Defense Research and Development: Fiscal Year 1993 Trustee and Adviser Costs at Federally Funded Centers (Letter Report, 12/26/95, GAO/NSIAD-96-27)
Pursuant to a congressional request, GAO provided information on the
Department of Defense's Federally Funded Research and Development
Centers' (DOD FFRDC) stipends and expenses for trustee members and other
management advisory personnel for fiscal year (FY) 1993.
GAO found that: (1) in FY 1993, the Lincoln Laboratory, Rand
Corporation, Mitre Corporation, Aerospace Corporation, and the Logistics
Management Institute used both federal and non-federal funds to pay
trustee and adviser expenditures; (2) the average daily stipends paid to
the 186 trustees and advisory personnel ranged from $0 to $7,200, and
the 11 highest daily stipends ranged from $3,038 to $7,200; (3) the
Defense Science Board's (DSB) maximum daily limits were $333 for
stipends, $140 for lodging, and $38 for meals, but there were no set
limits for airfare, gifts, and entertainment costs; (4) although most
average daily stipends were small, there were some larger expenditures
that exceeded DSB limits; and (5) total expenditures for DOD FFRDC
trustee and management advisory personnel ranged from $4,763 at the
Software Engineering Institute to $496,951 at the MITRE Corporation, and
the average daily stipends ranged from $370 at the Lincoln Laboratory to
$2,057 at the Rand Corporation.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-96-27
TITLE: Defense Research and Development: Fiscal Year 1993 Trustee
and Adviser Costs at Federally Funded Centers
DATE: 12/26/95
SUBJECT: Advisory committees
Military research
Defense operations
Research and development
Federal funds
Travel costs
Management consultants
Research programs
Non-profit organizations
Per diem allowances
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Cover
================================================================ COVER
Report to the Chairman and Ranking Minority Member, Subcommittee on
Defense, Committee on Appropriations, U.S. Senate
December 1995
DEFENSE RESEARCH AND DEVELOPMENT -
FISCAL YEAR 1993 TRUSTEE AND
ADVISER COSTS AT FEDERALLY FUNDED
CENTERS
GAO/NSIAD-96-27
Defense Research and Development
(705088)
Abbreviations
=============================================================== ABBREV
ASP - Aerospace Corporation
CNA - CNA Corporation
DOD - Department of Defense
DSB - Defense Science Board
FFRDC - Federally Funded Research and Development Center
IDA - Institute for Defense Analyses
LLB - Lincoln Laboratory
LMI - Logistics Management Institute
MIT - Massachusetts Institute of Technology
MTR - MITRE Corporation
RND - Rand Corporation
SEI - Software Engineering Institute
Letter
=============================================================== LETTER
B-259058
December 26, 1995
The Honorable Ted Stevens
Chairman
The Honorable Daniel K. Inouye
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate
This report responds to your joint request that we provide
information on the stipends and expenses of the boards of trustees\1
and other management advisory personnel who served in fiscal year
1993 at DOD's FFRDCs. Specifically, you asked us to provide
information on (1) the extent to which federal funds were used by
FFRDCs to pay these costs; (2) the range and highest daily stipends
paid to individual trustees and other management advisory personnel;
(3) FFRDC advisers' costs and where applicable, the Defense Science
Board's (DSB) limits on paying for such expenditures; (4) the total
and average daily FFRDC costs for their trustees and advisory
personnel; and (5) individual stipends and total expenditures for
each of the 186 FFRDC fiscal year 1993 trustees and other management
advisory personnel. This report is a companion to our recently
issued report on FFRDC trustee affiliations.\2
--------------------
\1 To simplify discussion, all Department of Defense Federally Funded
Research and Development Centers (DOD FFRDC) board members are called
"trustees" in this report.
\2 Defense Research and Development: Fiscal Year 1993 Trustee
Affiliations for Federally Funded Centers (GAO/NSIAD-95-135, July 26,
1995).
BACKGROUND
------------------------------------------------------------ Letter :1
FFRDCs were established during World War II to meet special research
needs that federal and private sector facilities could not provide.
The number of FFRDCs has varied over the years, but in fiscal year
1993 there were 39,\3 with 10 sponsored by DOD located at--the
Aerospace Corporation, the CNA Corporation, the Institute for Defense
Analyses, Lincoln Laboratory,\4 the Logistics Management Institute,
the MITRE Corporation, the Rand Corporation,\5 and the Software
Engineering Institute.\6
Each FFRDC is managed by a private sector nonprofit company or
university and funded primarily through a renewable 5-year,
sole-source contract. The 8 boards of trustees managing the 10 DOD
FFRDCs in fiscal year 1993 had 158 total members, including 15
trustees sitting on 2 boards and 1 on 3. The FFRDCs generally used
the same bases to pay both their advisory personnel and trustee
stipends and other expenses. In addition, the FFRDCs brought in 28
other management advisory personnel to assist these trustees. The
CNA Corporation and the MITRE Corporation employed most of these
advisers (12 and 10, respectively), while 4 FFRDCs (the Aerospace
Corporation, Lincoln Laboratory, the Logistics Management Institute,
and the Rand Corporation) employed none. In fiscal year 1993,
Congress appropriated about $1.4 billion for the DOD FFRDCs.
As requested, we identified the maximum compensation and expenses
payable to the members of the DSB and compared it to the compensation
and expenses paid to the DOD FFRDC trustees and other management
advisers, although their functions are not identical. Under the
guidance set forth by DOD Directive 5105.4, the DSB provides DOD and
the Joint Chiefs of Staff with advice on science, technology,
research, engineering, manufacturing, and other matters of special
interest. Its 31 members are selected on the basis of their
preeminence in the fields of science, technology, military
operations, research, engineering, and manufacturing, and generally
serve a maximum of two 2-year terms.
--------------------
\3 The 29 non-DOD FFRDCs are managed by the Department of Energy
(19), the National Science Foundation (6), the Federal Aviation
Administration (1), the Internal Revenue Service (1), the National
Institutes of Health (1), and the National Aeronautics and Space
Administration (1).
\4 The Massachusetts Institute of Technology (MIT) manages the
Lincoln Laboratory.
\5 Rand Corporation manages three FFRDCs--the Arroyo Center for the
Army, Project Air Force, and the National Defense Research Institute
for DOD.
\6 Carnegie Mellon University manages the Software Engineering
Institute.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :2
The CNA Corporation, the Institute for Defense Analyses, and the
Software Engineering Institute operate solely with federally derived
funds. The FFRDCs operated by the Aerospace Corporation, Lincoln
Laboratory, the Logistics Management Institute, the MITRE
Corporation, and the Rand Corporation used both federal and
non-federal funds to pay trustee and adviser expenditures. According
to these FFRDCs, the use of non-federal funds in fiscal year 1993 was
about 28 percent for Lincoln Laboratory, 14 percent for the Rand
Corporation, about 5 percent for the MITRE Corporation, 2 percent for
the Aerospace Corporation, and about 1 percent for the Logistics
Management Institute.
The average daily stipends paid to the 186 trustees and advisory
personnel ranged from $0 (for 27) to $7,200 (for 1). Of those that
were paid a stipend (159 of the 186), 40 percent received $1,501 or
more a day. The 11 highest average daily stipends ranged from $3,038
to $7,200. (See app. I.)
The DSB reimburses its members for travel expenses in accordance with
federal travel regulations and pays stipends limited by title 5
U.S.C. Specifically, the fiscal year 1993 DSB's maximum daily limits
were: $333 for stipend, $140 for lodging (for New York City), and
$38 for meals. There are no set limits on airfare costs, and
expenditures for gifts, entertainment, and spouses are generally not
allowable.
Although most of the average daily costs for trustees and advisers
(excluding stipends) were small, there were some larger expenditures
that exceeded DSB limits. For example, four Lincoln Laboratory
trustees had
1 night's lodging costs of about $230 in Boston, Massachusetts
(versus a limit of $101), and seven MITRE Corporation trustees had 2
days average meal costs of about $140, while six others' costs were
about $220 for the second day (versus a limit of $38). (See app.
II.)
There was significant variation in the total trustee and management
advisory personnel expenditures paid by FFRDCs. The total
expenditures ranged from $4,763 at the Software Engineering Institute
to $496,951 at the MITRE Corporation, while average daily stipends
paid (the Software Engineering Institute paid no stipends) ranged
from $370 at Lincoln Laboratory to $2,057 at the Rand Corporation.
(See app. III.)
Detailed information on fiscal year 1993 expenditures for each
individual trustee and other management advisory personnel is in
appendix IV.
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3
We initially requested from each DOD FFRDC stipend and expense data
and number of days worked for trustees and other management advisory
personnel, and expense data for their spouses. We defined other
management advisory personnel to include all non-full-time personnel
brought into the FFRDCs during fiscal year 1993 to assist the
trustees in directing, reviewing, or evaluating operations, policies,
or projects. Specifically, we asked each FFRDC to (1) provide fiscal
year 1993 individual stipend and other work-related costs that were
paid to, reimbursed to, or paid for individual trustees, other
management advisory personnel, and their spouses; (2) identify which
costs were paid for with federal funds; and (3) provide the number of
days each individual worked in fiscal year 1993. The Rand
Corporation advised us that they would not provide information on
reimbursements for trustee spouses' travel costs since neither the
Rand Corporation nor its three DOD FFRDCs claim reimbursement from
the government for these expenditures.
For this report, we defined federal funds as all money paid by the
federal government to FFRDCs, including fees and any other type of
payment regardless of their designation or subsequent use. We did
not look at the propriety or allowability of any costs, as these
considerations are part of the Defense Contract Audit Agency audits
of the FFRDC operations.
We used average daily costs as the comparison measurement for FFRDCs
and individuals. Initial data received from the FFRDCs related only
to work done at trustee meetings. No other specific trustee or
adviser workdays were provided by any FFRDCs. Therefore, we used the
number of days in attendance at meetings as the number of days
worked. In addition, the stipend amounts used included payments for
time spent traveling to and attending meetings as well as retainers
and other compensation. For the cases where no workdays were
recorded, we used 1 workday to compute average daily costs. We used
random numbered codes to identify trustees (with a T prefix) and
management advisory personnel (with a M prefix) in report schedules,
to protect the privacy of the individuals involved. Our work was
performed from November 1994 through September 1995.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :4
In commenting on a draft of this report, each of the eight
organizations managing DOD's FFRDCs generally agreed that the report
accurately presented the data provided on their expenditures.
However, five of them indicated that they believed it was not
appropriate to compare DSB and FFRDC trustee stipends. In their
view, the FFRDC trustees and DSB members have different financial and
management responsibilities. Three also felt that the way the daily
average stipends were calculated did not take into account the
possibility of travel days and work being done prior to trustee
meetings.
As requested, we compared the amount of money paid by FFRDCs for
their advisory personnel to the limits payable by DSB. Although the
responsibilities of the DSB members are not identical to those of the
FFRDC trustees, DSB members, like the trustees, are preeminent in
their fields and provide advice to the highest levels of DOD. We
used the number of days in attendance in meetings as the number of
days worked for consistency and because it was the only data
initially provided by FFRDCs, which did not maintain records of other
specific workdays for their advisory personnel. The payments made
for any travel time to meetings is, as noted in our methodology,
included as part of the total stipends paid. Therefore, we have not
revised the report based on these comments. Six of the organizations
managing FFRDCs also offered some technical corrections or editorial
suggestions which we incorporated in the report where appropriate.
---------------------------------------------------------- Letter :4.1
Unless you publicly announce the contents of this report earlier, we
plan no further distribution until 30 days from its issue date. At
that time, we will send copies to the Secretaries of Defense, the
Army, the Navy, and the Air Force; the Directors, Office of
Management and Budget and Defense Research and Engineering; other
congressional committees and subcommittees; and each of the DOD
FFRDCs. We will also make copies available to others on request.
If you or your staff have any questions about the information
presented in this report, please contact me on (202) 512-4587. The
major contributors to this report are listed in appendix V.
David E. Cooper
Director, Acquisition Policy, Technology,
and Competitiveness Issues
INDIVIDUAL TRUSTEE AND MANAGEMENT
ADVISORY PERSONNEL STIPENDS
=========================================================== Appendix I
Table I.1
Range of Average Individual Daily
Stipends
Number of
Stipend individuals Percent of total
------------------------------ ------------------ ------------------
$4,001 -7,200 3 2
2,001 -4,000 28 15
1,501 -2,000 33 18
1,001 -1,500 56 30
501 -1,000 24 13
1 -500 15 8
0\a 27 14
----------------------------------------------------------------------
\a No stipends were paid to Software Engineering Institute trustees
and advisers, trustees who were also Federally Funded Research and
Development Center ( FFRDC) presidents and chief executive officers,
and others that either did not attend meetings or chose to receive no
payment.
Table I.2
Highest Average Individual Daily
Stipends Paid\a
Average daily
Individual\b FFRDC\c Days worked stipend
------------------------- ------------- ------------- -------------
T69 ASP 1\d $7,200
M178 MTR\e 1 5,950
T8 IDA 2 4,750
T72 RND 7 3,600
T45 RND 4 3,350
M180 MTR\e 1 3,200
T36 RND 2 3,175
T118 CNA 1 3,125
T73 MTR\e 3 3,067
T6 IDA 2 3,038
T7 IDA 2 3,038
----------------------------------------------------------------------
\a For comparison purposes, the maximum allowable daily stipend for
fiscal year 1993 for members of the Defense Science Board was $333.
\b T represents a trustee, and M represents a management adviser.
\c Abbreviations are explained on page 7.
\d Available during the year on retainer; however, no workdays were
recorded by the FFRDC. One day worked was used to compute a daily
stipend.
\e MITRE Corporation stipends include quarterly retainers.
EXAMPLES OF HIGHEST FISCAL YEAR
1993 EXPENDITURES
========================================================== Appendix II
FFRDC\a Cost\b Comments
-------- -------- --------------------------------------------------
MTR $7,450 Private plane hired to transport nine trustees and
nine officers from Los Angeles International
Airport to Edwards Air Force Base and return
(about 110 miles each way). Federal funds were
used.
LMI 595 Flowers sent to 17 trustees during the December
1992 holiday season. Federal funds were used.
LLB 920 Lodging cost of $230 each for four trustees for 1
night in Boston. Federal funds were used.
MTR 4,113 Breakfast and lunch for 13 trustees (plus one
dinner for 6) at a 2-day meeting. Federal funds
were used.
ASP 14,308 Six group meals for trustees, their spouses and
guests during six trustee meetings. Federal and
non-federal funds were used.
LLB 6,753 Two trustee dinners (20 attendees at first dinner
and 17 at the second, including some MIT
administration and LLB management officials). All
costs were paid by MIT.
MTR 2,500 One-day lunch and tour for 9 trustees' spouses and
10 officers' wives. Federal funds were used.
----------------------------------------------------------------------
\a Abbreviations are explained on page 7.
\b For comparison purposes, the Defense Science Board's maximum daily
expenditures for fiscal year 1993 were $38 for meals and $140 for
lodging. There are no specific limits on the cost of airfare, and
the cost of gifts and spouses' expenditures are generally not
allowable.
SUMMARY OF TOTAL AND AVERAGE
EXPENDITURES PAID BY FFRDCS FOR
TRUSTEE AND OTHER MANAGEMENT
ADVISORY PERSONNEL
========================================================= Appendix III
Table III.1
FFRDCs' Fiscal Year 1993 Expenditures
for Trustees and Management Advisory
Personnel
Lodgin Airfar
FFRDC\a Stipend Meals g e Other Total
------------------ -------- ------ ------ ------ ------ ========
ASP $311,500 $12,24 $15,75 $49,91 $5,634 $395,046
(22) 7 2 3
CNA 208,708 255 3,429 26,024 3,910 242,326
(41)
IDA 200,450 746 6,563 26,602 3,692 238,052
(21)
LLB\b 8,500 122 2,238 5,909 418 17,187
(17)
LMI 171,600 7,089 7,646 40,135 3,736 230,206
(18)
MTR 381,433 6,517 23,420 82,267 3,314 496,951
(31)
RND 197,450 1,804 9,593 22,303 4,091 235,241
(22)
SEI 0 638 844 2,759 522 4,763
(14)
======================================================================
Total $1,479,6 $29,41 $69,48 $255,9 $25,31 $1,859,7
(186) 41 8 5 12 7 73
----------------------------------------------------------------------
\a Abbreviations are explained on page 7. Number in parenthesis is
the total number of trustees and management advisers.
\b Does not include $6,753 for two trustee dinners paid for by MIT.
Table III.2
FFRDCs' Average Fiscal Year 1993
Expenditures for Trustees and Management
Advisory Personnel
Lodgin Airfar
FFRDC\a Stipend Meals g e Other Total
------------------ -------- ------ ------ ------ ------ ========
ASP $1,456 $57 $74 $233 $26 $1,846
(22)
CNA 1,250 2 21 156 23 1,452
(41)
IDA 1,554 6 51 206 28 1,845
(21)
LLB 370 5 97 257 18 747
(17)
LMI 1,152 48 51 269 25 1,545
(18)
MTR 1,271 22 78 274 12 1,657
(31)
RND 2,057 19 100 232 42 2,450
(22)
SEI 0 17 23 75 14 129
(14)
----------------------------------------------------------------------
\a Abbreviations are explained on page 7. Number in parenthesis is
the total number of trustees and management advisers.
TRUSTEE AND MANAGEMENT ADVISORY
PERSONNEL FISCAL YEAR 1993
STIPENDS AND EXPENDITURES
========================================================== Appendix IV
INTRODUCTION
-------------------------------------------------------- Appendix IV:1
Included in this appendix are the fiscal year 1993 stipends and
expenditures for each of the 186 trustees and management advisory
personnel at the Department of Defense (DOD) FFRDCs. The amounts
listed were prepared from financial data provided by each FFRDC on
fiscal year 1993 individual stipends and other costs that were paid
to, reimbursed to, or paid for individual trustees and other
management advisory personnel.
We used (1) average daily costs as the comparison measurement for
FFRDCs and individuals; (2) the number of days in attendance at
meetings as the number of days worked; (3) payments for traveling to
and attending meetings, as well as retainers and other compensation,
as components of an individual's stipend; and (4) 1 day to compute
average daily costs for the cases where no workdays were recorded.
Figure IV.1: Aerospace
Corporation
(See figure in printed
edition.)
\a Available during the year on retainer; however, no workdays were
recorded by the FFRDC. One day worked was used to compute daily
expenditures.
Figure IV.2: CNA Corporation
(See figure in printed
edition.)
Figure IV.2: CNA Corporation -
continued
(See figure in printed
edition.)
\a Available during the year on retainer; however, no workdays were
recorded by the FFRDC. One day worked was used to compute daily
expenditures.
Figure IV.3: Institute for
Defense Analyses
(See figure in printed
edition.)
\a Available during the year on retainer; however, no workdays were
recorded by the FFRDC. One day worked was used to compute daily
expenditures.
Figure IV.4: Lincoln
Laboratory
(See figure in printed
edition.)
\a No workdays were recorded by the FFRDC. One day worked was used
to compute daily expenditures.
Figure IV.5: Logistics
Management Institute
(See figure in printed
edition.)
Figure IV.6: MITRE Corporation
(See figure in printed
edition.)
\a Available during the year on retainer; however, no workdays were
recorded by the FFRDC. One day worked was used to compute daily
expenditures.
Figure IV.7: Rand Corporation
(See figure in printed
edition.)
Figure IV.8: Software
Engineering Institute
(See figure in printed
edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
Charles F. Rey, Assistant Director
Roy B. Karadbil, Evaluator-in-Charge
Charles W. Malphurs, Evaluator-in-Charge
Jai E. Lee, Senior Computer Specialist
Shirley B. Johnson, Evaluator
Stacy Edwards, Evaluator
*** End of document. ***
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