7

Cost, Personnel, and Procurement Comparisons of Options

This chapter summarizes the committee's cost estimates for the four Army Research Laboratory organizational and management options, and discusses the major personnel and contracting issues raised by each option. Appendix D contains the detailed background, data collected, comparative analyses made, and findings in the areas of cost, personnel, and procurement.

The baseline for cost analysis, with which each of the four options was compared, was the projected ARL personnel structure for fiscal year 1997 (the year when ARL's formation will be complete), as provided by ARL. This baseline, labeled “ARL-97,” represents a significant reduction in support staff, compared with the current ARL staffing, in accordance with the Army Science and Technology Master Plan (Department of the Army, 1992a) and the directives of the Defense Base Closure and Realignment Commission (1991). Because several actions to achieve the ARL-97 structure have already been initiated, the committee found the planned fiscal year 1997 structure better for comparison purposes than the current (fiscal 1993) ARL structure.

ASSUMPTIONS

The major assumptions used for cost comparisons follow.

  • All options would operate with the same budget as is planned for ARL in fiscal year 1997 ($323 million in fiscal year 1993 dollars); this revenue-neutral assumption means that recurring costs would remain constant and that the major differences in the estimated quantifiable costs of the options would be their one-time conversion costs.

  • The revenue-neutral assumption implies that, in all the options but the ARL Enhanced, fewer personnel could be afforded, because personnel would receive higher salaries or benefits; it further implies that, for those options, there would be a necessary reduction in the total number of personnel to remain within the fixed budget.

  • The committee believes that some of ARL's laboratories may need to be upgraded, regardless of the option chose, to enhance the quality of the



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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options 7 Cost, Personnel, and Procurement Comparisons of Options This chapter summarizes the committee's cost estimates for the four Army Research Laboratory organizational and management options, and discusses the major personnel and contracting issues raised by each option. Appendix D contains the detailed background, data collected, comparative analyses made, and findings in the areas of cost, personnel, and procurement. The baseline for cost analysis, with which each of the four options was compared, was the projected ARL personnel structure for fiscal year 1997 (the year when ARL's formation will be complete), as provided by ARL. This baseline, labeled “ARL-97,” represents a significant reduction in support staff, compared with the current ARL staffing, in accordance with the Army Science and Technology Master Plan (Department of the Army, 1992a) and the directives of the Defense Base Closure and Realignment Commission (1991). Because several actions to achieve the ARL-97 structure have already been initiated, the committee found the planned fiscal year 1997 structure better for comparison purposes than the current (fiscal 1993) ARL structure. ASSUMPTIONS The major assumptions used for cost comparisons follow. All options would operate with the same budget as is planned for ARL in fiscal year 1997 ($323 million in fiscal year 1993 dollars); this revenue-neutral assumption means that recurring costs would remain constant and that the major differences in the estimated quantifiable costs of the options would be their one-time conversion costs. The revenue-neutral assumption implies that, in all the options but the ARL Enhanced, fewer personnel could be afforded, because personnel would receive higher salaries or benefits; it further implies that, for those options, there would be a necessary reduction in the total number of personnel to remain within the fixed budget. The committee believes that some of ARL's laboratories may need to be upgraded, regardless of the option chose, to enhance the quality of the

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options research environment. However, the committee could find no reason to believe that facilitation costs would differ among options. Thus, such costs would not be discriminators for choosing from among the options. Additionally, the committee adhered to the guidelines for this study that no additional capital costs be considered for any option. The committee believes, though, that such increases might improve the chances of attracting better research personnel. The focusing of the laboratory's work in fewer business areas would result in the displacement of a number of scientists and engineers (S&Es) who would not be qualified to perform research in the areas of concentration. The in-house/contracted ratio for the fiscal year 1997 ARL is assumed to be 80/20 as opposed to the 70/30 provided by ARL (see Appendix D). Another general assumption for this study is that, if the Army were to emulate the structure, management, personnel practices, and facilities of research laboratories generally considered in the scientific community to be world-class, the value of the resulting research effort would be enhanced compared to that of the existing ARL. Under such circumstances, even if a conversion were to take place with no increase in operating cost (not counting the one-time conversion costs), the long-term value would increase even though the number of personnel decreased. Achieving the Army's vision of becoming a world-class laboratory requires the ability to attract and retain exceptional scientists and engineers, whose increased productivity would make up for the lower number of personnel afforded under the options in which pay for these exceptional personnel was higher. PREVIOUS STUDIES A number of previous studies were reviewed to gain insight into what past analyses concluded about the costs of converting government research laboratories to either NIST-like or GOCO operations. These studies were conducted by ARL's predecessor, the U.S. Army Laboratory Command (1990); by the Air Force, the Navy, and the Office of the Secretary of Defense (Office of the Secretary of Defense, 1991a, 1991b; Heeb, 1991). The studies are discussed in more detail in Appendix D. All previous studies assumed that scientists and engineers in a GOCO operation would be paid substantially more than in the current structure. Consequently, on an equal operating cost basis, significantly fewer S&Es, as well as fewer total staff, would be affordable. These studies found one-time conversion costs to be very large. For example, the Army study concluded that the conversion costs for the U.S.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Army Laboratory Command would be $525 million, without including the costs for severance pay and other reduction-in-force (RIF)-related costs. The bulk of this conversion cost was for retirement pay buyouts, which, according to DOD instructions, is not a proper cost of conversion, since those costs will be paid at some time regardless of whether the conversion occurs. It is understood that, during the conversion process, disposition of retirement pay entitlements would have to be determined; for example, in conversion to a GOCO organization, such pay could fund the contractor's retirement fund for government employees hired by the contractor, or be held by the government for later payment to the individual. None of the studies provided evidence that the same missions as required from the baseline laboratories (government-owned and -operated) could be carried out satisfactorily by substantially fewer personnel, or that greater productivity or overall value would be added by changing to the new structures. However, the committee believes that private sector laboratories can deliver higher productivity per person. This belief is supported by the excellent reputations of the Department of Energy laboratories sponsored in universities and industry, the Jet Propulsion Laboratory sponsored by the National Aeronautics and Space Administration, and the Massachusetts Institute of Technology Lincoln Laboratory sponsored by the Department of Defense. COSTING APPROACH The committee took the following steps in costing the options: select the appropriate cost metrics on which to base the comparisons; collect available actual data for each metric; analyze the data to obtain usable metric values, where possible on a per capita basis, for use in the comparisons; calculate the cost impact on personnel of fixed operating budgets (i.e., how many fewer personnel could be afforded); and calculate the total cost of the conversion to each of the options. The general results of these steps are described below, and the results are summarized in the next two subsections. To provide valid comparisons, the committee chose cost metrics carefully. A number of metrics were considered in the course of the study; those used were selected on the basis of (a) availability of data; (b) meaningfulness of the parameter for comparison purposes; and (c) the

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options committee's belief that the metric represents a true discriminator of the options. The wide variation in accounting procedures from facility to facility meant that cost comparisons only at a very high level of aggregation were considered appropriate. The committee selected the following metrics: total operating costs (adjusted to exclude the cost of contracting out research); total operating cost (adjusted) per S&E; average salary; cost of designing and training for new personnel system; severance pay and other RIF costs; and contracting (for a research contractor or a GOCO management firm) process. Other conversion costs (not easily calculated or measured, but considered important to document) include: pay differential for converted personnel; facilities upgrade; processing costs of legislative and regulatory changes; costs of obtaining understanding and approval of labor unions (if necessary); disruption costs; and government monitoring and oversight costs. The total estimated fiscal year 1997 budget (excluding pass-through funding to outside contractors for research) of $323 million (in fiscal year 1993 dollars) was provided by ARL and is assumed in this study to be the operating budget for all options (i.e., the recurring operating costs are to be the same before and after conversion). Consequently, the number of S&Es and the number of support staff affordable under each option were determined based on the average salaries of contractor and government personnel. All costs in this study, except where otherwise noted, are in constant fiscal year 1993 dollars. If the actual fiscal year 1997 funding is less, the number of affordable manpower positions will be proportionately fewer. It was assumed, as stated earlier, that ARL would focus on fewer, and possibly a different set, of business areas, requiring different skills than are currently available. For costing purposes, it was assumed that half of ARL's 10 business areas would be eliminated, and that, as a result, half of ARL's S&Es would be either RIFed or reassigned. It was further assumed that half of the affected personnel could be reassigned to the new or refocused business areas, while the remaining half (or 25 percent of the total) would be replaced by S&Es with new skills.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options In the NIST option, not all government S&Es leaving could be replaced by other government S&Es, because the total number of S&Es affordable within the fixed budget amount is less than in the baseline. In the ARL Multicenter and GOCO ARL options, the terminated S&Es would be replaced by contractor personnel and be entitled to severance and other pay. Current Office of Personnel Management and DOD regulations require that any government employee who is terminated due to conversion to a commercial enterprise, and who is not retiring, is eligible for severance and other benefits, whether or not he or she is hired by the commercial firm involved in the conversion (Office of Personnel Management, 1989; Department of Defense, 1993). Because the costs for a pure contractor-owned and contractor-operated commercial venture were not estimated, the GOCO ARL costs were used in the estimate for the ARL Multicenter option. The costs to obtain contractors in the ARL Multicenter vary according to the number of contractors being sought. The following calculation procedures and per capita costs were used for the conversion cost comparisons: The number of scientists and engineers affordable under each option was determined by dividing the operating budget by the fully loaded cost per S&E; the fully loaded cost is the average salary multiplied by a loading factor to account for all costs for the laboratory (including support staff and facilities). The loading factor was 3.4, representing an average load for salaries at an ARL-like laboratory, as explained in Appendix D. The average S&E salary rate of $70,000 per year, determined for the GOCO ARL option, was used for all contract personnel in all the options to keep the comparisons consistent and valid. The ratio of S&Es to total staff was held constant for all options (even though contractors may choose to operate differently), and the ratio was based on the ARL-97 plan to have 1,744 S&Es as part of a total staff of 3,131; thus to calculate the total staff for each option, the number is multiplied by 1.8 (3,131/1,744). The cost of severance was calculated by ARL, based on the actual population of personnel expected at ARL in fiscal year 1997; per capita severance pay ($21,000) was calculated by dividing the total severance cost by the number of people being RIFed. Based on the ARL-supplied information, all options that would require RIFs used 23.8 percent to calculate the number of people who could be RIFed but would be eligible for retirement or would find other government jobs, leaving only 76.2 percent of the total to receive severance pay and other RIF-related payments. Other RIF-related payments and associated costs for individuals leaving the government was estimated using Army-wide estimated costs (Department of the Army, 1992b) of $11,500 per person RIFed.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Per capita costs for personnel system design and training (for the NIST option) were based on recent experience at the China Lake, California, installation of the Naval Air Warfare Center, which recently converted its Point Mugu facility to the demonstration project personnel system. Costs to obtain a contractor to perform and/or manage research activities for the ARL Multicenter and GOCO ARL options were based on the $7.5 million average of a range ($5 to $10 million) for competing to obtain a single contractor. This range was based on historical government-to-contractor conversions through the Office of Management and Budget-specified process (Office of Management and Budget Circular A-76, dated August 4, 1983). Costs to obtain more than one contractor for the ARL Multicenter would increase with the number of contractors. These calculations and costs are discussed in greater detail, including their sources, in Appendix D. These costs, and any other conversion costs which may be identified in a more detailed estimate of conversion costs, could, in some instances, be spread over more than one year for budgeting purposes. COST ANALYSIS This subsection summarizes the cost analysis and results conversion cost calculations for each of the four options (Table 7-1). ARL Enhanced Option The ARL Enhanced option maintains the fiscal year 1997 ARL number of in-house S&Es (1,744) and total government staff (3,131) and maintains the same in-house/contracted ratio (80/20) as in the fiscal year 1997 baseline. This option differs from the baseline only in the reduction and/or focusing of the business areas and the resulting change in S&E personnel numbers. The termination of 25 percent of the ARL's S&Es (436 of 1,744), to be replaced by S&Es with different skills, causes the only conversion cost. Of the 436 S&Es who are displaced by the reduction in the number of business areas, 23.8 percent of them (104) would either be eligible for retirement or find other government employment, leaving 332 to be RIFed, and would receive termination pay (severance pay and other allowances) resulting in a conversion cost of $10.8 million for this option. The 23.8 percent is consistent with the severance pay calculations made for the committee by ARL, as explained in Appendix D. Providing the director discretionary funding, already in the budget, or reassigning ARL to Department of Army headquarters is not

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options TABLE 7-1 Cost Comparison (Fiscal Year 1993 $)   Baseline Cases Options   ARL FY 1993 ARL FY 1997 ARL Enhanced NIST ARL Multicenter GOCO Operational Budget (millions) 484 323 323 323 323 323 In-House Dollars 317 257 257 257 97 0 Contracted Out Dollars 167 66 66 66 226 323 In-House Percentage 65 80 80 80 30 0 Contracted Out Percentage 35 20 20 20 70 100 Average Salary per S&E (thousands) In-House 52.7 52.7 52.7 61.2 52.7 NA Contracted Out 70.0 70.0 70.0 70.0 70.0 70.0 Total Staff (S&Es and Other) 5,095 3,629 3,629 3,194 2,880 2,436 Total Staff in House 3,835 3,131 3,131 2,696 1,174 0 Total Contracted Staff 1,260 498 498 498 1,706 2,436 In-House S&Es 1,769 1,744 1,744 1,502 654 0 Contracted Out S&Es 702 277 277 277 950 1,357 Total Number of S&Es 2,471 2,021 2,021 1,779 1,604 1,357

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Business Areas 10 10 5 5 5 5 Impact of Fewer Business Areas (fewer S&Es) 0 0 436 436 0 0 People Displaced (including S&Es) 0 0 436 629 1,957 3,131 S&Es Hired with Replacement Skills 0 0 436 194 0 0 People Retiring/Transferring/Attriting (24 percent) 0 0 104 149 465 744 People to be RIFed 0 0 332 480 1,492 2,387 Conversion Costs (millions): Severance Pay (21,000 each) NA NA 7.0 10.1 31.3 50.1 “Other” Costs (11,500 each) NA NA 3.8 5.5 17.2 27.5 System Design Cost ($348/S&E) NA NA NA 0.5 NA NA Training Cost ($546/S&E) NA NA NA 0.8 NA NA Cost to Obtain Contractor(s) NA NA NA NA 7.5–21.5* 7.5 Total Conversion Cost (millions) NA NA 10.8 16.9 56.0–70.0 85.1 * The cost will depend on the number of independent centers of excellence which are contracted out.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options expected to add any additional costs, but may result in a shift of responsibilities and personnel, and may have a positive impact on productivity. NIST Option Under the NIST option, salaries would be permitted to rise under a pay-for-performance system, approaching the salary practices of industry (National Institute of Standards and Technology, 1993). For the purpose of this analysis an instant rise in salaries was assumed. The higher average S&E salary ($61,200 per year compared with $52,700 for ARL) would cause the total number of S&Es affordable under the budget (1,502) and the total number of staff personnel (3,194) to be less than that for the baseline. The cost of contracting out would remain constant. Reducing the number of business areas would cause 436 (25 percent) of ARL's S&Es, and 193 other staff personnel to be terminated, for a total of 629 displaced personnel. Only 194 government S&Es, with new skills, could be hired in order to stay within the affordable total of 1,502 S&Es. This reduction in the number of business areas would cause the actual RIF of 480 people at a cost of $15.6 million in severance and other allowances. Another $1.3 million would be required to design or adapt a NIST-like personnel system to ARL and to train the government employees in the use of that system, making the total conversion cost of this option $16.9 million. Of no cost consequence, but of interest, is the fact that NIST was the only government laboratory visited that had a revolving investment account. Laboratory directors can draw on the fund to procure equipment and replenish the fund by amortization over a number of years. ARL Multicenter Option The ARL Multicenter option differs from the baseline by changing the in-house/contracted ratio from 80/20 in the baseline to 30/70 in this option. Using the same rationale as was used for the other options, this change results in a reduction to 654 government S& Es and 1,174 total government employees. The total government (654) and contracted (950) S&Es in the final structure are estimated to be 1,604, compared with a total of 2,021 in the baseline case, for a 21 percent reduction in S&E staff. Because 950 S&Es are being contracted, it is expected that the contractor would have enough margin to select new employees with the newly required skills. The one-time severance pay and other allowances would be $48.5 million, due to the 1,492 personnel that would be terminated (76.2 percent of the 1,957 people lower than the baseline number of 3,131). Somewhere between $7.5 and $21.5

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options million is estimated to be required for the contracting process (based on the number of contracts). Thus, the total conversion cost would be between $56.0 and $70.0 million. GOCO ARL Option Analysis of the costs of the GOCO ARL option is based on a number of diverse data sources. Considerable data were obtained from the U.S. Department of Energy (1992a, 1992b), and further information was collected from Sandia National Laboratories and Brookhaven National Laboratory. Summary information was obtained from federally funded research and development center sources, discussed in more detail in Appendix D. Sandia personnel stated that the average S&E salary there is $70,000, and that this salary is comparable with industrial salaries. Since ARL-97 is distributed in three geographical areas, no regional adjustment was made to these data. It was further assumed that the GOCO firm would operate in a method more analogous to ARL than to Sandia, where high security and safety concerns, as well as high equipment maintenance costs, cause the overhead costs to be very high (as is true at all DOE multipurpose laboratories). Since all government employees who are not eligible for retirement or reassignment would be eligible for termination pay (76.2 percent of the 3,131 people, or 2,387 employees), the one-time severance pay and other allowances would amount to $77.6 million, in addition to the initial contracting process costs of $7.5 million. This cost to acquire a contract would apply each time the contract is recompeted. COST FINDINGS The most significant findings, as highlighted above and discussed in more detail in Appendix D, are the following: All conversions to different management structures involve some one-time conversion costs. Those options shifting more of the research effort to contracted sources require larger one-time conversion costs. The recurring annual operating budgets for all options were assumed to be the same as the current budget; therefore, the one-time conversion costs are not recoverable over time except through potential improvements in operating efficiency or research productivity. Table 7-1 is a summary of the estimated staffing levels and conversion costs for the four options. As shown in the table, when the total annual operating budget is held constant for all options, the conversion costs

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options will be greater the farther the option is from having all government personnel at ARL. For all except the ARL Enhanced option, the number of S&E personnel and the number of overall staff will decrease. The benefit or value side of the equation is extremely difficult to assess. ARL has announced its vision of becoming a world-class laboratory. There is general agreement that a pay structure, for instance, that would help attract and retain world-class scientists and engineers would bring the laboratories closer to this vision. It is less clear what the additional costs implied by a richer and more flexible pay plan would yield, quantitatively, in research output. It is also likely that additional capital investment will be required to maintain world-class scientists. These costs cannot be estimated without a clearer definition of the laboratory's mission in the new environment. The government management and oversight of contract operations could result in significant recurring costs, which were not calculated in this study. A current DOE study is reviewing how to reduce these costs. The Secretary of Energy, in her Congressional testimony, stated that DOE oversight experience indicates a requirement of 1 field officer for each 28 contract personnel, not including the DOE headquarters personnel that perform oversight and policy functions. DOE in recent years has come to consider the national laboratory employees to be quasi-government employees, and now keeps tight control over them. DOE is currently studying its relationships with these laboratories. On the other hand a number of federally funded research and development centers are monitored with much fewer personnel. The number of personnel performing this function depends directly on the details of the negotiated contract(s). The Army should manage this oversight function so that it does not result in such a large number of overseers and so that it does not become a major additional cost. COSTING LIMITATIONS A number of limitations apply to the results shown in this analysis. Among the most significant limitations are the following: Because there is no evidence of a defense R&D organization having been converted from government operation to contract operation, the analysis has significant uncertainties. There is no quantitative evidence that the alternative management structures for ARL would be able to complete ARL's mission, or whether they would represent better values to the Army. (Judgments of research value are beyond the scope of the cost study.)

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options It is possible that a new, aggressive management team, either government or contractor, could operate more efficiently (e.g., reduce the ratio of indirect to direct personnel) and thereby operate either at less cost or with more S&Es than the numbers shown. Any change in governance (e.g., ARL reporting to the Assistant Secretary of the Army [Research, Development and Acquisition], rather than to the Army Materiel Command), is not assumed to significantly affect cost but could affect value. It was not possible within the time available to compare above base pay benefits because of large definitional and accounting differences; however, we believe the cost comparisons presented form a reasonable basis on which to draw conclusions about the magnitude of costs required to achieve each option. The time it takes to prepare for and perform a transition and the time lost during disruption could not be estimated with a high degree of accuracy. Costs may be affected by local conditions. ARL-97 will operate in three dispersed geographical areas, but no attempt was made to refine the data collected to take this geographical factor into account. A GOCO can pay prevailing salaries for an area—sometimes more and sometimes less than a government employee in the same area. The one-time conversion costs do not include the cost of buying out retirements, which the Navy and the Air Force estimated to be about $43,000 to $50,000 per person, although the referenced Army study did not consider this cost relevant (Office of the Secretary of Defense, 1991b). These costs are not properly costs of conversion, because they would have to be paid at some time, with or without conversion. The cost of additional government personnel to provide policy, manage and oversee the contract, which could result in a significant amount if based on DOE experience and congressional requirements, is not included in the estimates. Acquisition return could reduce this cost. As mentioned earlier, the Army should strive to avoid the burden of large numbers of oversight personnel no matter which of the options is selected. PERSONNEL The chapters on each of the four options (Chapter 3, Chapter 4, Chapter 5, through Chapter 6) discussed the personnel implications of each option. This subsection provides an overview of the issues and a summary of the personnel improvements which are likely under each of the four options. Key personnel issues that the committee examined under each of the four options (ARL Enhanced, NIST, ARL Multicenter, and GOCO ARL)

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options include the ability to hire, the ability to pay for performance, and the ability to fire. Each of these issues was examined for each option and the results are provided in the following paragraphs. Within existing laws and regulations, much can be improved in the personnel management area. For example, permitting line managers to classify positions and establishing an automated position classification system, with an associated S&E database, to support the line managers in their job classification process would shorten the time it takes to establish and fill a critical S&E position. This measure can be taken within AMC's current statutory and regulatory authority. It is among the Defense Laboratory Demonstration Initiatives (see Chapter 3) and has been partially implemented. Changes in the position classification process would have to be coordinated with and approved by the Office of Personnel Management. The use of term appointments to attract senior retired research experts is another example of an improved procedure which has been tried only in a limited way at ARL. More personnel management flexibility (e.g., hiring, firing, pay for performance, etc.) could be achieved under the NIST option (see Chapter 4). The existing personnel demonstration projects at NIST and the Naval Air Warfare Center at China Lake have proven that the ability to hire rapidly, assess periodically, and encourage improvements in performance or fire for lack of satisfactory performance (within a set period of time after hiring) are all working well and should result in better performance by all employees under these revised civil service rules. Of the four options being considered, the GOCO ARL option offers the greatest opportunity for achieving excellence in the personnel arena, as was discussed in Chapter 6, but this excellence could be at a greater overall cost, as is demonstrated by the conversion cost comparisons shown in the previous subsections. The reasons for this excellence would be that the GOCO contractor could operate ARL as a business and not be bound by any of the constraints of the current civil service personnel system. The ARL Multicenter option (Chapter 5) would also achieve this excellence in the 80 percent that would be contracted out under that option. All of the options considered would involve labor/management relations issues that would have to be addressed at conversion time. For more details on the personnel issues addressed for each of the options, see Chapters 3 through 6.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options CONTRACTING The chapters on each of the four options (Chapters 3 through 6) discussed the procurement and contracting implications of each option. This subsection provides an overview of the issues and a summary of the contracting improvements which are likely under each of the four options. The further one moves in contracting and procurement practices away from government standards (the Federal Acquisition Regulation) and toward those of private industry, the faster and more efficient should be the processes. However, the government has instituted some innovative practices (e.g., for low-value items utilizing credit cards distributed to certain centers) to attempt to speed up the procurement process time. As discussed in Chapter 3 (ARL Enhanced option), and as recommended by the Laboratory Demonstration Initiatives, more extensive use of Competition in Contracting Act exceptions should be promoted (e.g., sole-source awards when justified, prequalified bidders lists so that awards are made on a price basis only). The Army should make use of all contracting practices, allowable within the Federal Acquisition Regulation, to improve the procurement process. Specific contracting implications of each ARL option are summarized below: Under either of ARL (Enhanced or Multicenter) and the NIST options, there are to be no changes in the Federal Acquisition Regulation, and the only efficiency possible is to follow procurement practices that have proven successful at other places. The GOCO ARL option should provide the most flexible contracting procedures and the fastest completion time on all contracting actions, since when true relaxation of, or creative deviations from, the procurement process rules is permitted, the process will move more smoothly and the end result will be more rapid completion of all contracting actions. For more details on the contracting issues addressed for each of the options, see Chapters 3 through 6 and Appendix D.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options REFERENCES Army Laboratory Command. 1990. GOCO's vs. Army Labs. Internal report. March 23. Defense Base Closure and Realignment Commission. 1991. Report to the President. Washington, D.C. July 1. Department of the Army. 1992a. Army Science and Technology Master Plan. November. Department of the Army. 1992b. Estimating costs of reduction in force (RIF). DAPE-CPE. June 29. Information Paper. Department of Defense. 1993. DOD program for stability of civilian employment; DOD displaced employees information and entitlement pamphlet. DOD Manual 1400.20-1-M. September . Department of Energy. 1992a. Capsule review of DOE research and development laboratories and field facilities. Office of the Technical Advisor. Washington, D.C. September. Department of Energy. 1992b. The National Laboratories of the U.S. Department of Energy. Washington, D.C. Heeb. M. 1991. GOCO or status quo for defense R&D labs. Department of Defense. Briefing for the Advisory Commission on the Consolidation and Conversion of Defense Research and Development Laboratories. July 17–18, 1991 . National Institute of Standards and Technology. 1993. NIST evaluation of a Hay Management Consultants report on Total Compensation Comparability (January 10, 1992). Informal communication to the Committee on Alternative Futures for the Army Research Laboratory, June 2, 1993. Office of Management and Budget. 1983. Circular A-76. August 4. Office of Personnel Management. 1989. Notice of proposed changes to Title 5 of the code of federal regulations, attachments 1 and 2 to FPM Bulletin 550-68.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Office of the Secretary of Defense. 1991a. GOCO or status quo for defense R&D labs? Briefing by Michael Heeb for the Advisory Commission on the Consolidation and Conversion of Defense Research and Development Laboratories, July 17–18, 1991. Office of the Secretary of Defense. 1991b. Background material on GOCOs. DOD Laboratory Demonstration Program Panel. June.