United States General Accounting Office

GAO Report to the Chairman and Ranking

Minority Member, Subcommittee on

Defense, Committee on Appropriations,

U.S. Senate

December 1995 DEFENSE RESEARCH

AND DEVELOPMENT

Fiscal Year 1993

Trustee and Adviser

Costs at Federally

Funded Centers

GAO/NSIAD-96-27

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-259058 

December 26, 1995

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

This report responds to your joint request that we provide information on

the stipends and expenses of the boards of trustees1

 and other

management advisory personnel who served in fiscal year 1993 at DOD’s

FFRDCs. Specifically, you asked us to provide information on (1) the extent

to which federal funds were used by FFRDCs to pay these costs; (2) the

range and highest daily stipends paid to individual trustees and other

management advisory personnel; (3) FFRDC advisers’ costs and where

applicable, the Defense Science Board’s (DSB) limits on paying for such

expenditures; (4) the total and average daily FFRDC costs for their trustees

and advisory personnel; and (5) individual stipends and total expenditures

for each of the 186 FFRDC fiscal year 1993 trustees and other management

advisory personnel. This report is a companion to our recently issued

report on FFRDC trustee affiliations.2

Background FFRDCs were established during World War II to meet special research

needs that federal and private sector facilities could not provide. The

number of FFRDCs has varied over the years, but in fiscal year 1993 there

were 39,3

 with 10 sponsored by DOD located at—the Aerospace

Corporation, the CNA Corporation, the Institute for Defense Analyses,

Lincoln Laboratory,4

 the Logistics Management Institute, the MITRE

1

To simplify discussion, all Department of Defense Federally Funded Research and Development

Centers (DOD FFRDC) board members are called “trustees” in this report.

2

Defense Research and Development: Fiscal Year 1993 Trustee Affiliations for Federally Funded

Centers (GAO/NSIAD-95-135, July 26, 1995).

3

The 29 non-DOD FFRDCs are managed by the Department of Energy (19), the National Science

Foundation (6), the Federal Aviation Administration (1), the Internal Revenue Service (1), the National

Institutes of Health (1), and the National Aeronautics and Space Administration (1).

4

The Massachusetts Institute of Technology (MIT) manages the Lincoln Laboratory.

Page 1 GAO/NSIAD-96-27 Defense Research and Development
B-259058 

Corporation, the Rand Corporation,5 and the Software Engineering

Institute.6

Each FFRDC is managed by a private sector nonprofit company or

university and funded primarily through a renewable 5-year, sole-source

contract. The 8 boards of trustees managing the 10 DOD FFRDCs in fiscal

year 1993 had 158 total members, including 15 trustees sitting on 2 boards

and 1 on 3. The FFRDCs generally used the same bases to pay both their

advisory personnel and trustee stipends and other expenses. In addition,

the FFRDCs brought in 28 other management advisory personnel to assist

these trustees. The CNA Corporation and the MITRE Corporation employed

most of these advisers (12 and 10, respectively), while 4 FFRDCs (the

Aerospace Corporation, Lincoln Laboratory, the Logistics Management

Institute, and the Rand Corporation) employed none. In fiscal year 1993,

Congress appropriated about $1.4 billion for the DOD FFRDCs.

As requested, we identified the maximum compensation and expenses

payable to the members of the DSB and compared it to the compensation

and expenses paid to the DOD FFRDC trustees and other management

advisers, although their functions are not identical. Under the guidance set

forth by DOD Directive 5105.4, the DSB provides DOD and the Joint Chiefs of

Staff with advice on science, technology, research, engineering,

manufacturing, and other matters of special interest. Its 31 members are

selected on the basis of their preeminence in the fields of science,

technology, military operations, research, engineering, and manufacturing,

and generally serve a maximum of two 2-year terms.

Results in Brief The CNA Corporation, the Institute for Defense Analyses, and the Software

Engineering Institute operate solely with federally derived funds. The

FFRDCs operated by the Aerospace Corporation, Lincoln Laboratory, the

Logistics Management Institute, the MITRE Corporation, and the Rand

Corporation used both federal and non-federal funds to pay trustee and

adviser expenditures. According to these FFRDCs, the use of non-federal

funds in fiscal year 1993 was about 28 percent for Lincoln Laboratory,

14 percent for the Rand Corporation, about 5 percent for the MITRE

Corporation, 2 percent for the Aerospace Corporation, and about

1 percent for the Logistics Management Institute.

5

Rand Corporation manages three FFRDCs—the Arroyo Center for the Army, Project Air Force, and the

National Defense Research Institute for DOD.

6

Carnegie Mellon University manages the Software Engineering Institute.

Page 2 GAO/NSIAD-96-27 Defense Research and Development
B-259058 

The average daily stipends paid to the 186 trustees and advisory personnel

ranged from $0 (for 27) to $7,200 (for 1). Of those that were paid a stipend

(159 of the 186), 40 percent received $1,501 or more a day. The 11 highest

average daily stipends ranged from $3,038 to $7,200. (See app. I.)

The DSB reimburses its members for travel expenses in accordance with

federal travel regulations and pays stipends limited by title 5 U.S.C.

Specifically, the fiscal year 1993 DSB’s maximum daily limits were: $333 for

stipend, $140 for lodging (for New York City), and $38 for meals. There are

no set limits on airfare costs, and expenditures for gifts, entertainment,

and spouses are generally not allowable.

Although most of the average daily costs for trustees and advisers

(excluding stipends) were small, there were some larger expenditures that

exceeded DSB limits. For example, four Lincoln Laboratory trustees had 

1 night’s lodging costs of about $230 in Boston, Massachusetts (versus a

limit of $101), and seven MITRE Corporation trustees had 2 days average

meal costs of about $140, while six others’ costs were about $220 for the

second day (versus a limit of $38). (See app. II.)

There was significant variation in the total trustee and management

advisory personnel expenditures paid by FFRDCs. The total expenditures

ranged from $4,763 at the Software Engineering Institute to $496,951 at the

MITRE Corporation, while average daily stipends paid (the Software

Engineering Institute paid no stipends) ranged from $370 at Lincoln

Laboratory to $2,057 at the Rand Corporation. (See app. III.)

Detailed information on fiscal year 1993 expenditures for each individual

trustee and other management advisory personnel is in appendix IV.

Scope and

Methodology

We initially requested from each DOD FFRDC stipend and expense data and

number of days worked for trustees and other management advisory

personnel, and expense data for their spouses. We defined other

management advisory personnel to include all non-full-time personnel

brought into the FFRDCs during fiscal year 1993 to assist the trustees in

directing, reviewing, or evaluating operations, policies, or projects.

Specifically, we asked each FFRDC to (1) provide fiscal year 1993 individual

stipend and other work-related costs that were paid to, reimbursed to, or

paid for individual trustees, other management advisory personnel, and

their spouses; (2) identify which costs were paid for with federal funds;

and (3) provide the number of days each individual worked in fiscal year

Page 3 GAO/NSIAD-96-27 Defense Research and Development
B-259058 

1993. The Rand Corporation advised us that they would not provide

information on reimbursements for trustee spouses’ travel costs since

neither the Rand Corporation nor its three DOD FFRDCs claim

reimbursement from the government for these expenditures.

For this report, we defined federal funds as all money paid by the federal

government to FFRDCs, including fees and any other type of payment

regardless of their designation or subsequent use. We did not look at the

propriety or allowability of any costs, as these considerations are part of

the Defense Contract Audit Agency audits of the FFRDC operations.

We used average daily costs as the comparison measurement for FFRDCs

and individuals. Initial data received from the FFRDCs related only to work

done at trustee meetings. No other specific trustee or adviser workdays

were provided by any FFRDCs. Therefore, we used the number of days in

attendance at meetings as the number of days worked. In addition, the

stipend amounts used included payments for time spent traveling to and

attending meetings as well as retainers and other compensation. For the

cases where no workdays were recorded, we used 1 workday to compute

average daily costs. We used random numbered codes to identify trustees

(with a T prefix) and management advisory personnel (with a M prefix) in

report schedules, to protect the privacy of the individuals involved. Our

work was performed from November 1994 through September 1995.

Agency Comments

and Our Evaluation

In commenting on a draft of this report, each of the eight organizations

managing DOD’s FFRDCs generally agreed that the report accurately

presented the data provided on their expenditures. However, five of them

indicated that they believed it was not appropriate to compare DSB and

FFRDC trustee stipends. In their view, the FFRDC trustees and DSB members

have different financial and management responsibilities. Three also felt

that the way the daily average stipends were calculated did not take into

account the possibility of travel days and work being done prior to trustee

meetings.

As requested, we compared the amount of money paid by FFRDCs for their

advisory personnel to the limits payable by DSB. Although the

responsibilities of the DSB members are not identical to those of the FFRDC

trustees, DSB members, like the trustees, are preeminent in their fields and

provide advice to the highest levels of DOD. We used the number of days in

attendance in meetings as the number of days worked for consistency and

because it was the only data initially provided by FFRDCs, which did not

Page 4 GAO/NSIAD-96-27 Defense Research and Development
B-259058 

maintain records of other specific workdays for their advisory personnel.

The payments made for any travel time to meetings is, as noted in our

methodology, included as part of the total stipends paid. Therefore, we

have not revised the report based on these comments. Six of the

organizations managing FFRDCs also offered some technical corrections or

editorial suggestions which we incorporated in the report where

appropriate.

Unless you publicly announce the contents of this report earlier, we plan

no further distribution until 30 days from its issue date. At that time, we

will send copies to the Secretaries of Defense, the Army, the Navy, and the

Air Force; the Directors, Office of Management and Budget and Defense

Research and Engineering; other congressional committees and

subcommittees; and each of the DOD FFRDCs. We will also make copies

available to others on request.

If you or your staff have any questions about the information presented in

this report, please contact me on (202) 512-4587. The major contributors to

this report are listed in appendix V.

David E. Cooper

Director, Acquisition Policy, Technology,

 and Competitiveness Issues

Page 5 GAO/NSIAD-96-27 Defense Research and Development
Contents

Letter 1

Appendix I 

Individual Trustee and

Management Advisory

Personnel Stipends

8

Appendix II 

Examples of Highest

Fiscal Year 1993

Expenditures

9

Appendix III 

Summary of Total and

Average Expenditures

Paid by FFRDCs for

Trustee and Other

Management Advisory

Personnel

10

Appendix IV 

Trustee and

Management Advisory

Personnel Fiscal Year

1993 Stipends and

Expenditures

11

Introduction 11

Appendix V 

Major Contributors to

This Report

21

Page 6 GAO/NSIAD-96-27 Defense Research and Development
Contents

Tables Table I.1: Range of Average Individual Daily Stipends 8

Table I.2: Highest Average Individual Daily Stipends Paid 8

Table III.1: FFRDCs’ Fiscal Year 1993 Expenditures for Trustees

and Management Advisory Personnel

10

Table III.2: FFRDCs’ Average Fiscal Year 1993 Expenditures for

Trustees and Management Advisory Personnel

10

Figures Figure IV.1: Aerospace Corporation 12

Figure IV.2: CNA Corporation 13

Figure IV.2: CNA Corporation - continued 14

Figure IV.3: Institute for Defense Analyses 15

Figure IV.4: Lincoln Laboratory 16

Figure IV.5: Logistics Management Institute 17

Figure IV.6: MITRE Corporation 18

Figure IV.7: Rand Corporation 19

Figure IV.8: Software Engineering Institute 20

Abbreviations

ASP Aerospace Corporation

CNA CNA Corporation

DOD Department of Defense

DSB Defense Science Board

FFRDC Federally Funded Research and Development Center

IDA Institute for Defense Analyses

LLB Lincoln Laboratory

LMI Logistics Management Institute

MIT Massachusetts Institute of Technology

MTR MITRE Corporation

RND Rand Corporation

SEI Software Engineering Institute

Page 7 GAO/NSIAD-96-27 Defense Research and Development
Appendix I 

Individual Trustee and Management

Advisory Personnel Stipends

Table I.1: Range of Average Individual

Daily Stipends Stipend Number of individuals Percent of total

$4,001 - 7,200 3 2

2,001 - 4,000 28 15

1,501 - 2,000 33 18

1,001 - 1,500 56 30

501 - 1,000 24 13

1 - 500 15 8

0a 27 14

aNo stipends were paid to Software Engineering Institute trustees and advisers, trustees who

were also Federally Funded Research and Development Center ( FFRDC) presidents and chief

executive officers, and others that either did not attend meetings or chose to receive no payment.

Table I.2: Highest Average Individual

Daily Stipends Paida

Individualb FFRDCc Days worked

Average daily

stipend

T69 ASP 1d $7,200

M178 MTRe 1 5,950

T8 IDA 2 4,750

T72 RND 7 3,600

T45 RND 4 3,350

M180 MTRe 1 3,200

T36 RND 2 3,175

T118 CNA 1 3,125

T73 MTRe 3 3,067

T6 IDA 2 3,038

T7 IDA 2 3,038

aFor comparison purposes, the maximum allowable daily stipend for fiscal year 1993 for members

of the Defense Science Board was $333.

bT represents a trustee, and M represents a management adviser.

cAbbreviations are explained on page 7.

dAvailable during the year on retainer; however, no workdays were recorded by the FFRDC. One

day worked was used to compute a daily stipend.

eMITRE Corporation stipends include quarterly retainers.

Page 8 GAO/NSIAD-96-27 Defense Research and Development
Appendix II 

Examples of Highest Fiscal Year 1993

Expenditures

FFRDCa Costb Comments

MTR $7,450 Private plane hired to transport nine trustees and nine

officers from Los Angeles International Airport to Edwards

Air Force Base and return (about 110 miles each way).

Federal funds were used.

LMI 595 Flowers sent to 17 trustees during the December 1992

holiday season. Federal funds were used.

LLB 920 Lodging cost of $230 each for four trustees for 1 night in

Boston. Federal funds were used.

MTR 4,113 Breakfast and lunch for 13 trustees (plus one dinner for 6)

at a 2-day meeting. Federal funds were used.

ASP 14,308 Six group meals for trustees, their spouses and guests

during six trustee meetings. Federal and non-federal

funds were used.

LLB 6,753 Two trustee dinners (20 attendees at first dinner and 17 at

the second, including some MIT administration and LLB

management officials). All costs were paid by MIT.

MTR 2,500 One-day lunch and tour for 9 trustees’ spouses and 

10 officers’ wives. Federal funds were used.

aAbbreviations are explained on page 7.

bFor comparison purposes, the Defense Science Board’s maximum daily expenditures for fiscal

year 1993 were $38 for meals and $140 for lodging. There are no specific limits on the cost of

airfare, and the cost of gifts and spouses’ expenditures are generally not allowable.

Page 9 GAO/NSIAD-96-27 Defense Research and Development
Appendix III 

Summary of Total and Average Expenditures

Paid by FFRDCs for Trustee and Other

Management Advisory Personnel

Table III.1: FFRDCs’ Fiscal Year 1993

Expenditures for Trustees and

Management Advisory Personnel

FFRDCa Stipend Meals Lodging Airfare Other Total

ASP

(22)

$311,500 $12,247 $15,752 $49,913 $5,634 $395,046

CNA

(41)

208,708 255 3,429 26,024 3,910 242,326

IDA

(21)

200,450 746 6,563 26,602 3,692 238,052

LLBb

(17)

8,500 122 2,238 5,909 418 17,187

LMI 

(18)

171,600 7,089 7,646 40,135 3,736 230,206

MTR 

(31)

381,433 6,517 23,420 82,267 3,314 496,951

RND

(22)

197,450 1,804 9,593 22,303 4,091 235,241

SEI 

(14)

0 638 844 2,759 522 4,763

Total

(186)

$1,479,641 $29,418 $69,485 $255,912 $25,317 $1,859,773

aAbbreviations are explained on page 7. Number in parenthesis is the total number of trustees

and management advisers.

bDoes not include $6,753 for two trustee dinners paid for by MIT.

Table III.2: FFRDCs’ Average Fiscal

Year 1993 Expenditures for Trustees

and Management Advisory Personnel

FFRDCa Stipend Meals Lodging Airfare Other Total

ASP

(22)

$1,456 $57 $74 $233 $26 $1,846

CNA

(41)

1,250 2 21 156 23 1,452

IDA

(21)

1,554 6 51 206 28 1,845

LLB 

(17)

370 5 97 257 18 747

LMI 

(18)

1,152 48 51 269 25 1,545

MTR 

(31)

1,271 22 78 274 12 1,657

RND

(22)

2,057 19 100 232 42 2,450

SEI 

(14)

0 17 23 75 14 129

aAbbreviations are explained on page 7. Number in parenthesis is the total number of trustees

and management advisers.

Page 10 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Introduction Included in this appendix are the fiscal year 1993 stipends and

expenditures for each of the 186 trustees and management advisory

personnel at the Department of Defense (DOD) FFRDCs. The amounts listed

were prepared from financial data provided by each FFRDC on fiscal year

1993 individual stipends and other costs that were paid to, reimbursed to,

or paid for individual trustees and other management advisory personnel.

We used (1) average daily costs as the comparison measurement for

FFRDCs and individuals; (2) the number of days in attendance at meetings

as the number of days worked; (3) payments for traveling to and attending

meetings, as well as retainers and other compensation, as components of

an individual’s stipend; and (4) 1 day to compute average daily costs for

the cases where no workdays were recorded.

Page 11 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.1: Aerospace Corporation

aAvailable during the year on retainer; however, no workdays were recorded by the FFRDC. One

day worked was used to compute daily expenditures.

Page 12 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.2: CNA Corporation

Page 13 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.2: CNA Corporation - Continued

aAvailable during the year on retainer; however, no workdays were recorded by the FFRDC. One

day worked was used to compute daily expenditures.

Page 14 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.3: Institute for Defense Analyses

aAvailable during the year on retainer; however, no workdays were recorded by the FFRDC. One

day worked was used to compute daily expenditures.

Page 15 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.4: Lincoln Laboratory

aNo workdays were recorded by the FFRDC. One day worked was used to compute daily

expenditures.

Page 16 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.5: Logistics Management Institute

Page 17 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.6: Mitre Corporation

aAvailable during the year on retainer; however, no workdays were recorded by the FFRDC. One

day worked was used to compute daily expenditures.

Page 18 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.7: Rand Corporation

Page 19 GAO/NSIAD-96-27 Defense Research and Development
Appendix IV 

Trustee and Management Advisory

Personnel Fiscal Year 1993 Stipends and

Expenditures

Figure IV.8: Software Engineering Institute

Page 20 GAO/NSIAD-96-27 Defense Research and Development
Appendix V 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Charles F. Rey, Assistant Director

Roy B. Karadbil, Evaluator-in-Charge

Charles W. Malphurs, Evaluator-in-Charge

Jai E. Lee, Senior Computer Specialist

Shirley B. Johnson, Evaluator

Stacy Edwards, Evaluator

(705088) Page 21 GAO/NSIAD-96-27 Defense Research and Development
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