DOD Research

With considerable support from Congress, the Defense Department (DOD) has made acquisition reform one of its top priorities as it tries to reduce the cost of maintaining technological superiority in an era of tighter military budgets. Acquisition reform has generally focused on measures affecting DOD procurements. However, DOD is also investigating new approaches in its science and technology efforts, including using cooperative agreements and other transaction instruments to enter into research projects with commercial firms and consortia. DOD has cited the use of cooperative agreements and other transaction instruments as a way to (1) reduce barriers to integrating the defense and civilian sectors of the industrial base, (2) promote new relationships and practices within the defense industry, and (3) allow the government to leverage for defense purposes the private sectors' financial investments in research and development of commercial products and processes. This report discusses DOD's use of these instruments to further these three objectives. GAO also discusses issues concerning the selection and the structure of the instruments.

GAO found that: (1) cooperative agreements and other transactions appear to have contributed to reducing some of the barriers between the defense and civilian industrial bases by attracting firms that traditionally did not perform research for DOD; (2) the instruments have enabled the use of more flexible financial management and intellectual property provisions than those typically found in contracts and grants; (3) the instruments appear to be fostering new relationships and practices within the defense industry, especially for projects being undertaken by consortia; (4) DOD has partially offset its own costs by sharing project costs with recipients, but the DOD practice of accepting the value of recipients' prior research efforts in lieu of concurrent financial or in-kind contributions may increase the actual DOD monetary share of the project's costs; (5) differences between DARPA and the military services regarding the selection of instruments and treatment of specific provisions have led to some confusion among firms that were negotiating agreements with different DOD components; and (6) DOD is revising its interim regulations to provide clearer guidance on the instruments' selection, use, and structure.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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