Federally funded research and development centers (FFRDCs) are a special type of government-owned, contractor-operated research centers—commonly referred to as "GOCOs"—that conduct research and development (R&D) and related activities in support of a federal agency's mission. FFRDCs operate under the framework of the Federal Acquisition Regulation. They differ from other performers of federal R&D—such as federal laboratories, universities, non-profit organizations, and private firms—in that they are designed to meet a "special long-term research or development need which cannot be met as effectively by existing in-house or contractor resources" and that they have "access, beyond that which is common to the normal contractual relationship, to Government and supplier data, including sensitive and proprietary data, and to employees and installations equipment and real property. " Over the years, Congress has been concerned with the oversight and management of FFRDCs, lack of competition in contracting, and mission creep. More recently, some Members of Congress have focused on the need to balance responsible oversight with improved efficiency, effectiveness, and innovation. The appropriate role of FFRDCs in the federal R&D enterprise may remain an issue in the 115 th Congress. FFRDCs have their origin in World War II. During that time, the federal government sought to mobilize the country's scientific and engineering talent and apply it to the development of technologies that would aid U.S. war efforts. For example, the Department of Defense's (DOD's) Lincoln Laboratory was created to develop radar for identifying aircraft and ships and the Los Alamos and Oak Ridge National Laboratories (now under the auspices of the Department of Energy [DOE]) were established to support the development of the atomic bomb. The purpose of FFRDCs—to bring scientific and technical expertise to bear on pressing R&D challenges—remains. Then, as now, it was widely believed that a lack of flexibility in the federal government made it difficult to recruit and maintain scientific and technical talent. Since FFRDCs are operated by contractors, many federal restrictions, including restrictions on pay and hiring, do not apply, in effect increasing the flexibility of FFRDCs compared to the federal government. FFRDCs were called "Federal Contract Research Centers" until 1967. In November 1967, the chairman of the Federal Council for Science and Technology, a predecessor to the National Science and Technology Council, sent a memorandum to federal science agencies formally changing the name of Federal Contract Research Centers to FFRDCs and detailing criteria for the establishment of an FFRDC. Accordingly, an FFRDC was required to: conduct basic research, applied research, or development, or perform R&D management; be independently incorporated or constitute a separate organizational unit within the parent organization; perform R&D under the direction of the federal government; receive 70% or more of its funding from one agency; have a long-term relationship with its sponsoring agency (five years or more); be government-owned; and have an average annual budget of at least $500,000. In 1984, the Office of Federal Procurement Policy (OFPP) issued a policy letter revising and updating the governance of FFRDCs. The OFPP issued regulations in 1990 that incorporated the principles articulated in the policy letter as part of the Federal Acquisition Regulation (FAR). The FAR now defines the purposes of an FFRDC in addition to the policies that direct an FFRDC's establishment, use, review, and termination. The " Characteristics of FFRDCs " as defined by the FAR are discussed in more detail later in this report. Currently, 12 federal agencies sponsor a total of 42 FFRDCs. These FFRDCs provide R&D capabilities in a broad range of areas—from energy and cybersecurity to cancer and astronomy. DOE and DOD sponsor a majority of the FFRDCs, 16 and 10 respectively. The National Science Foundation (NSF) sponsors 5 centers, the Department of Homeland Security (DHS) sponsors 3, and the Department of Health and Human Services (HHS) sponsors 2. The National Aeronautics and Space Administration (NASA), the National Institute of Standards and Technology (NIST), the Department of Transportation (DOT), the Nuclear Regulatory Commission (NRC), the Department of the Treasury (Treasury), the Department of Veterans Affairs (VA), and the United States Courts each sponsor a single FFRDC. FFRDCs are classified in three "activity type" categories under a system established by DOD and used by NSF: R&D laboratory, study and analysis center, or system engineering and integration center. R&D laboratories maintain long-term competencies in technology areas that cannot be effectively met by the federal government or the private sector alone. Study and analysis centers deliver independent and objective analysis and advice to federal agencies in support of policy development, decisionmaking, alternative approaches, and new concepts. System engineering and integration centers provide technical and engineering capabilities not available in a federal agency to ensure complex systems meet operational requirements. NSF has the responsibility of maintaining a master list of FFRDCs across the federal government. According to NSF and as shown in Appendix A , 26 of the 42 current FFRDCs are R&D laboratories, 10 are study and analysis centers, and 6 are system engineering and integration centers. The Federal Acquisition Regulation governs the establishment, use, review, and termination of FFRDCs. According to the FAR, FFRDCs are intended to address an R&D need that cannot be met as effectively by the federal government or the private sector alone. Essentially, FFRDCs are intended to only perform work that cannot be done by other contractors. FFRDCs accomplish their R&D through a strategic relationship with their sponsoring agency. Two overarching characteristics—special access and longevity—define this strategic relationship. An FFRDC may be given special access to government and supplier data, employees, and facilities. This access is beyond what is typical in a normal contractual relationship and may include access to sensitive and proprietary information. Accordingly, the FAR requires that FFRDCs (1) operate in the public interest with objectivity and independence, (2) be free from organizational conflicts of interest, and (3) fully disclose their activities to their sponsoring agency. Additionally, FFRDCs are not allowed to use their special access to privileged information, equipment, or property to compete with the private sector for federal R&D contracts. However, an FFRDC is allowed to perform work for other agencies when the capabilities of the FFRDC are not available in the private sector. Finally, the prohibition against competing with the private sector for federal R&D contracts does not apply to the parent organization or any subsidiary of the parent organization associated with an FFRDC. The other defining characteristic is the long-term relationship between an FFRDC and its sponsoring agency. Under the FAR, the initial contract period of an FFRDC may be up to five years, but these contracts may be renewed, following a review, in increments of up to five years. For example, one DOE FFRDC—the Pacific Northwest National Laboratory—has been operating under the same contract since 1964. The FAR encourages long-term contracts to provide stability and continuity that are intended to allow an FFRDC to attract high-quality personnel. Additionally, under the FAR, a long relationship is required to enable the FFRDC to maintain in-depth expertise, stay familiar with the needs of the agency, provide a quick response capability, and maintain objectivity and independence. In addition to the described characteristics and requirements, prior to establishing an FFRDC, a sponsoring agency must make sure that there are no existing alternatives for addressing the agency's R&D needs (i.e., the research cannot be done effectively by the federal government or the private sector) and that the agency has the expertise necessary to review the performance of the FFRDC. The sponsoring agency must also ensure that cost controls are in place and that the purpose and mission of the FFRDC are clearly defined. Other organizations, such as University Affiliated Research Centers (UARCs), have characteristics and requirements similar to those of FFRDCs. A brief description of UARCs is provided in the following box. According to NSF, the federal government spent $128.6 billion on R&D in FY2015. Of this amount, $11.1 billion or 8.6% of the total was spent on R&D performed by FFRDCs, compared to $47.5 billion (36.9%) performed by industry, $34.9 billion (27.2%) performed by federal agencies (intramural), and $27.4 billion (21.3%) performed by universities and colleges ( Figure 1 , see box below for definitions of R&D performers). According to NSF, in FY2015, FFRDCs spent 22% of their R&D expenditures on basic research, 38% on applied research, and 39% in support of development activities. The distribution of R&D expenditures by character of work performed, i.e., basic research, applied research, and development, has remained stable for the past three years. Prior to FY2013, the proportion of R&D spending on basic research was consistently more than one-third of total R&D expenditures and spending on applied research was closer to one-quarter of total R&D expenditures. Figure 2 and Figure 3 illustrate federal R&D spending trends for FFRDCs from FY1967 to FY2015. Figure 2 shows that the proportion of total federal R&D spending obligated to FFRDCs has varied over time, ranging from a high of 11.6% in FY1983 to a low of 6.4% in FY2008. On average, between FY1967 and FY2015, the federal government has obligated 9.1% of its federal R&D spending to FFRDCs.