Best Practices: Elements Critical to Successfully Reducing Unneeded RDT&E Infrastructure (Chapter Report, 01/08/98, GAO/NSIAD/RCED-98-23)
Pursuant to a congressional request, GAO reviewed a number of issues
related to the federal government's research, development, test, and
evaluation (RDT&E) infrastructure, focusing on: (1) the condition of the
existing infrastructure; (2) the approaches used by organizations
outside of the federal government to realign RDT&E infrastructure; and
(3) a comparison of those approaches to federal agency efforts.
GAO noted that: (1) the Department of Energy (DOE), the Department of
Defense (DOD), and the National Aeronautics and Space Administration
(NASA) have attempted to reduce their excess laboratory capacity and
associated costs, but could achieve even further reductions in their
RDT&E infrastructure; (2) even though DOD will have closed 62 RDT&E
sites and activities at host sites after implementing fully all four
base realignment and closure rounds, a 1995 DOD estimate indicates the
department still will have an estimated 35 percent excess capacity in
its laboratories and an estimated 52 percent excess capacity in its test
and evaluation centers in the air vehicles, electronic combat, and
armaments/weapons areas; (3) while NASA closed a number of individual
sites and facilities in recent years, it has yet to consolidate or close
any of its major laboratory facilities; (4) all of the individual agency
actions were taken independent of one another and have resulted in
limited infrastructure reductions and cost savings; (5) little success
has been achieved in attempts to consolidate federal RDT&E
infrastructure across agency boundaries; (6) in recent years, corporate
and foreign government organizations have restructured successfully
their laboratory operations to achieve cost-saving efficiencies; (7) GAO
examined restructuring efforts by two organizations both of which
reduced substantially their laboratories' infrastructure and costs; (8)
officials responsible for those successful efforts identified five
critical elements that were key to their success; (9) many of the
elements that made the Boeing Company Defense & Space Group's and the
British Defence Research Agency's laboratory consolidations a success
generally are lacking in U.S. federal agencies' efforts; (10) in
general, budgetary concerns have not, to date, created a catalyst to
focus and redefine missions and then reduce the supporting RDT&E
infrastructure within DOE, DOD, and NASA; (11) agencies are not
collecting the information they need to assess the full scope and cost
of their RDT&E infrastructure; (12) according to U.S. officials that
direct federal RDT&E activities, in some cases resistance to inter- and
intra-agency restructuring of RDT&E activities has stymied the thrust of
recent streamlining efforts; and (13) balancing the federal RDT&E
infrastructure with current and future missions is a complex problem
that has proven intractable largely because of the limited scope of past
efforts.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD/RCED-98-23
TITLE: Best Practices: Elements Critical to Successfully Reducing
Unneeded RDT&E Infrastructure
DATE: 01/08/98
SUBJECT: Comparative analysis
Agency missions
Interagency relations
Future budget projections
Federal downsizing
Laboratories
Research and development facilities
Strategic planning
Federal agency reorganization
IDENTIFIER: DOD Vision 21 Plan
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Cover
================================================================ COVER
Report to Congressional Requesters
January 1998
BEST PRACTICES - ELEMENTS CRITICAL
TO SUCCESSFULLY REDUCING UNNEEDED
RDT&E INFRASTRUCTURE
GAO/NSIAD/RCED-98-23
Federal Laboratory Infrastructure
(707179)
Abbreviations
=============================================================== ABBREV
AID - Agency for International Development
AIDS - acquired immune deficiency syndrome
BRAC - base realignment and closure
DDR&E - Director, Defense Research and Engineering
DED - Department of Education
DERA - Defence Evaluation and Research Agency
DHHS - Department of Health and Human Services
DOC - Department of Commerce
DOD - Department of Defense
DOE - Department of Energy
DOI - Department of the Interior
DOJ - Department of Justice
DOT - Department of Transportation
DRA - Defence Research Agency
DVA - Department of Veterans' Affairs
EPA - Environmental Protection Agency
FDA - Food and Drug Administration
FFRDC - federally funded research and development center
GAO - General Accounting Office
HIV - human immunodeficiency virus
MOD - Ministry of Defence
NASA - National Aeronautics and Space Administration
NSF - National Science Foundation
NSTC - National Science and Technology Council
OMB - Office of Management and Budget
OSTP - Office of Science and Technology Policy
R&D - research and development
RaDiUS - Research and Development in the United States
RDT&E - research, development, test, and evaluation
SSMP - Stockpile Stewardship and Management Program
T&E - test and evaluation
USDA - U.S. Department of Agriculture
Letter
=============================================================== LETTER
B-277529
January 8, 1998
The Honorable Sam Brownback
Chairman, Subcommittee on Oversight of Government
Management, Restructuring and the District of Columbia
Committee on Governmental Affairs
United States Senate
The Honorable John R. Kasich
Chairman, Committee on the Budget
House of Representatives
In response to your request, we reviewed a number of issues related
to the federal government's research, development, test, and
evaluation (RDT&E) infrastructure. We briefed your staffs previously
and this report contains the final results of our review.
This report, in laying out a framework within which changes to the
federal RDT&E infrastructure can be accomplished and around which
debate about the need for those changes can occur, (1) examines the
condition of existing infrastructure, (2) analyzes the approaches
used by organizations outside of the federal government to realign
RDT&E infrastructure, and (3) compares those approaches to federal
agency efforts. This approach, if implemented fully by federal
agencies, could help focus agencies' efforts in research and
development, reduce unneeded infrastructure governmentwide, and free
up resources necessary for scientific programs and related equipment.
We are sending copies of this report to other interested
congressional committees and the Secretaries of Agriculture,
Commerce, Defense, Education, Energy, Health and Human Services,
Interior, Justice, State, Transportation, Treasury, and Veterans'
Affairs. We also are sending copies to the Secretaries of the Army,
the Navy, and the Air Force; the Director, Office of Management and
Budget; the Director, Centers for Disease Control and Prevention; the
Director, Drug Enforcement Administration; the Director,
Environmental Protection Agency; the Director, Food and Drug
Administration; the Administrator, National Aeronautics and Space
Administration; the Director, National Institutes of Health; the
Director, National Science Foundation; the Director, Nuclear
Regulatory Commission; the Director, Office of Personnel Management;
the Director, Office of Science and Technology Policy; the Director,
Smithsonian Institution; and the Director, Tennessee Valley
Authority. We will make copies available to other interested parties
upon request.
This report was prepared under the direction of Katherine V.
Schinasi, Associate Director, Defense Acquisitions Issues, who may be
reached on (202) 512-4841 if you or your staff have any questions.
Other major contributors to this report are listed in appendix V.
Louis J. Rodrigues
Director, Defense Acquisitions Issues
National Security and
International Affairs Division
Victor S. Rezendes
Director, Energy, Resources, and Science Issues
Resources, Community, and
Economic Development Division
EXECUTIVE SUMMARY
============================================================ Chapter 0
PURPOSE
---------------------------------------------------------- Chapter 0:1
The federal research, development, test, and evaluation (RDT&E)
establishment is in transition. The missions of its research and
development (R&D) laboratories and test and evaluation (T&E) centers
are being redefined within a changed environment while these agencies
compete for scarce federal resources. As future pressures to reduce
discretionary spending increase, a greater share is devoted to
operating and maintaining an aged, inefficient, and costly
infrastructure at the expense of research and development.
In an effort to identify alternatives for achieving cost-saving
efficiencies while maintaining high quality research and development,
the former and current Chairmen of the Subcommittee on Oversight of
Government Management, Restructuring and the District of Columbia,
Senate Committee on Governmental Affairs, and the Chairman of the
House Committee on the Budget asked the U.S. General Accounting
Office (GAO) to review a number of issues related to the federal
RDT&E infrastructure. GAO (1) examined the condition of existing
infrastructure, (2) analyzed approaches used by organizations outside
of the federal government to realign RDT&E infrastructure, and (3)
compared those approaches to federal agency efforts.
GAO focused on efforts by the Departments of Energy and Defense and
the National Aeronautics and Space Administration (NASA) to
streamline their RDT&E infrastructure because they represent about 72
percent of all federal investment in research and development and own
most of the RDT&E infrastructure. This report lays out a framework
within which changes to the federal RDT&E infrastructure can be
accomplished and around which debate about the need for those changes
can occur.
BACKGROUND
---------------------------------------------------------- Chapter 0:2
For fiscal year 1997, the U.S. Congress appropriated $72 billion for
the conduct of federal research and development (including Defense
Department test and evaluation), about 14 percent of federal
discretionary spending. Although that amount is expected to increase
slightly in fiscal year 1998, budget projections indicate a decline
in the future.
Twenty-two federal agencies receive R&D funding, and 17 of them own
514 R&D laboratories and T&E centers. These RDT&E facilities support
six fundamental research areas: national security, health and
safety, energy security, environmental protection and cleanup,
industrial competitiveness, and fundamental science. Much of the R&D
funding the Congress provides to agencies is passed on to
laboratories that other agencies, universities, or the private sector
operate. For example, the Department of Energy carries out over $1
billion in research and development for other agencies each year and
its three weapons laboratories receive more than one-half of their
R&D funding from the Defense Department as "work for others." Thus,
agencies' research activities often are intertwined. The Research
and Development in the United States (RaDiUS) database, newly created
by The RAND Corporation's Critical Technologies Institute, compiles
systematically data on the conduct of federal R&D investments. A
review of RaDiUS database activities raises concerns that duplication
within and across agencies may be prevalent and identifies
opportunities for collaborations that are being missed.
The end of the Cold War and budget constraints led to calls to
streamline federal organizations, including the RDT&E establishment,
eliminate unneeded infrastructure, and reduce costs. In response,
federal agencies have undertaken some actions. For example, the
Office of Science and Technology Policy and the Office of Management
and Budget have engaged the Departments of Energy and Defense and
NASA in internal reviews of RDT&E infrastructure. While the
Departments of Energy and Defense and NASA have conducted
intra-agency reviews and reduced personnel levels, they have made
only limited reductions in RDT&E infrastructure.
RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3
The Departments of Energy and Defense and NASA have attempted to
reduce their excess laboratory capacity and associated costs, but
could achieve even further reductions in their RDT&E infrastructure.
In recent years, more than 150 studies, panels, commissions, task
forces, and GAO reports have cited excess capacity, poor maintenance,
duplicative activities, and the failure of the federal RDT&E
establishment to adapt missions and programs to the changing world
environment. For example, according to the 1995 Task Force on
Alternative Futures for the Department of Energy National
Laboratories (the Galvin Task Force), Energy's laboratory
infrastructure was oversized for its existing mission and its
productivity was lagging. In addition, even though the Defense
Department will have closed 62 RDT&E sites and activities at host
sites after implementing fully all four base realignment and closure
(BRAC) rounds, a 1995 Defense Department estimate indicates the
Department still will have an estimated 35-percent excess capacity in
its laboratories and an estimated 52-percent excess capacity in its
T&E centers in the air vehicles, electronic combat, and
armaments/weapons areas. While NASA closed a number of individual
sites and facilities in recent years, it has yet to consolidate or
close any of its major laboratory facilities. All of the individual
agency actions were taken independent of one another and, to date,
have resulted in limited infrastructure reductions and cost savings.
Little success has been achieved in attempts to consolidate federal
RDT&E infrastructure across agency boundaries.
The federal sector is not alone in its need to reduce RDT&E
infrastructure in response to fiscal constraints and a changing world
environment. In recent years, corporate and foreign government
organizations have restructured successfully their laboratory
operations to achieve cost-saving efficiencies. GAO examined
restructuring efforts by two organizations--the Boeing Company
Defense & Space Group (recently renamed the Boeing Company
Information, Space, & Defense Systems Group) and the Defence Research
Agency within the British Ministry of Defence--both of which reduced
substantially their laboratories' infrastructure and costs.
Officials responsible for those successful efforts identified five
critical elements that were key to their success. The elements were
(1) a "crisis" that served as a catalyst to spark action; (2) an
independent authority to overcome parochialism and political
pressures that impede decision-making; (3) core RDT&E missions
focused to support the organizations' overall goals and strategies;
(4) clear definitions that delineate fully the existing
infrastructure needed to support those missions; and (5) accurate,
reliable, and comparable data that capture total infrastructure costs
and utilization rates for each affected activity. They further
asserted that their success depended on the use of all five elements
in concert.
Many of the elements that made the Boeing Company Defense & Space
Group's and the Defence Research Agency's laboratory consolidations a
success generally are lacking in U.S. federal agencies' efforts. In
general, budgetary concerns have not, to date, created a catalyst to
focus and redefine missions and then reduce the supporting RDT&E
infrastructure within the Departments of Energy and Defense and NASA.
The missions of R&D laboratories and T&E centers are being redefined
as agencies compete for scarce federal resources. Without concurrent
reductions in infrastructure, this perpetuates excess capacity and
contributes to the retention of old, poorly maintained facilities.
Moreover, agencies are not collecting the information they need to
assess the full scope and cost of their RDT&E infrastructure.
Further, there has been little effort to address mission and
infrastructure issues across agencies. According to U.S. officials
that direct federal RDT&E activities, in some cases resistance to
inter- and intra-agency restructuring of RDT&E activities has stymied
the thrust of recent streamlining efforts. The one exception, noted
in this report, is the Defense Department's Vision 21 process, a
5-year plan directed by the Congress to consolidate and restructure
the Defense Department's R&D laboratories and T&E centers. The
Vision 21 process sought to incorporate an independent authority and
comprehensive analyses of full operating costs along with the
relatively strong mission focus of its RDT&E infrastructure.
Balancing the federal RDT&E infrastructure with current and future
missions is a complex problem that has proven intractable largely
because of the limited scope of past efforts. Individual agency
initiatives have produced some results and while such efforts to
achieve management efficiencies should continue, they also need to
proceed within the context of a more complete understanding of
governmentwide implications. GAO's review shows that independent
agency efforts have not been sufficient to date to accomplish the
level of improvements warranted. An independently directed approach
to governmentwide restructuring by looking at the RDT&E
infrastructure of individual agencies in support of the government's
broader strategies and missions has not been attempted.
PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4
AGENCIES HAVE NOT REDUCED
INFRASTRUCTURE IN LINE WITH
CHANGING MISSIONS
-------------------------------------------------------- Chapter 0:4.1
The energy crisis of the 1970s, the end of the Cold War in the late
1980s, the desire for a smaller and more efficient government, and
the agreement to achieve a balanced budget by fiscal year 2002 have
provided the impetus to change federal RDT&E missions. More than 150
reports cited the need for the Departments of Energy and Defense and
NASA to improve efficiency and effectiveness at their RDT&E
facilities. Some studies addressed the need to ensure that changing
activities are tied closely to core missions and noted that to do so,
in many cases, would result in RDT&E infrastructure reductions.
The President's National Science and Technology Council concluded in
its 1995 Interagency Federal Laboratory Review Final Report that,
given post-Cold War conditions and fiscal restraints, the Departments
of Energy and Defense and NASA must downsize and restructure RDT&E
facilities, define laboratory missions more clearly, manage
laboratories better, and eliminate needless redundancies. Further,
-- The Galvin Task Force reported that Energy's facilities could be
restructured productively by eliminating obsolete and redundant
missions and supporting infrastructure.
-- Although it did not make specific consolidation recommendations
for NASA infrastructure, the 1995 NASA Federal Laboratory Review
(the Foster Task Force) reported that it found major areas of
"duplication of capabilities." NASA, recognizing its excess
capacity, developed plans to consolidate and close some of its
facilities to reduce its RDT&E infrastructure, setting a
"stretch" goal to decrease the current replacement value of its
facilities by 25 percent by the end of fiscal year 2000.
-- The Defense Department's 1995 Directions for Defense: Report of
the Commission on Roles and Missions of the Armed Forces
identified many opportunities to integrate activities across
service lines rather than RDT&E infrastructure reduction.
-- The March 1997 Status of Federal Laboratory Reforms, prepared as
an update to the National Science and Technology Council report,
recognizes improvements but cites a continued need for reform.
Despite these and other reports citing the need for reductions, the
three agencies still maintain excess, aging, and deteriorating RDT&E
infrastructure that they find increasingly difficult to maintain and
support. As of 1993, more than one-half of federal laboratory floor
space was over 30 years old, some of it ill-equipped for today's R&D
activities. For example, many of Energy's older R&D laboratories
were not designed to meet today's (1) need for precise measurements
by considering factors like temperature, humidity, and vibrations and
(2) health and safety code requirements. NASA's planned $2.8 billion
reduction in the current replacement value of its facilities may only
result in about $250 million in operations and maintenance cost
reductions through fiscal year 2000. Moreover, the maintenance of
excess infrastructure, while at the same time modernizing other
infrastructure, may lead to higher operational and repair costs.
Long-standing backlogs of the maintenance and repair of Defense
Department R&D facilities have reportedly worsened as required upkeep
and modernization are deferred. The lack of repair of aged
facilities may reflect the realities of recent deficit reduction
efforts and associated funding priorities. In addition, excess
capacity and aged facilities in Energy, for example, may continue to
exist because facilities suffer from toxic contamination that cannot
be disposed of currently or is too costly to decontaminate and
decommission.
COMMON ELEMENTS WERE USED IN
SUCCESSFUL DOWNSIZING
-------------------------------------------------------- Chapter 0:4.2
The Boeing Company Defense & Space Group and the Defence Research
Agency restructured successfully their laboratory operations by using
five critical elements. According to officials managing these
restructurings, their success depended on using all five of the
elements in concert.
As a result, the Boeing Company Defense & Space Group reduced the
number of its laboratories from 456 to 133 in about 4 years, reduced
square footage requirements significantly, and saved about $100
million in operating costs. Similarly, the British Ministry of
Defence reorganized its four research establishments into a single
agency, reduced the number of laboratories from 54 to 35, and reduced
overhead costs by more than $100 million.
In the Boeing Company Defense & Space Group and the Defence Research
Agency restructuring efforts, respectively, "crises" that served as
catalysts to spark change were a refocused strategic plan for the
parent organization and a shift in national economic priorities
coupled with the likelihood of severe budget cuts. In each case, an
independent authority outside of the organizations' normal
decision-making chain-of-command, free from parochial or political
pressures, was instrumental in precipitating change and ensuring the
efficiency and integrity of data collection and analysis. At the
Boeing Company Defense & Space Group, this authority reported
directly to the company's president, and at the Defence Research
Agency, the authority reported to the Secretary of State for Defence.
Additionally, both organizations (1) developed core missions and
aligned them with their customers' needs, (2) determined what
infrastructure they had and how it supported their missions, and (3)
collected accurate, reliable, and comparable data about their
facilities across-the-board to reduce confusion, prevent facility
officials from claiming they should be exempted from restructuring,
and reduce their assertions that the facilities were "unique" or
"incomparable."
With this information, both organizations were able to determine how
best to restructure their programs and activities and reduce their
infrastructure and its costs.
CRITICAL ELEMENTS WERE NOT
PRESENT IN RECENT ATTEMPTS
TO REDUCE FEDERAL RDT&E
INFRASTRUCTURE
-------------------------------------------------------- Chapter 0:4.3
The Departments of Energy and Defense and NASA have attempted to
reduce their excess laboratory capacity and associated costs
generally by conducting intra-agency reviews, reducing personnel
levels, and making limited reductions in RDT&E infrastructure.
However, these agencies generally have not taken the steps necessary
to ensure success and few of the critical elements used in successful
consolidations we reviewed have been applied. For example, to date,
no catalyst to spur action, such as budgetary constraints imposed on
agencies, has proven to be sufficient impetus for a major
restructuring of federal RDT&E facilities.
Although the Office of Science and Technology Policy and the Office
of Management and Budget have engaged the Departments of Energy and
Defense and NASA in internal reviews, no independent authority has
undertaken a structured approach for streamlining the overall federal
RDT&E infrastructure, that is, looking at the infrastructure of
individual agencies in support of the government's broader strategies
and missions. In addition, individual agency efforts have been
limited. For example, the September 1997 plans submitted by these
agencies as mandated by the Government Performance and Results Act of
1993 (the Results Act) did not use cross-agency criteria for
assessing missions as required by the Results Act. Further, GAO
found that agency officials have few incentives or insufficient
authority to make significant and far-reaching changes or to
implement the recommendations contained in a number of studies that
have addressed this issue.
Structural barriers, along with parochialism, have kept the Energy
Department from translating changes in mission to reductions of its
existing RDT&E infrastructure. For example, although the Energy
Department established a Laboratory Operations Board to streamline
its laboratory infrastructure, in its current study, the Board is not
evaluating any of the larger, multipurpose laboratories that offer
the greatest opportunity to reduce unneeded and duplicative RDT&E
infrastructure. The Defense Department achieved only limited results
in trying to reduce RDT&E infrastructure through the 1995 BRAC round
because, due to service parochialism, the services would not agree on
cross-service reviews of the capabilities of R&D laboratories and T&E
centers together. In fiscal year 1996, the Defense Department and
NASA agreed to form six test facilities alliances in an attempt to
work together more efficiently and effectively. However, in one of
the few attempts to address interagency redundancies, the Defense
Department and NASA excluded certain infrastructure from review and
asserted that the existing infrastructure was, in general, the
minimum they needed to sustain the technology base. Thus, no
significant reductions were achieved.
Since each agency, in essence, operates its RDT&E activities
independently, the conditions for overlap and duplication are
prevalent. In some cases, agencies' new missions and objectives
brought them into competition. Both NASA and the Air Force have test
centers that are competing with each other to test the engines for a
space launch system. Also, some Energy Department laboratories are
competing with private industry, for example, by building facilities
to produce medical isotopes.
Neither the Energy Department nor NASA has conducted a full, rigorous
inventory of its RDT&E infrastructure or its costs. In fact, NASA's
infrastructure current replacement value increased by about 14
percent between fiscal years 1990 and 1995, indicating that NASA was
building new facilities faster than it was consolidating or closing
older ones. Although the Defense Department was required to
delineate fully the scope of its RDT&E infrastructure during four
previous BRAC rounds, it has not yet determined the true costs of
operating its RDT&E facilities because available cost data and
information on utilization rates are considered inaccurate and
unreliable.
ONGOING APPROACHES IN THE
RESTRUCTURING PROCESS
-------------------------------------------------------- Chapter 0:4.4
Some individual agencies have developed initiatives that incorporate
some of the elements necessary for restructuring successfully their
RDT&E infrastructures, but none have implemented them fully. For
example:
-- The Defense Department developed Vision 21, a 5-year plan
directed by the Congress to consolidate and restructure the
Defense Department's R&D laboratories and T&E centers.
Significantly, the Vision 21 process included a request to the
Congress for an independent authority (like that of the defense
base closure and realignment commissions) as the key
implementing mechanism. However, the Department now asserts
that, based on the results of the broader Quadrennial Defense
Review, implementation of the Vision 21 plan should be
incorporated into future BRAC rounds.
-- NASA, which has identified infrastructure cuts as a potential
source of cost reductions, recently began an effort designed to
improve the reliability of data needed to determine its RDT&E
infrastructure costs. It remains to be seen whether this effort
will reach fruition.
-- NASA and Defense Department alliances are working to better
coordinate RDT&E activities in several categories of major test
facilities. However, reducing the infrastructure has not been
explicitly stated as an expected outcome of better coordination.
Further, NASA and Defense Department cooperative activities
under the alliances have been limited and several have not yet
convened.
-- The Office of Science and Technology Policy recently established
the National Science and Technology Council Interagency Working
Group to review barriers to and broaden federal laboratory
reform.
These efforts, although helpful, fall short of the elements found in
the models.
OBSERVATIONS
-------------------------------------------------------- Chapter 0:4.5
The RDT&E infrastructure problem is long-standing, complex, and
controversial. Balancing the federal RDT&E infrastructure with
current and future missions is a complex problem that has proven
intractable largely because of the limited scope of past efforts.
Even in the current climate of pressure to reduce discretionary
spending, budget reductions have not served as a catalyst for
reductions.
Ongoing individual agency initiatives are helpful but will not likely
be sufficient to accomplish significant improvements. Additional
efforts across federal agencies would offer a more meaningful
solution. The critical elements of the models GAO analyzed, when
compared to ongoing efforts in the federal government, suggest
approaches that could prove successful if implemented fully.
Consensus must be reached between the Congress and the administration
that significant changes in the RDT&E infrastructure would better
position the RDT&E complex to support current and future science
priorities through a more efficient and rational RDT&E
infrastructure. Developing the foundation necessary to support an
RDT&E infrastructure restructuring process across the government
could begin in the executive branch with two agencies: (1) the
Office of Science and Technology Policy, which has technical
cognizance across the federal RDT&E arena but no direct means to
effect change, and (2) the Office of Management and Budget, which is
responsible for helping to maintain effective government by reviewing
the organizational structure and management procedures of executive
branch agencies and developing efficient coordinating mechanisms to
implement government activities and expand interagency cooperation.
However, the Office of Management and Budget, in responding to a
draft of this report, said that it prefers continuance of the current
agency-by-agency approaches until they are completed.
Ultimately, however, many of the structural and other barriers that
exist between agencies go beyond those found at the agency level.
Initiating a governmentwide process that includes all five model
elements in concert could mitigate virtually all of the parochial
concerns that stymied past efforts to restructure. Establishing an
independent decision-making authority could ensure that all elements
of the process are administered fairly. In implementing the process
described in the model, such an authority could benefit from
information developed through ongoing initiatives, such as proper
implementation of the Results Act, to help coordinate missions and
goals of individual agencies that are involved in crosscutting
program areas and balancing individual agencies' multiple strategic
goals. An independent authority also could benefit from lessons
learned during the federal government's past uses of independent
authorities, such as the defense base closure and realignment
commissions, and from activity and budget details about research and
development accumulated in the RaDiUS database.
The need to reduce RDT&E infrastructure in balance with mission
requirements is a long-standing and complex issue. Agency efforts to
date, while encouraging in some cases, are too narrowly focused and
likely will promote or sustain duplication and excess capacity.
Further, many of the elements employed as best practices by other
organizations are neither integral nor readily available to federal
agencies. Thus, a governmentwide approach, which could focus both
within and across agencies, may offer a viable alternative and
increase the likelihood of successfully reshaping the nation's RDT&E
infrastructure to meet current and future needs. While agencies
should be encouraged to continue ongoing efforts to improve
efficiencies in the management of RDT&E infrastructure, emphasizing
interagency approaches could be a significant improvement in this
arena.
MATTERS FOR CONGRESSIONAL
CONSIDERATION
---------------------------------------------------------- Chapter 0:5
To help craft a more efficient structure to support future federal
RDT&E efforts, the Congress may wish to begin a process to reduce the
federal RDT&E infrastructure that applies collectively the critical
elements identified in this report. This process could be designed
to look both within and across agencies to eliminate unnecessary
mission overlap and duplication and the resulting excess
infrastructure capacity. Lessons learned from the federal
government's past uses of independent, external authorities could be
used to structure this process. Ongoing restructuring efforts of the
agencies could be assessed for their potential to contribute to
overall RDT&E infrastructure restructuring. The RaDiUS database
could provide preliminary inputs indicating possible duplication of
effort. The Government Performance and Results Act of 1993 provides
an established legislative framework that addresses agencies'
missions and performance and may be useful in focusing specifically
on crosscutting agency missions that determine the requirements for
RDT&E infrastructure.
RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:6
GAO is making no recommendations in this report.
AGENCY COMMENTS AND GAO'S
EVALUATION
---------------------------------------------------------- Chapter 0:7
Specific comments from the Office of Management and Budget, Energy
Department, NASA, and the Defense Department and GAO's evaluation of
them have been incorporated throughout this report. Office of
Management and Budget, Energy Department, NASA, and Defense
Department comments are reprinted in appendixes I, II, III, and IV,
respectively.
All four agencies indicated that the report did not give sufficient
credit for actual, ongoing, and planned infrastructure reductions
they have undertaken. To illustrate further the infrastructure
reduction steps the agencies have initiated, GAO has added
information that recognizes other agency plans and activities.
Although the agencies acknowledge that they need to reduce further
their infrastructure, there was no universal view expressed as to how
to effect significant change in the federal RDT&E infrastructure.
For example, while each of the four agencies recognized the
importance of mission focus in their comments, they had varying
perspectives regarding the efficacy of the model's other critical
elements. For example, the Department of Energy does not believe a
"crisis" is needed to spur action, stating that changing missions and
budget reductions provide the external pressure needed to get change.
NASA agreed with the need for accurate and reliable data about the
true cost of operating RDT&E facilities and pointed out that it is
developing an integrated financial management system to gather such
data. The Department of Defense agreed with GAO's conclusion
regarding the need for an independent, BRAC-like authority to effect
significant change. The Department of Energy and NASA, on the other
hand, believe they can make, or have already made, appropriate
changes regarding the future strategies for their RDT&E
infrastructure. Lastly, the Office of Management and Budget believes
each agency should rationalize individually its infrastructure before
a more complex interagency approach is attempted. The Office of
Management and Budget agrees, however, that an interagency approach
is needed. With respect to defining fully the scope of the RDT&E
infrastructure, the agencies comments' largely were silent.
After reviewing carefully the agencies' comments, GAO believes that
the comments generally reflect the parochialism and structural and
organizational barriers discussed in the report. For example, when
the agencies' comments discussed planned RDT&E infrastructure
reductions, those plans were limited in scope and focused exclusively
on internal reductions. While acknowledging, in some cases,
overlapping capability and excess capacity in RDT&E infrastructure,
Departments of Energy and Defense and NASA comments generally reflect
their belief that (1) their missions and associated infrastructure
are unique, (2) they have planned to do enough restructuring and
consolidation on their own, and (3) they already coordinate among
agencies to the maximum extent practicable.
The Office of Management and Budget states that although additional
steps are necessary to ensure that maximum impact is achieved through
restructurings, agencies should downsize first before crosscutting
analysis is conducted. GAO believes that, to the extent the agencies
actively pursue interagency approaches as they restructure their
respective RDT&E infrastructures, the potential for success in
ongoing efforts may be increased. As GAO has reported previously,
decision-making on the size and scope of infrastructure needed by an
individual agency in the absence of information and consideration of
related missions and activities has resulted in decisions that are
not rational nor cost effective when looked at from a broader
perspective.\1 GAO and the agencies agree that maintaining more RDT&E
infrastructure than warranted by requirements does not well serve the
nation's research needs and that successful consolidation and
reduction efforts are key ingredients to assuring adequate resourcing
of future research in science and technology. GAO's perspective
differs from the agencies' in that we believe the best way to achieve
this end is through a governmentwide restructuring process.
The Department of Energy also questioned the basic applicability of
the best practices model, stating that the scale of the successful
consolidations cited by GAO was small in comparison to the Energy
Department's RDT&E laboratory system. However, the Department of
Defense, which is a much larger organization, already has
incorporated many of the elements of the model in its BRAC rounds and
is proposing many of the elements for its Vision 21 process.
Further, while it is self-evident that differences in scale (and
complexity) may make it more difficult to overcome challenges and
barriers, these differences do not negate the validity of the process
for different types of organizations nor of the key elements employed
in successful consolidations.
NASA further commented that it was concerned about GAO publishing the
report because, in NASA's opinion, the report did not meet GAO's
normal standards, largely because NASA believes the report overlooks
its accomplishments in reducing RDT&E infrastructure while focusing
on governmentwide issues. GAO believes its report does recognize
NASA's accomplishments, while also pointing out that NASA's most
comprehensive infrastructure study--its 1995 Zero-Base Review--began
with the premise that to meet its mission, NASA needed the existing
infrastructure. The model presented in this report provides a
different approach by suggesting that decisions regarding mission be
made first and then infrastructure aligned to support those missions.
--------------------
\1 See, for example, Electronic Combat: Consolidation Master Plan
Does Not Appear to Be Cost-Effective (GAO/NSIAD-97-10, July 10,
1997).
INTRODUCTION
============================================================ Chapter 1
For fiscal year 1997, the Congress appropriated $72 billion for the
conduct of federal research and development (R&D), which included
Department of Defense (DOD) test and evaluation (T&E)--only about 4
percent of the federal budget but about 14 percent of the
government's discretionary budget. To balance the budget, the
government is cutting discretionary spending, and R&D funding is
expected to decline by about 14 percent between fiscal years 1997 and
2002. Twenty-two federal departments and agencies receive federal
R&D funding, and 17 of the 22 own 514\1 R&D laboratories and T&E
centers. Within this vast network, DOD, the Department of Energy
(DOE), and the National Aeronautics and Space Administration (NASA)
receive about three-quarters of the R&D funding and own most of the
research, development, test, and evaluation (RDT&E) infrastructure.
--------------------
\1 See Federal R&D Laboratories (GAO/RCED/NSIAD-96-78R, Feb. 29,
1996). Although this report lists 515 federal R&D laboratories, DOD
officials indicated that one DOD R&D laboratory has since closed.
THE FEDERAL GOVERNMENT'S ROLE
IN RESEARCH, DEVELOPMENT, TEST,
AND EVALUATION
---------------------------------------------------------- Chapter 1:1
Investment in--and performance of--the science mission involves a
complex web of government, industrial, and academic organizations.
Funds from these three sources were estimated to total more than $184
billion\2 in 1996.\3 While industry contributes a larger share
overall, federal research is essential where the risk is too great
for private companies to make investments or where the public benefit
is large despite small private return. For example, about 60 percent
of the basic research\4
performed in the United States is funded by the federal government.
U.S. industry also depends heavily on federal research and
development for the innovations that drive productivity and new
products.
Twenty-two federal departments and independent agencies receive
federal R&D funding for projects in six fundamental research areas:
national security, health and safety, energy security, environmental
protection and cleanup, industrial competitiveness, and fundamental
science. As shown in table 1.1, 17\5 of the 22 organizations own 514
RDT&E facilities, 62 of which are operated by nongovernment
entities--for-profit businesses, universities, or other nonprofit
organizations under contracts or cooperative agreements with a
federal agency, some of which are federally funded research and
development centers (FFRDC). Sixty-five of these RDT&E facilities
also operate a total of 221 additional satellite locations. Much of
the R&D funding the Congress provides to agencies is passed on to
laboratories and centers operated by other agencies, universities, or
the private sector. For example, DOE carries out over $1 billion in
research and development for other agencies each year. Most of the
federal government's research and development is conducted under
contract with industry and universities--not in government-owned and
-operated laboratories.
Table 1.1
Type of Federally Owned R&D Laboratory
by Agency\a
Government-
operated Nongovernment-
Federal agency laboratories operated laboratories
----------------------------------- ------------------- ----------------------
Department of Agriculture\b 185 0
Department of Commerce 38 0
DOD 51 16
Department of Education 0 10
DOE 7 26
Department of Health and Human 18 1
Services
Department of the Interior 20 0
Department of Justice 2 0
Department of Transportation 5 1
Department of the Treasury 0 1
Department of Veterans' Affairs 102 0
Environmental Protection Agency 11 0
NASA 9 1
National Science Foundation 0 5
Nuclear Regulatory Commission 0 1
Smithsonian Institution 2 0
Tennessee Valley Authority 2 0
================================================================================
Total 452 62
--------------------------------------------------------------------------------
\a Includes T&E centers.
\b Although the Department of Agriculture reported owning the most
laboratories, its laboratories are among the smallest in size and
have relatively small operating budgets.
The federal RDT&E network is complex and definitions of what
constitutes RDT&E infrastructure can vary significantly. For
example, the number of laboratories counted depends upon the
definition used for the term "laboratory." In fact, not all agencies
use that term. A NASA "Center of Excellence" is an overall
capability that resides within a center or laboratory.\6 Likewise,
DOD differentiates strictly its R&D laboratories from its T&E
centers. The "infrastructure" associated with these facilities often
has varying definitions. (See the glossary for agency definitions of
key terms.) Figure 1.1 shows the number of RDT&E facilities located
in each of the 50 states (as of February 1996).
Figure 1.1: Number of RDT&E
Facilities in Each State
(See figure in printed
edition.)
Note: Three Department of
Agriculture laboratories are
located in Argentina, France,
and Panama and two Navy medical
research institutes are located
in Indonesia and Egypt.
(See figure in printed
edition.)
DOD, NASA, and DOE combined own most of the federal RDT&E
infrastructure. This infrastructure consists of thousands of
buildings and large acreage of government property. More than
180,000 research and support personnel work in these facilities (see
table 1.2). Their numbers vary greatly by agency and by facility.
DOD facilities may have as few as 18 or as many as 20,000 employees.
NASA facilities may have as few as 206 or as many as 6,104 employees.
DOE facilities may have as few as 432 or more than 10,000 employees.
Table 1.2
Approximate Number of Research and
Support Personnel in DOE, NASA, and DOD
Laboratories and Centers
Resear Suppor
ch t Total
person person person
Agency\a nel nel nel
---------------------------------------------- ------ ------ ------
DOD 39,209 61,272 100,48
1
NASA 11,150 8,067 19,217
DOE 38,791 22,908 61,699
----------------------------------------------------------------------
\a Technical staff are included in the research category for DOE and
the support category for DOD and NASA.
Source: DOD, NASA, and DOE.
--------------------
\2 About 62 percent of this total is funded by industry, about 34
percent is funded by the federal government, and the remaining 4
percent is funded by universities and nonprofit organizations.
\3 The National Science Foundation collects these data by different
means and represents expenditures during the calendar year;
therefore, they do not correlate with the federal budget data
reported elsewhere in this report, which are shown in budget
authority by fiscal year.
\4 Government-funded basic research, performed mostly by university
laboratories, explores the fundamental aspects of science without
specific application.
\5 The Departments of Housing and Urban Development and Labor, the
U.S. Agency for International Development, the U.S. Postal Service,
and the Social Security Administration receive federal funding for
research and development but do not own any RDT&E facilities.
\6 A Center of Excellence is a laboratory that specializes in an area
of research and development and is sufficiently proficient that other
organizations will rely on the Center of Excellence to perform their
required work in that research and development area.
FEDERAL R&D BUDGETS
---------------------------------------------------------- Chapter 1:2
Funding for R&D is not identified as a single line item in the
federal budget. Instead, it is appropriated by the Congress in 13
different bills and expenditures for programs are included in the
budgets of the 22 departments and agencies involved in research,
development, test, and evaluation. These organizations report to
dozens of congressional committees and subcommittees. Further, each
RDT&E facility generally does not receive its funding in a large
allocation. For example, each DOE laboratory budget is comprised of
individual funding decisions by the Department's senior management
and program managers and by other agencies.
The $72 billion appropriation for the conduct of federal R&D in
fiscal year 1997 represented only about 4 percent of the total budget
but about 14 percent of discretionary funding. About $2.2 billion
also was appropriated separately for RDT&E facilities. Of the $72
billion, about 72 percent was to be used by DOD, NASA, and DOE, the
three largest laboratory systems. As seen in figure 1.2, DOD
received about $37.3 billion, or about 52 percent of the total. In
addition to R&D funding, this amount includes funding for T&E
facilities and a significant amount of it is spent to support work in
DOE's nuclear weapons laboratories and with NASA. In fact, DOE's
weapons laboratories receive more than one-half of their R&D funding
from DOD. While most agencies break out R&D into the three
categories of basic research, applied research, and development, DOD
divides its RDT&E account into seven categories (basic research,
exploratory development, advanced technology development,
demonstration and validation, engineering and manufacturing
development, management and support, and operational systems
support). Finally, NASA received about $9 billion and DOE received
about $5.3 billion.
Figure 1.2: Agency-by-Agency
Appropriation for the Conduct
of Federal Research and
Development for Fiscal Year
1997 (constant fiscal year 1997
dollars in billions)
(See figure in printed
edition.)
\a While the Department of Health and Human Services received the
second largest amount of R&D funding--about $12.7 billion--it
provides primarily grants to other research organizations.
Source: Critical Technologies Institute, The RAND Corporation.
The President's fiscal year 1998 budget projected a significant
decline in research and development (see fig. 1.3). Between fiscal
years 1997 and 2002, the total R&D budget is projected to decline
from about $73.7 billion (including spending for RDT&E facilities) to
about $63.4 billion, or about 14 percent. However, for fiscal year
1998, the Congress approved increases greater than the expected
2.5-percent rate of inflation for every major R&D funding agency
except the Departments of Agriculture and Transportation. Moreover,
the Congress funded only the fiscal year 1998 installment of the
administration's request for almost $1 billion in construction costs
of various R&D facilities. As seen in figure 1.3, defense RDT&E,
which includes funding for defense programs in DOD and DOE, is
projected to decline by about 18 percent and nondefense R&D is
projected to decline by about 9 percent.
Figure 1.3: Projected Changes
in Federal R&D Funding for
Fiscal Years 1997-2002
(constant fiscal year 1997
dollars in billions)
(See figure in printed
edition.)
Source: American Association for the Advancement of Science and the
Budget of the United States Government for Fiscal Year 1998.
At the agency level, the President's budget for fiscal year 1998
projected that between fiscal years 1997 and 2002, NASA's R&D funding
will decrease by about 12 percent and DOE's will decrease by about 16
percent.\7 DOD plans to reduce RDT&E funding every year until fiscal
year 2001 and then projects a small increase for fiscal year 2002.
In fiscal year 2002, the DOD RDT&E budget request is estimated to be
18 percent less than in fiscal year 1997.
--------------------
\7 Targeted investments in large-scale facilities and equipment, such
as the $1 billion National Ignition Facility, tend to mask greater
declining R&D funding for DOE.
OBJECTIVES, SCOPE, AND
METHODOLOGY
---------------------------------------------------------- Chapter 1:3
At the request of the former and current Chairmen of the Subcommittee
on Oversight of Government Management, Restructuring and the District
of Columbia, Senate Committee on Governmental Affairs, and the
Chairman of the House Committee on the Budget, we reviewed a number
of issues related to the federal RDT&E infrastructure. The purpose
of this report is to lay out a framework within which changes to the
federal RDT&E infrastructure can be accomplished and around which
debate about the need for those changes can occur. To do so, we have
(1) examined the condition of existing infrastructure, (2) analyzed
the approaches used by organizations outside the federal government
to realign RDT&E infrastructure, (3) and compared those approaches to
federal agency efforts.
To determine the existing condition of the federal RDT&E
infrastructure, we surveyed the 17 cabinet-level departments and
independent agencies that own such facilities. We identified and
evaluated the restructuring of RDT&E facilities undertaken by the
Boeing Company Defense & Space Group (a private company) and the
British Ministry of Defence's Defence Research Agency. Further, we
reviewed major studies conducted between fiscal years 1987 and 1997
on federal RDT&E facilities. These studies included those conducted
by the defense base closure and realignment commissions, the Office
of Science and Technology Policy (OSTP), and the National Science and
Technology Council (NSTC); departments and agencies; and others
outside of the government.
To review the criteria and methodologies used in consolidating
successfully RDT&E infrastructure, we reviewed pertinent documents
and interviewed appropriate representatives from the Boeing Company
Defense & Space Group in Seattle, Washington; officials at the
British and Canadian Embassies in Washington, D.C.; the British
Ministry of Defence in London, England; the Defence Research Agency
and Defence Evaluation and Research Agency (DERA) in Farnborough,
England; and the Defence Test and Evaluation Organisation at Boscombe
Down in Salisbury, England.
We examined infrastructure restructuring efforts throughout the
federal government and, based on our survey results, performed a
detailed review of DOE, NASA, and DOD because (1) about 72 percent of
federal R&D budget authority flows through these agencies and (2)
they own most of the federal RDT&E infrastructure. We discussed
RDT&E infrastructure with appropriate officials in the Departments of
Agriculture, Commerce, Defense, Education, Energy, Health and Human
Services, Interior, Justice, Transportation, and Veterans' Affairs;
the Centers for Disease Control and Prevention; the Drug Enforcement
Administration; the Environmental Protection Agency; the Food and
Drug Administration; NASA; the National Institutes of Health; the
National Science Foundation (NSF); the Office of Management and
Budget (OMB), and OSTP within the Executive Office of the President.
Within DOE's laboratory system, we visited Lawrence Livermore
National Laboratory in Livermore, California; Lawrence Berkeley
National Laboratory in Berkeley, California; Sandia National
Laboratories in Albuquerque, New Mexico; Los Alamos National
Laboratory in Los Alamos, New Mexico; Argonne National Laboratory in
Argonne, Illinois; and Brookhaven National Laboratory in Upton, New
York. Also, we interviewed officials from DOE headquarters divisions
in Washington, D.C., and DOE representatives at the national
laboratories we visited.
Within NASA's laboratory system, we visited the Jet Propulsion
Laboratory, a FFRDC in Pasadena, California; Ames Research Center at
Moffett Federal Airfield, California; Aeroflightdynamics Directorate
of the U.S. Army Aviation and Troop Command, a tenant of Ames
Research Center, Moffett Federal Airfield, California; and George C.
Marshall Space Flight Center, Alabama. Also, we interviewed
officials from NASA headquarters in Washington, D.C.
Within DOD's R&D laboratory and T&E center systems, we visited the
U.S. Army Research Laboratory in Adelphi, Maryland; U.S. Air Force
Wright Laboratory at Wright-Patterson Air Force Base, Ohio; Naval Air
Warfare Center, Weapons Division, China Lake, California; Naval Air
Warfare Center, Weapons Division, Point Mugu, California; Naval
Command, Control and Ocean Surveillance Center, San Diego,
California; U.S. Army Missile Command, Redstone Arsenal, Alabama;
U.S. Army Missile Research, Development and Engineering Center,
Redstone Arsenal, Alabama; Redstone Technical Test Center, Redstone
Arsenal, Alabama; and the U.S. Army Engineer Waterways Experiment
Station in Vicksburg, Mississippi. We also interviewed officials
from the Office of the Director, Defense Research and Engineering
(DDR&E), and its Office of Laboratory Management and Technology
Transition; and the Chief Scientist and Technical Director, Office of
Naval Research, Europe, in London, England. In addition, we
interviewed officials of the Massachusetts Institute of Technology's
Center for International Studies and Defense and Arms Control Studies
in Cambridge, Massachusetts.
All federal budget data are presented in 1997 constant dollars. We
obtained data for fiscal years 1995 to 1997 from The RAND Corporation
Critical Technologies Institute's Research and Development in the
United States (RaDiUS) database. We also obtained data about
research topics performed by multiple agencies in fiscal year 1996,
the number of awards/tasks active in fiscal year 1996 for those
topics, and their known federal obligations for fiscal year 1996 (see
table 2.1) from RaDiUS and The RAND Corporation representatives. The
Critical Technologies Institute is a FFRDC supported by OSTP. RaDiUS
is the first comprehensive, real-time accounting of federal R&D
activities and spending. It allows users to track federal R&D
activity from cabinet- and agency-level budgets down to the program,
project, and award levels, where budget categories translate into
actual R&D work performed for fiscal years 1993 to 1997. RaDiUS
allows users to see the total R&D investment by all federal agencies,
compare the level of R&D investment in specific areas of science and
technology across all federal agencies, or examine the details of
research investments within a specific agency. Researchers at the
Critical Technologies Institute use the database to analyze federal
R&D expenditures and programs in support of OSTP and NSTC. The
operational version of the database recently was made available to
OSTP and other federal agencies. RaDiUS is accessible to designated
users via the Internet through the World Wide Web. The RAND
Corporation representatives said that obligational data presented in
this report are conservative because obligational data are not
available for all awards/tasks. We did not verify the accuracy of
the data contained in the RaDiUS database.
Future trend data were obtained from the Budget of the United States
Government for Fiscal Year 1998 and the American Association for the
Advancement of Science. Data on the amount of R&D investments by
industry and academia were obtained from NSF's National Patterns of
R&D Resources: 1996. Personnel data for DOD were obtained from the
Department of Defense In-House RDT&E Activities Management Analysis
Report for Fiscal Year 1996. Personnel data for NASA were from the
end of the second quarter of fiscal year 1997 and were obtained from
the NASA Civil Service Workforce Report. Personnel data for DOE were
from the end of fiscal year 1996 and were obtained from the Secretary
of Energy's Advisory Board. We did not attempt to verify the
accuracy of these data.
We performed our review from July 1996 through June 1997 in
accordance with generally accepted government auditing standards.
CONDITION OF THE FEDERAL RDT&E
INFRASTRUCTURE
============================================================ Chapter 2
Despite numerous studies citing the need for DOE, NASA, and DOD to
reduce significantly their RDT&E infrastructures in alignment with
agency core missions, these agencies have not responded fully to the
studies' recommendations. The energy crisis of the 1970s, the end of
the Cold War in the late 1980s, the desire for a smaller and more
efficient government, and the agreement to achieve a balanced budget
by 2002 caused these three agencies to revise their missions. In
some cases, RDT&E facilities have taken on expanded missions beyond
agency core requirements in order to employ the existing
infrastructure. As a result, they perpetuate excess capacity and
retain many old, deteriorating facilities in need of repair.
Moreover, DOE, NASA, and DOD--along with many of the other 14
agencies that own RDT&E infrastructure--have programs involving the
same areas, thus creating the potential to overlap and duplicate
research.
STUDIES SHOW THAT A REDUCTION
OF RDT&E INFRASTRUCTURE IS
NEEDED
---------------------------------------------------------- Chapter 2:1
Numerous studies, panels, commissions, and task forces, and several
GAO reports have addressed the inefficiencies in DOE, NASA, and DOD
RDT&E facilities. Many concluded that RDT&E facilities must adapt
appropriately their missions and programs to the changing world
environment; tie RDT&E closely to agency core missions; and eliminate
duplication, excess capacity, and unfunded backlogs in facility
maintenance and repair. The President's NSTC reported that given
post-Cold War conditions and new fiscal constraints, DOE, NASA, and
DOD must reduce and restructure their RDT&E infrastructures, define
laboratory missions more clearly, manage laboratories better, and
eliminate needless redundancies.\1
-- Since 1982, seven major panels, commissions, and task forces,
and six GAO reports have addressed how DOE could achieve
operational efficiencies in its RDT&E facilities.
Recommendations included focusing unclear missions, aligning
laboratory activities with DOE goals, consolidating facilities,
and replacing its cumbersome, inefficient management structure.
In particular, the 1995 Task Force on Alternative Futures for
the Department of Energy National Laboratories (the Galvin Task
Force) reported DOE's entire laboratory system could be reduced
productively by eliminating obsolete and redundant missions and
supporting infrastructure.\2
-- Although it did not make specific recommendations to consolidate
NASA infrastructure, the 1995 Foster Task Force\3 reported that
it found overlaps in capabilities at NASA and other agencies and
recommended that NASA should reduce redundant capabilities among
its centers. NASA, recognizing its excess capacity, developed
plans to close and consolidate some of its facilities to reduce
its RDT&E infrastructure, setting a "stretch" goal to decrease
the current replacement value\4 of its facilities by 25 percent
by the end of fiscal year 2000.
-- Since 1987, more than 150 studies have addressed the need for
DOD to achieve operational efficiencies in its RDT&E
infrastructure. Recommendations from these studies focused most
on management efficiencies and less on infrastructure
reductions. For example, the 1995 Directions for Defense:
Report of the Commission on Roles and Missions of the Armed
Forces identified many opportunities for DOD to integrate
operational activities with duplicative missions in areas such
as command, control, communications, computers, and intelligence
(C\4 I) rather than RDT&E infrastructure reduction.\5
-- The March 1997 Status of Federal Laboratory Reforms, prepared as
an update of the NSTC report, recognizes improvements but cites
a continued need for reform.
--------------------
\1 See Interagency Federal Laboratory Review Final Report, Executive
Office of the President, Office of Science and Technology Policy (May
15, 1995), pp. 1, 7, and 9-13.
\2 See Alternative Futures for the Department of Energy National
Laboratories, Secretary of Energy Advisory Board Task Force on
Alternative Futures for the Department of Energy National
Laboratories (Feb. 1995).
\3 See NASA Federal Laboratory Review, NASA Federal Laboratory Review
Task Force, NASA Advisory Council (Feb. 27, 1995).
\4 The current replacement value of a facility is its acquisition
cost, excluding land, and the cost of collateral equipment and
incremental book value changes escalated to the current year using a
20-city average cost index for buildings.
\5 See Directions for Defense: Report of the Commission on Roles and
Missions of the Armed Forces (May 24, 1995).
AGENCIES MAINTAIN LARGE RDT&E
INFRASTRUCTURES
---------------------------------------------------------- Chapter 2:2
DOE, NASA, and DOD actions to address inefficiencies in their RDT&E
have focused most on management efficiencies and less on reducing
infrastructure. When attempted, strategic infrastructure reduction
was largely limited to individual facilities within agencies, but it
has not been attempted governmentwide. In part, because
well-established programs have mobilized political support to resist
change, these three agencies still maintain large, relatively
unchanged RDT&E infrastructures.
Some DOE reform efforts led to management efficiencies, staff
reductions, and the closure of a few facilities directly related to
the end of the Cold War. However, DOE's efforts failed to implement
large-scale restructuring because either the scope of these efforts
was limited, subsequent recommendations were not implemented fully,
or the recommending body lacked the independent authority necessary
to implement recommendations. DOE currently maintains one of the
world's largest collections of scientific laboratories--33 such
laboratories valued at over $100 billion. Figure 2.1 shows an aerial
view of the Lawrence Livermore National Laboratory in Livermore,
California.
Figure 2.1: Lawrence Livermore
National Laboratory, Livermore,
California
(See figure in printed
edition.)
Source: DOE.
(See figure in printed
edition.)
Although budgetary constraints forced NASA to look for savings, NASA
has not consolidated or closed any of its 10 major centers. For
example, the 1995 NASA Federal Laboratory Review concluded that NASA
saved money by cutting personnel but not by closing facilities.
According to NASA officials, additional reductions in R&D
laboratories are unlikely. Although NASA established a "stretch"
goal of reducing the current replacement value of its facilities by
$2.8 billion by 2000, it may achieve only $250 million in operations
and maintenance cost reductions by then. In fact, NASA's
infrastructure current replacement value increased by about 14
percent between fiscal years 1990 and 1995, indicating that NASA was
building new facilities faster than it was consolidating or closing
older ones. NASA's 10 major centers currently include about 3,000
buildings on about 130,000 acres of land. Figure 2.2 shows an aerial
view of NASA's Ames Research Center at Moffett Federal Airfield,
California.
Figure 2.2: NASA Ames Research
Center, Moffett Federal
Airfield, California
(See figure in printed
edition.)
Source: NASA Ames Research
Center.
(See figure in printed
edition.)
DOD will have closed 62 RDT&E sites and activities at host sites once
it implements the recommendations from the four base realignment and
closure (BRAC) rounds (1988, 1991, 1993, and 1995). While this
action is laudable, once complete, DOD still will have about
35-percent excess capacity in its laboratory infrastructure and about
52-percent excess capacity in the air vehicles, electronic combat,
and armaments/weapons arenas of its T&E infrastructure, according to
DOD's own estimates. DOD currently owns 67 laboratories. Figure 2.3
shows an aerial view of the Air Force's Wright Laboratory,
Wright-Patterson Air Force Base, Ohio.
Figure 2.3: Wright Laboratory,
Wright-Patterson Air Force
Base, Ohio
(See figure in printed
edition.)
Source: U.S. Air Force.
(See figure in printed
edition.)
There are cases where DOE, NASA, and DOD laboratories coordinate to
help ensure that similar research programs are complementary and not
overlapping. Although individual agencies have taken limited actions
to reduce their own RDT&E infrastructures, they have had little
success in consolidating infrastructure across agency boundaries.
Recent attempts by DOD to reduce RDT&E infrastructure excluded
analyses of overlap with other agencies. Previously, DOD and NASA
established integrated product teams and then alliances to improve
coordination between their laboratories. However, interagency
rivalries hampered their efforts. Further, some areas either started
slowly or have not started at all. More importantly, these teams had
no explicit goal to identify ways to reduce their infrastructures
through this effort. As a result, their efforts achieved minimal
infrastructure reduction to date.
Although agencies say that they assess continuously the
infrastructure required to fulfill their mission requirements through
their strategic planning processes, in some cases, instead of
restructuring their infrastructure to support core missions, agencies
have expanded missions to preserve existing infrastructure. Rather
than expanding the agency's mission, NASA has focused and redefined
its centers' missions. In some cases, this has resulted in
competition among agencies that may also extend into their dealings
with the private sector. For example, NASA and Air Force test
centers are competing with each other to test engines for the Air
Force's Evolved Expendable Launch Vehicle. Also, some DOE
laboratories are competing with private industry, for example, by
building facilities to produce medical isotopes.
MULTIPLE AGENCIES CONDUCT
RESEARCH IN SIMILAR PROGRAMS
---------------------------------------------------------- Chapter 2:3
Many RDT&E activities of DOD, DOE, and NASA are inextricably linked.
For example, the major thrust of DOD's RDT&E effort is national
security and DOE laboratories have been making contributions to
national security since the World War II Manhattan Project by
designing, developing, and/or maintaining nuclear weapons. NASA also
contributes to national security with its work on military aerospace
and improved aircraft performance. In addition, environmental issues
are a growing part of the three agencies' RDT&E efforts. Both DOD
and DOE now have significant responsibilities for finding ways to
clean up their own pollution and advance the science and technology
of environmental remediation. NASA and DOE have undertaken
complementary or coordinated RDT&E programs related to the earth's
environmental and climate changes.
Agency mission and RDT&E infrastructure duplication is thought by
some to be a governmentwide problem. However, the full extent is not
known. DOE, NASA, and DOD, along with many other agencies involved
in research, develpment, test, and evaluation, are awarding contracts
and directing tasks in programs that involve research on the same or
similar subjects. This research may be different at each agency, but
there is potential for overlap or duplication. Until recently, there
was no formal system to monitor possible redundancies in research and
development. The RaDiUS database, newly created by The RAND
Corporation's Critical Technologies Institute to support OSTP and
NSTC, compiles systematically data on the conduct of federal R&D
investments by agency, bureau, program, project, and award. This
database can aggregate individual agencies' total investments,
compare the level of investment in specific areas of science and
technology across all federal agencies, and provide the details of
research investments within a specific agency. Table 2.1 shows
examples of agencies' fiscal year 1996 contract awards/tasks for four
research topics that we selected at random.
Table 2.1
Research Topics Involving Multiple
Agencies (dollars in millions)
Estimate of
Number of amounts
Agencies supporting known spent in fiscal
Research topic research\a awards/tasks year 1996
--------------------- --------------------- -------------- ------------------
Fuel Cell(s) DOD, DHHS, NASA, DOE, 120+ $160-$175
NSF, USDA, DOT, DVA
HIV/AIDS DOD, DHHS, DOE, NSF, 2,800+ $550-$700
USDA, DOC, AID, DVA,
DED
Human Genome DOD, DHHS, DOE, NSF, 290+ $110-$125
USDA, DOC, DVA
Aviation Safety DOD, DHHS, NASA, DOE, 160+ $800-$950
NSF, DOC, DOT
--------------------------------------------------------------------------------
\a AID (Agency for International Development); AIDS (acquired immune
deficiency syndrome); DED (Department of Education); DHHS (Department
of Health and Human Services); DOC (Department of Commerce); DOI
(Department of the Interior); DOJ (Department of Justice); DOT
(Department of Transportation); DVA (Department of Veterans'
Affairs); and USDA (U.S. Department of Agriculture).
Source: RaDiUS database, Critical Technologies Institute, The RAND
Corporation.
A review of activities in the database raises concerns that
duplication within and across agencies may be prevalent and
identifies opportunities for collaborations that are being missed.
The search revealed that many agencies and awards/tasks are involved.
However, what appear on the surface to be overlapping projects or
surprising locations where particular research is taking place, in
fact, may be different. For example, fuel cell research for
different vehicles (automobiles, spacecraft, and launch vehicles) may
involve distinct technologies with different objectives as well as
public and private applications. Without a comprehensive evaluation
of the actual details of the various R&D activities, it is difficult
to assess whether collaboration is sufficient or if duplication is
occurring.
REPAIRS OF AGING RDT&E
INFRASTRUCTURE ARE BACKLOGGED
---------------------------------------------------------- Chapter 2:4
As we and others have reported, backlogs of maintenance and repairs
of deteriorating RDT&E facilities have increased significantly.
Further, much of the federal laboratory infrastructure is old, in
poor operating condition, or rapidly becoming obsolete--in part
because maintenance and repairs are underfunded.\6 Some of it is
ill-equipped for today's R&D activities. For example, many of DOE's
older R&D laboratories were not designed to meet today's (1) need for
precise measurements by considering factors like temperature,
humidity, and vibrations and (2) health and safety code requirements.
The lack of repair of aged facilities may reflect the realities of
recent deficit reduction efforts and associated funding priorities.
In addition, excess capacity and aged facilities in DOE, for example,
may continue to exist because facilities suffer from toxic
contamination that cannot be disposed of currently or is too costly
to decontaminate and decommission. However, since noncontaminated
excess capacity exists, it seems reasonable that restructuring could
be used to reduce excess capacity and consolidate some functions in
the better maintained facilities, and not waste available resources
maintaining and repairing old and underused facilities.
In 1993, we reported that about 54 percent of federal laboratories'
space was over 30 years old.\7
DOE's floor space, which accounts for almost 50 percent of the total
RDT&E laboratory space for all federal agencies, was the oldest--35
percent of its space was over 40 years old, and 62 percent was over
30 years old. In addition, 29 percent of DOD's laboratory space and
24 percent of NASA's laboratory space was more than 40 years old. In
1991, DOD reported that it had a $850 million backlog in unfunded
repairs to research facilities that would take more than 12 years to
eliminate.
DOE, NASA, and DOD officials confirm that the RDT&E maintenance and
repair backlogs we reported in 1993 still persist today or have been
improved only marginally. For example, in 1996, about 41 percent of
DOD's laboratory space was over 36 years old and 62 percent was more
than 26 years old. DOE officials estimated that the agency would
need $1.3 billion to maintain and modernize R&D facilities, but
funding for such projects in fiscal year 1995 was only $80
million--about 6 percent of that amount. In fiscal year 1997, NASA
requested $238 million for routine annual maintenance and repair of
its facilities. Although this amount does not reduce its backlog of
maintenance and repairs, NASA indicated that some minor amounts of
routine maintenance funds may be expended for such projects as
painting the exteriors of mothballed buildings or replacing the roofs
of facilities considered to be excess capacity.
--------------------
\6 See DOE's Laboratory Facilities (GAO/RCED-96-183R, June 26, 1996);
Federal Research: Aging Federal Laboratories Need Repairs and
Upgrades (GAO/RCED-93-203, Sept. 20, 1993); Federal Buildings:
Actions Needed to Prevent Further Deterioration and Obsolescence
(GAO/GGD-91-57, May 13, 1991); Long-Term Modernization of Research,
Development, Test and Evaluation (RDT&E) Facilities, Institute for
Defense Analyses, January 1991; and NASA Maintenance: Stronger
Commitment Needed to Curb Facility Deterioration (GAO/NSIAD-91-34,
Dec. 14, 1990).
\7 See Federal Research: Aging Federal Laboratories Need Repairs and
Upgrades (GAO/RCED-93-203, Sept. 20, 1993).
APPROACHES OTHER ORGANIZATIONS
HAVE TAKEN TO REDUCE RDT&E
INFRASTRUCTURE SUCCESSFULLY
============================================================ Chapter 3
The need to reduce RDT&E infrastructure in light of fiscal
constraints and changing requirements is not unique to the U.S.
government. In recent years, several organizations that faced
declining resources and a globally competitive business environment
have restructured successfully their RDT&E operations, reducing both
the size and cost of their RDT&E infrastructures. Our review of how
two organizations' restructured their RDT&E facilities shows that
five elements, used in concert, were critical to their success.
These two restructurings provide useful "lessons learned" for the
U.S. government.
CONSOLIDATION OF RDT&E
FACILITIES AT THE BOEING
COMPANY DEFENSE & SPACE GROUP
AND THE BRITISH MINISTRY OF
DEFENCE'S DEFENCE RESEARCH
AGENCY
---------------------------------------------------------- Chapter 3:1
The Boeing Company Defense & Space Group\1 eliminated significant
RDT&E infrastructure through its restructuring efforts. Before
restructuring, the company had neither focused on the number or size
of its facilities nor identified how widespread duplication had
hampered its facilities' efficiency. After forecasting reductions in
its workload for military electronics and space programs in 1989,
however, the Boeing Company Defense & Space Group realigned its
laboratory infrastructure to support the company's new strategic
business plan.
In roughly 4 years, the Boeing Company Defense & Space Group reduced
its 456 laboratories to 133, cutting its square footage requirements
significantly. As a result of this consolidation, labor and other
facility-based operating costs were reduced by about $100 million.
Despite the consolidation, the company's business base suffered no
losses, and there was little need to contract out for services. With
a successful restructuring methodology in place, the Boeing Company
Defense & Space Group began to review the possible consolidation of
additional laboratories gained through the acquisition of Rockwell
International's space and defense units, including The Rocketdyne
Corporation. An official from the Boeing Company Defense & Space
Group estimated that this consolidation may take as few as 12 months.
Similarly, the British Ministry of Defence consolidated its four
research establishments into a single agency for laboratories, the
Defence Research Agency, which serves all three military services.
The Ministry created the agency when operating and planning problems
revealed that its laboratories and T&E sites were unresponsive to
customers' needs, culturally antiquated, and unaffordable. The
laboratories and test centers were widely dispersed, laid out
inefficiently, and in poor repair. These inefficiencies were
compounded by a likely reduction in future defense spending and a
Ministry staff relocation that left two major sites only half
utilized and a heavy burden to operate and maintain.
To respond to these problems, from 1991 to 1995 the Defence Research
Agency reduced its 54 laboratories to 35 and combined the Ministry's
four principal nonnuclear research establishments into one coherent
and highly efficient single organization. The agency reduced its
overhead costs by more than $100 million, yet the military-science
program maintained nearly the same level of funding. The agency
later expanded to include T&E centers and is now called DERA.
--------------------
\1 In August 1997, the Boeing Company Defense & Space Group was
renamed the Boeing Company Information, Space, & Defense Systems
Group.
FIVE ELEMENTS CRITICAL TO THE
BOEING COMPANY DEFENSE & SPACE
GROUP AND BRITISH MINISTRY OF
DEFENCE RESTRUCTURING
---------------------------------------------------------- Chapter 3:2
According to the Boeing Company Defense & Space Group and British
Defence Research Agency officials, the restructuring process included
five elements that were critical to ensuring prompt and complete
success. According to officials managing these restructurings, their
success depended on using all five elements together. These elements
were either in place when the consolidation began or were added to
complete the process.
-- A "crisis" that served as a catalyst to spark action.
-- An independent authority to overcome parochialism and political
interest.
-- Core missions focused to support the organization's goals and
strategies.
-- The full scope of supporting infrastructure clearly delineated.
-- Accurate, reliable, and comparable data that capture total
infrastructure cost and utilization rates for each affected
entity and can be collected and evaluated systematically.
A "CRISIS" AS A CATALYST TO
SPARK ACTION
-------------------------------------------------------- Chapter 3:2.1
At both the Boeing Company Defense & Space Group and the Defence
Research Agency, the overriding catalyst that forced action to
preserve the organizations' options and maintain the quality of their
work was a shift in national economic priorities. Organization
executives at the Boeing Company Defense & Space Group and the
Ministry of Defence foresaw imminent and severe budget cuts, which
created the impetus to restructure their RDT&E facilities.
During the U.S. defense buildup in the 1980s, the Boeing Company
Defense & Space Group operated two separate military aircraft
divisions, which competed with one another for designs. However,
when the Cold War ended and defense budgets declined, the company
realized that it could no longer afford the luxury of internal
competition.
The Defence Research Agency, on the other hand, created its own
"crisis" that served as a catalyst to effect the restructuring of its
RDT&E facilities. Originally, the Ministry of Defence was slow to
respond both organizationally and culturally to post-Cold War
changes. The executive in charge of restructuring the Defence
Research Agency forced the facilities to become financially
self-sufficient by making them independent contractors to the
government, thus creating an environment of "crisis" for both the
Defence Research Agency and its new military customers.
AN INDEPENDENT AUTHORITY TO
DIRECT RESTRUCTURING
-------------------------------------------------------- Chapter 3:2.2
According to representatives of the Boeing Company Defense & Space
Group and the Defence Research Agency, their RDT&E consolidation
efforts succeeded primarily because an independent authority provided
leadership from outside the organizations' normal decision-making
chain-of-command. Being free from parochial or political pressures,
the authority could effect change, ensure that data collection and
analysis were efficient and objective, and implement recommendations
quickly. In the Boeing Company Defense & Space Group, the authority
reported directly to the company president, and in the Defence
Research Agency, the authority reported directly to the Secretary of
State for Defence. Facility personnel were told that the independent
authority would direct the restructuring with or without their
cooperation and that it would therefore be in their best interests to
represent their facilities completely and candidly.
CORE MISSIONS THAT SUPPORT
ORGANIZATIONAL GOALS AND
STRATEGIES
-------------------------------------------------------- Chapter 3:2.3
As part of larger organizations, the Boeing Company Defense & Space
Group and the Defence Research Agency were expected to support
overall goals and strategies as efficiently as possible. Both the
Boeing Company Defense & Space Group and the Defence Research Agency
realigned their missions to meet existing and anticipated conditions.
They achieved this by asking several basic questions:
-- What are the organizations' core missions?
-- What research areas are the organizations involved in?
-- Does existing research at a facility support the core missions?
-- Can someone else do the research?
-- What are the costs and consequences of not doing the research?
The Boeing Company Defense & Space Group's RDT&E facility capacity
(and any consolidation or streamlining) had to conform to the Boeing
Company's strategic business plan. The Defence Research Agency began
operating on a "trading fund" basis and aligned its missions along
functional lines that were linked directly to the needs of its
customer, the Ministry of Defence. In both organizations, when the
plans required a particular capability, the executive responsible for
the laboratories had to choose either to maintain the applicable
research and development or to contract for it (if the capability was
reasonably available by outside contract). The Boeing Company
Defense & Space Group and the Defence Research Agency documented
their decisions to ensure that laboratory missions and functions were
linked directly to the missions and functions of the greater
organization.
THE FULL SCOPE OF SUPPORTING
INFRASTRUCTURE CLEARLY
DELINEATED
-------------------------------------------------------- Chapter 3:2.4
Before determining whether their capabilities and functions supported
their parent organizations' missions, the Boeing Company Defense &
Space Group and the Defence Research Agency had to complete an
inventory of all their RDT&E facilities, without exception, to
determine what to cut. For example, although its High Technology
Center was only 3 years old and cost $40 million to build, it was
included in the inventory and dismantled because it failed to support
the company's strategic business plan. According to a Boeing Company
Defense & Space Group official, if the company had exempted certain
facilities from its inventory, new ones like the Center would likely
not have been cut.
Because of political sensitivities, the Defence Research Agency
restructured its RDT&E infrastructure in two phases. The R&D
laboratories were restructured first, then the T&E centers. The R&D
laboratories were easier to restructure because they were all in
England, and so only one constituent country was involved. The T&E
centers, on the other hand, were located in England, Scotland, and
Wales. The agency thus had to face three separate legislative bodies
in two constituent countries (England and Scotland) and one
principality (Wales) with its politically sensitive restructuring
decisions. However, the successful restructuring of the laboratories
eased the way for the restructuring of the T&E centers.
ACCURATE, RELIABLE, AND
COMPARABLE DATA ON
INFRASTRUCTURE COSTS AND
UTILIZATION RATES
-------------------------------------------------------- Chapter 3:2.5
The Boeing Company Defense & Space Group and the Defence Research
Agency discovered that their financial management systems could not
capture or evaluate either the total costs of operating their
laboratories or the facility utilization rates. Because accurate,
reliable, and comparable data were critical to success in
restructuring their RDT&E facilities, both organizations developed
standardized data collection instruments to capture necessary details
about their infrastructure. These details included each laboratory's
geographic location, original and current purpose, present and future
projects, unique capabilities, product areas, equipment values,
utilization rates, maintenance costs, personnel costs and
capabilities, anticipated capability requirements, and potential
consolidation/closing requirements.
To validate and analyze the data collected, the Boeing Company
Defense & Space Group created multidisciplinary review teams that
included scientists, strategic planners, financial experts,
accountants, engineers, and laboratory operations specialists. For
each site visit, corresponding individuals were added to the team to
ensure that accurate and comparable data were being obtained and to
allow laboratory personnel to participate in the data collection
process. A neutral party unified the overall data collection
process. Once the data was collected and its accuracy verified, the
teams analyzed the data by function and, if needed, by geographical
area. Data on functional categories tied each laboratory's
activities to its primary mission, and data on geographical area
helped the teams discern differences in facility use rates in that
area. Brainstorming sessions listed 45 to 50 functions, which were
winnowed to 15 prime functions. Team decisions were reached by
consensus.
Senior scientists from the Defence Research Agency analyzed data
about each other's facilities. The agency's Director of
Rationalisation worked with the Director of Support Services and
Director of Personnel to restructure facilities and determine human
resource needs. The final results from these data covered over 50
individual options for sites in detail and revealed common elements.
In fact, the level of overlap was so great that the restructuring
plan could only be assembled as a complete package after all the
studies were completed.
Both organizations collected accurate, reliable, and comparable data
about their facilities across-the-board to reduce confusion, prevent
facility officials from claiming they should be exempted from
restructuring, and reduce their assertions that the facilities were
"unique" or "incomparable." Also, both organizations' recommendations
encompassed a wide variety of restructuring options: closure,
consolidation, relocation, downsizing, expanding, transferring
responsibility, mothballing, or no change. Once approved,
recommendations were implemented quickly.
FEDERAL AGENCIES' APPROACHES TO
REDUCING RDT&E INFRASTRUCTURE
LACKED CRITICAL ELEMENTS
============================================================ Chapter 4
When the Boeing Company Defense & Space Group and the Defence
Research Agency applied elements critical to their restructuring
efforts, they achieved cost savings and operational efficiencies.
However, not all of these critical elements were present in DOE,
NASA, and DOD attempts to restructure their RDT&E facilities.
Reduced agency budgets have not served as a catalyst for major
reductions or restructurings. Although individual agencies have
taken steps to realign their missions, these steps have been taken
independently and not within the context of a rational,
governmentwide approach. In fact, when agencies did refocus their
missions, the goal sometimes was to maintain existing infrastructure
or to limit infrastructure reduction. Furthermore, agencies have
made decisions using the various definitions of R&D infrastructure
without considering fully the scope of existing infrastructure and
lacking information on the cost to operate it and the way to assess
its value. The five critical elements used in concert by the Boeing
Company Defense & Space Group and the Defence Research Agency are
broadly applicable to laboratory infrastructure within and across
federal agencies.
THE DEPARTMENT OF ENERGY'S
RESTRUCTURING EFFORTS
---------------------------------------------------------- Chapter 4:1
DOE has attempted in limited and isolated ways to consolidate its
RDT&E infrastructure. For example, DOE began a restructuring of
RDT&E facilities in 1987 at the Nevada Test Site, which is used by
DOE's three defense weapons laboratories to meet unique requirements
with specific technical and operational capabilities. At that time,
DOE initiated a comprehensive effort to reengineer its support
operations and facilities at the site; created joint experimental
facilities and consolidated its construction camp, dormitories, and
other logistical services; and consolidated several personnel support
functions, such as the support contractor and drilling crew.
According to DOE officials, this effort resulted in a test site
budget about 2.5 times smaller than the 1987 budget of nearly $1
billion. Overall however, DOE's attempts to restructure its RDT&E
facilities yielded only modest budget savings and little or no
significant restructuring. Further, none of the five critical
elements used in the successful consolidations by the Boeing Company
Defense & Space Group and the Defence Research Agency were part of
DOE's process. Institutional barriers, along with parochialism and
other pressures, prevented DOE from reducing much of its existing
infrastructure.
During the Cold War, more than one-half of the total work of the
major DOE laboratories was directed toward defense-related research,
development, testing, and environmental management. The DOE
multiprogram laboratories and the DOE weapons laboratories have
diversified their missions during the past decade, including, for
example, more emphasis on industrial competitiveness. Also,
environmental cleanup and restoration and nonproliferation projects
that were funded primarily by the Defense Program budget were
transferred to the Environmental Restoration and Non-Proliferation
Program budgets. Thus, the total Defense Program's work in 1993
dipped below 50 percent of the total laboratory complex budget.
In 1994, the Secretary of Energy announced DOE's strategic plan,
which included a plan to reduce its budget by $14.1 billion over the
next 5 years. This goal was later revised to $10.5 billion, with
savings to be achieved by reducing management expenses in the
environmental area and energy programs and by implementing
recommendations from two DOE commissions created to improve its
defense laboratories and applied research programs.\1 In May 1995,
DOE began a strategic alignment and downsizing initiative, as part of
its strategic plan, attempting to save $1.7 billion in its
laboratories over 5 fiscal years.
More recently, DOE has changed its mission focus to respond to the
changed world environment, but without a reduction in infrastructure.
In August 1995, U.S. efforts toward ratification of the
Comprehensive Test Ban Treaty required DOE to create the Stockpile
Stewardship and Management Program (SSMP) to replace research and
production of new nuclear weapons with the maintenance and testing of
the existing nuclear stockpile. The SSMP is a 10-year initiative
that has cost about $4 billion per year and is expected to cost $4.5
billion per year beginning in 1999--$400 million a year more than the
Department's annual weapons budget during the Cold War. If funding
for weapons production in Cold War budgets is included, then the
program's budgets are substantially less than Cold War budgets.
However, current budgets do contain an increase in annual funding for
weapons research programs. Through the program, DOE reduced some
overlap and duplication at its three weapons laboratories and made
major reductions in the production complex. Nevertheless, no major
laboratory facilities will be consolidated or closed because of the
program. For fiscal year 1998, DOE laboratories are again devoting
more than one-half of their workload to defense.
Other than nuclear weapons work, DOE has expanded its RDT&E mission
to include research on, for example, the human genome,
chemical/biological warfare agents, and the expansion of fusion
energy research at five laboratories. Studies have been expanded at
one laboratory on ways to counter all weapons of mass destruction.
Often, research on weapons of mass destruction was mandated either
within the executive branch or in legislation.
DOE has never conducted the rigorous inventory of its RDT&E programs,
personnel, and facilities like that done by the Boeing Company
Defense & Space Group and the Defence Research Agency. As part of a
recent DOE effort to capture total research costs, all laboratories
were asked to submit personnel and cost data to enable DOE to
evaluate ratios of research to support staff, determine percent
technical labor on research, and average operating costs per research
full-time employee. Laboratory directors criticize this effort for
overlooking the many unique capabilities and local accounting methods
that make DOE laboratories so diverse. They also widely criticize
DOE's more recent requirement to collect functional cost data, saying
that it has no value. One laboratory estimated that it took one-half
of a staff year to collect the data, while at another an official
said the data cost the laboratory millions of dollars to obtain.
Except for the data now being collected, DOE has made no other effort
to validate and evaluate data about the cost or utilization of its
R&D laboratories--one of the five critical elements applied in the
Boeing Company Defense & Space Group's and the Defence Research
Agency's restructurings. In 1995, DOE established a Laboratory
Operations Board to guide the Department's effort to improve the
management of its laboratories and reduce their costs, but the Board
has a limited mandate and little autonomy. In July 1996, the Board
produced the Strategic Laboratories Mission Plan, which inventoried
laboratory programs and capabilities but not their operating costs or
facility utilization rates. The latest report of the Board's
external members said that the laboratories have made progress and
have cut costs, but they note that inefficiencies in each mission
continue because of DOE's complicated management structure and that
progress over the last year has been much slower than is desirable.
Their main findings state that DOE program plans need improvement.
The Board reports that each program needs a plan that articulates a
compelling mission, identifies the technical paths to accomplish the
mission, and defines the roles of different R&D performers to
accomplish the missions. The Board notes that this has been
accomplished in DOE's Defense Program, but to a much lesser extent in
the other parts of the Department. In many programs, the Board finds
that plans are not worked out in sufficient detail to allow the
laboratories to plan their roles.
The report also states that some programs are using a larger number
of performers than appears optimum; there are opportunities to
improve performance and reduce costs through better focusing; and
better planning is needed, for example, to set priorities for the
energy mission, to develop a road map for future major scientific
facilities, and to develop greater integration across R&D programs.
The Board is surveying currently some of DOE's small, single-purpose
laboratories to validate roles or determine if they are candidates
for privatization, alternative contracting mechanisms, consolidation,
or closure, but it is not performing the same review of the large,
multiprogram laboratories where opportunities for overlap and
duplication are most prevalent.
Directors at three of the multiprogram laboratories told us that an
independent authority was needed to reduce RDT&E infrastructure.
However, the directors at DOE's three weapons laboratories or their
representatives disagreed; they contended that the SSMP already had
focused their missions and consolidated their funding for the next
decade.
--------------------
\1 See Energy Downsizing: While DOE Is Achieving Budget Cuts, It Is
Too Soon to Gauge Effects (GAO/RCED-96-154, May 13, 1996).
NASA'S RESTRUCTURING EFFORTS
---------------------------------------------------------- Chapter 4:2
Several elements we identified in the Boeing Company Defense & Space
Group and the Defence Research Agency models were evident in NASA's
response to what it perceived as a serious budgetary crisis. In
response to successive budgetary reductions, NASA readjusted missions
at individual locations and closed some facilities that were no
longer needed. Most recently, the Administrator introduced an
initiative, which is scheduled to be implemented fully in fiscal year
1999, to capture more fully the cost of supporting NASA's missions.
NASA officials note that the elimination of unnecessary
infrastructure is a continuous, ongoing objective of the agency's
strategic planning. Despite this plan, it remains to be seen whether
NASA can meet its internal infrastructure reduction goals and,
through its cooperative efforts with DOD, reduce unnecessary
duplication in aerospace RDT&E facilities.
NASA HAS APPLIED SEVERAL OF
THE CRITICAL ELEMENTS IN ITS
RESTRUCTURING AND ACHIEVED
SOME REDUCTIONS
-------------------------------------------------------- Chapter 4:2.1
NASA's future years' budget requests for fiscal years 1995 to 2000
were reduced from $122 billion in fiscal year 1993 to $82 billion in
fiscal year 1996. To manage this major reduction, beginning in
fiscal year 1994, NASA adjusted or terminated several major programs.
The agency also began to reduce the number of support contractors and
decrease its workforce from about 25,000 in fiscal year 1993 to a
projected 17,500 in fiscal year 2000--a 30-percent reduction. In
fiscal year 1996, NASA decided to absorb funding decreases by
consolidation and closure of smaller facilities in conjunction with
personnel reductions. NASA officials said they made a conscious
decision not to close any of NASA's 10 major centers based on the
agency's workload, customer requirements, and statutory
responsibilities.
NASA officials believe NASA still is in a budgetary crisis. However,
parochial and cultural barriers have prevented a more substantial
reduction in its facilities infrastructure to help deal with the
crisis. These barriers include concerns about the effect that
closing facilities, relocating activities, and consolidating
operations will have on missions, personnel, and local communities.
As we reported in 1996, NASA will not meet its initial goal of
decreasing the current replacement value of its facilities by $4
billion.\2 Instead, NASA now plans a $2.8 billion reduction in the
current replacement value of its facilities, or approximately 16
percent of the facilities identified in the 1994 baseline. This
reduction is estimated to yield only about $250 million in operations
and maintenance cost reductions through fiscal year 2000. The agency
will not meet its goal partially because it has had problems
evaluating some cost-reduction opportunities and its efforts with DOD
to coordinate the joint use of facilities are progressing slowly.
Like the Boeing Company Defense & Space Group and the Defence
Research Agency, NASA's Zero-Base Review\3 redefined roles and
program management structures and better focused its centers'
missions. However, the review began with the premise that to meet
its mission, NASA needed the existing infrastructure. Therefore,
NASA purposefully did not consolidate or close any of its 10 major
R&D centers. Rather, NASA made laboratory infrastructure reductions
within each center by deactivating 25 wind tunnels and aeropropulsion
facilities and closing some of its smaller sites. For example, in
1995, (1) the Jet Propulsion Laboratory closed its Edwards Test
Station at Edwards Air Force Base, California; (2) Ames Research
Center closed Crows Landing in Stanislaus County, California\4 ; and
(3) Marshall Space Flight Center, Alabama, closed the Slidell
Computer Facility in Slidell, Louisiana, and the Yellow Creek
Facility in Iuka, Mississippi, which was to have built the Advanced
Solid Rocket Motor for the Space Shuttle. According to NASA
officials, additional reductions are unlikely in NASA's centers.
NASA attempted to define clearly its supporting infrastructure in
considerable detail. Using the National Facility Study that was
performed in 1993 to 1994 as a starting point, and, in cooperation
with DOD, NASA created the Major Facilities Inventory, which provided
a database of 1,494 NASA and DOD facilities. However, this database
is not being used to make decisions regarding reductions in
infrastructure because it contains errors and does not use consistent
metrics and credible variables that could be applied across NASA or
DOD.
While the two agencies have not found opportunities to eliminate
physical infrastructure from their inventories, they have found
modest ways to avoid costs. For example, the two agencies can avoid
spending (1) $60 million by combining spacecraft technology
demonstrations and sharing the results of their experiments; (2) $14
million by sharing a C-17 aircraft hangar at Edwards Air Force
Base/Dryden Flight Research Center, California; (3) $445,000 through
joint use of an alternative fueling facility at Langley Air Force
Base/Langley Research Center, Virginia; and (4) $200,000 annually
through the Army's use of the Marshall Space Flight Center's
photography laboratory at Redstone Arsenal, Alabama.
NASA does not have an integrated financial system. Also, NASA
officials do not know the true costs of operating and maintaining the
agency's laboratory infrastructure. Each of the 10 major centers
maintains its own accounting system. NASA's nonstandard,
decentralized accounting systems do not capture information on
overhead rates in a consistent, rigorous, reliable, or useable
manner. According to a NASA official, the agency has a poor
cost-accounting analysis capacity, poor cost-accounting systems, and
cannot determine the laboratories' actual costs. In 1995, NASA
introduced an initiative, which it is implementing incrementally, to
integrate full-cost accounting, budgeting, and management practices.
The initiative was begun to provide complete cost information with
which to make more fully informed decisions and improve mission
performance. Full implementation of the initiative requires that
NASA's financial systems be improved significantly to accommodate
detailed cost data, practices, and processes. NASA has indicated
that it plans to integrate the full-cost accounting system in its
fiscal year 1999 budget. However, according to a NASA official, the
resulting cost data still will not provide the level of detail needed
for infrastructure reduction processes like those used by the Boeing
Defense & Space Group and the Defence Research Agency.
--------------------
\2 See NASA Infrastructure: Challenges to Achieving Reductions and
Efficiencies (GAO/NSIAD-96-187, Sept. 9, 1996).
\3 The Zero-Base Review was a NASA-wide effort completed in June 1995
to allocate reductions in the fiscal year 1996 budget, establish
center role assignments, provide suitable guidance for the fiscal
year 1997 budget, and change the way NASA conducts business.
However, of the review's 50 recommendations, only two applied to
specific facilities.
\4 Crows Landing was a former Navy airfield that Ames Research Center
acquired as a result of becoming landlord of Moffett Federal Airfield
following the 1991 BRAC round.
NASA AND DOD EFFORTS TO WORK
TOGETHER
-------------------------------------------------------- Chapter 4:2.2
In April 1996, NASA and DOD agreed to form alliances to work together
more efficiently and effectively in six categories of major test
facilities, including wind tunnels, air-breathing propulsion, rocket
propulsion, space environmental, hypervelocity ballistic
range/impact, and arc-heated facilities. The agreement was the
result of a joint study, Final Report on the 1995-1996 DOD/NASA
Cooperation Initiative, which concluded that, because a number of
major test facilities were deactivated since 1993, the existing major
facilities "very nearly represent the minimum necessary" to conduct
current and planned civil and defense-related aerospace research,
development, test, and evaluation. However, the study also concluded
that NASA and DOD do not coordinate adequately major test facilities'
investments, upgrades, and operations, and there was excess capacity
in rocket engine test facilities.
NASA officials note that the starting point for determining
infrastructure needs are NASA and DOD's missions and programs.
Nonetheless, the agencies have not directly sought infrastructure
reduction as part of the alliances' goals. Also, NASA and DOD
cooperative activities under the alliances have been limited since
their agreement in April 1996. Beyond the Rocket Propulsion
Alliance, only two of the five new alliances actually convened.\5
In part because NASA and DOD have not been directed specifically to
consider jointly RDT&E infrastructure reductions during such
restructurings, these agencies are not adequately coordinating with
one another about infrastructure investment decisions and
infrastructure consolidations. For example, according to DOD
officials, DOD's 1996 Vision 21, a 5-year plan directed by the
Congress to consolidate and restructure DOD's R&D laboratories and
T&E centers for the 21st century, does not provide for coordination
with or participation by NASA. Moreover, the plan does not call for
involvement by DOE.
The National Defense Authorization Act for Fiscal Year 1997 (sec.
211) directed NASA and DOD to prepare a joint plan, by the end of
1996, for coordinating and eliminating unnecessary duplication in the
operation and planned improvements of the rocket engine and rocket
engine component test facilities managed by the Air Force and NASA
and for developing commonly funded and operated facilities. The
agencies did not meet the deadline but indicated that they had
efforts underway to form the basis for such a plan.\6 However, the
outcome of these efforts is uncertain or excludes NASA.
It remains to be seen whether the two agencies' cooperative efforts
will reduce their investments, excess capacity, and unnecessary
duplication in aerospace RDT&E facilities. NASA center officials
generally agreed that an independent, external authority may be
necessary to optimize restructuring activities, but they believe that
NASA already has focused successfully its centers' roles and
missions.
--------------------
\5 For a further discussion of the alliances, see our forthcoming
report on Aerospace Testing: Promise of Closer NASA/DOD Cooperation
Remains Largely Unfulfilled (GAO/NSIAD-98-52).
\6 These efforts include DOD's Vision 21 and Quadrennial Defense
Review and a joint draft rocket propulsion test alliance.
THE DEPARTMENT OF DEFENSE'S
RESTRUCTURING EFFORTS
---------------------------------------------------------- Chapter 4:3
Although DOD has been through four BRAC rounds, it has not made the
reductions and realignments of RDT&E infrastructure it deems
necessary. Its Vision 21 initiative incorporates several of the
elements critical to success, but it is on hold pending resolution of
related BRAC issues.
The end of the Cold War, combined with the increasing need to reduce
and eventually eliminate the federal budget deficit, altered
fundamentally DOD's requirements for RDT&E infrastructure. DOD
officials recognized the need to (1) reduce excess capacity, (2)
avoid unnecessary overlap and duplication in missions and
capabilities, (3) reduce costs, and (4) maximize operational
efficiency and effectiveness. According to the former Secretary of
Defense, future increases in spending for readiness and weapons
modernization will have to come, in part, from infrastructure
reduction savings. Further, DOD officials recognized that to fund
weapons modernization and modernization of required RDT&E
infrastructure, DOD must reduce current infrastructure costs by
eliminating old, high-maintenance, and inefficient RDT&E facilities
while retaining critical capabilities to meet future requirements.
Since 1989, DOD has missed three opportunities for interservice
consolidations to reduce RDT&E infrastructure and maintained the
status quo of separate RDT&E facilities for each military service
instead. These opportunities were (1) the RDT&E restructuring that
occurred at the end of Cold War, (2) the 1995 BRAC round, and (3)
Vision 21.
The end of the Cold War afforded DOD its first opportunity. In 1989,
the President directed the Secretary of Defense to develop a plan to
implement fully the Packard Commission recommendations\7 and to
review DOD's management. The Secretary of Defense formed a task
force to provide specific plans on how suggested guidance on cutbacks
would be implemented. One of the task force's recommendations was to
consolidate RDT&E activities into a single agency.
In response to the recommended consolidation, the services offered a
counter-proposal that ultimately established Project Reliance, which
was intended to improve coordination and reduce overlap and
duplication in the services' RDT&E programs and facilities. While
Project Reliance has improved communications and increased
cooperation between the military services' RDT&E activities, it was
not conceived as a mechanism for infrastructure reductions and thus
maintains the status quo. DOD also did studies that focused on
interservice rather than intraservice consolidations, in which the
three services were already engaged. DOD's first opportunity was
lost because the services implemented RDT&E restructuring with little
interservice consolidation.
DOD officials did not--and still do not--have a sense of "crisis"
because RDT&E funding long has been a national security priority and
has been relatively flat or decreasing only slightly. The closest
DOD came to facing a ¹crisisº similar to that of the British Ministry
of Defence was a 1990 task force recommendation to consolidate all
RDT&E organizations into a single agency.\8 In referring to this
recommendation, an official in the Office of the Secretary of Defense
stated that "nothing could bring the services together in agreement
like a threat."
Overall, the roles and missions of DOD's RDT&E facilities are aligned
closely with the services and responsive to their requirements. They
are integral components of the military departments' acquisition and
combat support infrastructure. The basic mission of DOD's
laboratories is "to provide the technical expertise to enable the
Services to be smart buyers and users of new and improved weapons
systems and support capabilities."\9 While DOD's laboratories act as
interpreters and integrators of technology, industry produces the
products--weapons systems--that the laboratories' customers, the
warfighters, ultimately use. Although each service aligns its
laboratories along core product lines (such as ships, aircraft,
tanks, weapons, and communications) and assigns its laboratories full
life-cycle R&D responsibility, DOD laboratories help support each of
the six areas of national need outlined in chapter 1.
It has been long recognized that the services have had many
crosscutting opportunities for more direct use of resources so that
duplicative and overlapping capacity and capabilities could be
reduced or eliminated. However, service parochialism and
controversies successfully thwarted any such restructuring. Although
DOD officials recognize that any lasting solution to reducing RDT&E
infrastructure requires breaking down long-standing cultural barriers
involving service parochialism, DOD to date has been unable to
achieve that goal even with an independent, external authority (the
BRAC process), which focused primarily on the closure of military
bases.
Since 1988, the BRAC process also has been the primary vehicle within
DOD for RDT&E infrastructure reductions. In 1996, we reported that
despite four BRAC rounds in 1988, 1991, 1993, and 1995, DOD's
infrastructure reductions had not kept pace with reductions in
funding, personnel, and force structure.\10 When the last round has
been implemented fully by 2001, DOD will have closed 62 RDT&E sites
and activities at host sites,\11 but significant excess capacity will
remain in DOD's RDT&E infrastructure. According to officials from
the BRAC 1995 Laboratory Joint Cross-Service Group, after all current
BRAC actions have been completed, DOD's laboratory infrastructure
still will have an excess capacity of about 35 percent. Similarly,
according to officials from the BRAC 1995 Test and Evaluation Joint
Cross-Service Group, DOD's T&E infrastructure will have an excess
capacity of about 52 percent in the areas of air vehicles, electronic
combat, and armaments/weapons.
DOD has been forced through four BRAC rounds\12 to clearly define and
delineate in detail the full scope of its supporting RDT&E
infrastructure. Also, during the BRAC process, DOD attempted to
develop and use accurate, comparable cost data to overcome concerns
regarding the lack of consistency and reliability of data used in the
process, but was unsuccessful. DOD did not capture the total costs
associated with operating and maintaining its RDT&E infrastructure in
previous BRAC rounds either--and still does not know the true costs
of operating its RDT&E facilities. DOD officials found it
particularly difficult to compare laboratories across the services
due to insufficient cost and equipment use data. In some cases,
according to BRAC 1995 participants, data were collected and compiled
by those most affected by the outcome of the analysis, and prior
knowledge about how the data was to be evaluated led to modifications
of the data in a way that made an accurate analysis impossible.
During the first three BRAC rounds, each of the service's processes
and recommendations focused almost exclusively on its own activities
without considering the potential for consolidating work across
service lines. Therefore, joint cross-service groups for RDT&E
facilities, among others, were established for BRAC 1995. The Vice
Chairman of the Joint Chiefs of Staff advocated a strong role for the
joint cross-service groups and recommended that the services be
required to incorporate their alternatives in the final
recommendations,\13 thus affording DOD the second opportunity for
interservice consolidations. However, the services asserted that
they had to retain the final decision on realignments and closures to
meet their individual responsibilities to ensure, for example, a
ready and controlled source of technical competence and the resources
necessary to ensure timely responses.
DOD also lost opportunities in the BRAC 1995 process to reduce its
RDT&E infrastructure.\14 For example, DOD's decision to split its
analysis of R&D laboratories and T&E centers into two groups created
artificial barriers around the functions and facilities that each
could consider. R&D laboratories and T&E centers later were reviewed
independently using different methodologies. Also, the services
protected their own facilities, which undermined the BRAC process.
The services did not adopt scenarios that could have eliminated
excess T&E infrastructure and could not agree on comparable
definitions of laboratories and centers or potential realignments or
closures, since they were unwilling to collocate or rely on each
other. Thus, BRAC 1995 resulted in little joint cross-servicing.
Upon expiration of BRAC legislation and full implementation of
previous BRAC recommendations, DOD and the Congress realized that
RDT&E infrastructure needed to be reduced further. Because DOD was
unable to do it on its own, the Congress directed the Secretary of
Defense, in the National Defense Authorization Act for Fiscal Year
1996 (sec. 277), to develop a 5-year plan to consolidate and
restructure DOD's RDT&E facilities for the 21st century. The
Secretary of Defense was to specify the administrative and
legislative actions needed to consolidate RDT&E facilities into as
few as practical and possible by October 1, 2005.\15 The Secretary of
Defense responded with a plan and developed a legislative package
entitled Defense Research, Development, Test and Evaluation, Vision
21, Reduction, Restructuring and Revitalization Act of 1997 (commonly
referred to as Vision 21). DOD initially sought unilateral authority
to reduce its RDT&E infrastructure. However, while the legislative
package was being reviewed for interagency coordination, officials
from OMB told DOD that it must include an independent commission in
the Vision 21 process, since DOD has historically been unable to
reduce significantly its RDT&E infrastructure.
DOD officials consider Vision 21 the equivalent of a BRAC round for
RDT&E facilities. DOD officials structured Vision 21 to incorporate
the lessons learned from BRAC 1995 concerning the decision-making
process, which had resided solely with the services. Thus, Vision 21
became another DOD opportunity for interservice consolidations.
Moreover, DOD's plan incorporated most of the critical elements used
by the Boeing Company Defense & Space Group and the Defence Research
Agency, such as the collection of accurate, reliable, and comparable
data that captured the total cost associated with RDT&E operations
and an analysis of the data along functional lines and related
directly to the agency's overall mission. The legislative package
was modified to include a provision for an independent commission
outside of DOD to make the final realignment and closure
recommendations to the Congress.
Vision 21 did not contain any provision to review related or
duplicative facilities in other agencies, however, because the
Congress, in section 277, did not direct DOD to seek interagency
cooperation. Moreover, DDR&E officials want to rationalize DOD's
RDT&E facilities before addressing issues inherent in analyzing NASA
and DOE facilities as well.
More recently, the Quadrennial Defense Review called for two
additional BRAC rounds for fiscal years 1999 and 2001. DOD decided
not to submit its legislative package for Vision 21 and instead opted
to include RDT&E infrastructure in any future BRAC round, again
rejecting efforts that would result in interservice consolidation and
delaying this opportunity to implement the critical elements used in
the Boeing Company Defense & Space Group's and the Defence Research
Agency's restructuring. Since the Congress has not accepted DOD's
BRAC legislative package and DOD's recommendation for two new BRAC
rounds in 1999 and 2001, it remains unclear whether DOD will attempt
to consolidate and restructure its RDT&E infrastructure and how it
might proceed.
--------------------
\7 The recommendations addressed defense management structural
problems in the areas of national security planning and budgeting,
military organization and command, acquisition organization and
procedures, and government-industry accountability. The
recommendations included (1) presenting the defense budget to the
Congress based on national priorities and operational concepts rather
than line items; (2) changing current law to designate the Chairman
of the Joint Chiefs of Staff as the principal uniformed military
advisor to the President, the National Security Council, and the
Secretary of Defense; (3) creating the new position of Under
Secretary of Defense (Acquisition); and (4) providing precise
criteria for applying contractor sanctions.
\8 See Defense Management Report: RDT&E Consolidation, Office of the
Under Secretary of Defense for Acquisition Defense Management Report
Task Force (Oct. 9, 1990).
\9 See Federal Advisory Commission on Consolidation and Conversion of
Defense Research Laboratories, 1992.
\10 See Defense Acquisition Infrastructure: Changes in RDT&E
Laboratories and Centers (GAO/NSIAD-96-221BR, Sept. 13, 1996).
\11 During the four BRAC rounds, the Army closed only three sites and
11 activities at sites located on other installations. The Navy
closed 13 sites and 27 activities at host sites. The Air Force
closed only three sites and five activities at host sites.
\12 See Base Realignment and Closures: Report of the Defense
Secretary's Commission (Dec. 29, 1988); 1991 Report to the
President, Defense Base Closure and Realignment Commission (July 1,
1991); 1993 Report to the President, Defense Base Closure and
Realignment Commission (July 1, 1993); and 1995 Report to the
President, Defense Base Closure and Realignment Commission (July 1,
1995).
\13 See Military Bases: Analysis of DOD's 1995 Process and
Recommendations for Closure and Realignment (GAO/NSIAD-95-133, Apr.
14, 1995).
\14 See Defense Acquisition Infrastructure: Changes in RDT&E
Laboratories and Centers (GAO/NSIAD-96-221BR, Sept. 13, 1996).
\15 Section 265 of the act requires the Secretary to conduct a
related comprehensive review of the aeronautical research and test
facilities and capabilities to assess their current condition.
CONCLUSIONS
---------------------------------------------------------- Chapter 4:4
Although there are no easy solutions for how a successful
consolidation process can be used to restructure and reduce RDT&E
infrastructure throughout the federal system, our review indicates
that lessons from the Boeing Company Defense & Space Group and
British Ministry of Defence models could be applied successfully to
federal agencies.
-- A Catalyst to Spark Action. Catalysts that precipitated
successful laboratory consolidations by the Boeing Company
Defense & Space Group and the British Ministry of Defence (i.e.,
severe fiscal constraints, structural changes that shift
significantly control of budgets, mission failures, etc.) are
not affecting federal agencies in ways that effect bold actions.
In an enterprise as broad and diverse as the federal laboratory
system, the potential effects of catalysts such as "budget
crises" may be averted for years because the impacts of funding
reductions and mission shifts can often be delayed indefinitely.
It is well understood by many laboratory managers and
budgeteers, however, that a federal budget "crunch"
precipitated, in part by continued decreases in federal
discretionary spending, is "right around the corner."
Considering conditions that exist in the federal laboratory
systems, now is the time to act.
-- An Independent Authority to Direct Restructuring. Many
government officials responsible for directing federal RDT&E
activities, as well as academic and industry representatives,
have said that significant barriers impede successful
infrastructure reduction efforts. Further, many of them agree
that, while a more rational R&D infrastructure is needed,
agencies have been unable to achieve significant infrastructure
reductions alone because they face intractable barriers. They
further conclude that an independent, external panel or
commission would be crucial to making significant reductions.
At various times, some members of Congress, the GAO, and others,
having reached similar conclusions, have called for
consideration of this option for DOE, NASA, and DOD laboratories
or T&E centers.
However, there is little agreement on how to structure an independent
authority to focus on governmentwide reductions of RDT&E
infrastructure, and no agreement exists on the scope of the
restructuring to be attempted. Such an approach could only succeed
if both the Congress and the administration agree that change is
necessary and openly demonstrate the willingness to scale the federal
RDT&E infrastructure to better meet national needs.
-- Core Missions That Support Organizational Goals and Strategies.
Although federal laboratories acknowledge the need to focus
their core missions better, they have been incapable of doing so
on their own. However, it is taken for granted that missions
must be refocused around agency core functions if they are to
meet impending fiscal constraints. Existing legislative
frameworks, such as the Government Performance and Results Act
of 1993 (the Results Act), could be used to determine and
establish appropriate core missions for each laboratory in the
federal RDT&E system. The Results Act already engages agencies
and the Congress in a dialogue about missions and performance.
In addition, alternative approaches to reducing infrastructure,
but also requiring legislative action, include the following:
Establish an independent commission with the authority to (1) review
and evaluate the agencies' R&D laboratory and T&E center missions,
(2) conduct comparative analyses of the RDT&E capabilities and
capacities, and (3) make recommendations regarding mission focus and
infrastructure reductions to the Congress and the administration.
Prepare for a comprehensive RDT&E infrastructure reduction effort by
having an independent authority begin a "pilot program" to focus on
one or two lines of research or documented areas of duplication,
redundancy, or excess capacity. Potential areas or commodities
include chemical and biological warfare agents, solar power, nuclear
nonproliferation, or energetics.
Amend current mandates, such as section 277 of the National Defense
Authorization Act for Fiscal Year 1996, to require interagency
analyses in decision-making regarding reductions of RDT&E
infrastructure.
-- The Full Scope of Infrastructure Clearly Delineated. Agency
efforts to identify and disclose the scope and capabilities of
their RDT&E infrastructure, which have only recently emerged,
have not yet been used for infrastructure reductions. The
computerized Major Facilities Inventory, which includes more
than 1,494 RDT&E facilities operated by DOE, NASA, and DOD, as
well as R&D facilities owned by the National Ocean and
Atmospheric Administration, is a first step and could provide
data to set the stage for reductions. Interagency agreement not
to take anything "off the table" before discussion begin also is
necessary.
-- Accurate, Reliable, and Comparable Data on Infrastructure Cost
and Utilization Rates. Accurate and reliable data about the
true cost of operating federal RDT&E facilities are not
available, thus making meaningful comparisons of relative
efficiency difficult.
OBSERVATIONS AND MATTERS FOR
CONGRESSIONAL CONSIDERATION
============================================================ Chapter 5
OBSERVATIONS
---------------------------------------------------------- Chapter 5:1
The RDT&E establishment is in transition. The missions of R&D
laboratories and T&E centers are being redefined within a changed
global environment as agencies compete for scarce federal resources.
Future pressures to reduce discretionary spending governmentwide
suggest that, without changes now, a greater share of science funding
will be devoted to operating and maintaining an aged, inefficient,
and costly infrastructure at the expense of research and development.
The current condition, although unsettled, provides an opportunity to
shape the future in a way that ensures an efficient and rational
RDT&E infrastructure is in place to support current and future
science priorities.
Adjusting the federal infrastructure to meet the most important
current and future RDT&E requirements is an enormous task that has,
to date, proven to be intractable. Cultural and parochial barriers
have, in large part, been responsible for federal agencies' inability
to achieve a major restructuring of RDT&E facilities within and
across the agencies. As is apparent in reviewing the restructuring
process of the Boeing Company's Defense & Space Group and the British
Defence Research Agency, the use of an independent authority to
direct the process was key to achieving streamlined RDT&E operations
and infrastructure. The approaches taken by individual agencies have
not been sufficient to balance the federal RDT&E infrastructure with
focused core missions and has resulted in concerns about mission
overlap and duplication and the retention of excess capacity. For
example, the September 1997 plans submitted by these agencies as
mandated by the Results Act did not use cross-agency criteria for
assessing missions as required by the Results Act.
The critical elements of the best practices model we analyzed, when
compared to ongoing efforts in the federal government, suggest
approaches that could prove successful. However, consensus must be
reached that significant changes in the RDT&E infrastructure would
better position federal agencies to support current and future
science priorities through a more efficient and rational RDT&E
infrastructure possible.
First, we encourage the federal departments and independent agencies
to continue their individual efforts to achieve management
efficiencies in their respective RDT&E infrastructure restructuring
efforts, but with an increased focus on interagency approaches.
Cross-agency efforts to support an RDT&E infrastructure restructuring
process could begin in the executive branch with two agencies: (1)
OSTP, which has technical cognizance across the federal RDT&E arena,
but no direct means to effect change and (2) OMB, which is
responsible for helping to maintain effective government by reviewing
the organizational structure and management procedures of executive
branch agencies and developing efficient coordinating mechanisms to
implement government activities and expand interagency cooperation.
Although these agencies have engaged DOE, NASA, and DOD in internal
reviews, such as OSTP's recently established NSTC Interagency Working
Group, no independent mechanism exists to undertake a structured
approach for streamlining the overall federal RDT&E infrastructure,
that is, looking at the infrastructure of individual agencies in
support of the government's broader strategies and missions. OMB, in
responding to a draft of this report, said that it prefers to see
federal RDT&E infrastructure examined as a whole only after
reductions using the current agency-by-agency approaches are
completed.
Ultimately, however, many of the structural and other barriers that
exist between agencies go beyond those found at the agency level.
Initiating a governmentwide process that includes all five elements
discussed in this report could mitigate virtually all of the
parochial concerns that stymied past efforts to restructure.
Establishing an independent decision-making authority could ensure
that all elements of the process are administered fairly. In
implementing the process described in this report, such an authority
could benefit from information developed through ongoing initiatives,
such as proper implementation of the Results Act, to help coordinate
missions and goals of individual agencies that are involved in
crosscutting program areas and balancing individual agencies'
multiple strategic goals. It also could benefit from lessons learned
from the government's past uses of independent authorities, such as
the defense base closure and realignment commissions, and from
activity and budget details about research and development
accumulated in the RaDiUS database that is used to compile
systematically data on federal R&D investments.
The need to reduce RDT&E infrastructure in balance with mission
requirements is a long-standing and complex issue. Agency efforts to
date, while encouraging in some cases, are too narrowly focused and
likely will promote or sustain duplication and excess capacity.
Further, many of the elements employed as best practices by other
organizations are neither integral to nor readily available to
federal agencies. Thus, a governmentwide approach, which could focus
both within and across agencies may offer a viable alternative and
increase the likelihood of successfully reshaping the nation's RDT&E
infrastructure to meet current and future needs. While agencies
should be encouraged to continue ongoing efforts to improve
efficiencies in the management of RDT&E infrastructure, emphasizing
interagency approaches could be a significant improvement in this
arena.
MATTERS FOR CONGRESSIONAL
CONSIDERATION
---------------------------------------------------------- Chapter 5:2
To help craft a more efficient structure to support future federal
RDT&E efforts, the Congress may wish to begin a process to reduce the
federal RDT&E infrastructure that applies collectively the critical
elements identified in this report. This process could be designed
to look both within and across agencies to eliminate unnecessary
mission overlap and duplication and the resulting excess
infrastructure capacity. Lessons learned from the federal
government's past uses of independent, external authorities could be
used to provide structure to this process. Ongoing restructuring
efforts of the agencies could be assessed for their potential to
contribute to overall RDT&E infrastructure streamlining. The RaDiUS
database could provide preliminary inputs indicating possible
duplication of effort. The Government Performance and Results Act of
1993 provides an established legislative framework, which addresses
agencies' missions and performance, and may be useful in focusing
specifically on crosscutting agency missions that determine the
requirements for RDT&E infrastructure.
AGENCY COMMENTS AND GAO'S
EVALUATION
---------------------------------------------------------- Chapter 5:3
In commenting on a draft of our report, the Departments of Energy and
Defense, NASA, and OMB generally indicated that the report did not
give sufficient credit for actual, ongoing, and planned
infrastructure reductions they have undertaken. To illustrate
further the infrastructure reduction steps the agencies have
initiated, we have added information that recognizes other agency
plans and activities.
Although the agencies acknowledge that they need to reduce further
their infrastructure, there was no universal view expressed as to how
to effect significant change in the federal RDT&E infrastructure.
For example, while each of the four agencies recognized the
importance of mission focus in their comments, they had varying
perspectives regarding the efficacy of the model's other critical
elements. DOE, for example, does not believe a "crisis" is needed to
spur action, stating that changing missions and budget reductions
provide the external pressure needed to get change. However, as the
report points out, DOE's new missions are being developed from the
inside and decreases in budgets have been addressed largely through
plans to improve management efficiencies. Conversely, NASA agreed
with the need for accurate and reliable data about the true cost of
operating RDT&E facilities and pointed out that it is developing an
integrated financial management system to gather such data. DOD
agreed with our conclusion regarding the need for an independent,
BRAC-like authority to effect significant change. DOE and NASA, on
the other hand, believe they can make, or have already made,
appropriate changes regarding the future strategies for their RDT&E
infrastructure. OMB's strategy blends the two. OMB believes each
agency should rationalize individually its infrastructure before a
more complex interagency approach is attempted. OMB agrees with GAO,
however, that an interagency approach is needed. With respect to
defining fully the scope RDT&E infrastructure, the agencies comments
largely were silent.
After reviewing carefully the agencies' comments, we believe that the
comments generally reflect the parochialism and structural and
organizational barriers discussed in the report. For example, when
the agencies' comments discussed planned RDT&E infrastructure
reductions, those plans were limited in scope and focused exclusively
on internal reductions. While acknowledging, in some cases,
overlapping capability and excess capacity in RDT&E infrastructure,
Departments of Energy and Defense and NASA comments generally reflect
their belief that (1) their missions and associated infrastructure
are unique, (2) they have planned to do enough restructuring and
consolidation on their own, and (3) they already coordinate among
agencies to the maximum extent practicable.
OMB states that although additional steps are necessary to ensure
success, agencies should downsize first before crosscutting analysis
is conducted. We believe that, to the extent the agencies actively
pursue interagency approaches as they restructure their respective
RDT&E infrastructures, the potential for success in ongoing efforts
may be increased. Decision-making on the size and scope of
infrastructure needed by an individual agency in the absence of
information and consideration of related missions and activities has
resulted in decisions that are neither rational nor cost effective
when looked at from a broader perspective.\1 We and the agencies
agree that maintaining more RDT&E infrastructure than warranted by
requirements does not well serve the nation's research needs and that
successful consolidation and reduction efforts are key ingredients to
assuring adequate resourcing of future research in science and
technology. Our perspective differs from the agencies' in that we
believe the best way to achieve this end is through a governmentwide
restructuring process.
DOD generally supported the findings in our report. For example, DOD
said that a significant reduction in infrastructure can only be
achieved under BRAC-like authority. However, DOD responded that (1)
we did not give appropriate weight to the role of the Congress in
reducing infrastructure by the BRAC process and to the reductions in
RDT&E infrastructure prior to the 1995 BRAC round, (2) the Vision 21
effort should not be listed as a lost opportunity because it is
expected to continue under existing authority, (3) excess capacity
expressed in work years may not necessarily match up to excess
physical facilities, (4) the personnel component of the RDT&E
infrastructure has been declining steadily by 4 to 5 percent annually
since 1993, and (5) the supporting mission of the DOD laboratories
and T&E facilities in providing superior warfighting technology has
never been challenged. We agree fully with DOD on the need for an
independent, BRAC-like authority and recognize that the Congress has
an important role to play, as it has on prior occasions. We believe
the extent DOD's Vision 21 effort proceeds under existing authority
may be largely dependent on continuing congressional support for
reductions. We acknowledge fully that personnel reductions of the
magnitude suggested by DOD have occurred and continue under
congressional mandates. However, we have reported that, overall,
defense civilian acquisition workforce costs are about the same as
they were in 1980 as measured in constant dollars.
DOE questioned the basic applicability of the best practices model,
stating that the scale and complexity of its R&D enterprise presents
a much bigger challenge than that faced by the Boeing Company Defense
& Space Group and the Ministry of Defence. We do not imply that the
model could be transplanted exactly to any organization or situation,
but indicate that the basic underlying principles and processes are
key. For example, we report that DOD's Vision 21 process, which
contains provisions for an independent authority, inclusion of full
operating costs, and strong mission focus incorporated many of the
same critical elements described in the model. Further, while it is
self-evident that differences in scale (and complexity) may make it
more difficult to overcome challenges and barriers, these differences
do not negate the validity of the process for different types of
organizations nor of the key elements employed in successful
consolidations. DOE also commented that (1) the end of the Cold War
has had a major direct effect on its mission and the mission of its
laboratories, (2) DOE's Offices of Defense Programs, Nuclear Energy,
and Energy Research will declare excess an estimated 1,000 facilities
over the 5-year period from 1996 to 2000, (3) DOE laboratories have
unique facilities and capabilities that also serve other federal
agencies, and (4) the agency's Laboratory Operations Board has
developed a "Strategic Laboratories Mission Plan." We have reported
that much of DOE's "evolved mission" is not unique, but is shared, at
a minimum, with the NSF and the Department of Commerce.
NASA said that (1) it has experienced upheaval, restructuring,
downsizing, and streamlining and has been reinventing itself since
well before the 1995 National Performance Review, (2) it does not
have an integrated financial system, (3) a major objective of its
strategic planning process is proper sizing of its infrastructure,
and (4) based on its Zero-Base Review, it has made appropriate plans
to implement closure of unnecessary facilities. NASA also believed
that by addressing the three major agencies in the same report, we
had overly generalized conclusions and overlooked its
accomplishments. We acknowledge fully the goals of NASA's completed
Zero-Base Review in our report, but we conclude that it is unlikely
that NASA's planned reductions will meet its own internal objectives.
NASA further commented that it was concerned about our publishing the
report because, in NASA's opinion, the report did not meet our normal
standards, largely because NASA believes the report overlooks its
accomplishments in reducing RDT&E infrastructure while focusing on
governmentwide issues. While we recognize NASA's accomplishments, we
also note that NASA has not closed any of its major facilities, as
supported by its own comments on this report.
(See figure in printed edition.)Appendix I
--------------------
\1 See, for example, Electronic Combat: Consolidation Master Plan
Does Not Appear to Be Cost-Effective (GAO/NSIAD-97-10, July 10,
1997).
COMMENTS FROM THE OFFICE OF
MANAGEMENT AND BUDGET
============================================================ Chapter 5
See comment 1.
See comment 2.
(See figure in printed edition.)
See comment 5.
See comment 6.
See comment 7.
(See figure in printed edition.)
The following are GAO's comments on the Office of Management and
Budget's letter dated October 9, 1997.
GAO COMMENTS
---------------------------------------------------------- Chapter 5:4
1. Our report states that, among the agencies we reviewed, only the
Department of Defense (DOD) has been assessed by an independent
authority charged with reducing infrastructure significantly, and
those reviews did not look across related agencies having significant
research, development, test, and evaluation (RDT&E) infrastructure
such as the Department of Energy (DOE) and the National Aeronautics
and Space Administration (NASA). The Office of Management and Budget
(OMB) stated in its comments that such a review has not been done and
"...would be simply too large at this time ...." We also changed the
wording in the report to better reflect OMB's views concerning
agencies' progress in rationalizing their RDT&E infrastructure.
2. We reported in detail the major actions taken by agencies in
recent years to reduce RDT&E infrastructure. We noted, however, that
these actions were almost exclusively intra-agency in nature and,
with the exception of base realignment and closure (BRAC) actions,
generally did not reduce significantly the number of major
facilities.
3. We agree with OMB that making RDT&E infrastructure reductions may
be a difficult task. However, we disagree with OMB's preferred
strategy of first restructuring the infrastructure of each individual
agency before examining them on an interagency basis. Pursuing such
an approach that has agencies individually conducting "stovepiped"
reviews that ignore similar and complementary infrastructure in other
agencies may result in unintended consequences (i.e., additional
investments may be made in the wrong areas or the wrong facilities
may be closed or realigned).
4. We agree with OMB's conclusion that the federal RDT&E
infrastructure should be examined as a whole. However, we believe
the barriers to reducing such infrastructure may best be attacked by
conducting such analyses before each agency completes individual
infrastructure reviews.
5. The report discusses our analysis of NASA's Zero-Base Review and
gives significant coverage of its objectives and results to date. It
is encouraging to note that OMB and NASA are using the Government
Performance and Results Act of 1993 (the Results Act) as a framework
in their discussions of RDT&E infrastructure.
6. Although NASA is implementing an integrated financial management
system to improve the quality of data used for decision-making, NASA
officials have acknowledged that such a system will not likely
provide overall summary data in sufficient detail to provide
comparative efficiencies in the different facilities and
installations that comprise the RDT&E infrastructure.
7. DOD's Vision 21 effort is currently at a standstill in its
implementation. However, it is encouraging that OMB and DOD have
stated their intent to resume the Vision 21 process at some time in
the future, with or without implementing BRAC legislation.
8. We have addressed all the relevant agency initiatives that deal
with the issues considered in this report and that were described as
being fully implemented at the time our review was performed.
(See figure in printed edition.)Appendix II
COMMENTS FROM THE DEPARTMENT OF
ENERGY
============================================================ Chapter 5
(See figure in printed edition.)
(See figure in printed edition.)
The following are GAO's comments on the Department of Energy's letter
dated October 1, 1997.
GAO COMMENTS
---------------------------------------------------------- Chapter 5:5
1. Our review was conducted to address several objectives that are
clearly stated in the report. Nowhere among the objectives were
there "assumptions regarding the Department of Energy...." DOE
incorrectly characterizes as assumptions our findings regarding
critical elements and processes used by other organizations to
consolidate successfully and their applicability to DOE. Further, we
have reported on (and continue to report) DOE's lack of mission focus
and that some mission areas and capabilities overlap with other
federal agencies (i.e., the National Science Foundation, the
Department of Commerce, and the Environmental Protection Agency, to
name a few). Further, we note that managerial imperatives such as
(1) focused missions (through the Results Act processes, strategic
planning, or otherwise), (2) recognition of fiscal constraints in
decision-making, (3) an understanding of the full implications of
operating costs, and (4) strategies to overcome the effects of
cultural and structural barriers are (or should be) as broadly
applicable to federal managers as they are to managers applying "best
practices" in other organizations.
2. Our report reflects the emergence of the Stockpile Stewardship
and Management Program and its approach to assuring the viability of
our nuclear deterrent stockpile. We agree that the program's success
could allow DOE to reduce significantly related infrastructure.
However, during our review, this had not yet been done.
3. DOE's statement that over 1,000 facilities will be declared
excess over the 5-year period (1996 to 2000) is an example of the
magnitude and scope of the federal RDT&E infrastructure that requires
consolidation. We agree that cleanup costs affect significantly the
pace of closing such facilities.
4. Although some laboratories have some unique facilities and
capabilities, there are myriad areas of duplicative and overlapping
capabilities in federal agencies' laboratories, both within and among
agencies. The extent of mission overlap between agencies must be
addressed as part of the Results Act process. Further, the extent of
overlap and duplication of capabilities, facilities, and research has
been suggested by others as an area that needs to be assessed.
5. As stated in the report, the cited model was applied in the
successful consolidations by dissimilar organizations. It is
self-evident that differences in scale and complexity may make it
more difficult to overcome challenges and barriers. These
differences, however, do not negate the validity of the process for
different types of organizations nor of the key elements employed in
successful consolidations. For example, both DOD's Vision 21 process
and past BRAC rounds incorporated many of the same critical elements
described in the model.
6. To date, budget reductions have not been a sufficient catalyst
for change. Agencies have been able to defer effectively, if not
indefinitely, impacts of budget reductions by anticipating that
funding will improve.
7. The report discusses DOE's efforts to reform DOE laboratory
management processes and cites many other reports that also address
this issue. Most recently, we testified that DOE has failed to
rationalize sufficiently its laboratory infrastructure and has not
reformed its burdensome management structure. The Secretary of
Energy's Advisory Board recently criticized the fact that individual
DOE programs spread research dollars to more laboratories than
necessary, thus involving too many of them in too many mission areas.
8. These plans are basically inventories of capabilities and ongoing
efforts rather than sources of vision and focus for future research.
Further, the House Committee on Government Reform and Oversight gave
low marks to DOE's strategic planning in the area of identifying and
addressing overlapping/crosscutting functions during its Results Act
assessment.
9. Although it is necessary to review small, mission-specific
laboratories to validate their roles and determine if there are
alternatives, a process with similar objectives focused on reducing
governmentwide infrastructure also appears warranted.
(See figure in printed edition.)Appendix III
COMMENTS FROM THE NATIONAL
AERONAUTICS AND SPACE
ADMINISTRATION
============================================================ Chapter 5
(See figure in printed edition.)
The following are GAO's comments on the National Aeronautics and
Space Administration's letter dated September 8, 1997.
GAO COMMENTS
---------------------------------------------------------- Chapter 5:6
1. Although an integrated financial system can play an important
role in providing greater insight into cost issues for
decision-making, NASA officials have acknowledged that even full
implementation of NASA's integrated financial system will not likely
provide the level of detailed information necessary for successful
infrastructure consolidation.
2. Our report recognizes that NASA has made a conscious decision not
to propose to the Congress the closing of a major center. The report
also discusses the objectives and results of NASA's Zero-Base Review
with respect to infrastructure.
3. Nowhere in our report did we treat DOD, NASA, and DOE as a single
¹entity.º We examined the agencies' processes and infrastructure
reductions separately and have presented fact-based, agency-by-agency
evaluations of what has been achieved by agencies and what remains to
be done to date. We discuss the results of NASA's Zero-Base Review
with respect to infrastructure and NASA's accomplishments in
infrastructure resizing to date. Moreover, we would note that OMB,
in commenting on our draft report, indicated that implementation of
NASA's efforts to close a number of facilities was just a beginning.
4. NASA expressed concern about our publishing this report because,
in its view, the report addresses the broad issue of RDT&E
infrastructure of the Departments of Defense and Energy and NASA as a
single entity. NASA believes this approach results in generalized
and misleading statements and broad, overall conclusions that
overlook NASA's individual accomplishments in strategic planning,
strategic management, reinvention, and infrastructure resizing. We
believe our report does recognize NASA's accomplishments. We updated
and added examples of individual agency infrastructure consolidation
and reduction-related actions. The report also notes that NASA's
most comprehensive infrastructure study--its 1995 Zero-Base
Review--began with the premise that to meet its mission, NASA needed
the existing infrastructure. The model presented in this report
provides a different approach by suggesting that decisions regarding
mission be made first and then infrastructure aligned to support
those missions.
(See figure in printed edition.)Appendix IV
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================ Chapter 5
(See figure in printed edition.)
The following are GAO's comments on the Department of Defense's
letter dated October 1, 1997.
GAO COMMENTS
---------------------------------------------------------- Chapter 5:7
1. Our report does discuss the role of congressionally directed BRAC
rounds in reductions of DOD infrastructure, and while it is true that
the Congress did not approve DOD's latest request for additional BRAC
rounds, DOD in its Vision 21 process still can affect changes.
2. The report indicates that BRAC rounds led to the closure of over
60 RDT&E facilities as well as related realignments. In DOD's own
estimate, it has not reduced sufficiently its RDT&E infrastructure.
3. Although DOD asserts that it is in the best position to
rationalize its own RDT&E infrastructure, it was also the one federal
agency asking for another BRAC-like independent authority to oversee
reductions in its RDT&E infrastructure. We have not suggested that
the agencies should play no role in the design of their
infrastructures. Moreover, the Boeing Company Defense & Space Group
and the Defence Research Agency largely attributed the success of
their efforts to the establishment of independent authorities to
implement change.
4. We agree with DOD that the likelihood of significant reductions
in infrastructure is enhanced immensely under BRAC-like authority.
We note in our report that the Vision 21 process is on hold and that
its future course had not been determined at the time we completed
our review.
5. We agree with DOD that there has been a steady decline in
acquisition personnel levels associated with its laboratories and
test and evaluation (T&E) centers. Also, we recognize, and we have
reported on, the difficulty of measuring excess capacity in RDT&E
infrastructure. However, the report uses DOD's own estimates of its
excess capacity throughout.
6. The report already noted the relative clarity of missions and
close ties between DOD laboratories and T&E centers and their
military customers, the warfighters.
MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
--------------------------------------------------------- Appendix V:1
Katherine V. Schinasi, Project Director
Clifton E. Spruill, Project Manager
Mark A. Pross, Deputy Project Manager
James L. Morrison, Deputy Project Manager
Leslie E. Schafer, Senior Evaluator
Stacy Edwards, Evaluator
Nancy L. Ragsdale, Evaluator (Communications Analyst)
RESOURCES, COMMUNITY, AND
ECONOMIC DEVELOPMENT DIVISION,
WASHINGTON, D.C.
--------------------------------------------------------- Appendix V:2
William J. Lanouette, Senior Evaluator
GLOSSARY
============================================================ Chapter 1
APPLIED RESEARCH
-------------------------------------------------------- Chapter 1:0.1
The National Science Foundation (NSF) and the Office of Management
and Budget (OMB) define applied research as "research directed toward
the acquisition of knowledge or understanding necessary for
determining the means by which a recognized and specific need may be
met." The Department of Defense (DOD) defines applied research as
"research concerned with the practical application of knowledge,
material, and/or techniques directed toward a solution to an existent
or anticipated military requirement."
BASIC RESEARCH
-------------------------------------------------------- Chapter 1:0.2
NSF and OMB define basic research as "research directed toward
increases in knowledge or understanding of the fundamental aspects of
phenomena and of observable facts without specific application toward
processes or products in mind." DOD defines basic research as
"efforts typically performed in laboratories as experiments to
explore the basic laws of science and their potential application to
DOD weapon systems or technology development."
CURRENT REPLACEMENT VALUE
-------------------------------------------------------- Chapter 1:0.3
DOD uses "plant replacement value" as an estimate of what it would
cost to replace all of the buildings, pavements, and utilities at its
bases using today's building standards. The Department of Energy
(DOE) uses "replacement plant value" as the current cost to replace
an existing building with a new building. This value does not
include the cost of the underlying land. The estimate is based on
assigning dollar values to usage categories. DOE also uses "other
structures and facilities replacement plant value," which is the cost
to replace the existing structure with a new structure of comparable
size using current technology, codes, standards, and materials. The
National Aeronautics and Space Administration (NASA) uses "current
replacement value" to mean the acquisition cost of facilities,
excluding land, plus the cost of collateral equipment and incremental
book value charges escalated to the current year using a 20-city
average cost index for buildings.
INFRASTRUCTURE
-------------------------------------------------------- Chapter 1:0.4
DOD generally defines infrastructure as "all fixed and permanent
installations, fabrications, or facilities for the support and
control of military forces." It consists of mission supporting
property, plant, equipment, and personnel, including contractor
manpower. DOD excludes the equipment and personnel necessary to
perform directly critical technical and acquisition functions. DOE
defines infrastructure as "all real property and installed equipment
and personal property that is not solely supporting a single program
mission." NASA defines infrastructure as "the underlying foundation
for NASA operations, including its people, facilities, equipment,
business systems, institutional information systems, and technical
infrastructure." Facilities are the land, buildings, structures,
permanently located trailers, and other real property improvements,
including utility systems and collateral equipment that essentially
is integrated into the facility. Business systems are business
processes and business tools. Institutional information systems
include NASA computers, networks, and general purpose application
software. Technical infrastructure includes
mission/project/technology/science implementation tools and
processes, such as equipment and instrumentation, processes and
procedures, and software tools.
LABORATORY
-------------------------------------------------------- Chapter 1:0.5
DOD defines laboratory as "an activity (an aggregate of personnel and
facilities located at one base, under the same command) owned and
operated by a DOD component, that performs predominantly science and
technology, engineering development, systems engineering, engineering
support of deployed materiel and its modernization, and/or in-service
engineering work." DOE defines laboratories functionally by the
research discipline housed in the particular building. DOE maintains
laboratories for the following functions: research and development
(R&D) support, meteorology and calibration, calibration, computation,
applied science, other support, chemistry, nonnuclear chemistry,
nuclear chemistry, other chemistry, optics, physics, applied physics,
nuclear physics, other physics, electrical/electronics, other
electrical/electronics, communications, biomedical research,
biological research, medical research, human factors, animal
research, materials, environmental, radiation effects, research
reactor, general, non-nuclear general, nuclear general, and
multi-function research. NASA defines laboratory as "all of the
activities and facilities at a NASA center and subordinate
organizational units that perform or support the performance of
research and development."
RESEARCH, DEVELOPMENT, TEST,
AND EVALUATION
-------------------------------------------------------- Chapter 1:0.6
Research, development test, and evaluation (RDT&E) can be subdivided
as (1) science and technology (i.e., activities that produce or
expand the use of new knowledge and new or enabling technologies) and
(2) systems development (i.e., weapons systems in DOD, product
demonstration, testing, and evaluation such as nuclear work in DOE,
and missions operations and demonstrations in NASA). DOD, unlike
other federal agencies, subdivides its RDT&E funding into seven
program element categories, each with a numerical code: Basic
Research (6.1), Exploratory Development (6.2), Advanced Technology
Development (6.3), Demonstration and Validation (6.4), Engineering
and Manufacturing Development (6.5), Management and Support (6.6),
and Operational Systems Support (6.7). The first three categories
are comparable strictly to the research and development reported by
other agencies.
SCIENCE AND TECHNOLOGY
-------------------------------------------------------- Chapter 1:0.7
DOD defines science and technology as the first three program
elements of the seven RDT&E categories. The first three are Basic
Research (6.1), Exploratory Development (6.2), and Advanced
Technology Development (6.3). (Systems development corresponds to
the other four DOD RDT&E categories.)
TEST AND EVALUATION
-------------------------------------------------------- Chapter 1:0.8
DOD defines test and evaluation as "any project or program designed
to obtain, verify, and provide data for the evaluation of research
and development other than laboratory experiments for the purpose of
determining if the minimum operational performance requirements as
specified in the Operational Requirements Document have been
satisfied."
RELATED GAO PRODUCTS
============================================================ Chapter 2
Aerospace Testing: Promise of Closer NASA/DOD Cooperation Remains
Largely Unfulfilled (GAO/NSIAD-98-52).
Department of Energy: Clearer Missions and Better Management Are
Needed at the National Laboratories (GAO/T-RCED-98-25, Oct. 9,
1997).
Military Bases: Lessons Learned From Prior Base Closure Rounds
(GAO/NSIAD-97-151, July 25, 1997).
Results Act: Observations on the Department of Energy's Draft
Strategic Plan (GAO/RCED-97-199R, July 11, 1997).
Defense Acquisition Infrastructure: Changes in RDT&E Laboratories
and Centers (GAO/NSIAD-96-221BR, Sept. 13, 1996).
NASA Facilities: Challenges to Achieving Reductions and Efficiencies
(GAO/T-NSIAD-96-238, Sept. 11, 1996).
NASA Infrastructure: Challenges to Achieving Reductions and
Efficiencies (GAO/NSIAD-96-187, Sept. 9, 1996).
Department of Energy: Observations on the Future of the Department
(GAO/T-RCED-96-224, Sept. 4, 1996).
DOE's Laboratory Facilities (GAO/RCED-96-183R, June 26, 1996).
Energy Downsizing: While DOE Is Achieving Budget Cuts, It Is Too
Soon to Gauge Effects (GAO/RCED-96-154, May 13, 1996).
FDA Laboratories: Magnitude of Benefits Associated With
Consolidations Is Questionable (GAO/HEHS-96-30, Mar. 19, 1996).
Federal R&D Laboratories (GAO/RCED/NSIAD-96-78R, Feb. 29, 1996).
Department of Energy: A Framework for Restructuring DOE and Its
Missions (GAO/RCED-95-197, Aug. 21, 1995).
Department of Energy: Need to Reevaluate Its Role and Missions
(GAO/T-RCED-95-85, Jan. 18, 1995).
Department of Energy: National Laboratories Need Clearer Missions
and Better Management (GAO/RCED-95-10, Jan. 27, 1995).
DOE's National Laboratories: Adopting New Missions and Managing
Effectively Pose Significant Challenges (GAO/T-RCED-94-113, Feb. 3,
1994).
Federal Research: Aging Federal Laboratories Need Repairs and
Upgrades (GAO/RCED-93-203, Sept. 20, 1993).
Department of Energy: Management Problems Require a Long-Term
Commitment to Change (GAO/RCED-93-72, Aug. 31, 1993).
Federal Buildings: Actions Needed to Prevent Further Deterioration
and Obsolescence (GAO/GGD-91-57, May 13, 1991).
*** End of document. ***
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