FFRDCS were first established during World War II to meet specialized or unique research and development needs that could not be readily satisfied by government personnel or private contractors. Additional and expanded requirements for specialized services led to increases not only in the size of the FFRDcs but also the number of FFRDcs, which peaked at 74 in 1969. Today, 8 agencies, including DOD, fund 39 FFRDcs that are operated by universities, nonprofit organizations, or private firms under long-term contracts. Federal policy allows agencies to award these contracts noncompetitively. The Office of Federal Procurement Policy within the Office of Management and Budget (0MB) establishes government-wide policy on the use and management of FFRDCS. Within DOD, the Director of Defense Research and Engineering is responsible for developing overall policy for DOD's 11 FFRDC5. The Director communicates DOD policy and detailed implementing guidance to FFRDC sponsors through a periodically updated management plan, and determines the funding level for each FFRDC based on the overall congressional ceiling on FFRDC funding and FFRDC requirements. Total funding for DOD'S FFRDC's was $1.25 billion in fiscal year 1995. DOD categorizes each of its FFRDcs as a systems engineering and integration center, a studies and analyses center, or a research and development laboratory. Appendix II provides information on each FFRDC, including its parent organization, primary sponsor, DOD funding, and staffing levels for fiscal year 1995.

This report describes: funding and staff size of the Federally Funded R&D Centers (FFRDC); extent of subcontracted FFRDC work; structure of the parent organizations; missions, core competencies, and capabilities of the FFRDC's sponsors' criteria for defining core work; and sponsors' oversight mechanisms and responsibilities. Overall funding for DoD's FFRDC's increased by about 23%, from almost $1.4 billion in FY 1985 to a peak of approximately $1.7 billion in FY 1990. Since FY 1990, funding for DoD's FFRDC's has decreased by almost 26% to about $1.3 billion in FY 1995.