Specifically, it recommended (1) moving allowable costs out of fee and reducing fee accordingly, and (2) establishing consistent policies on ordinary and necessary costs to be funded through fee. Even though DOD states that it is important to ensure that tasks assigned to the FFRDC meet the core work criteria, we believe it will continue to be difficult to determine whether a task meets these criteria. FFRDC mission statements remain broad, and core competencies appear to differ little from the previous scope of work descriptions. Currently, six of the eight parent organizations that operate FFRDCs also operate one or more non-FFRDC affiliates. DOD’s action plan also recommended the establishment of an independent advisory committee to review and advise on FFRDC management. In late 1995, an independent advisory committee was established. The committee is responsible for reviewing and advising DOD on the management of its FFRDCs by providing guidelines on the appropriate scope of work, customers, organizational structure, and size of the FFRDCs; overseeing compliance with DOD’s FFRDC Management Plan; reviewing sponsor’s management of FFRDCs; reviewing the level and appropriateness of non-DOD and nonsponsor work performed by the FFRDCs; overseeing the comprehensive review process; and performing selected FFRDC program reviews. Comprehensive Review of the Department of Defense’s Fee-Granting Process for Federally Funded Research and Development Centers, Director for Defense Research and Engineering, May 1, 1995.
Why GAO Did This Study

GAO discussed the Department of Defense's (DOD) efforts to improve the management of its federally funded research and development centers (FFRDC), focusing on the: (1) guidelines to ensure that management fees paid to FFRDC are justified; (2) core work appropriate for FFRDC; (3) criteria for the acceptance of work outside of the core by FFRDC parent corporations; and (4) establishment of an independent advisory committee to review DOD management, use, and oversight of FFRDC.

What GAO Found

GAO noted that: (1) the DOD action plan recommended that management fees be revised to move allowable costs out of fee, reduce fees, and establish policies on ordinary and necessary costs; (2) it is difficult to determine whether tasks assigned to FFRDC meet core work criteria because the mission statements are broad and the core competencies offer little deviation from previous work descriptions; (3) six of the eight parent organizations that operate FFRDC also operate one or more non-FFRDC affiliates; and (4) DOD established an independent advisory committee to review FFRDC work, customers, and organizational structure and size, oversee FFRDC compliance with the DOD FFRDC management plan, review sponsor's management of FFRDC, determine the level and appropriateness of non-DOD and non-sponsor work performed by FFRDC, monitor the comprehensive review process, and perform selected FFRDC program reviews.