Research and Development Patterns by Sector


Federally Funded Research and Development Centers

Federal R&D obligations for all government laboratories are expected to equal $22.5 billion in FY 1995, 37 percent of total Federal R&D obligations. (See text table 4-7.)

Thirty-nine of these laboratories are designated FFRDCs.22 R&D obligations for these facilities totaled $5.8 billion in FY 1995. (See appendix tables 4-3 and 4-24.)

FFRDCs are R&D-performing organizations administered by industrial firms, universities, or nonprofit organizations and financed either exclusively or substantially by a Federal agency either to meet particular R&D objectives or to provide major facilities at universities for research and related training purposes. There are four categories of FFRDCs: research laboratories, R&D laboratories, study and analysis centers, and systems engineering/systems integration centers.

The most well-known FFRDCs are often referred to as the national laboratories. These 10 facilities are administered by DOE. Three were established during World War II specifically to design and build nuclear weapons; six others were created in the decades immediately following the war to develop commercial applications of nuclear technology.23 (See The National Laboratories-A New Role?)

Research and Development Support by Agency

Despite an increase in collaborative efforts with the outside world, most of the work conducted at FFRDCs is still defense-related R&D funded by DOE. This agency provided an estimated $3.4 billion in FY 1995, more than half the FFRDC total. (See appendix table 4-25.) DOE is the sponsoring agency for 19 FFRDCs, including the 10 national laboratories.24 Eleven of these facilities are administered by universities and colleges, five by industrial firms, and three by nonprofit organizations. DOE funding of work performed at FFRDCs reached an all-time high of nearly $4 billion in FY 1992. Recent declines are largely attributable to the removal of three industry-administered laboratories (Bettis Atomic Power Laboratory, Hanford Engineering Development Lab, and Knolls Atomic Power Laboratory) from FFRDC designation in late 1992.

NASA ranks second in terms of R&D funds spent at FFRDCs; FY 1995 R&D obligations amounted to $1.1 billion, a large gain over the FY 1993 and FY 1994 levels of $685 million and $816 million, respectively. NASA is the only major FFRDC-supporting agency expected to have an increase between 1992 and 1995. The agency sponsors only one FFRDC, the Jet Propulsion Laboratory (administered by the California Institute of Technology).

DOD sponsored 10 FFRDCs in 1995: 2 administered by universities and 8 by nonprofit organizations. Total DOD support is estimated to have fallen 42 percent in the mid-1990s-from $1.5 billion in FY 1992 to $889 million in FY 1995. More than half the decrease occurred in university-administered facilities. Industry-administered FFRDCs appear to have "lost" $250 million in DOD funding in the mid-1990s; the dollar decline is primarily attributable to the removal of FFRDC designation from the three laboratories mentioned above.

Research and Development Support by Type of Administering Organization

FFRDCs Administered by Academic Institutions

Universities and university consortia administered 19 FFRDCs in 1995. (See appendix table 4-26.) R&D obligations for these facilities totaled an estimated $3.6 billion in that year, with $2.0 billion provided by DOE, $1.1 billion by NASA, $300 million by DOD, and $260 million from all other Federal agencies.

Although the level of R&D funding has been relatively stable (in current dollars) during this decade, it should be noted that a 50-percent reduction in DOD funding was counterbalanced by an increase in support from NASA.

Three university-administered FFRDCs have annual R&D funding levels exceeding $500 million. In 1993 (the most recent year for which data are available), the Jet Propulsion Laboratory had R&D obligations equaling $742 million. This facility serves as NASA's principal center for solar system exploration. The other two-Lawrence Livermore and Los Alamos-are national laboratories, both administered by the University of California. In FY 1993, they had R&D obligations of $705 million and $637 million, respectively. More than 80 percent of their R&D funding comes from DOE; DOD supplies about 15 percent. While R&D funding at Los Alamos has been relatively stable, support of projects undertaken at Livermore fluctuated considerably during the 1990s. Three university-administered FFRDCs-Lincoln Laboratory, Argonne National Laboratory, and Brookhaven National Laboratory-had R&D obligations in the $200-million to $300-million range in FY 1993.

NSF sponsors four university-administered FFRDCs. The largest of these is the National Center for Atmospheric Research (with FY 1993 R&D obligations of $56 million). The other three, with combined FY 1993 obligations of $65 million, are astronomy observatories.25

FFRDCs Administered by Industrial Firms

With the removal of FFRDC designation from three laboratories in the early 1990s, the number of industry-administered FFRDCs is down to six. DOE provided all but $300 million of an estimated $1.3 billion received by these facilities in 1995.

Five of the six industry-administered FFRDCs are sponsored by DOE. The largest of these-and the largest of all FFRDCs in terms of 1993 R&D obligations-is Sandia National Laboratory. In FY 1993, it received an estimated $880 million in R&D obligations (DOD provided about 20 percent of the total). The second largest industry-administered FFRDC is Oak Ridge National Laboratory with FY 1993 R&D obligations of $320 million. Both facilities are administered by subsidiaries of Lockheed Martin, and both registered 10-percent increases in R&D funding between 1992 and 1993. Although Sandia also had sizable funding gains between 1989 and 1992, Oak Ridge recorded a fairly substantial decline between 1990 and 1992.

Two industry-administered FFRDCs had their R&D activities cut by more than half between 1990 and 1993. The Idaho National Engineering Laboratory and the Savannah River Technology Center now spend less than $100 thousand annually on R&D. Before it was removed from FFRDC designation, Hanford also experienced a sharp decline in its R&D activity. All of these cuts reflect the fact that, for the first time in half a century, the United States is no longer manufacturing nuclear warheads. For example, no new plutonium has been generated at Savannah River since 1988.

HHS sponsors one FFRDC. The National Cancer Institute (NCI) Frederick Cancer Research and Development Center is administered by four different companies. This facility had just over $100 thousand in R&D obligations in 1993.

FFRDCs Administered by Nonprofit Organizations

The 15 FFRDCs administered by nonprofit organizations had an estimated total of $890 million in R&D obligations in FY 1995. Most of this support-nearly $500 million-was provided by DOD, which sponsors eight of these facilities. DOE contributed an estimated $350 million, and all other agencies contributed a little over $50 million.

Most of the nonprofit-administered FFRDCs are much smaller than those operated by academic institutions and industrial firms. The two largest in terms of FY 1993 obligations were the C3I (Command, Control, Communication, and Intelligence) Center (administered by the MITRE Corporation) and the Aerospace Corporation, with R&D obligations amounting to $188 million and $150 million, respectively. Both of these FFRDCs provide systems engineering and other technical support to DOD.

Six of the nonprofit-administered facilities were given FFRDC designation in the late 1980s or early 1990s. The sponsoring agencies for two of these laboratories-the Federal Aviation Administration and the Internal Revenue Service-are new to the FFRDC business.


22 FFRDCs include both Government-owned, contractor-operated labs and labs that are owned by nongovernment organizations but do virtually all of their work for the Government.

23 The 10 laboratories are Lawrence Berkeley, Los Alamos, and Oak Ridge, which were established during World War II to design and build nuclear weapons; Argonne, Brookhaven, Sandia, Idaho Engineering, Lawrence Livermore, and Pacific Northwest, which were created between 1946 and 1965 to advance civilian uses of nuclear technology; and the National Renewable Energy Laboratory, which was established to conduct R&D on alternative energy sources. The National Renewable Energy Laboratory was given FFRDC status in 1991.

24 In 1994, the Secretary of Energy established an independent panel, officially named the Task Force on Alternative Futures for the Department of Energy National Laboratories. The panel was charged with advising the department on the (1) future role of the national labs, now that the United States is no longer making bombs the way it used to and (2) management of the labs. The panel's conclusions were issued in a publication known as The Galvin Report (after the panel chairman, retired Motorola Chief Executive Robert Galvin). It advised the department

Other reports on Federal laboratories have been produced in recent years, including DOD's Dorman Report (Department of Defense, 1995c), NASA's Foster Report (NASA, 1995), and HHS' Bishop/Calabresi Report (National Institutes of Health, 1995) and Cassell/Marks Report (NIH, 1994).

25 The National Radio Astronomy Observatory, the National Optical Astronomy Observatories, and the National Astronomy and Ionosphere Center