will go up for the remaining users, some of whom will then stop using the facility, and so on. If the facility is scarcely used, a decision may be made to close it altogether, even though the facility may be critical for testing future advanced systems. In the long term, new systems could entail higher system costs and perform less well than if they had been improved through testing in the facility. In conclusion, although they are expensive to maintain and operate and require continual investment to keep them efficient and up to date, major technical facilities, such as wind tunnels, will be needed in the future. Planning for future technical resources must include maintaining these facilities. Fiscal pressures on the testing agencies are intensified by the continued decline in the use of aeropropulsion test and wind tunnel facilities. These pressures could be alleviated somewhat if DoD and NASA agreed on which facilities will be needed. These facilities could then be properly maintained and upgraded, and excess facilities could be mothballed or closed. The cost of using comparable facilities should be as close to uniform as possible so that the choice of facility is based on availability of the required test capability rather than on price competition.

Facilities used solely for research could continue to operate at the discretion of the responsible agency. In that case, the Air Force would have to define its long-term system goals and translate them into specific requirements for test facilities.


As the commercial segment of the economy continues to increase, the burdens associated with defense contracts are becoming more difficult to justify and support. Because of their unwillingness to accept DoD acquisition rules, key commercial suppliers, such as Intel, no longer supply military-unique hardware as a matter of policy. Thus, the pool of available companies and technical talent from which DoD can draw is shrinking.

Federal Acquisition Regulations (FAR)—such as the requirement to apply government cost-accounting standards (CAS), the Truth in Negotiations Act (TINA) (Public Law 10 USC section 2306a), and the False Claims Act (Public Law 31 USC sections 3729–3733)—are frequently cited as major obstacles to efficient, effective relationships between the government and the industrial sector. Although everyone would agree with the idealistic intent of TINA, many of the regulations simply generate paperwork and increase administrative costs. Some progress is being made. For example, FARs do not permit companies to recover the full cost of benefits and incentives, such as moving allowances and certain stock options that companies may find necessary to offer to recruit new people in today’s marketplace (LMSS, 2000).

The DSB recently recommended making recruitment and retention bonuses for people with critical skills, such as software and avionics specialists, recoverable (DSB, 2000b). In October 2000, Undersecretary of Defense for Acquisition and Technology Jacques Gansler announced that this policy change would be implemented. As another example, in 2000, Congress passed an initial reform of the government-unique CAS; the threshold on the value of contracts governed by the CAS was raised significantly (Douglass, 2000b).

In FAR Section 845, “Other Transactions Authority,” Congress authorized the Defense Advanced Research Projects Agency (DARPA) to enter into agreements with private industry without adherence to the FAR. The intent was to allow DARPA to experiment in its contracts for R&D. Under Section 845, government organizations or agencies can establish relationships with industry much more akin to commercial relationships. Congress has since authorized the extension of Section 845 authority to the military services. In a report issued in 1999, however, the DSB concluded that application by DOD was still quite limited (DSB, 1999). DoD could use the opportunity to explore commercial-type arrangements with industry to evaluate a variety of alternative arrangements. Lessons learned could be captured and used to identify, evaluate, and provide support for meaningful refinements to FAR.

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