Federal Agencies' Contracting for Research and Development in the Private, Profitmaking Sector

Gao ID: PSAD-77-66 March 24, 1977

Federal research and development contract awards to the private, profitmaking sector are increasing. These contract awards have particular potential problems which should receive attention. The authority, practices, and procedures for awarding research and development contracts to private, profitmaking firms were investigated for the following agencies: the Maritime Administration, the Environmental Protection Agency, the Federal Aviation Administration, the National Highway Traffic Safety Administration, the Federal Railroad Administration, and the Office of the Secretary of Transportation.

Examination of more than 100 contracts awarded by these agencies in fiscal year 1975 to private, profitmaking firms indicated that there are three potential problem areas: (1) end-of-year contract awards; (2) contract modifications; and (3) a lack of formal procedures for evaluating the usefulness of contract work. In addition, agencies were found to be furnishing inaccurate research and development funding data to the National Science Foundation (NSF). NSF uses this funding data to compile annual comprehensive statistical reports on the magnitude and composition of federal research and development programs which are used in planning for government programs. Many of the inaccuracies of the agencies' reports may occur because the agencies have not issued firm instructions for supplying accurate statistics.

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