Reducing the Barriers Between the Defense and Civilian Industrial Bases

The use of cooperative agreements and other transactions appears to provide some opportunities to remove barriers between the defense and civilian industrial bases, in particular by attracting firms that traditionally did not perform research for DOD. Similarly, DARPA officials commented that the added flexibility within the intellectual property provisions would assist the firms’ efforts to develop and commercialize the technology. Promoting New Relationships and Practices

The instruments appear to be fostering new relationships and practices within the defense industry, especially for those projects being undertaken by consortia. It should be noted that the government’s actual share of the projects’ costs may be higher than indicated by table 1. Participants also were allowed to propose the value of prior research as part of their cost-sharing contributions. Accepting prior research in lieu of concurrent financial or in-kind contributions may obscure each party’s relative contributions in the current project. The selection of different instruments, coupled with different treatment of specific issues among the services, has led to some confusion among firms that were negotiating agreements with both DARPA and the services. Recommendation

Because inconsistent selection of a particular instrument and treatment of specific clauses may unnecessarily increase confusion for government and industry users and may hinder their effective use, we recommend that the Secretary of Defense ensure that DOD’s revised guidance on the use of cooperative agreements and other transactions promotes increased consistency among DOD components on the selection and structure of these instruments.
Why GAO Did This Study

GAO evaluated the Department of Defense's (DOD) use of cooperative agreements and other transactions to further its objectives of: (1) helping to reduce the barriers to integrating the defense and civilian sectors of the industrial base; (2) promoting new relationships and practices within the defense industry; and (3) allowing the government to leverage for defense purposes the private sector's financial investment in research and development of commercial products and processes. GAO also discussed two emerging issues concerning the selection and structure of the instruments.

What GAO Found

GAO found that: (1) cooperative agreements and other transactions appear to have contributed to reducing some of the barriers between the defense and civilian industrial bases by attracting firms that traditionally did not perform research for DOD; (2) the instruments have enabled the use of more flexible financial management and intellectual property provisions than those typically found in contracts and grants; (3) the instruments appear to be fostering new relationships and practices within the defense industry, especially for projects being undertaken by consortia; (4) DOD has partially offset its own costs by sharing project costs with recipients, but the DOD practice of accepting the value of recipients' prior research efforts in lieu of concurrent financial or in-kind contributions may increase the actual DOD monetary share of the project's costs; (5) differences between DARPA and the military services regarding the selection of instruments and treatment of specific provisions have led to some confusion among firms that were negotiating agreements with different DOD components; and (6) DOD is revising its interim regulations to provide clearer guidance on the instruments' selection, use, and structure.