It's time to reconsider the role of Federally Funded Research and Development Centers in our 3rd Millennium Federal Government

Federally Funded Research and Development Centers (FFRDCs) are unique organizations invented by the Federal Government in the bygone era of the 1940s. They were intended to assist with governmental scientific research and analysis, systems development, and systems acquisition. However they are an icon of an extinct paradigm. A very expensive one, not clearly justifying the billions of tax dollars consumed and much less clearly adding value to governmental functions and services. Like many institutions created by government, they've become bureaucratically entrenched, continuing to prosper over half a century later.

Their numbers have grown to at least forty FFRDC organizations sponsored by government agencies in the various governmental departments. They are designated "not-for-profit" entities, producing impressive incomes for their members. with less than impressive return on agency investments. They are given special advantages over other commercial, industrial and academic organizations because of their perceived "objectivity" and "technical excellence." Special advantages they enjoy include opportunities to participate in otherwise closed government meetings and participate in formulating government planning, thus enabling them to easily identify and exploit opportunities to ensure "job security" and to "feather their nest," while restricting opportunities of others in private enterprise struggling through open competition for their livelihood.

It is not clear that in the modern information age the government is best served by an exclusive club of FFRDCs performing services very similar to those performed frequently more cost-effectively by by private enterprises. Though they are expected to "operate in the public interest," some in and out of government view selfish self-interest often prevailing in activities provided the government by the FFRDCs.

The MITRE Corporation is only one of the more than 40 organizations suckling from many tits of the Federal Government in areas of defense, energy, aviation space, health, human services and YES, even support to spy operations and Internal Revenue Service (IRS) tax administration. According to publicly posted information, they operate at least three separate FFRDCs, the oldest being their command, control, communications and intelligence (C3I) FFRDC prominently participating in myriad activities throughout the Defense Department and intelligence community. One of the original FFRDCs, MITRE has prospered since the 1940s, beginning as a quasi public/private organization within the Air Force and extending its tentacles from their to myriad connections within the Federal Government. Last year it's operations continued to grow at a rate of 8%, with the vast majority of its income being from the Department of Defense (DOD). MITRE's FY 1998 operations revenue was $526.6 million, generated from the following customers: Department of Defense, $405.3 million; Federal Aviation Administration, $68.1 million, U.S. Government Classified (such as support to spy operations), $32.4 million; International Air Traffic Control, $8.6 million; and other customers, $12.2 million.

This past October MITRE signed on the IRS for a five year agreement to establish a "partnership" in modernizing IRS tax administration services. As an IRS FFRDC, MITRE supports the operation and modernization of our federal tax administration systems. Though MITRE's expertise in tax administration is not absolutely clear to the author, the justification given for buying MITRE services is MITRE's capable of providing "expert advice to help IRS officials determine, monitor and evaluate the technical direction of its modernization effort in an environment free from both internal constraints and external market and profit-related influences." Similarly, it is often difficult to determine what special knowledge, skills or abilities MITRE offers the Government for its other expensive services, often appearing to be more costly than similar services easily available through competitive private enterprise sources.

The size, scope, and oversight of DOD's FFRDCs have been recurring areas of concern to Congress, federal officials, and the private sector throughout the past three decades. In a GAO report of a congressionally directed study of DOD FFRDCs it was determined that, although funding for FFRDCs increased by about 23 percent between fiscal year (FY) 1985 and FY 1990, it subsequently decreased. This was partly due to Congress reducing funding and personnel ceilings and executives' salaries, as well as prohibiting new FFRDCs. However, in spite of these cuts and reductions earlier in the past decade, as noted above, MITRE government-related operations are continuing to grow.

A prevalent role for MITRE has been that of postulating, refining, and developing the systems requirements and technical specifications for electronic systems development projects in multi-billion dollar Air Force acquisition programs. The thesis being that "users" of these systems may lack the technical capability to translate their operational requirements into systems specifications and systems development plans. This role extended beyond the Air Force to the other Services and agencies of the Defense Department and subsequently to other governmental institutions.

Up until the late 1980’s, at great expense, the DOD developed the majority of its communications-electronics and information technology (IT) . The DOD-developed technology generally provided the foundation for and drove the proposed systems solutions in the C3I arena. During that period the aerospace industry was required to respond to DOD driven specifications which resulted from the work of MITRE and organizations such as the Air Force's Electronic Systems Command. For C3I and IT systems solutions, the process from identifying the operational need to the delivery of systems to support that need took up to ten years. In the meantime, private enterprise was making great strides in outpacing DOD in developing IT. Technology developed by DOD for many of the C3I systems often became obsolete before systems became operational. Just as important, DOD developed technology, products, and systems became extremely expensive to maintain and upgrade.

Similarly, in the "aerospace" arena, aerospace industries evolved in recent decades, introducing "front-end" experts in operational analysis, systems architecture, and systems engineering to evaluate future operational needs of the DOD. FFRDCs assumed these roles and provided government recommendations on where to focus on and allocate independent research and development priorities. The strategy by industry in the private enterprise was to become the best prepared to compete on upcoming systems development procurements that would be forthcoming from the military development and acquisition communities. However, FFRDCs such as MITRE, from their "non-competitive" advantage, frequently held and exerted their influence, sometimes undercutting organizations in private enterprise aerospace industries.

As the Federal Government begins to adopt commercial practices, as a result of the Cohen-Clinger Bill of 1996, dod is seeking maximum exploitation of commercial technology and commercial solutions in the areas of C3I and related information systems. IT solutions and service companies in private enterprise are fully equipped to supply the government with total C3I or IT systems solutions using state-of-the-art technology. In addition the information systems and aerospace industry has the fully capable staffs of operational and systems experts to assist the government users in assessing their operational needs and providing the required architectural engineering, systems engineering , systems integration, fielding, sustainment, and including technology insertion services over the life cycle of their systems.

In light of the above, we're left with this question. Why does our government need to continue to extend the life of the costly obsolete FFRDC paradigm when the era within which it was created long ago disappeared, where computers were strange monstrous machines that did cumbersome calculations. Do we really need (or can we afford) non-competitive FFRDCs like MITRE in the modern era of the 3rd millennium? We are entering a new information age where all private and public enterprises perform services very similar to those the government calls "C3I" which are based on information and information technology management.

Related, very important questions that need attention in the public arena are these.

(1) Why must our competitive commercial enterprises compete (at a disadvantage) with FFRDCs?

(2) Why are FFRDC prices sometimes twice that of those in commercial enterprises?

(3) How can our commercial enterprises compete with FFRDCs that sometimes offer "free" services to U.S. and Foreign Defense/Military customers by enjoying advantages denied non-FFRDC private enterprise?

It's definitely time to revisit the validity of the FFRDC role in the dynamic collaborative enterprise-wide management environment of the evolving modern Federal Government of the 3rd Millennium."

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