4 percent other. Apart from the work conducted for the NSA, the Institute’s research program is focused in eight areas: systems evaluations; test and evaluation; technology assessment;

information systems and technologies; force and

strategy assessment; advanced simulation, resource and support analyses; and economic and

environmental studies.

IDA’s primary sponsor is still OSD (especially

the Undersecretary of Defense (Acquisition and

Technology)), but it does considerable work for

defense agencies such as ARPA and the NSA, as

well as the Joint Staff. It does a small amount of

work for other federal agencies, but none for other

not-for-profits or industry (29). The research of

the three IDA divisions working for the NSA is

generally considered laboratory research.

Figure 1-6 shows the Institute’s expenditures,

both DoD and non-DoD, in constant dollars.

Logistics Management Institute

The Logistics Management Institute was formed

in 1961 on the recommendation of the Secretary

of Defense and became an FFRDC in 1984 (52).

The corporate charter of LMI permits it to work

only for government agencies and other not-forprofit organizations (34). Its primary sponsor is

the Undersecretary of Defense (Acquisition and

Technology) and its executive agent is the Undersecretary of Defense (Logistics), but it also does

work for a variety of other organizations in DoD,

particularly the Air Force and Army Corps of Engineers. It does some work for other federal government agencies such as the Department of Veterans Affairs, Department of State, and Department of Transportation. All of its work is logistics

related. Its revenues for 1993 were $30 million,

100

■ Non-DoD

60

t

I

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE: Institute for Defense Analyses, 1995
A History of the Department of Defense Federally Funded Research and Development Centers 141

with five-sixths of that work from DoD sources

and one-sixth from non-DoD federal agencies

(33,35,30). Figure 1-7 shows the Institute’s DoD

and non-DoD funding in constant dollars.

The RAND Corporation

RAND now manages four FFRDCs Three are

DoD FFRDCs and one, the Critical Technologies

Institute, is a civilian FFRDC, created at the request of Congress in 1992. RAND’s three DoD

FFRDCs are the Air Force’s Project Air Force, the

Army’s Arroyo Center, and OSD’s National Defense Research Institute. In addition, RAND has

some defense work not included those three

FFRDCs and has a domestic policy department.

The work load for the whole RAND organization is roughly broken into quarters. For example,

in FY 1992, the RAND revenues were split almost

equally between the National Security Research

Division ($27.5 million, with $25.9 million from

the National Defense Research Institute); Project

Air Force ($25. 1 million); the Domestic Research

Division ($27.0 million); and the Army Research

Division ($23.3 million, including the Arroyo

Center) (48, p. 13).

Each of RAND’s FFRDCs is supported by a

five-year contract. Project Air Force and the Arroyo Center receive line-item funding from their

service sponsors, while NDRI receives funds primarily from its sponsor, the Office of the Secretary of Defense. This mechanism is intended to

provide the organization some insulation between

the recipients of the studies and those who make

the funding decisions. Additional budget monies

are obtained from agencies within DoD that wish

to fund specific research.

Each RAND FFRDC has a board that determines the general direction of the research and the

level of budget. For Project Air Force and the Arroyo Center, the majority of the members of the

board are general officers, with some senior civilian members. In 1994, the board for the National

Defense Research Institute was composed entirely of senior civilian members of OSD.

The supporting professional staff of RAND

consists of approximately 600 personnel organized into six research departments. Operations

3 2

2 8

2 4

2 0

1 6

1 2

8

4

0

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE: Logistics Management Institute, 1995

researchers, statisticians, mathematicians, and the

physical scientists account for approximately 20

percent of the staff. The social sciences (e.g.,

political science, humanities, sociology, public

policy, and behavioral sciences) account for over

40 percent of the staff. Economists and engineers

each make up over 10 percent of the staff.

Domestic research began at RAND in the early

1960s and by 1970 was nearly 25 percent of

RAND’s work. In the late 1970s, concurrent with

the reduction in RAND’s Air Force work, it made

up 50 percent of RAND’s work. Since that time,

it has declined as a percent of RAND’s work, partially due to increases in RAND’s other defense

work, until by the late 1980s, its share returned to

about 25 percent of RAND’s work. At that level,

RAND has the largest domestic policy analysis

program of any not-for-profit firm (67,64,48).

RAND has ensured that its reports receive wide

distribution. In the case of unclassified reports,

RAND set up (in 1953) 40 public libraries as deposit libraries throughout the United States and

seven repositories for its reports overseas (62).

Figure 1-8 shows the aggregate DoD and nonDoD expenditures for all of RAND, including the

four FFRDCs and non-FFRDC expenditures in

constant dollars.
42 I A History of the Department of Defense Federally Funded Research and Development Centers

100 ,

80

60

4 0

2 0

0

■ PAF

❏ RAND, other DoD

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

KEY: Arroyo = Arroyo Center; PAF = Project Air Force; NDRI = National

Defense Research Institute

SOURCE: RAND Corporation, 1995.

Project Air Force

Project RAND was at its largest in the late 1950s

and early 1960s. The Air Force was just beginning

to develop technological and systems analysis capabilities of its own; therefore, it depended more

heavily on RAND for these functions.

In 1950, when RAND began expanding from

its Project RAND contract, it established, at the

suggestion of the Air Force, a smaller contract

with the Atomic Energy Commission (68).

RAND reached its peak employment in 1957

when it had 2,605 people. However, this included

the significant training effort for the Air Defense

Directorate that was later spun off to form the Systems Development Corporation. In 1959, it began

work with ARPA and NASA. At that point, the

Air Force announced that it intended to freeze its

support of RAND at its current dollar level. In

1961 it added NSF and the National Institutes of

Health to its clients.

RAND had also done work for OSD, jeopardizing the special relationship with its Air Force customer by doing work for the Air Force’s superior.

In particular, it developed the Program Planning

and Budgeting System to which Secretary of Defense McNamara made all the services conform.

It was also at this time that OSD expanded and became more civilianized. RAND also did major

projects for the Office of the Assistant Secretary

of Defense for International Securit y Affairs. This

office was not always on the best of terms with

members of the Air Force.

As the decade continued, RAND worked for

the U.S. Agency for International Development

and the Defense Atomic Support Agency and received grants from other not-for-profit organizations to do studies in urban transportation, heuristic programming, and simulation of cognitive

processes. Project RAND support shifted from

being 95 percent of RAND’s budget to 68 percent:

RAND had over a dozen different clients. Parallel

to the shift to a more diversified client base,

RAND was forced to acquire all the functions of

a large corporation. In 1951, with only two clients

and almost all its work from the Project RAND

contract, 51 percent of its staff were researchers.

In 1963, the proportion of researchers in the organization had dropped to 40 percent, the rest being

taken up with departmental and corporate support

staff (68).

During the 1960s, the Air Force work declined

by nearly 50 percent, but up until 1968 work with

other agencies was able to keep the staff doing defense work at a stable level of approximately 450

professionals. After 1968, that work continued to

drop until a nadir was reached from 1972 through

1974 of about 250 professionals involved in defense work (60). In 1975 Project RAND was renamed Project Air Force and set up as a separate

FFRDC within the RAND Corporation. During

this period, RAND’s work in the domestic sector

continued to expand until it constituted a program

of nearly equivalent size.

During the 1960s and 1970s, RAND added a

range of sponsors both within and outside of the

DoD, including state and local governments and

private foundations. Only later in its history did it

sign contracts with the other services. One internal

Air Force study in 1952 had declared that it was

inappropriate for RAND to represent more than
A History of the Department of Defense Federally Funded Research and Development Centers 143

one of the services because the three branches of

the armed forces compete for budgets, facilities,

and military responsibilities (68, p. 83), though of

course today RAND’s Arroyo Center is an Armysponsored FFRDC.

Oversight of Project Air Force is conducted by

a panel of senior civilian members of the Department of the Air Force and general officers. This

panel determines the research priorities and the

budget for Project Air Force. In 1993, this panel

consisted of 11 general officers and two senior civilians. The RAND budget is primarily passed by

Congress as a single line item in the Air Force

budget. There is some direct funding of research.

Project Air Force also provides some direct assistance to the Air Force. In FY 1993, direct assistance was estimated to cover about 20 percent of its

work.

Since 1991, funding for Project Air Force has

declined. In FY 1993, the funding supported 116

years of labor for professional staff, down from its

usual 1980s level of approximately 140.

Project Air Force, after a 1992 reorganization,

consists of seven major projects:

■ strategy and doctrine,

■ force structure,

■ force modernization,

■ force employment,

■ command, control, communications, and intelligence (C3

I)/space,

■ logistics, and

■ acquisition.

Figure 1-9 shows Project Air Force (PAF)

funding in constant dollars.

The Arroyo Center

The Arroyo Center came to RAND in 1984 at the

request of the Chief of Staff of the Army. The Arroyo Center had originally been established in the

early 1980s within a NASA FFRDC, the California Institute of Technology’s Jet Propulsion Laboratory (JPL). In 1984 the university, at the urging

of its faculty, decided to divest itself of the Arroyo

Center. RAND and the Army agreed that the research agenda pursued at JPL did not fully match

25 

I

2 0

I

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE. RAND Corporation, 1995

the Army’s needs. Therefore anew agenda was developed, a new director was chosen, and only 13

employees made the transfer from the Center’s old

incarnation to its new one (23). Since its research

was developing an emphasis on policy as opposed

to technical matters, it was decided to locate the

Center at RAND as a new FFRDC (61, p. 57).

The Center’s purpose is to provide the Army

with objective, independent analysis of mediumand long-term problems. The potential for objectivity is enhanced by having much of its funding

as a separate line item within the DoD budget. The

funding decisions are not made by all the same

people within the Army that receive the studies.

The Arroyo Center also receives a portion of its

budget from individual agencies within the Army.

The annual allocation for the Arroyo Center’s

research is assigned to projects based on priorities

set by the Arroyo Center Policy Committee, consisting in January 1994 of three senior civilian

members of the Department of the Army and nine

general officers from the various commands.

The work is managed within four programs: 1)

Strategy and Doctrine, 2) Force Development and
44 I A History of the Department of Defense Federally Funded Research and Development Centers

20-

16-

12-

8-

4 -

0-

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE: RAND Corporation, 1995

Technology, 3) Military Logistics, and 4) Manpower and Training (8).

Figure 1-10 shows Arroyo’s funding in

constant dollars.

The National Defense Research Institute

The National Defense Research Institute (NDRI)

was established in 1984 at RAND by amalgamating the various programs already being done at

RAND for OSD, the Joint Staff and other defense

agencies. It was established as a separate FFRDC

to assemble all the work being done for DoD (as

opposed to the Army and Air Force) into one independent organization. RAND had been working

directly for OSD since the late 1950s.

NDRI serves the long-term analytic, planning

and innovation needs of OSD, the Joint Staff, and

other defense agencies. It is intended to fulfill the

following objectives:

■ to conduct a sustained research program,

■ to establish a reservoir of expertise,

■ to allow flexible response, and

■ to provide unbiased analysis.

The research program for NDRI is established

by a policy board consisting (in September 1992)

of 11 senior DoD civilians, usually at the level of

an undersecretary and assistant secretary. They

determine both the research program and the DoD

budget request for NDRI. Additional funding for

NDRI (usually about 30 percent of its budget)

comes from the additional budget monies

awarded to it, usually from the departments of its

policy board members.

The NDRI is organized with four programs and

a center. The programs are 1 ) International Security and Defense Strategy, 2) International Economic Policy, 3) Applied Science and Technology, and

4) Acquisition and Support Policy. The center is

the Defense Manpower Research Center. The

NDRI also does some limited independent research and operates some facilities jointly supported by all the RAND FFRDCs (Project Air

Force, the Arroyo Center, and NDRI). NDRI researchers are drawn from the corporate staff at

RAND (48).

Figure 1-11 shows NDRI’s funding in constant

dollars.

❚ Laboratories

Lincoln Laboratory

The Massachusetts Institute of Technology Lincoln Laboratory was established as a federal research center in 1951 at the joint request of the Air

Force, Navy, and Army to conduct research in advanced electronics pertinent to national defense.

In 1958, when ARPA was created, it also became

a sponsor (75), although Air Force-related work

continued to provide more than 50 percent the

work of the laboratory. Non-DoD sponsorship

currently amounts to 18 percent of staff and is limited by policy to 30 percent (30,40,75). Contracting is primarily done through the Air Force Systems Command, Electronics Systems Division.

Until recently all programs were sponsored by

federal agencies, but Cooperative Research and

Development Agreements (CRADAs) are now

permitted with industry, subject to federal government approval for pre-competitive technology

transfer.

The mission of Lincoln Laboratory is to carry

out a program of research and development pertinent to national defense, with particular emphasis
A History of the Department of Defense Federally Funded Research and Development Centers 145

on advanced technology. The thrust of the Laboratory’s activity is in the areas of surveillance, identification, and communication. Mission areas include ballistic missile defense, space surveillance,

air defense, and communication (76).

MIT has management oversight and participates in mutual research activities with Lincoln

Laboratory. MIT management provides general

policy, financial accountability, and review of

Laboratory activities. A DoD Joint Advisory

Group reviews and approves the Laboratory program annually. Like many other university

FFRDCs it is effectively an independent organization. MIT has never received a fee for the operation of Lincoln Laboratory. Student interaction

is limited: the interns, graduate students, and visiting researchers from the university make up less

than 5 percent of the staff (42). Currently the Laboratory employs 2,300 people with just under 800

principal members of the technical staff. Almost

all hold advanced degrees in scientific and engineering fields (40).

Lincoln Laboratory particularly prides itself on

technology transfer through having companies

created by its former employees. These spin-offs

include the MITRE Corporation, which currently

runs two FFRDCs Lincoln Laboratory also

claims to have spun off more than 60 other companies that employ over 130,000 people nationwide,

of which the largest is Digital Equipment Corporation (DEC), founded by two former employees

of the Lincoln Laboratory in 1957. DEC employs

just under 121,000 people worldwide (39,38,41).

Figure 1-12 shows Lincoln Laboratory’s total

funding, including both DoD and non-DoD, in

constant dollars.

Software Engineering Institute, Carnegie-Mellon University

The Software Engineering Institute (SEI) is

sponsored by DoD through ARPA and administered by the Air Force. The SEI contract was competitively awarded to Carnegie-Mellon University

in December 1984. It is staffed by approximately

270 technical and support people from industry,

academia, and the federal government.

Software has become an increasingly critical

component of U.S. defense systems. DoD

2 4

2 0

1 6

1 2

8

4

0

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE. RAND Corporation, 1995

established the Software Engineering Institute

with a charter to advance the practice of software

engineering, so as to produce quality software on

schedule and within budget. The SEI mission is to

provide the means and leadership to bring the

ablest professional minds and the most effective

technology to bear on rapid improvement of the

450, I I

350

300

250 

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE: Lincoln Laboratory, 1995
46 I A History of the Department of Defense Federally Funded Research and Development Centers

3 5

■■ Non-DoD n

2 5

2 0

15

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE: Software Engineering Institute, 1995

quality of operational software in software intensive systems, accelerate the introduction to practice of modem software engineering technology,

promulgate the use of this technology throughout

the software community, and establish standards

of excellence for improving software engineering

practice.

In pursuit of its mission, SEI’s fundamental

emphasis is on technology transfer, and all efforts

undertaken by SEI reflect this emphasis. SEI is

also allowed to receive funding from other federal

agencies for work consistent with its charter

(70,69,72,36,71 ).11 The non-DoD work constitutes less than 4 percent of its effort (30).

Figure 1-13 shows SEI’s total funding, including both DoD and non-DoD, in constant dollars.

❚ Engineering and Technical Direction

Centers

The Aerospace Corporation

The Aerospace Corporation is primarily involved

in the Air Force space programs, including almost

all of its space launch and satellite programs. It

was also involved in launch vehicles for Projects

Mercury and Gemini, the one- and two-man space

capsules and for NASA’s Viking and Voyager programs. It was involved in the Ballistic Missile

Program and in establishing the design of the

Space Transportation System (the Shuttle) and in

supporting Air Force activities that used that vehicle. Aerospace’s role in space has been increased with the increased use of other launch vehicles since the Challenger disaster. It has been

involved in the current major efforts of the Air

Force including military communications satellites, weather satellites, early-warning satellites,

the Global Positioning System (GPS), other National Security space systems, and ballistic missile defense.

In 1969, Secretary of Defense Melvin Laird encouraged Aerospace to increase work in nondefense programs, as DoD expected its funding of

federal centers to be reduced: DoD wanted the civilian economy to benefit from some of the

technology developed for military and space uses.

Participation in domestic programs, including

NASA, reached its peak in the early 1970s but

never exceeded 20 percent of the company’s business (2). It is currently less than 5 percent of its total effort (30).

Currently Aerospace has a staff of 3,100, almost two-thirds of whom are scientists and engineers. Of the technical staff, two-thirds hold advanced degrees and one-fourth have doctorates.

Its gross revenue for 1993 was $422 million. Its

estimated revenue for FY 1994 is $380 million (5,

pp. 3,7). Aerospace carries out work for DoD,

NASA, the Department of Transportation, the Environmental Protection Agency, and some foreign

countries. Its primary customer is the Air Force

Space and Missile Systems Center. By 1994, DoD

funding in the face of stable military space budgets had declined 19 percent in real terms since

1990, but Aerospace is trying to expand by offer11 The SEI charter states in part, “Systems developments are still typically plagued by schedule slippage and cost overruns. In addition,

software intensive systems frequently fail due to poor quality and an inability to be rapidly modified to meet changing needs.”
A History of the Department of Defense Federally Funded Research and Development Centers 147

ing its expertise in space and environmental

technology to other federal government agencies

(3,2,5). Aerospace clearly prides itself on its

7-year record of 71 consecutive launches of launch

vehicles developed with Aerospace Corporation

technical oversight with no major failures, while

commercial systems have an average of one failure every six launches (6, p.2; 4, p. 2; 5, pp.2,8).

Figure 1-14 shows Aerospace’s funding, including both DoD and non-DoD, in constant dollars.

The MITRE Corporation

The MITRE Corporation operates two FFRDCs

the DoD’s C3

I FFRDC and the Federal Aviation

Administration’s Center for Advanced Aviation

System Development. It supports more than 50

additional clients, most of which are agencies of

the federal government (notably the Federal Bureau of Investigation and the General Services Administration), or foreign, state, or local governments. No part of MITRE competes with service

companies, manufactures products, or works for

a supplier of information system components

(47). In 1994, MITRE’s overall revenues were almost $600 million and its staff about 5,000, of

whom about two-thirds were technical staff.

450,

1981 82 83 84 85 86 87 88 89 90 91 92 93 94

SOURCE: Aerospace Corporation, 1995,

600

■■ Non-DoD FFRDC

1981 82 83 84 85 86 87 88 89 90 91 92 93

SOURCES: MITRE Corporation, 1995; President’s Council of Economic

Advisors, Economic Report of the President, Transmitted to the Congress (Washington, DC: US Government Printing Office, February

1994),

About three-fourths of MITRE’s work in 1994

was performed by the C3

I FFRDC, of which more

than 90 percent was for the Department of Defense

and about half was for the Air Force (67).

Originally, the entire MITRE Corporation was

one FCRC, funded by the Air Force (44). MITRE

is now organized into six centers. DoD’s C3

I

FFRDC (sponsored by the Assistance Secretary of

Defense (C3

I)) is composed of three centers: the

Center for Air Force systems, which performs Air

Force C3

I work; the Center for Integrated Intelligence Systems, which does work throughout the

intelligence community; and the Washington C3

Center, which works for the Army, Navy, Defense

Information Systems Agency, and others. The

Center for Advance Aviation System Development is the Federal Aviation Administration’s

FFRDC. The Center for Environment, Resources,

and Space and the Center for Information Systems

do non-FFRDC work, including some work for

DoD that falls outside the C3

I mission area (47).

Figure 1-15 shows MITRE’s funding.
Appendix A:

List of

Current

FFRDCs

for FY 1995 A

NAME ADMINISTERED BY TYPE SPONSOR

The Aerospace Corporation

Ames Laboratory

Argonne National Laboratory

Arroyo Center

Brookhaven National Laboratory

Center for Advanced Aviation

System Development

Center for Naval Analyses

Center for Nuclear Waste

Regulatory Analysis

Continuous Electron Beam

Accelerator Facility

Critical Technologies Institute

C

3

I Federally Funded Research

& Development Center

Energy Technology Engineering Center

Fermi National Accelerator Laboratory

Idaho National Engineering Laboratory

Inhalation Toxicology Research

Institute

Institute for Defense Analyses

Jet Propulsion Laboratory

Lawrence Berkeley Laboratory

Iowa State University of Science

and Technology

University of Chicago

RAND Corporation

Associated Universities Inc.

MITRE Corporation

CNA Corporation

Southwest Research Institute

Southeastern Universities

Research Associates

RAND Corporation

MITRE Corporation

Rockwell International Corporation

Universities Research Association Inc.

Lockheed Idaho Technologies Inc.

Lovelace Biomedical and

Environmental Research Institute

California Institute of Technology

University of California

Lawrence Livermore National Laboratory University of California

Nonprofit

University

University

Nonprofit

University

Nonprofit

Nonprofit

Nonprofit

University

Nonprofit

Nonprofit

Industrial firm

University

Industrial firm

Nonprofit

Nonprofit

University

University

University

USAF

DOE

DOE

Army

DOE

FAA

Navy

NRC

DOE

NSF

OSD

DOE

DOE

DOE

DOE

OSD

NASA

DOE

DOE

I 49
50 I A History of the Department of Defense Federally Funded Research and Development Centers

NAME ADMINISTERED BY TYPE SPONSOR

Lincoln Laboratory

Logistics Management Institute

Los Alamos National Scientific

Laboratory

National Astronomy and

Ionosphere Center

National Center for Atmospheric

Research

National Defense Research Institute

National Optical Astronomy

Observatories

National Radio Astronomy University

National Renewable Energy

Research Laboratory

NCI Frederick Cancer Research

and Development Center

Oak Ridge Institute for Science

and Education

Oak Ridge National Laboratory firm

Pacific Northwest Laboratory

Princeton Plasma Physics Laboratory

Project Air Force

Sandia National Laboratory

Savannah River Laboratory

Software Engineering Institute

Stanford Linear Accelerator Center

Tax Systems Modernization Institute

Massachusetts Institute of Technology University

Nonprofit

University of California University

Cornell University University

University Corporation for University

Atmospheric Research

RAND Corporation Nonprofit

Association of Universities for University

Research in Astronomy

Associated Universities Inc. University

Midwest Research Institute Nonprofit

Program Resources Inc.; Nonprofit

Advanced Bioscience Laboratories Inc.;

Charles River Laboratories Inc.;

Data Management Services Inc.

Oak Ridge Associated Universities Inc. University

Martin Marietta Energy Systems Inc.

Battelle Memorial Institute

Princeton University

RAND Corporation

Sandia, subsidiary of Martin Marietta Inc.

Westinghouse Electric Corporation

Carnegie-Mellon University

Leland Stanford, Jr. University

IIT Research Institute

Industrial

Nonprofit

University

Nonprofit

Industrial firm

Industrial firm

University

University

Nonprofit

USAF

OSD

DOE

NSF

NSF

OSD

NSF

NSF

DOE

NIH

DOE

DOE

DOE

DOE

USAF

DOE

DOE

ARPA

DOE

IRS

Abbreviations:

ARPA-Advance Research Projects Agency; DOE-Department of Energy; FAA=Federal Aviation Administration, Department of Transportation;

IRS=Internal Revenue Service, Department of Treasury; NASA-National Aeronautics and Space Administration; NIH=National Institute of Health,

Department of Health and Human Services; NRC=Nuclear Regulatory Commission; NS=National Science Foundation; OSD=Office of the Secretary

of Defense; USAF=U.S. Air Force.

SOURCE: Mary V. Burke, National Science Foundation, Washington, DC, 1995.
Appendix B:

Number of

Federal Research

Centers Each Year

In the back of the National Science Foundation reports, Federal Funds for Science, there is usually a list of Federal

Research Centers, FCRCs, or FFRDCs. The actual number in each report is shown below. The reports do have

errors and omissions in them, and are not always clear as to exactly what year they are reporting on. The first

column total of federal research centers includes other centers besides DoD, DOE, AEC, and ERDA centers.

FISCAL

YEAR TOTAL DoD AEC/ERDA/DoD NOTES

1950 23 from 1st report

1951 24 from 1st report

1952 No count provided

1953 No count provided

1954 No count provided

1955 No count provided

1956 46 27 18 count from 1956-58 report

1957 45 27 18 count from 1956-58 report

1958 52 32 18

1959 No list in report

1960 No list in report

1961 66 43 20

1962 63 37 21

1963 66 36 25

1964 61 32 25

1965 58 27 26

1966 47 23 19

1967 45 20 19

1968 73 16 19 “As of 1 June 1968”

1969 74 16 20 “As of 1 August 1969”

1970 69 15 20

1971 68 13 21

1972 66 13 21

| 51
52 | A History of the Department of Defense Federally Funded Research and Development Centers

FISCAL

YEAR TOTAL DoD AEC/ERDA/DoD NOTES

1973 39 11 21

1974 39 10 22

1975 39 9 22

1976 37 8 20

1977 37 8 20

1978 35 6 20

1979 35 6 21

1980 35 6 21

1981 35 6 21

1982 34 6 20

1983 34 6 20

1984 36 10 20

1985 36 10 20

1986 36 10 20

1987 36 10 20

1988 37 10 21

1989 38 10 22

1990 40 10 23

1991 41 11 22

1992 42 11 22

1993 39 11 19

1994 39 10 19

1995 39 10 19

Abbreviations:

AEC=Atomic Energy Commission; DoD = Department of Defense; DOE = Department of Energy; ERDA = Energy Research and Development

Administration.
Appendix C:

List Of All

Identified DoD

Federal Research Centers c

NAME ADMINISTERED BY TYPE SPONSOR NOTES

Aerospace Corporation

Aircraft Nuclear Power Plant Facility

Aircraft Nuclear Propulsion Plant Facility

Aircraft Nuclear Test Facility

USAF Shock Tube Facility

Allegheny Ballistics Laboratory

ANSER

Applied Physics Laboratory

Applied Physics Laboratory

Applied Research Laboratory

Arctic Research Laboratory

Army Mathematics Center

Arnold Engineering Development Center

Arroyo Center

Battelle Memorial Institute

Boston University Physical

Research Laboratory

Center for Naval Analyses

Center for Naval Analyses

Center for Naval Analyses

Center for Naval Analyses

Center for Research in Social Systems

Chicago Midway Laboratories

Columbia Radiation Laboratory

Aerospace Corporation

General Electric Corporation

General Electric Corporation

Convair Division,

General Dynamics Corp.

University of New Mexico

Hercules Powder Company

Analytic Services Inc.

Johns Hopkins University

University of Wisconsin

Pennsylvania State University

University of Alaska

University of Wisconsin

ARO, Inc.

RAND Corporation

Battelle Memorial Institute

Boston University

Franklin Institute

Franklin Institute

University of Rochester

Hudson Institute

American University

University of Chicago

Columbia University

Nonprofit

Profit

Profit

Profit

University

Profit

Nonprofit

University

University

University

University

University

Profit

Nonprofit

Nonprofit

University

Nonprofit

Nonprofit

University

Nonprofit

University

University

University

USAF

USAF

USAF

USAF

USAF

Navy

USAF

Navy

Navy

Navy

Navy

Army

USAF

Army

USAF

USAF

Navy

Navy

Navy

Navy

Army

USAF

Army

FCRC, FFRDC

FCRC

FCRC

FCRC

FCRC

FCRC, FFRDC

FCRC, FFRDC

FCRC, FFRDC

FFRDC

FCRC

FCRC, FFRDC

FCRC

FFRDC

FCRC

FCRC

FCRC, FFRDC

FFRDC

FFRDC

FFRDC

FCRC

I 53
54 I A History of the Department of Defense Federally Funded Research and Development Centers

NAME ADMINISTERED BY TYPE SPONSOR NOTES

Connecticut Aircraft Nuclear

Engine Laboratory

Control Systems Laboratory

coordinated Science Laboratory

Cornell University Laboratory

Cruft Laboratory

C

3

I Division

Defense Metals Information Center

Electromagnetic Compatibility

Analysis Center

Electronics Defense Laboratory

Electronic Defense Group

Electronic Research Laboratory

Electronic Research Laboratory

Fuels and Lubricants Research Laboratory

Georgia Nuclear Aircraft Laboratory

Hartford Research Facility

Hudson Institute

Hudson Laboratories

Human Resource Research Office

Human Resource Research Office

Institute for Advanced Technology

Institute for Defense Analyses

IT&T Communication Systems

Itek Corporation

Jet Propulsion Laboratory

Laboratory for Insulation Research

Laboratory of Insulation Research

Lincoln Laboratory

Logistics Management Institute

Microwave Research Institute

MIT Instrumentation Laboratory

MITRE Corporation

National Defense Research Institute

Naval Biological Laboratory

Navy Oceanographic Research Laboratory

Pratt & Whitney Aircraft

Division, Profit

United Aircraft Corp.

University of Illinois

University of Illinois

Cornell University

Harvard University

MITRE Corporation

Battelle Memorial Institute

Illinois Institute of

Technology Research

Sylvania Electric Products Inc.

University of Michigan

Stanford University

University of California

Southwest Research Institute

Lockheed Aircraft Corporation

Pratt & Whitney

Aircraft Division,

United Aircraft Corporation

Hudson Institute

Columbia University

George Washington University

Human Resource Research Office

Universities of Texas

Institute for Defense Analyses

International Telephone

& Telegraph Co.

Itek Corporation

California Institute of Technology

Massachusetts Institute

of Technology

Massachusetts Institute

of Technology

Massachusetts Institute

of Technology

Logistics Management Institute

Polytechnic Institute of Brooklyn

Massachusetts Institute

of Technology

Mitre Corporation

RAND Corporation

University of California

Woods Hole Oceanographic

Institution

University

University

University

University

Nonprofit

Nonprofit

Nonprofit

Profit

University

University

University

Nonprofit

Profit

Profit

Nonprofit

University

University

Nonprofit

University

Nonprofit

Profit

Profit

University

University

University

University

Nonprofit

University

University

Nonprofit

Nonprofit

University

University

USAF

Army

Army

USAF

Army

USAF

USAF

USAF

Army

Army

Army

Army

Army

USAF

USAF

OSD

Navy

Army

Army

Army

OSD

USAF

USAF

Army

Army

Navy

USAF

OSD

Army

USAF

USAF

OSD

Navy

Navy

FCRC

FCRC

FCRC

FCRC

FCRC

FFRDC

FCRC

FCRC, FFRDC

FCRC

FCRC

FCRC

FCRC

FCRC

FCRC

FCRC

FCRC, FFRDC

FCRC, FFRDC

FFRDC

FFRDC

FCRC, FFRDC

FCRC

FCRC

FCRC

FCRC

FCRC, FFRDC

FCRC, FFRDC

FCRC

FCRC

FCRC, FFRDC

FFRDC

FCRC
Appendix C List Of All Identified DoD Federal Research Centers | 55

NAME ADMINISTERED BY TYPE SPONSOR NOTES

Nuclear Aerospace Research Facility Convair Division, Profit USAF FCRC

 General Dynamics Corp.

Operations Evaluation Group Massachusetts Institute University Navy

 of Technology

Operation Research Group Massachusetts Institute University Navy

 of Technology

Operations Research Office Johns Hopkins University University Army

Ordnance Aerophysics Laboratory Convair Division, Profit Navy FCRC

 General Dynamics Corp.

Ordnance Research Laboratory Pennsylvania State University University Navy FCRC, FFRDC

Physical Research Laboratory Boston University University USAF FCRC

Prevention of Deterioration Center National Academy of Science Nonprofit Army FCRC

Project Air Force RAND Corporation Nonprofit USAF FFRDC

Project Doan Brook Case Institute of Technology University USAF FCRC

Project Lincoln Massachusetts Institute University USAF

 of Technology

Project Michigan University of Michigan University Army FCRC

RAND Corporation RAND Corporation Nonprofit USAF FCRC, FFRDC

Research Analyses Corp. Research Analyses Corp. Nonprofit Army FCRC, FFRDC

Research Laboratory of Electronics Massachusetts Institute University Army FCRC

 of Technology

Rocket and Propellent Laboratory Rohm & Haas, Inc. Profit Army FCRC

Software Engineering Institute Carnegie Mellon University University USAF FFRDC

Space Technology Laboratory Thompson Ramo

 Wooldridge, Inc. Profit USAF FCRC

Special Operations Research Office American University University Army FCRC

Systems Development Corp. Nonprofit USAF FCRC

Thiokol Project Thiokol Chemical Corp. Profit Army FCRC

Weapon Systems Evaluation Group Institute for Defense Analysis Nonprofit OSD FCRC

Abbreviations:

OSD=Office of the Secretary of Defense; USAF=U.S. Air Force..
Appendix D:

Ceiling

Limits

for FFRDCs
58 A History of the Department of Defense Federally Funded Research and Development Centers

Honorable Ronald V. Del lures

Chairman, Committee on Armed Services

House of Representatives

Washington, DC 20515

Dear Mr. Chairman:

Section 217 of the National Defense Authorization Act for

Fiscal Year 1995 requires the submission of the proposed funding

and the estimated personnel level for each Federally Funded

Research and Development Center (FFRDC) during the current fiscal

year, Fiscal Year 1995, not later than 30 days after the date of

the enactment of the Authorization Act.

Section 8054(c) of the Department of Defense Appropriations

Act for Fiscal Year 1995 limits obligations of the amount

available for defense FFRDCs, until the congressional defense

committees receive the annual funding ceiling for FY 1995 for each

defense FFRDC or significantly unique subcomponent thereof.

The required data is provided in the enclosure.

Enclosure

cc:

Honorable Floyd D. Spence

Ranking Republican
Appendix D Ceiling Limits for FFRDCs 59

Honorable Sam Nunn

Chairman, Committee on Armed Services

United States Senate

Washington, DC 20510

Dear Mr. Chairman:

Section 217 of the National Defense Authorization Act for

Fiscal Year 1995 requires the submission of the proposed funding

and the estimated personnel level for each Federally Funded

Research and Development Center (FFRDC) during the current fiscal

year, Fiscal Year 1995, not later than 30 days after the date of

the enactment of the Authorization Act.

Section 8054(c) of the Department of Defense Appropriations

Act for Fiscal Year 1995 limits obligations of the amount

available for defense FFRDCs until the congressional defense

committees receive the annual funding ceiling for FY 1995 for each

defense FFRDC or significantly unique subcomponent thereof.

The required data is

Enclosure

cc:

Honorable Strom Thurmond

Ranking Republican

provided in the enclosure.
60 A History of the Department of Defense Federally Funded Research and Development Centers

Dear Mr. Chairman:

Section 217 of the Department Defense Authorization Act for

Fiscal Year 1995 requires the submission of the proposed funding

and the estimated personnel level for each Federally Funded

Research and Development Center (FFRDC) during the current fiscal

year, Fiscal Year 1995, not later than 30 days after the date of

the enactment of the Authorization Act.

Section 8054(c) of the Department of Defense Appropriations

Act for Fiscal Year 1995 limits obligations of the amount

available for defense FFRDCs until the congressional defense

committees receive the annual funding ceiling for FY 1995 for each

defense FFRDC or significantly unique subcomponent thereof.

The required data is provided in the enclosure.

Enclosure

cc:

Honorable Joseph M. McDade

Ranking Republican
Appendix D Ceiling Limits for FFRDCs 61

Honorable Robert C. Byrd

Chairman, Committee on Appropriations

United States Senate

Washington, DC 20510

Dear Mr. Chairman:

Section 217 of the Department of Defense Authorization Act

for Fiscal Year 1995 requires the submission of the proposed

funding and the estimated personnel level for each Federally

Funded Research and Development Center (FFRDC) during the current

fiscal year, Fiscal Year 1995, not later than 30 days after the

date of the enactment of the Authorization Act.

Section 8054(c) of the Department of Defense Appropriations

Act for Fiscal Year 1995 limits obligations of the amount

available for defense FFRDCs until the congressional defense

committees receive the annual funding ceiling for FY 1995 for each

defense FFRDC or significantly unique subcomponent thereof.

The required data is provided in the enclosure.

Enclosure

cc:

Honorable Mark O. Hatfield

Ranking Republican
62 I A History of the Department of Defense Federally Funded Research and Development Centers

Enclosure

I

FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTERS

I

FY 1995 DATA

FY 95 FY 95

Allocation Manpower

($M) (MTS) Est.

RAND ARROYO CENTER 20.10 95

PROJECT AIR FORCE 24.00 115

NATIONAL DEFENSE RESEARCH INSTITUTE 22.90 112

CENTER FOR NAVAL ANALYSES 45,90 229

INSTITUTE FOR DEFENSE ANALYSES (S&A) 53.60 293

LOGISTICS MANAGEMENT INSTITUTE 27.23 146

TOTAL - Studies and Analyses 193.73 990

AEROSPACE 335.00 1,893

INSTITUTE FOR DEFENSE ANALYSES (OT&E) 12.92 7 1

MITRE (C3I) 373.80 2161

TOTAL - Systems Engineering 721.72 4125

INSTITUTE FOR DEFENSE ANALYSES (C3I) 33.60 144

MIT LINCOLN LABS 274.00 926

SOFTWARE ENGINEERING INSTITUTE 29.60 162

TOTAL - Laboratory 337.2 1232

TOTAL 1252.65 6347
Appendix E:

Abbreviations

AEC Atomic Energy Commission

ANSER Analytic Services, Inc.

APL Applied Physics Laboratories

ARL Applied Research Laboratory

ARPA Advanced Research Projects Agency

ASD Applied Science Division

AWACS Airborne Warning and Control System

BMEWS Ballistic Missile Early Warning System

CAA U.S. Army Concepts Analysis Agency

CDEC Combat Development Experimentation

Center

C3I Command, Control, Communications,

and Intelligence

CICA Competition in Contracting Act

CNA Center for Naval Analyses

COCO contractor-owned, contractor-operated

CORG Combat Operations Research Group

CRADA cooperative research and development

agreement

CRESS Center for Research in Social Systems

DDR&E Director of Defense Research and

Engineering

DEC Digital Equipment Corporation

DoD Department of Defense

DOE Department of Energy

FAA Federal Aviation Administration

FAR Federal Acquisition Regulations

FCRC Federal Contract Research Center

FFRDC Federally Funded Research and

Development Centers

GOCO government-owned,

contractor-operated

GOGO government-owned,

government-operated

GPS Global Positioning System

HumRRO Human Resources Research Office

IDA Institute of Defense Analyses

INS Institute of Naval Studies

IPR Institute for Public Research

JPL Jet Propulsion Laboratory

LMI Logistics Management Institute

MIT Massachusetts Institute of Technology

NASA National Aeronautics and Space

Administration

NAVWAG Naval Warfare Analysis Group

NDRC National Defense Research Committee

NDRI National Defense Research Institute

NORAD North American Air Defense

Command

NSF National Science Foundation

OEG Operations Evaluation Group

OFPP Office of Federal Procurement Policy

ONR Office of Naval Research

ORG Operations Research Group

| 63
64 | A History of the Department of Defense Federally Funded Research and Development Centers

ORO Operations Research Office

OSD Office of the Secretary of Defense

OSRD Office of Scientific Research and

Development

PPBS Program Planning and Budgeting

System

PRC Planning Research Corporation

RAC Research Analysis Corporation

RDT&E Research, Development, Test and

Evaluation

SAGE Semi-Automatic Ground Environment

SDC Systems Development Corporation

SDI Strategic Defense Initiative

SDS Students for a Democratic Society

SEI Software Engineering Institute

SMEC Strategic Missiles Evaluation

Committee

SORO Special Operations Research Office

SRI Stanford Research Institute

STL Space Technologies Laboratory

STAG Strategy and Tactics Analysis Group

TAG Technical Advisory Group

WSED Weapon Systems Evaluation Division

WSEG Weapons Systems Evaluation Group
eferences

1. The Aerospace Corporation, The Aerospace Corporation, Its Work: 1960-1980 (El Segundo, CA:

1980).

2. The Aerospace Corporation, Aerospace Origins

and Operations (El Segundo, CA: 1992).

3. The Aerospace Corporation, The Aerospace Corporation, 1992 Annual Report (El Segundo, CA:

1993)

4. The Aerospace Corporation, Space System Risk

Management (El Segundo, CA: 1993).

5. The Aerospace Corporation, The Aerospace Corporation, Annual Report, 1993 (El Segundo, CA:

1994).

6. The Aerospace Corporation, The Role of The

Aerospace Corporation FFRDC (El Segundo,

CA: 1994).

7. Anger, Thomas E., Vice President and Treasurer,

CNA Corporation, Alexandria, VA, letter to Brian

McCue, Director of Assessment of Defense Modeling and Simulation, the Office of Technology

Assessment, U.S. Congress, Washington, DC,

Sept. 27, 1994.

8. The Arroyo Center, The Arroyo Center Annual

Report, Research Year 1993-1994 (Santa Monica,

CA: 1994).

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