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The Army Research Laboratory: Alternative Organizational and Management Options (1994)

Chapter: Appendix D: Cost, Personnel, and Contracting Considerations

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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Suggested Citation:"Appendix D: Cost, Personnel, and Contracting Considerations." National Research Council. 1994. The Army Research Laboratory: Alternative Organizational and Management Options. Washington, DC: The National Academies Press. doi: 10.17226/9030.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

APPENDIX D 176 Appendix D: Cost, Personnel, and Contracting Considerations This appendix provides the background, data, comparative analysis results, and statement of findings for each of the three areas (cost, personnel, and contracting) examined by the committee. Each of these three areas is discussed separately below, with the key issues and findings relative to each of the four options considered: (1) an ARL Enhanced option with no regulatory changes (Chapter 3); (2) a NIST option employing demonstration model personnel procedures (Chapter 4); (3) an ARL Multicenter option involving 70 percent of the research being performed outside of ARL under one or more contracts (Chapter 5); and (4) a GOCO ARL option in which all research and management are contracted out (Chapter 6). COSTS One of the objectives of this study was to determine the magnitude of the cost implications involved in changing ARL from its current management structure to alternative management structures. Each conversion option considered has both nonrecurring (i.e., one time) conversion-related cost and recurring operating cost implications. Data for this cost analysis was based on and derived from prior studies and operational cost data from organizations considered to be appropriate models—sources for the data are referenced throughout this appendix. It is difficult to make a direct cost comparison between the different conversion options. Cost estimates can never fully take into account the specific differences between one laboratory option and another, nor one particular (actual or hypothetical) conversion or transition and another. Each organization has a unique set of tasks, its own computing and travel needs, its own support staff requirements and its own facility and utility needs, and each is located in a particular part of the country with its own local area cost considerations. These differences tend to reduce the accuracy of detailed cost comparisons. The assumption underlying this study is that if the Army were to emulate the structure, management, personnel practices, and facilities of research laboratories generally considered within the scientific community to be

APPENDIX D 177 world-class, the value of the resulting research effort would be enhanced compared to that of the existing ARL laboratories. Under such circumstances, even if a conversion were to take place within an equal total operating cost constraint (except for one-time conversion costs), the long-term value would increase. To achieve the Army's vision of becoming a world-class laboratory ARL will have to attract and retain exceptional S&Es. This will probably require additional capital investments, which could not be considered here, within the scope of this analysis. Previous Studies A number of previous studies were reviewed to gain insight into what prior studies concluded about the costs of conversion of government research laboratories to either a NIST-type operation or a GOCO-type operation (these two operations would include the ARL Multicenter option since it is a mixture of in-house and contracted-out research). The summary below identifies those studies and indicates what the committee discovered from that information. The studies used are referenced by number and the numbered references are included at the end of this appendix. Relative to the ARL Enhanced Option A baseline study was conducted by U.S. Army Laboratory Command to provide guidance and direction to ARL in its formative (formation was in 1992) years. The costs and staffing envisioned for fiscal year 1997 generally follow the guidelines of this Laboratory Command study. The Combat Materiel Research Laboratory (now ARL) Baseline Study (Army Laboratory Command, 1991) was reviewed. The results shown in Table D-1 are close to the actual data received from ARL. The study does not appear to have considered any significant changes in personnel or laboratory management of the type envisioned in the ARL Enhanced option. Relative to Demonstration Projects The committee reviewed several studies that provide information on the attempts to estimate the impact on conversion to NIST-like operations. The most relevant of these studies were those conducted by the National Research Council (National Research Council, 1993), several Office of Personnel Management (OPM) analyses and reviews of the ongoing demonstration

TABLE D-1 ARL Baseline Study Comparison ($ Millions) Current (Fiscal Year 1993) Baseline Study (Fiscal Year 1990) Direct Costs APPENDIX D Direct Labor (Fringe, Benefits, Supplies) 170.0 123.9 Support Contracts 167.1 40.4 Equipment above 18.3 Military Reimbursement N/A 5.0 Subtotal 337.1 187.6 Indirect Costs Indirect Labor (loaded) 32.0 15.5 Support Contracts 15.5 10.0 Equipment 2.5 Subtotal 47.5 28.0 General and Administrative Laboratory General and Administrative 31.3 Base Operations/Maintenance 41.3 Laboratory Command/ARL Headquarters 20.2 Subtotal 99.5 92.8 Non-reimbursable Interservice Support Agreement 15.0 Non-reimbursable Military 3.0 Subtotal 0.0 18.0 Grand Total 484.1 326.4 Workyears 3929 3144 Cost/Workyear 123.2K 103.8K Escalated (fiscal year 19993) 114.1K 178

APPENDIX D 179 projects the Naval Air Weapon Center (NAWC) at China Lake and NIST, and internal reviews of the ongoing demonstration projects. The fact that the demonstration project at China Lake has been extended twice from its original five-year life is evidence that the project has become accepted by the various agencies in the government as viable and worthwhile. The visit made by the panel to China Lake resulted in an impression that the personnel at China Lake are benefitting from relaxed personnel regulations and their payfor-performance evaluation system is enabling constructive actions to be taken when poor or borderline performance is identified. No studies were found that would provide information on conversions to an ARL Multicenter option; however, this option is basically a hybrid between the ARL Enhanced and the GOCO ARL option (a mix of in- house research and contracted-out research), so the information provided for those two options is pertinent to the ARL Multicenter option. Relative to Conversion to a GOCO The committee found no evidence of an entire defense research laboratory having ever been converted to a GOCO operation. Only selected services within laboratories have been converted under Office of Management and Budget A-76 rules to commercial contracts and the available examples are not directly applicable. Consequently no data are available to ascertain implications on resources or value from such a conversion. However, a number of studies are available which conjecture the implications of such conversions. An internal study conducted by ARL (Army Laboratory Command, 1990) examined the conversion of the Laboratory Command, the predecessor of today's ARL, to a GOCO operation. The following key assumptions were made in that study: • The average scientist's and engineer's salary was increased by 60 percent and other salaries were increased by lesser amounts. • The S&E-to-support-staff ratio was raised from 1:1.1 to 1:1.6. • Annual facilities replacement costs are 5 percent of facilities value. • New construction (one-time) was estimated at $18 million (in fiscal year 1989 dollars). • A GOCO fee of 1 percent was assumed and the total cost for government oversight was 1 percent. • Annual maintenance costs were not estimated. • Included were 155 percent of payroll to buy-out retirement and 45 percent for early retirement (one- time).

APPENDIX D 180 • Sizable one-time costs to improve facilities, maintenance, and equipment were included. Using these values and assumptions the Army generated two management and staffing structures. One structure assumes the total budget is held constant, including the capital investment costs (Table D-2). The other structure keeps the salary budget fixed, but pays for capital investment as additions to the budget (Table D-3). In both cases the one-time conversion costs would have been funded off-line. The one-time conversion costs documented in the Army study totaled $525 million, with $282 million for personnel-related costs and $243 million for facility-related costs. The personnel-related costs include $218 million to buy out retirement and $64 million of early retirement benefits. These costs are not applicable according to DOD Pamphlet 1400.20-1-P (Department of Defense, 1993) since these costs are normal deferred costs. On the other hand, severance pay and other reduction-in-force (RIF)-related expenses, in accordance with the Department of the Army information paper (Department of the Army, 1992a) should be included in conversion costs, but were not part of the Army study conversion costs. Drawing on the Army study, as well as comparable studies performed by the other Services, the Office of Secretary of Defense conducted an in-house review (Heeb, 1991; Department of Defense, 1991) which resulted in a third structure (Table D-4) for the Laboratory Command/ARL on an almost equal recurring operating cost basis. Other cost impact conclusions stated in the Office of Secretary of Defense study, based on the individual Service studies, were: • Facilities upgrading will require a one-time cost of 30 percent of the total current budget. • One-time personnel conversion costs will be higher than the current annual total salary budget, possibly twice as large. • Salary increases for a GOCO option should be about 26 percent to 34 percent. • Annual operating costs for the GOCO option would run at least 20 percent over the current costs for a similar laboratory staff. The study further concluded that since no Service estimate included all of the potential cost increases, all of these estimates may be low. The point of including the results summarized above is that, in prior studies, the cost of converting ARL to a GOCO operation was considered to be a very expensive option in terms of reduced staff structure and one-time conversion costs. In neither of the above studies was it demonstrated that any

APPENDIX D 181 TABLE D-2 Staffing Structure Holding Total Budget Constant (ARL Study) Current ARL ($ millions) GOCO ($ millions) Percentage of Personnel in GOCO Total Budget 780 780 — Total Staff 3035 1736 45 S&E 1766 668 38 Technical 504 420 83 Administrative 754 334 44 Clerical 568 214 38 Maintenance 243 100 41 TABLE D-3 Staffing Structure Holding Salary Budget Constant (ARL Study) Current ARL ($ millions) GOCO ($ millions) Percentage of Personnel in GOCO Salary Budget 141 141 — Total Staff 3835 2761 72 S&E 1766 1062 60 Technical 504 669 132 Administrative 754 531 70 Clerical 568 340 60 Maintenance 243 159 65

TABLE D-4 Holding Recurring Operating Costs Constant (Study of the Office of the Secretary of Defense) Conversion Estimate Current Example GOCOs APPENDIX D Employee/Type Full Time Average Total Salary Full Time Increase Average Total Salary Percent Full Employees Salary (K) (M) Employees Salary Salary (K) (M) Time Employees (percent) Scientists/Engineers 1,766 38.3 68.5 1,413 60 62 88 80 Technicians 504 32.3 16.3 1,165 30 42 49 230 Admininstrative 754 31.6 23.8 377 20 38 14 50 Clerical 568 18.3 10.4 284 15 21 6 50 Maintenance 243 29.0 7.0 243 10 32 8 100 Total 3,835 — 141* 3,482 44 avg — 184* — Scientist and 1.2 — — 1.5 — — — — Engineer: Support Contracting $532M $488M * Includes 12 percent benefits Assume: Facilities issues not included; one-time costs not included; and increased in-house technical support reduced need for outside scientist and engineer support. 182

APPENDIX D 183 of the three structures would, in fact, provide equal or additional value, or that any of the structures would actually be able to perform the ARL mission. Methodology Cost comparisons were made for the four options stated above (i.e., (1) ARL Enhanced, (2) NIST, (3) ARL Multicenter, and (4) GOCO ARL) using the methodology explained in this section. Different institutions perform their financial accounting using very different methodologies making direct detailed comparison by common accounting terms nearly meaningless. Coopers and Lybrand examined 12 FFRDCs in 1991 and concluded that indirect cost comparison is not possible (Coopers & Lybrand, 1991). For example, general and administrative rates varied from 7.2 percent to 92.5 percent for the different institutions. In order to provide valid comparisons, metrics had to be carefully selected. A number of metrics were considered in the course of the present study; however, the ones employed were selected on the basis of: (1) available data; (2) the meaningfulness of the parameter for comparison purposes; and (3) the committee's belief that the metric represents a true discriminator of the options. Due to the wide variation in facility accounting procedures, only cost comparisons at a very high level of aggregation were considered appropriate. Calculable Cost Metrics Initially the relevant costs are divided into recurring costs (i.e., annual costs required to operate ARL under each of the alternative management constructs) and conversion costs (i.e., one-time costs of converting from the current ARL management structure to an alternative management structure). All cost figures shown are adjusted to fiscal year 1993 dollars unless noted otherwise. Total Operating Costs (Adjusted). This metric was selected because it should include all of the direct and indirect (support) costs relevant to carrying out the institution's mission. The total operating cost was adjusted to exclude the cost of contracting out research which, in general, requires a smaller amount of support, compared to carrying out the research in-house. The cost of support contracts to provide services in support of the laboratory's research functions was however included in the operating cost.

APPENDIX D 184 Total Operating Cost (Adjusted) Per S&E Full-Time Equivalent (FTE). It was assumed that the basic unit performing research is the S&E and that all the other operating costs are performed in his support. Consequently, total operating costs were normalized on the basis of a scientist/engineer FTE. Average Salary. Another metric employed was the basic average salary for a scientist or engineer. Basic salaries were adjusted to represent pay for 2,088 hours per year which includes leave and other paid absences. Some of the data collected had leave costs as part of the fringe benefits. Because of the fragmentation of the fringe benefits in the government among different agencies, an absolute value of those benefits is difficult to determine. However, the fringe benefit package is the same for all government management options, but can vary fairly widely for different GOCO institutions. On the other hand, a 1992 Hay Group survey of 30 DOE management and operating contractors found that the total value of the benefits of the DOE institutions was comparable to those of the national average, or about 40 percent of gross salaries (Hay Group, 1992). The ratio of total operating cost to average cost per S&E was the primary parameter employed to obtain a meaningful loading factor to be applied to average S&E salary numbers. Severance Pay. Severance pay for the fiscal year 1997 ARL workforce was estimated, in detail using the specific employee population expected, by ARL and is shown in Table D-8 for the 3,131 positions expected to be at ARL in fiscal year 1997. About 76 percent (744 of 3,131 is 76.24 percent) of the employees terminated would receive severance pay and 24 percent (23.76 percent) would either retire or transfer to another government position. For the options where only a portion of the personnel are RIFed, ARL estimates are prorated on a per person (per capita) cost of $21,000 per person. Other RIF-Related Costs. These are the cost of terminating a civil servant if the operation shifts from a government-owned, government-operated to a GOCO method of operation. These costs are explained in a DOD pamphlet (Department of Defense, 1993). A June 1992 Department of the Army costing model for RIF actions provides the framework for estimating RIF costs (Department of the Army, 1992a). Costs per involuntary separation during the first 12 months following the RIF effective date are estimated at: $3,700 for severance pay, $2,800 for relocation allowances, $1,900 for lump sum annual leave payment (the Assistant Secretary of the Army [Financial Management] estimates these at $3,000), $1,300 for saved grade/pay, $2,500 for

APPENDIX D 185 unemployment compensation, $1,900 for retraining, and $100 for overtime associated with RIF administration. The total of the above items is $14,200 per RIFed person. ARL has provided a specific projection of the severance pay for the particular workforce so $3,700 has been deleted from the above costs leaving a total of $10,500. Since these costs were in fiscal year 1991 dollars, they have been escalated to fiscal year 1993 dollars (using a 9.3 percent factor) to arrive at a total other RIF costs of $11,500 per RIFed person. For management options in which ARL remains in the government structure no RIF pay is required. If ARL is converted to another type of operation, those employees that are not remaining in government in another position, and are not eligible for retirement, are entitled to severance pay, even if they accept comparable positions with the incoming contractor (Department of Defense, 1993). At one time, exemption from severance pay was possible for personnel who accepted employment with the contractor who took over management of a particular function, but authorization for that exemption was removed in 1989 by OPM (Office of Personnel Management, 1989). Current employees now have the right of first refusal for jobs for which they are qualified and which the contractor taking over a government operation is filling. System Design and Training Cost. In converting to a NIST management option, it is assumed that internal staff will be called upon to design or adapt a personnel model for use by ARL. In addition, there are training costs involved in any conversion of employee pay or rating systems to a new system. This includes the salaries of the employees being trained, the facilities for training and the cost of the instructors. Contracting Process. The process of selecting a contractor is both time-consuming and costly, in terms of manpower required in analyzing and specifying the requirements, performing independent government cost analyses, analyzing the proposals, and selecting a contractor. Other Conversion Costs (Not Easily Calculated/Measured) There are additional costs that could not be estimated accurately, either because they are too dependent on the specific contractual agreements or because insufficient data were available.

APPENDIX D 186 Pay Differential and the Impact of Employee “Bumping”. The pay differential is an adjustment of salaries to place all existing employees and managers converting to a NIST or GOCO operation, and newly appointed managers, on a new pay scale. The cost of bumping rights, because personnel with more seniority have a right to bump someone with lower seniority from a position, is also a cost that is not easy to measure, but will result in some additional cost and disruption time. Facilities Upgrade. This is a one-time cost of upgrading facilities and equipment, when converting to a new management structure, that will help make ARL a world-class laboratory. Since the major portion of ARL is assumed to move into the new Base Closure and Realignment-funded buildings, this cost differential could not be estimated. Legislative and Regulatory Changes Processing Costs. The time and cost associated with getting Departmental, Office of Personnel Management, Office of Management and Budget, and Congressional waivers or approvals, as required to convert to a NIST or a GOCO operation could not be estimated. Union Understanding and Approval. The involvement of government employee unions could require time to explain the new system to union leaders sufficiently to gain their support for the conversion. Adverse legal actions can lead to considerable delays and disruptions, as in the case of the Point Mugu conversion. In some instances (e.g., NAWC) the unionized employees were not converted to the improved personnel system. Disruption Costs. Costs are associated with personnel performing conversion activities not related to their prime mission or decreased productivity due to future uncertainty. Government Monitoring and Oversight Cost. This is the additional cost to the government of managing and overseeing the GOCO or contracted-out services.

APPENDIX D 187 Data Collection In order to establish a baseline, ARL was visited several times, previous studies were reviewed, and additional information was prepared by ARL specifically for this effort. In addition, discussions were held with AMC which furnished specific information on ARL funding and AMC's management and oversight role (Army Materiel Command, 1993). Two government demonstration projects, NIST, formerly the National Bureau of Standards, and NAWC at China Lake, California were visited. Each provided additional information for this project. Sandia National Laboratories were visited as a typical GOCO operation, of the weapon systems type, and discussions were held with DOE staff members in Washington on matters related to management and oversight over the Department's national laboratories. Additional current information was available on Brookhaven National Laboratory and other nondefense DOE national laboratories. Fragmentary current information was obtained relative to the salaries and operating costs of 13 FFRDCs and more detailed fiscal year 1991 data were obtained for 3 FFRDCs. The latter information was escalated to fiscal year 1993 for comparison purposes. Additional detailed, current information was available on one FFRDC. The paragraphs below discuss the types of data collected from each of the different types of organizations mentioned above and provide a basis for the comparisons that were performed, as summarized below. ARL Baseline The baseline for this study was an ARL-97 projected manning structure provided by ARL (Army Research Laboratory, 1993). This structure, in accordance with the Army Science and Technology Master Plan (Department of the Army, 1992b) and the directives of the Base Closure and Realignment Commission (Defense Base Closure and Realignment Commission, 1991), represents a significant reduction in support staff, compared to the current ARL staffing. Current fiscal year 1993 ARL data were used to validate the fiscal year 1997 projections for reasonableness, since these projections are still very uncertain. The program data and the expenditure data furnished by ARL are shown in Table D-5 and Table D-6. Since fiscal year 1997 represents the projected steady state for ARL at the end of the Commission conversion period, estimates for that year were obtained from ARL also and are shown in Table D-5 and Table D-6. The fiscal year 1997 data are clearly more uncertain. However, the $323 million (fiscal year 1993 constant dollars) for fiscal year 1997 form the basis of comparison for all options. Should funding in that year

TABLE D-5 ARL Program Data (Then Year, $ Millions) ARL's Fiscal Year 1993 Program ($ Millions) ARL's Business Plan ($ Millions) FY 1994 FY 1995 FY 1996 FY 1997 APPENDIX D ARL Operating Revenue Mission RDTE 6.1 37.0 0.07 73.1 65.1 61.6 63.6 6.2 171.8 0.31 122.9 145.3 146.1 148.3 6.3 40.0 0.07 2.2 1.3 0.3 0.3 6.5 Mission 67.1 0.12 48.2 52.7 49.0 48.9 6.5 Support 50.1 0.09 62.4 60.2 51.9 48.1 6.7 1.6 0.00 6.6 6.4 5.5 4.0 Total RDTE 367.6 0.66 315.7 331.0 314.4 313.2 Other Appropriations OMA/FHA 9.9 0.02 Procurement 1.6 0.00 OSD RPM 1.5 0.00 OSD RDTE 0.3 0.00 Advanced Projects Research Agency 46.0 0.08 0.11 Total Other 59.3 0.11 Reimbursable Customer Program RDECs 28.1 0.05 PEO/PMs 50.0 0.09 Other Army 10.3 0.02 DOD 10.3 0.02 Other Non-Army 6.4 0.01 Navy 4.4 0.01 Air Force 0.4 0.00 188

Total Reimbursable 109.9 0.20 111.1 91.4 83.8 79.1 Revenues not Available for ARL Operations (52.8) (0.11) (54.7) (4.4) (42.4) (38.7) Total ARL Operating Revenues 484.0 0.87 372.1 378.0 355.8 353.6 APPENDIX D ARL Non-Operating Revenue Direct Cite Customer Program PEO/PMs 7.6 0.01 RDECs 1.4 0.00 Other 41.0 0.07 Total Direct Cite 50.0 0.09 52.8 53.7 50.6 46.6 AHPCRC 4.1 0.01 4.8 36.9 4.2 0.0 Base Closure Amount 15.7 0.03 161.0 148.0 18.2 23.8 Total Non-Operating Revenue 69.8 0.13 218.6 238.6 73.0 70.4 Grand Total 553.8 1.00 590.7 616.6 428.8 423.9 Note: FHA = family housing Army PEO = program executive officers FY = fiscal year PMS = program managers OMA = operations and maintenance Army RDTE = research, development, test and evauation OSD = Office of the Secretary of Defense RPM = real property maintenance 189

APPENDIX D 190 TABLE D-6 ARL Recurring Operating Cost Comparison Fiscal Year 1993 versus Fiscal Year 1997 Projection ($ Millions) ARL Operating Costs Fiscal Year 1993 Fiscal Year 1997 Labor 215.6 182.1 Travel 10.4 8.8 Equipment 17.2 20.6 Other 11.9 10.1 Support Contracts 61.8 60.4 Total Operating Costs (Adjusted) 316.9 282.0 (fiscal year 1993) (257.5) R&D Contracts 61.8 71.6 Total Operating Costs 484.0 353.6 (fiscal year 1993) (323) Workyears 3929 3144 Operating Cost/Workyear (fiscal year 1993) 81 82 NOTE: $323 million (in fiscal year 1993 dollars) was used to compare all options to the ARL-97 Baseline budget. be reduced the manpower ceilings estimated in this study should be reduced proportionately. Based on available ARL projections (Army Research Laboratory, 1993), the number of S&Es is expected to remain constant (1,744), although examination of the respective Tables of Distribution and Allowance shows significant grade increases in the interim. The number of support staff is decreasing; however, and the fraction of support contracting is increasing, leaving the operating cost per S&E FTE nearly unchanged (Table D-7). ARL also provided data related to a conversion to a non-governmental structure (Army Research Laboratory, 1993). Their analysis involved the estimation of severance pay for individuals who would still be present in fiscal year 1997, when the ARL restructuring is expected to be completed. The results of this analysis show that a total severance pay of over $54 million ($50 million in fiscal year 1993 dollars) would be required (Table D-8).

APPENDIX D 191 TABLE D-7 ARL Overhead Cost Comparison Fiscal Year 1993 Versus Fiscal Year 1997 Projection ($ Millions) Fiscal Year 1993 Fiscal Year 1997 Overhead Costs Indirect G&A Total Indirect G&A Total Labor 21.3 61.0 82.3 18.6 53.6 72.2 Travel 2.0 2.2 4.2 1.8 1.9 3.7 Equipment 2.8 3.2 6.0 2.9 3.2 6.1 Other 5.8 3.1 8.9 5.4 3.7 9.1 Support Contracts 15.5 30.0 45.5 12.8 47.7 49.7 Total (Then Year) 47.4 99.5 146.9 41.5 110.1 140.8 (fiscal year 1993) 128.9 Total Operating Costs 316.9 257.5 (Adjusted)(excluding R&D contracts) Overhead/Operating Costs 46.4% 50.0% National Institute of Standards and Technology The demonstration project at NIST is still in its early stages, since the laboratory did not transition to the new structure until 1989 (Kramer, 1993; National Institute of Standards and Technology, 1993). Conceptually, NIST is a research institution, both basic and applied, not unlike ARL, and is located within the same personnel competition region as ARL. NIST has converted from the civil service pay structure to a structure involving four career paths and up to five bands in each path. Wage grade employees are not included. The pay range for each career path and the bands are shown in Table D-9 and the average pay rates are shown in Table D-10. Supervisory personnel receive an additional 5 percent pay increment during the period in which they act as supervisors. Periodic pay increases and promotions are based on an intricate rating system; however, supervisors have much latitude in distributing the increases based on merit (Cassady, 1991). A 1991 NIST evaluation (National Institute of Standards and Technology, 1992) by Hay Management Consultants shows that in the few years between before 1987 and after 1991, pay comparability with private sector was being approached (Table D-11).

TABLE D-8 ARL Fiscal Year 1997 Projection of Severance Cost if Converted to a GOCO Fiscal Year 1997 Projection Severance Pay APPENDIX D From To Group Fiscal Year Positions 1.1365 Severance Percentage of Positions $0 $10,000 0 409 $1,858,975 $10,000 $20,000 1 1081 $14,562,843 $20,000 $30,000 2 447 $12,134,488 $30,000 $40,000 3 182 $7,589,232 $40,000 $50,000 4 120 $6,649,430 $50,000 $60,000 5 70 $4,947,455 $60,000 $70,000 6 56 $4,646,692 $70,000 $80,000 7 18 $1,791,424 $80,000 $90,000 8 3 $280,362 $90,000 $100,000 9 1 $109,814 $100,000 $110,000 10 1 $121,813 Fiscal Year 1997 Severance Subtotal 2,388 $54,692,528 76 Retirees 744 $0 24 Fiscal Year 1997 Total Positions 3,132 100 Assumptions: 1. The costs shown reflect only those costs incurred by ARL in fiscal year 1997. 2. These costs include the severance costs earned by calculating 1 week per year for the first 10 years, 2 weeks per year there after plus Annual Leave Lump Sum Payment. 3. There is a maximum of 52 weeks (one year's salary) for weeks earned. 4. The fiscal year 1997 ARL employment profile will be similar to today's. 5. The population total for ARL in fiscal year 1997 will be 3,132. 6. Retirement rules for a major reduction in force apply. 7. There will be no incentive pay for early retirement or RIP. 8. The inflation rate for fiscal year 1997 will be 1.1365. Notes: 1. This revision to the July 14, 1993, report corrects the calculation of Wage Grade Salaries 2. Severance cost for annual leave included July 16, 1993. 192

APPENDIX D Notes: 1. Supervisory pay ceiling for each pay band is shown in top right corner. 2. ZP, Pay Band V, pay ceiling for supervisors below Division Chief, $89,187. Division Chiefs' pay ceiling $91,861. 193

APPENDIX D 194

APPENDIX D 195 TABLE D-11 Salary Comparability (to Industry) Study National Institute of Standards and Technology Before (1987) After (1991) Salary Deficiency 10.9 percent 6.0 percent Total Cash Deficiency 10.1 percent 6.4 percent Benefits Deficiency $306 $226 Total Compensation Deficiency 7.5 percent 4.7 percent Naval Air Weapons Center, China Lake The China Lake Naval facility is one of the oldest demonstration projects, having converted in 1980 (Naval Air Weapons Center, 1993a; Naval Air Weapons Center, 1993b). NAWC is less comparable to ARL than NIST since it is primarily a testing and production center and only about six percent of its budget is devoted to research and development. Furthermore, the availability of S&E personnel and industrial pay scales may not be directly comparable with ARL's. Since NIST's career path and paybanding system is adapted from NAWC's, they are very similar. China Lake does not have the 5 percent pay differential for supervisors, since they believe the two tracks (technical and management) handle the pay differences adequately. Table D-10 shows that NIST and NAWC have a comparable pay structure. Because the Navy operates NAWC on an industrially funded basis, the ratio of direct costs to indirect costs is not comparable to ARL's or NIST's. The Naval facility at Point Mugu is now organizationally part of the NAWC. As part of the integration process the Point Mugu facility is becoming part of the demonstration project at China Lake. The China Lake conversion model is being applied to Point Mugu. A total of 1,268 S&Es at Point Mugu have been converted to the China Lake personnel management model. Conversion was being done as a cost neutral option, but no one was being paid less after conversion. Wage grade and unionized personnel were not converted. NAWC emphasized that conversion to a demonstration model requires full command commitment and allotment of considerable staff time in designing or adapting the personnel system and training all the personnel both on the philosophical differences in the personnel system as well as the mechanics involved. NAWC furnished estimates of the conversion costs to convert 1,268 S&Es (GS-7 to GS-15):

APPENDIX D 196 • salary costs: $441,257 or $348 per S&E; and • training costs: $693,000 or $546 per S&E. Department of Energy The general laboratory data are based on a DOE 1992 reference document (Department of Energy, 1992), using 1991 data. Only multipurpose national laboratories were examined. It is evident from Table D-12 that the operating costs per S&E FTE are much higher for the three weapons (Defense) laboratories than for the other laboratories. The operating costs per FTE for the weapons laboratories (Lawrence Livermore, Los Alamos, and Sandia) range from $351,000 to $372,000, while the other laboratories range from $218,000 to $337,000. Of the three weapons laboratories, Sandia Laboratory costs rank on the lower end since it is more engineering and production oriented compared to the other two laboratories. Lawrence Berkeley was not considered in the analysis because its extensive use of academic personnel and students decreases its operating costs abnormally. A detailed review of the items constituting the operating costs could not be made. However, it was conjectured that the higher costs for the defense laboratories are primarily due to security and safety requirements, as well as a high cost for equipment and facilities maintenance for these very expensive installations. The fraction of scientists and engineers in the weapons laboratories range from 36 percent to 40 percent as shown in Table D-12. The degree structure of the laboratories is shown in Table D-13. The Department of Energy has relatively tight control over the management of its laboratories (Department of Energy, 1993). In her recent testimony, the DOE Secretary stated that one government field office person per 28 contract employees is employed to oversee the contracts. This does not include a significant departmental staff which also provides policy direction and oversight of the laboratories. Sandia National Laboratories Sandia was the specific DOE multipurpose laboratory selected by the Cost, Personnel, and Contracting panel to visit. Although only a relatively small portion of the laboratory is devoted to R&D. Basic research and exploratory technology represent about $77 million out of a total $1.3 billion for Sandia (Sandia National Laboratories, 1993; Sandia National Laboratories, 1990; and Sandia National Laboratories, 1992). Sandia corporation is a separate entity that is managed, under contract, by AT&T. Most employees belong to Sandia, as do the retirement funds. Sandia at Albuquerque is in a

TABLE D-12 DOE Laboratory Staffing and Cost Fiscal Year 1991 Dollars Laboratory Type Total Employees Operating Costs Total S&E Percent S&E Operating Costs Per S&E Lawrence Livermore National Defense 7,898 $1,053 3,034 38 $347,067 APPENDIX D Laboratory Los Alamos National Laboratory Defense 7,570 $964 2,760 36 $349,275 Sandia National Laboratories Defense 8,607 $1,135 3,448 40 $329,176 Argonne National Laboratory Energy 4,041 $347 1,690 42 $205,325 Brookhaven National Laboratory Energy 3,360 $262 1,204 36 $217,608 Oak Ridge National Laboratory Energy 4,650 $477 1,551 33 $307,544 Pacific Northwest Laboratory Restoration/Waste Management 3,774 $343 1,082 29 $317,006 Total 39,900 4,581 14,769 37 $310,176 Source: Capsule Review of DOE Research and Development Laboratories and Field Facilities. September 1992 Lawrence Berkeley omitted since it is more of a teaching facility than a GOCO laboratory. 197

TABLE D-13 DOE Multipurpose R&D Laboratory Employees Fiscal Year 1991 Laboratory Ph.D. Percent Total M.A./M.S. Percent Total B.A./B.S. Percent Total Total Degrees Total Employees Lawrence Livermore National Laboratory 1,284 34 1,1225 33 1,226 33 3,734 7,898 APPENDIX D Los Alamos National Laboratory 1,611 39 1,087 26 1,478 34 4,116 7,570 Sandia National Laboratory 1,365 31 2,088 47 975 22 4,426 8,600 Argonne National Laboratory 831 42 506 26 622 32 1,959 4,041 Brookhaven National Laboratory 656 43 345 22 538 35 1,539 3,360 Oak Ridge National Laboratory 873 40 557 25 770 35 2,200 4,643 Pacific Northwest Laboratory 486 23 615 30 981 47 2,082 3,774 Totals 7,106 35 6,421 32 6,529 33 20,056 39,886 Source: Capsule Review Note: Includes direct and indirect personnel. 198

APPENDIX D 199 different S&E availability and comparable salary demand area than ARL, and therefore the costs are not directly comparable. AT&T has operated Sandia on a non-fee basis since 1953; therefore, when considering a truly commercial GOCO venture, additional costs for a fee, that represents a return to the parent company, must be added. Sandia is only now instituting a pay for performance system. The above data are pertinent to the operation of Sandia by AT&T; however, AT&T decided to cease managing Sandia and a new contractor has been selected. Federally Funded Research and Development Centers Fiscal year 1990 actual costs were obtained, which were simply escalated to fiscal year 1993 for comparison purposes (Table D-14). Detailed fiscal year 1993 information from one FFRDC indicates consistency with the previous data (Aerospace Corporation, 1993). In addition, summary fiscal year 1993 data from 13 DOD FFRDCs show the operating cost per member of the technical staff of 9 of the 13 FFRDCs to be between $170,000 to $205,000 with a median value of $186,000. Coopers & Lybrand analyses show that there is uncertainty in analyzing the financial data in greater detail because of the diversity of the accounting systems used (Coopers & Lybrand, 1991). Analysis The methodology used in this study assumes ARL-97 funding to be constant at $323 million for all options. The number of S&Es and total personnel affordable under this constraint were calculated. Termination and other conversion costs were also estimated. The results are summarized in Table D-15. The options analyzed were as follows: 1. ARL Enhanced. An improved management structure is assumed and a refocusing of the ARL business areas is considered. 2. NIST. The total ARL laboratory is reconstituted as a NIST-like demonstration model structure. All personnel would be retained up to the budget-constrained limit, except for S&Es not considered necessary due to reduced or redefined business areas. 3. ARL Multicenter. The portion of research performed by contractors outside ARL was increased from 20 percent to 70 percent of the operating budget. This caused major personnel changes to accommodate the budget and facilitate contracting out some functions.

TABLE D-14 Fiscal Year 1990 Air Force Contract Summary for Three FFRDCs ($ Millions) Fiscal Year 1990 $ “A” “B” “C” Total Fiscal Year 1993 $ APPENDIX D Member of the Technical Staff Years* Program 2,378 2,525 413 Allocable Effort 129 70 Consultants 7 90 Total 2,514 2,525 573 5,612 Dollars Direct Labor 148 155 30 333 65 Other Direct Costs 40 63 17 120 Allocable Effort (MOIE and other Programs) 23 11 0 34 Total Direct Operating Expenses 211 230 47 487 Benefits 94 76 19 188 Other Overhead 86 74 30 190 37 Total Benefits & Overhead 180 150 48 379 74 Total Costs 391 380 95 866 170 200

General & Administrative — — — — — Fee 21 23 5 48 9 Total Price 412 403 100 163 180 APPENDIX D Cost Per Member of the Technical Staff year (thousands) 164 160 174 163 Overhead Rate on Direct Labor (percent) 121.5 96.8 160.9 113.6 Fee as a Percent of Cost (percent) 5.2 6 4.8 5.6 * Member of the Technical Staff Years = 1,808 hours ** Based on national consumer price index fiscal year 1991 = 3.4 percent, fiscal year 1992 = 3.0 percent, fiscal year 1993 = 3.5 percent 201

TABLE D-15 Staff and Conversion Cost Comparisons (Fiscal Year 1993 $) Baseline Cases Options ARL FY 1993 ARL FY 1997 ARL Enhanced NIST ARL Multicenter GOCO APPENDIX D 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 Percentage 75 86 86 84 41 0 Contracted-Out Percentage 25 14 14 16 59 100 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 Percentage S&Es 48 56 56 56 56 56 202

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 APPENDIX D 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. 203

APPENDIX D 204 4. GOCO ARL. All government personnel would be terminated and a contractor would be selected to operate ARL in government-owned facilities. To accommodate the available data, a comparison metric was developed, namely the ratio of recurring total operating cost (adjusted to remove contracted-out research) per S&E FTE to average basic S&E salary. The significance of this metric is based on the assumption that if a higher paid S&Es were placed in an existing laboratory facility to perform the established mission, this ratio would likely hold, at least initially. This ratio was calculated to be 3.53 for ARL and 3.33 for NIST. Consequently, a 3.4 ratio was selected which assumes a contractor would operate in an ARL/NIST-like environment. Sandia showed a ratio of 4.5, which appeared to reflect the significant difference between the support required for a Sandia type of operation, including security, safety, and investment considerations, compared to that for an ARL-type operation. This also includes the fact that the technician to S&E ratio is higher at Sandia. It may be possible that a contractor could achieve efficiencies that could drive the 3.4 factor down in time. The in-house/contracted ratio for the fiscal year 1997 ARL is assumed to be 80/20 as opposed to the 70/30 currently planned in the ARL. The committee has decided to use this higher ratio based on calculations using dollars available and planned numbers of in-house personnel. If the fiscal year 1997 ARL used 30 percent of its operating budget of $323 million, it would only have about $226 million for in-house personnel. Using the average salary of $52,700 per in-house scientist or engineer, multiplied by a factor of 1.558 to take into account the support staff and overhead, the fiscal year 1997 ARL would only have about 2,752 total in-house staff. This is about 400 people short of the original personnel predictions of the ARL (when this table was developed) and about 100 people short of the latest proposed figures for fiscal year 1997 found in Table 2-1. Assuming that the ARL and the Army did not want to displace any more people than they had to, the committee assumed a ratio of 80/20 which would give the fiscal year 1997 ARL 3,131 in-house total staff—which is closer to its original number. In this analysis of options it was assumed that the estimate of total operating costs for fiscal year 1997, $323 million in fiscal year 1993 dollars, remains constant for all options. The ratio of in-house and contracted R&D varied as well as the S&E salaries. The number of S&E personnel and total personnel that can be used for each option within total cost constraints was varied. The results are shown in Table D-15. If the 3.4 ratio could be lowered in restructuring by the introduction of efficiency improvements or greater output by the higher priced personnel then the total cost could be reduced or the number of S&Es available could be increased. However, there is no hard evidence that the reduced number of personnel would or would not be able

APPENDIX D 205 to complete the same mission or represent a better value to the Army. In all cases, the cost for contract research, and the number of staff affordable for that research, are estimated using the same (GOCO option) rates. It was further assumed that any option would need to refocus its business areas (i.e., fewer business areas) to support unique Army needs, and would have to pursue them more intensively. For costing purposes it was assumed that half the personnel would be affected by pursuing only half the current ten business areas. Since other areas are being pursued or enhanced, the support personnel affected would be able to be reassigned to the remaining or new mission areas. Half the scientific and engineering personnel affected could be reassigned also. Consequently only a quarter of the scientific and engineering personnel would be RIFed/retired. In this option 436 scientists and engineers would be removed and an equal number, with different skills would be rehired to keep the total constant, as shown in Table D-15 also. Refocusing could also require capital investment for equipment and facilities to meet the refocused research needs of the S&Es. Conversion Costs As mentioned earlier, the most significant and available conversion costs are those costs associated with (1) the actual severance pay and other costs associated with converting government personnel to contractors (for all options); (2) the new personnel system design costs and the cost of training personnel to operate in the new system (only for the NIST option); and (3) the cost of the contracting process to obtain a GOCO management contractor. Each of these is described below along with notes about other costs which the committee did not calculate. Severance Pay. This applies in any case where government personnel cease to work for the government, whether they accept employment with the new contractor or not. In this analysis, severance pay applies to any termination of government employees involved in staff reductions. Based on the ARL fiscal year 1997 data on severance pay, 24 percent of the terminating employees are assumed to either retire or stay in the government, with 76 percent subject to RIF and severance pay. A $21,000 average severance pay, based on the ARL- furnished detailed severance pay analysis, was used for every RIFed person in every option. In the case of GOCO options, the ARL analysis showed that severance pay would amount to about $50 million (fiscal year 1993 dollars), as mentioned earlier.

APPENDIX D 206 Other RIF-Related Costs, based on Army-wide analysis shown in the Department of the Army Information Paper on “Estimating Costs of Reduction in Force (RIF),” and discussed previously, exclusive of severance pay, amount to $11,500 per involuntary separation. System Design and Training Costs. This cost is only directly applicable to the NIST situation where ARL would adapt a demonstration personnel system and train the staff in its use. Using the NAWC data, and applying them to the 1,744 S&Es at ARL amounts to $607,000 in salary costs, and $952,000 in training costs. This assumes that an existing demonstration model is used for conversion. If a new model were developed, the cost could be significantly different. No severance cost would be incurred in a NIST-type conversion. Contracting Process. On the basis of the committee's experience and expertise, it is assumed that contracting would cost $5 million to $10 million in government or support contractor time, and the committee used the average of $7.5 million for the two options for GOCO option. The cost for the Multicenter option will depend on the number of independent contracts established. A range of $7.5 million to $21.5 million reflects that the cost varies with the number of contracts. Other Conversion Costs. As mentioned above, the pay differential, facility upgrade, legislative and regulatory change, and disruption costs were not estimated. The government management and oversight costs could be substantial if the DOE model is used. It would amount to an oversight staff of 1332/28 or 48 individuals, not counting their headquarters personnel. This cost was not included in the above analysis. The analysis for each option involved the calculation of the personnel affected by the changes in-house and contracted-out research, using the number of S&Es at ARL in fiscal year 1997 as the starting point. The calculations for each option are explained below and summarized in Table D-15, which is exactly like Table 7-1 in Chapter 7, but also includes percentages for the in-house versus contracted-out mixture and the percentage of S&Es of the total staff to show how the personnel mix changes with each 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 in-house/contracted ratio (80/20) as in the fiscal year 1997 baseline. This option differs from the baseline only by reducing and/or focusing the business areas and the resultant change in S&E personnel. Its only conversion costs

APPENDIX D 207 would involve the termination of 25 percent of the ARL's S&Es (436 of 1,744), who must be replaced by S&Es with different skills. Of the 436 who are displaced by the lowering of the number of business areas, 23.76 percent (104) would either be eligible for retirement or find other government employment, leaving 332 to be RIFed and would receive termination pay (i.e., severance pay and other allowances) resulting in a conversion cost of $10.8 million for this option. The 23.76 percent is consistent with the severance pay calculations made for us by ARL. Providing the director discretionary funding, already in the budget, or reassigning ARL to Department of Army headquarters is not expected to add any additional costs, but may result in a shift of responsibilities and personnel, and may have a positive impact on productivity. Under the NIST option, salaries were permitted to rise under a pay for performance philosophy, approaching those of industry (Hay Group, 1992). For the purpose of this analysis an instant rise in salaries was assumed. The higher average S&E salary ($61,200 per year compared to $52,700 for ARL) causes 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 remains constant. Reducing the number of the business areas causes 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 business areas and refocusing will cause the actual RIF of 480 people at a cost of $15.6 million in severance and other allowances. Another $1.3 million will 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 to be $16.9 million. Of no cost consequence, but it is of interest to note 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. 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 causes 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 was estimated to be 1,604, compared to a total of 2,021 in the baseline case, or a 21 percent reduction in S&E staff. Because 950 S&Es are being contracted for, it is expected that the contractor will have enough margin to select new employees with the newly required skills. The one- time conversion cost is $48.5 million due to the 1,492 (76.24 percent of the 1,957 people lower than the baseline number of 3,131) personnel being terminated. The range of

APPENDIX D 208 $7.5 million to $21.5 million is estimated to be required for the contracting process (depending on the number of contracts), each time the contracts are recompeted. Analysis of the costs of the GOCO ARL option is based on a number of diverse data sources. Considerable data was obtained from DOE (Office of Personnel Management, 1989; Army Materiel Command, 1993) and further information was collected from the Sandia National Laboratories, as well as from Brookhaven National Laboratory (1993). Additionally, summary information was obtained from FFRDC sources. The Sandia personnel stated that their average S&E salary is $70,000, and that this is comparable to industrial salaries. Since ARL-97 is distributed in three geographical areas, no regional adjustment was made to this 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 (this was true in all DOE multipurpose defense laboratories). Reducing the number of business areas can be accommodated in the conversion process, requiring that the contractor rebalance the S&E mix. Since all government employees who are not eligible for retirement or reassignment are eligible for termination pay (76.24 percent of the 3,131 people or 2,387 employees), the one-time severance pay and other allowances amounts to $77.6 million, in addition to contracting process costs of $7.5 million (average of the estimated $5 million to $10 million it would cost) each time the contract is recompeted. Cost Findings The most significant findings, as highlighted and discussed in more detail in the previous sections, were 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 budget 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 D-15 is summary of the estimated staffing levels and conversion costs for the four options which were discussed in the previous subsection. As shown in the table, when the total annual operating budget is held constant for all options, the conversion costs will be greater the farther the option is from having all government personnel at ARL. For all except the

APPENDIX D 209 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 established its vision as becoming a world-class laboratory. There is general agreement that a pay structure, for instance, that would facilitate ARL's attracting and retaining world-class scientists and engineers would bring the labs 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 function over a contract operation could result in significant recurring costs, which were not calculated in this study. For example, the Secretary of DOE, 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 considers the national laboratory employees to be quasi-government employees and keeps tight control over them. On the other hand a number of FFRDCs 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. Limitations of the Analysis A number of limitations apply to the results shown in this analysis. Among the most significant limitations (or caveats) are the following: • Since there is no evidence of a Defense R&D organization having been converted from government operation to contract operation, the results of the analysis include significant uncertainties. • There is no evidence that the alternative management structures for ARL would be able to complete ARL's mission, or whether or not such structures represent a greater value to the Army. • It is possible that a new, aggressive management team, either governmental or contractor, could operate more efficiently (e.g., reduce the indirect to direct personnel multiplier) and thereby either operate at less cost or with more S&Es than the numbers shown.

APPENDIX D 210 • Any change in governance (e.g., ARL reporting to the Assistant Secretary of the Army, rather than to AMC), 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, the committee believes 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 transition and the time lost during disruption could not be estimated. • Costs may be impacted by local area situations. 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. • 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 relevant. • 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. 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 Key personnel issues that require an objective analysis under each of the four options (ARL Enhanced, NIST, ARL Multicenter, and GOCO ARL) include: (1) ability to hire; (2) ability to pay for performance; and (3) ability to fire. Each of these issues was examined for each option and the results are provided in the following paragraphs. Many personnel actions are now permitted under the Federal Employee Pay Comparability Act of 1990 as well as the Civil Service Reform Act of 1978, but are not implemented (Army Laboratory Command, 1991). ARL Enhanced and Multicenter Options Under the federal personnel system, hiring of new employees is closely regulated by OPM, which establishes the criteria that will be used to examine the qualifications of candidates. OPM also establishes the rates of pay that may be offered candidates through the classification system and its link to the

APPENDIX D 211 federal pay system. These controls tend to have a force-fit impact on candidates. Qualifications are specified and given specified weights in the candidate evaluation process. Variations from the established salary norms are difficult to defend and may also require agency or OPM approval. Matching a salary to the specific qualifications of any applicant who is exceptionally well qualified is restricted first by the grade of the position, and second by authority for advances in hire rates that may or may not be approved by outside authorities. Under these options, ability to hire is closely allied to the position classification process. It is proposed that line managers classify positions and this is now permissible. Classification authority is delegated by OPM to agency heads who may delegate down through the management structure to any level deemed appropriate. There is a requirement that whoever does the classification will comply with the OPM Position classification standards, a process that requires considerable experience and time on the part of the person doing the classification. Under this option that problem would be eased by establishing an automated position classification system to support the manager. This can also be done now, and has been used successfully. It does require a considerable expenditure of time to do the initial job analysis for local positions and then create the automated program to run the system. There are generic programs available for common and mostly lower graded jobs, but it is possible to develop a database that could cover S&E jobs. This process is generally much quicker than the current ARL process and does produce an exceptional degree of accuracy and consistency. Another personnel action under this option involves using term appointments to attract distinguished senior scientists and engineers from industry or universities and would permit these temporary personnel to be removed after the term of the appointment has expired. The ability to pay for performance under these options would not be enhanced. Current performance ratings and incentive award systems would still be used. In addition, the ability to fire employees under these options would not be improved since there are no changes proposed in basic regulations and requirements. In summary, the ARL options would not require waivers or exceptions to any law and could be done within AMC's current authority. These actions have been linked to providing ARL with its own personnel staff. That would not be an imperative for making these changes. The pros and cons and the added cost of this change should be carefully evaluated. Another alternative under this option is for the ARL Director to participate in rating the Personnel Officer who provides him service—this would require only an agreement between the ARL Director and the host installation Commander.

APPENDIX D 212 NIST Option Under this option ARL's ability to hire could be considerably enhanced by having the authority to establish their own candidate qualification examinations and hiring from the resultant list of applicants. Pay rates that can be offered for new hires cover a broad range and can be established based on comparisons to private sector rates. Technical managers perform the job classification function using simplified classification standards that are tailored to local jobs. This process can also be automated. The ability to pay for performance is greatly enhanced by the incentive pay system which directly links performance appraisal to adjustments in base salary. No automatic increases are given on the basis of time-in-job alone. The demonstration project system also provides for bonuses and rewards, all aimed at retention of high performers. The performance appraisal and incentive pay systems are run by the technical managers. The ability to fire an employee is also enhanced by a demonstration project system and is tied directly to the appraisal process. Any rating below fully successful automatically triggers a process that results in either improved performance or removal from the workforce. The demonstration project option, in total, can provide a private-industry-oriented personnel system that is responsive to management needs. While it does not offer the broad freedoms enjoyed by private industry, it is a positive step in the right direction. The Army has ventured into the demonstration-project-type system for its non-appropriated fund workforce, but has not adopted it for any appropriated fund activity. ARL may present an opportunity to do that. GOCO ARL Option Under this option ARL could have a powerful base of capability to hire very high-caliber talent from the workforce market. This could include full-time, part-time, and short-term employment that is limited only by overall fund restrictions in the contracts. This also permits reaching out to scientists and engineers who are attuned to the state of the art in virtually any field of R&d that is required. Salaries and fringe benefits that equate to those provided by industrial world-class laboratories or research facilities would be possible. The requirements for the contractor to offer conversion rights to all current ARL employees would create an initial restriction on hiring. The ability to pay for performance is inherent in a GOCO operation. Many private industrial companies have highly sophisticated appraisal systems where performance evaluation is linked directly to pay and retention of the employee as part of the workforce. This also permits both monetary and honorary recognition of high performers.

APPENDIX D 213 In a GOCO operation it would be easier to fire an unsatisfactory employee than in any of the other options being considered. This would be particularly true of the S&E portion of the workforce where tenure need not be a consideration, but performance would drive the decision. However, in GOCO operations the impact of unions and fair labor practices acts may constrain the firing process with legal obstacles. Personnel Findings The most significant findings, as covered above, were the following: • Within existing laws and regulations, much can be improved in the personnel management area. • Of the four options being considered, the GOCO ARL option offers the greatest opportunity for achieving excellence in the personnel arena, at a greater cost. • The demonstration project option offers relative economy plus substantial enhancements in the personnel management area. • All of the options being considered involve labor/management relations issues that would have to be addressed at conversion time. CONTRACTING For the purposes of this study, contracting considerations fall into two broad and very different categories. The first of these applies only to the option of converting ARL to a GOCO for which there are contracting issues regarding the establishment of a new GOCO. These include, for example, the appropriate approvals, generation of the necessary procurement documentation, contractor selection, and oversight provisions. Detailed examination of the process for the formation of a new GOCO is beyond the scope of this study. The second category pertains to the provisions and restrictions that apply to the various organizational types under consideration in this study in their procurement and contracting-out activities. Of particular importance are those regulations which procedurally tend to adversely impact research activities. In general, it can be said that the farther one moves in contracting and procurement practices away from government standards and toward those of private industry, the faster and more efficient are the processes. Sluggish procurement practices have the effect of slowing down research progress and hurting staff morale. Scientists and engineers become frustrated and feel under-supported by their administrators and management. Their work is

APPENDIX D 214 delayed sometimes months for want of a seemingly simple item hung-up in the bureaucratic paper mill of procurement. In some cases the wrong item is delivered as a result of adherence to regulations governing bidder selection. In all fairness, the government, in recognition of these problems, has instituted several innovative practices for low value items utilizing credit cards distributed to certain centers. These practices represent a significant improvement and, in the enhanced ARL options and demonstration project option, should be exploited fully. Further, local or service imposed constraints should be selectively eliminated. Likewise, for these options, methods for streamlining contracting-out practices should be sought and used. More extensive use of Competition in Contracting Act exceptions should be promoted. Every indication suggests that in the GOCO ARL option, commercial practices in conformance with the Federal Acquisition Regulation and other applicable regulations, have the potential of providing high-quality support service to the S&Es. At Sandia, for example, the process of contracting out support services is streamlined by the use of pre-approved qualified vendors. The examples of speed in the procurement process cited by Sandia were mostly in the architectural and engineering area for building construction where requests for quotations are used to award contracts to the lowest bid received from the population of pre-qualified bidders. Specific contracting implications of each ARL conversion option are provided in the paragraphs below. ARL Enhanced and Multicenter Options Under either of these ARL options, there are to be no changes in the Federal Acquisition Regulation requirements and the only efficiency improvement possible is to follow procurement practices that have proven successful at other places. For example, the Sandia contracting process makes use of pre-qualified bidders for certain procurement—this could be done by ARL. There are ways to speed up the current Federal Acquisition Regulation processes, but most of these ways require command emphasis and a desire to get things done rapidly. The move to define small purchases as being under $100,000 should improve the speed with which procurement is completed at all federal agencies, and it would help ARL. NIST Option This option would still be under the Federal Acquisition Regulation and be subject to the same processes as described for the ARL enhanced options

APPENDIX D 215 above. There are several things being done at NIST that would improve ARL if they were used more extensively (e.g., use of a credit card for small purchases). GOCO ARL Option Theoretically, this option should provide the most flexible contracting procedures and the fastest completion time on all contracting actions. This would certainly be true if the contractor running the operational site(s) was independent of as many government regulations as possible. As the committee saw at Sandia and other DOE laboratories, this may not always be the case; however, when true relaxation of the procurement process rules is permitted, the committee believes that the process will move more smoothly and the end result will be more rapid completion of all contracting actions.

APPENDIX D 216 REFERENCES Aerospace Corporation. 1993. Informal communication to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. Army Laboratory Command. 1990. GOCO's vs. Army Labs. Internal Report. March 23. Army Laboratory Command. 1991. CMRL baseline study. Briefing of the Laboratory Command. April 29. Army Materiel Command. 1993. Informal communication to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. Army Research Laboratory. 1993. Informal communication to the Cost, Personnel, Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. Brookhaven National Laboratory. 1993. Informal communication to the Cost, Personnel, and Contracting panel, Committee on the Alternative Futures for the Army Research Laboratory. Cassady, A.1991. 1991 NIST Personnel Management Demonstration Project: Design, Implementation and Accomplishments. NISTIR 4640. July. Coopers & Lybrand. 1991. Indirect costs survey of comparable government contractors. Letter to Aerospace Corporation. June 13. Defense Base Closure and Realignment Commission. 1991. Report to the President. Washington, D.C. July 1. Department of the Army. 1992a. Estimating Costs of Reduction in Force (RIF). DAPE-CPE. June 29. Information Paper. Department of the Army. 1992b. Army Science and Technology Master Plan. November. Department of Defense. 1991. Background material on GOCOs. Laboratory Demonstration Program Panel. June.

APPENDIX D 217 Department of Defense. 1993. DOD Program for stability of civilian employment, DOD displaced employees information and entitlements pamphlet. Pamphlet 1400.20-1-P. Revised April. Department of Energy. 1992. Capsule review of DOE research and development laboratories and field facilities. Office of the Technical Advisor. September. Department of Energy. 1993. Appendix A (Personnel Appendix) to a typical National Laboratories contract. Hay Group. 1992. Comparison of benefits: management and operating contractors compared to national survey. March. 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. Kramer, S. 1993. An overview. Briefing by S. Kramer, Associate Director, National Institute of Standards and Technology. National Institute of Standards and Technology. 1992. NIST evaluation of a Hay management consultants report on Total Compensation Comparability. January 10; Informal communication to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. National Institute of Standards and Technology. 1993. NIST: Research. Services. Facilities. National Research Council. 1993. Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers. National Research Council. National Academy Press: Washington, D.C. Naval Air Warfare Center. 1993a. Navy demonstration project under the Civil Service Reform Act (CSRA). Series of briefings, China Lake, California, July 7, 1993. Naval Air Warfare Center. 1993b. Informal communication to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. China Lake, California.

APPENDIX D 218 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. Sandia National Laboratories. 1990. Strategic plan 1990. Sandia National Laboratories. 1992. Sandia National Laboratories: Strategic human resource plan, Fiscal Year 1993–Fiscal Year 1991. October. Sandia National Laboratories. 1993. Introduction to Sandia Laboratories. Series of briefings to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. Albuquerque, New Mexico, July 8, 1993.

BIBLIOGRAPHY 219 BIBLIOGRAPHY Aerospace Corporation. 1993. Informal communication to the Committee on Alternative Futures for the Army Research Laboratory. July. Army Material Command. 1993. Informal communication to the Committee on Alternative Futures for the Army Research Laboratory. July 18. Letter. Army Research Laboratory. 1992. Annual report. Army Research Laboratory. 1993a. Army Research Laboratory Business Plan: Fiscal Years 1994–2004. Army Research Laboratory. 1993b. Informal communication to the Committee on Alternative Futures for the Army Research Laboratory. Atwood, D.J. 1989. Laboratory demonstration program: Actions for improvement of the quality, productivity, and efficiency of DOD laboratories. November 20. Memorandum. Brookhaven National Laboratory. 1993. Informal communication to the Committee on Alternative Futures for the Army Research Laboratory. June 15. Facsimile. Congressional Budget Office. 1982. Contracting Out for Federal Support Services: Potential Savings and Budgetary Impacts. October. Coopers & Lybrand. 1991. Indirect Cost Survey of Comparable Government Contractors. Letters to Aerospace Corporation, June 13. Defense Base Closure and Realignment Commission. 1991. Report to the President. Washington, D.C. July 1. Department of the Army. 1992a. Estimating Costs of Reduction in Force (RIF). DAPE-CPE. June 29. Information Paper. Department of the Army. 1992b. Army Science and Technology Master Plan. November.

BIBLIOGRAPHY 220 Department of Defense. 1991. 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. Department of Defense. 1992. Interservice Interdepartmental, and Interagency Support. DOD Instructions 4000.19. April 15. Department of Defense. 1992. Annual report. Tri-Service Science and Technology Reliance, Joint Directors of Laboratories. December. Department of Defense. 1993. DOD program for stability of civilian employment, DOD displaced employees information and entitlements pamphlet. Revised April 1993 (FM&P). DOD Manual 1400.21-1-P. Department of Energy. 1982. The Department of Energy Multiprogram Laboratories, A Report of the Energy Research Advisory Board to the United States Department of Energy. September. Department of Energy. 1992. Capsule Review of DOE Research and Development Laboratories and Field Facilities. Office of the Technical Advisor. September. Department of Energy. 1992. The National Laboratories of the U.S. Department of Energy. Department of Energy. 1993. National Compensation Survey of Research and Development Scientists and Engineers. Wyatt Comparison Report for DOE. April 15. Department of Energy. 1993. Appendix A (Personnel Appendix) to a typical National Laboratories contract. Department of Energy. 1993. Informal communication from the Director, Employee Compensation and Benefits Division to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. July 9. General Accounting Office. 1988. Federal Productivity: DOD's Experience in Contracting Out Commercially Available Activities. GAO Report GAO/GGD-89-6. November.

BIBLIOGRAPHY 221 Hay Group. 1992. Comparison of Benefits: Management and Operating Contractors Compared to National Survey. March. Heeb, M. 1993. GOCO or status quo for defense R&D laboratories. Briefing to the Committee on Alternative Futures for the Army Research Laboratory, Washington, D.C. August 2, 1993. Naval Air Warfare Center (NAWC). 1993. Navy Demonstration Project under the Civil Service Reform Act (CSRA). Series of briefings to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. China Lake, California. July 7. Naval Air Warfare Center. 1993. Informal communication to the Cost, Personnel, and Contracting panel, Committee on the Alternative Futures for the Army Research Laboratory. July 29. Facsimile. National Institute of Standards and Technology. 1991. NIST Personnel Management Demonstration Project: Design, Implementation and Accomplishments. NISTIR 4640. July. National Institute of Standards and Technology. 1992. NIST Evaluation of a Hay Management Consultants Report on Total Compensation Comparability. January 10. National Institute of Standards and Technology. 1993. An overview. Briefing by Dr. Samuel Kramer, Associate Director, NIST, Gaithersburg, Maryland. May 13. National Institute of Standards and Technology. 1993. NIST: Research. Services. Facilities. National Institute of Standards and Technology. 1993. Informal communication to Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. July 6. Facsimile. National Research Council. 1993. Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers, A Report to the Carnegie Commission on Science, Technology and Government. National Research Council. Washington, D.C.: National Academy Press. Naval Research Laboratory. 1984. Final Report of the Working Group on Federal Laboratory Personnel Issues. July 1.

BIBLIOGRAPHY 222 Naval Research Laboratory. 1993. 1992-1993 Fact Book. NRL Publication NRL/PU/5240-93-238. June. Naval Research Laboratory. 1993. Informal communication to the Cost, Personnel, and Contracting panel, Committee on Alternative Futures for the Army Research Laboratory. July. Letter. Sandia National Laboratories. 1990. Strategic plan. Sandia National Laboratories. 1992. Sandia National Laboratories: Strategic human resource plan, fiscal year 1993-fiscal year 1991. October. Sandia National Laboratories. 1993 Introduction to Sandia Laboratories. Set of briefings for the Cost, Personnel, and Cost panel, Committee on Alternative Futures for the Army Research Laboratory. Albuquerque, New Mexico. July 8, 1993. Sandia National Laboratories. 1993. Sandia National Laboratories 1993. U.S. Army Laboratory Command. 1991. CMRL Baseline Study. LABCOM Briefing. April 29.

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