5

ARL Multicenter Option

The Army Research Laboratory Multicenter option involves contracting out most of ARL's work to several centers of excellence, under the oversight of a permanent staff of government technical experts, planners, and managers from the RDECs, the Training and Doctrine Command, Army staff, and other agencies. The object is to buy research and development from the best source, no matter what that source might be. This option, in a sense, would be a hybrid of current ARL assets and the GOCO option. The permanent staff of about 100 technical experts would be analogous to that of the Advanced Research Projects Agency.

In general, the option may be compared to the Air Force Wright Laboratory. The Wright Laboratory currently has a significant number of contractor personnel, industrial interns, and Air Force Ph.D. fellows working side-by-side with both military and civil service researchers. The out-of-house/in-house ratio of research comes close to that the committee recommends for the Multicenter option. Furthermore, the Wright Laboratory contracts with outside GOCO-like centers, such as the University of Dayton Research Institute (Bement, 1994).

This option abandons the concept of a central corporate laboratory. While there are many arguments in favor of such a laboratory, many leading commercial institutions are moving away from central laboratories, establishing more flexible arrangements to better ensure buying the best in any given field, and to gain the advantages of richer and more concurrent interactions among researchers, product and system developers, and customers (Dimmock, 1993).

ENHANCEMENTS

The ARL Multicenter option builds on the ARL Enhanced option (Chapter 3). It includes the same procurement, contracting, and personnel reforms; a narrowed program, with fewer business areas; new partnerships for technology transfer; and the recommended change in reporting channel, from



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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options 5 ARL Multicenter Option The Army Research Laboratory Multicenter option involves contracting out most of ARL's work to several centers of excellence, under the oversight of a permanent staff of government technical experts, planners, and managers from the RDECs, the Training and Doctrine Command, Army staff, and other agencies. The object is to buy research and development from the best source, no matter what that source might be. This option, in a sense, would be a hybrid of current ARL assets and the GOCO option. The permanent staff of about 100 technical experts would be analogous to that of the Advanced Research Projects Agency. In general, the option may be compared to the Air Force Wright Laboratory. The Wright Laboratory currently has a significant number of contractor personnel, industrial interns, and Air Force Ph.D. fellows working side-by-side with both military and civil service researchers. The out-of-house/in-house ratio of research comes close to that the committee recommends for the Multicenter option. Furthermore, the Wright Laboratory contracts with outside GOCO-like centers, such as the University of Dayton Research Institute (Bement, 1994). This option abandons the concept of a central corporate laboratory. While there are many arguments in favor of such a laboratory, many leading commercial institutions are moving away from central laboratories, establishing more flexible arrangements to better ensure buying the best in any given field, and to gain the advantages of richer and more concurrent interactions among researchers, product and system developers, and customers (Dimmock, 1993). ENHANCEMENTS The ARL Multicenter option builds on the ARL Enhanced option (Chapter 3). It includes the same procurement, contracting, and personnel reforms; a narrowed program, with fewer business areas; new partnerships for technology transfer; and the recommended change in reporting channel, from

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options the Commander, Army Materiel Command, to the Assistant Secretary of the Army (Research, Development and Acquisition). In its organization and management, however, it would depart radically from the ARL Enhanced baseline. The planning and analysis functions of ARL, now performed mainly by the Operations and Advanced Concepts and Plans directorates, would remain government responsibilities, preserving strong links with the Army staff and with users. The R &D program would be divided by business area among several (perhaps four to six) centers, chosen competitively to involve the very best performers to be found in the private or public sector. The centers of excellence could be government-owned and government-operated, government-owned and contractor-operated, or contractor-owned and contractor-operated. Some current ARL directorates might be among the centers. An external board of independent technical experts would replace ARL's current Board of Directors. This board would review ARL's R&D programs for technical quality and relevance, and advise on broad research directions. For purposes of analysis, it is assumed that 70 percent of the operating budget of ARL would be contracted out. That figure would be variable, depending on the Army's requirements and the availability of expertise inside and outside the Army at any given time. There could be a gradual transition for the ARL Enhanced or NIST options to the ARL Multicenter option through a systematic increase in the contracted out/internal ratio of funding over time. Permanent Staff The permanent staff would include about 50 to 100 senior scientists and engineers, planners, and managers whose central mission would be identifying the Army's technology needs, translating them into R&D programs at the centers of excellence, and overseeing and evaluating the implementation of the programs. It would include both civilian scientists and engineers and active-duty Army officers with advanced degrees. It would offer short-term rotating assignments, of one to two years, to personnel of the Army's RDECs and user agencies. Senior retirees from industry and academic institutions would also be offered short-term appointments, as provided for in the Defense Laboratory Demonstration initiatives that are the basis of the ARL Enhanced option (Atwood, 1989). The permanent staff would provide strong links to the users, communicate with requirements generators, and provide corporate memory. As government employees, its members would enjoy broad access to developments both at the centers of excellence and in the government. One or more small teams would be charged with identifying opportunities for

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options leveraging Army funds through small cooperative projects with outside organizations in related fields. In addition, the permanent staff would require the prestige to attract the best technical talent and industrial partners; the ability to bring in sufficient short-term expertise while maintaining corporate memory; a well developed strategy for identifying and acquiring the best technology, wherever it resides; the ability to quickly implement research decisions; and a tolerance of failure (Richardson, 1993). To maintain these qualities, ARL would need high-level Army support. It would also need the time to build its staff and reputation through high-quality research and development with tangible impacts on the Army. It should also be noted that if the key science and engineering centers in ARL are contracted out, it will be difficult to grow a government technical manager within ARL for the permanent staff. Technically-oriented managers would have to come from industry, academia, or from the RDECs. Centers of Excellence ARL's R&D development would be carried out by several centers of excellence, each concentrating on a single business area of the new, more focused ARL program. Centers could be owned and operated by the federal government (either current ARL directorates or the laboratories of other federal agencies) or run by industrial, academic, or nonprofit contractors, using government or contractor facilities. The mix of centers and the ratio of internal to contracted effort would evolve with time, depending on Army needs. The contracted centers would have broad, long-term missions similar to those of the GOCO laboratories of the U.S Department of Energy. Each would be responsible for carrying out research and development in a technology area equivalent in scope to those of today's ARL directorates (see Chapter 1). Contracts for the centers could be 5 to 10 years in length, with periodic performance and mission reviews. As new technologies became important to the Army, this version of ARL could quickly create new centers, while phasing out centers in maturing or otherwise unneeded technologies. If a maturing technology had proven its worth, the contractor could compete to work for the appropriate RDEC, which could continue to exploit the technology in system applications. At least two of the centers, it is assumed, would be derived from current ARL components, and would remain government-owned and operated. The analytical functions that support decision making in acquisition could form one or two such centers for the Survivability and Lethality Analysis

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Directorate and the Human Research and Engineering Directorate. Another likely candidate is the ARL Weapons Technology Directorate because of the uniqueness of its facilities, equipment, and personnel, which would be hard to replicate elsewhere. COMPARATIVE ASSESSMENT This option has major advantages over the other options considered by this committee, as well as a couple of disadvantages. The option was developed by the committee as a hybrid of the best of the ARL Enhanced, NIST, and GOCO options. It is therefore designed to yield the most favorable possible assessments, according to the committee 's assessment criteria. The option is also designed to take optimal advantage of the strengths of each of the other options: the flexibility and business practices of the private sector, as in the GOCO option, allied with the ARL Enhanced and NIST options' access to Army strategies and objectives. As shown in this report, the Multicenter option scores very high in comparison with the other options. One disadvantage is that there is no standing example to give credence to the assessment. A paper system can always look better than a real one. The Air Force Wright Laboratory is close in its operations. Another disadvantage will be the management of each center which is contracted out. Unlike the GOCO option, which will only have one contract, this option will have a few. Linkage to Army Strategy and Objectives The ARL Multicenter option is designed to optimize the linkage to the Army's strategy and objectives. The permanent staff would be devoted to that function, and would have the specific responsibility of linking world-class R&D with Army needs. The rotational appointments of personnel from RDECs and user organizations would complete the linkage. These strong connections with Army policy makers, the RDECs, and users would give ARL a clear focus on the needs and intentions of the Army, which would not be as easily accessible to the GOCO ARL option (Chapter 6). The ARL Enhanced and NIST options would have strong links, although they would lack the variety of this option. This option would therefore be superior to all of the others with respect to this criterion.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options World-Class Land Warfare Research The Multicenter option is designed specifically to buy science and technology from the best available sources, thereby attempting to achieve the highest quality. The permanent staff could thus achieve the world-class cachet of the Advanced Research Projects Agency. On the other hand, the centers of excellence would have neither the single clear reward system nor the rich variety to be expected of a single major contract laboratory, like that represented by the GOCO ARL option. Nor would they have the scale. By standards of pure research excellence, the GOCO ARL option might surpass it. The question of perception rears its head in this assessment. It is likely that implementing the ARL Enhanced option, for example, could greatly improve the lab, yet not counter perceptions about the quality or research and development in Army laboratories. The NIST option could be even better, but would have to be implemented with a burst of publicity to receive the respect from which NIST itself benefits. The ARL Multicenter option, like the GOCO ARL option, would involve radical change, and could therefore lead to immediate radical improvements in perception. Diversity and Quality of Research Sources Its combination of responsiveness and flexibility would make this option better than any other by this criterion. The option is designed for the highest possible diversity and quality of research sources. Its permanent staff would be charged with selecting technologies critical to the Army, and seeking the best available sources for those technologies, inside or outside the government. In order to do this, part of its permanent staff would have to come from industry or academia so as to bring in a knowledge of external sources. Technology Transfer to the Army This option would face a challenge in transferring technology to users, by way of the RDECs. All other things being equal, technology transfer should be best from internal staff, who have access to government information and cannot be suspected of commercial conflict of interest. There should be no proprietary barriers either in learning what industry has to offer, or in letting the user know what is available. The two internal options (ARL Enhanced and NIST) have advantages in that respect, because technology need not flow across the barriers between the private and public sectors. The ARL

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Multicenter option would, by this reasoning, be somewhat superior to the GOCO ARL option, but not to the others. But this option holds important potential for extremely effective technology transfer in particular cases. It would facilitate ARL 's moves out of maturing areas of technology, no longer of interest from ARL's standpoint, and into new areas, by phasing out existing centers and opening new ones. Support for the mature technologies could be assumed by the appropriate RDECs, simply by assuming responsibility for the center involved. The personnel working on the mature technology would continue to work on that technology after the transfer. Such transfers would test the Army's commitment to change, however. It would be difficult to bring a successful center to an end, for the sake of establishing a new and untested one. (In other guises, of course, this reluctance is felt by every R&D organization.) The test of management and oversight would be ARL's rate of turnover of centers over the years. (With 5-to 10-year contracts, this test would take more than a decade to produce meaningful results.) Short of these wholesale transitions, the permanent staff would ensure effective technology transfer to the Army by attracting rotational appointments from RDECs, doctrine developers, and users and by ensuring that ARL's R&D were aimed at Army needs. Ability to Leverage Funds and Programs This option would give ARL a strong ability to leverage Army funds and programs. Its emphasis on external sources of technology and rotating personnel assignments would give it a rich network of contacts with organizations in relevant areas of technology, which could not be equaled by an in-house option. At the same time, its permanent staff would be aware of Army needs and technology programs. Properly implemented, it would surpass all other options with respect to this criterion. It is quite possible that some of the contract centers of excellence would be in institutions doing broader work in the same areas. The synergy with other professionals in the same field could leverage funds and programs. The permanent staff would have a vital role in this respect. While most of the staff of the nucleus would be concerned with the major technologies of the centers, several small teams would be assigned to monitor, understand, and leverage particular technologies being developed elsewhere, through cooperative research agreements (see Chapter 3), cooperative research and development agreements, and otherwise, and translate it into Army terms and Army needs. The handicap these teams would have is that it is harder to perform this function without having large amounts of funds to disburse.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options Recurring Costs and Productivity The ARL Multicenter option has an inherent impetus for quality and productivity improvement, in the continuing competition among centers, which would be rewarded for improvements and phased out if they did not perform or became irrelevant. For this reason, the option would at least equal the GOCO ARL option in its ability to generate improvement and practice total quality management (within the contracted centers). Unless the permanent staff and the government centers of excellence have at least NIST-like personnel and procurement freedoms, it will be challenging for them to practice total quality management. It would surpass the ARL Enhanced or NIST options, which would remain subject to federal administrative constraints, albeit reduced ones because of the recommended personnel and procurement reforms (Chapter 3 and Chapter 4). In fact, this competition could become a management challenge. ARL would have to find some meaningful and objective common accounting measures for the recurring costs and output of its disparate centers. (It is unlikely that any center would allow others to benefit from unfair accounting.) Productivity is extremely hard to define and measure in this way, even in the context of a single organization, with a single accounting system. Still, this difficult task would be well worth attempting if it let ARL management reward improvements in productivity. Additionally, if a center failed to provide a technology that the Army needed, management could allow that center to lapse. Increased productivity would be a necessity owing to its higher pay scales. The average government scientist's or engineer's salary would be $52,700 (1993 dollars), the same as in the ARL Enhanced baseline. But 70 percent of the work would be done by contractors, at an average salary of $70,000. (These estimates are based on cost surveys of ARL and NIST commissioned by the committee; see Chapter 7 and Appendix D.) Based on a budget of $323 million, the total number of scientists and engineers, including contractors, would be 1,604, compared with 2,021 in the ARL Enhanced option. IMPLEMENTATION ISSUES The one-time cost of implementing this option is estimated to be substantially more than that of implementing either of the in-house options (i.e., ARL Enhanced and NIST). It would be less than that of the GOCO ARL option, because some people, facilities, and systems would stay in place. The one-time conversion cost would be between $56 and $70 million, including personnel costs and the costs of obtaining contractors. Most of this

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options cost ($48.5 million) is for severance and other personnel costs for the nearly 1,500 personnel who would be terminated, owing to the recommended narrowing of ARL's program and the higher salaries to contractors, under the committee's assumption that the operating budget for each option is equal. An additional $7.5 to $21.5 million is estimated to be needed for the contracting process, each time the contracts were put up for competition. (The amount depends on the number of centers contracted out to independent contractors.) Implementation of the Multicenter option would not be accomplished without considerable turmoil. Some government facilities might be closed. Many current employees would probably not find jobs in the new centers. One concern with this option (and with the GOCO ARL option, as well) is that if the work is performed in other than current or projected facilities it might conflict with findings of the Defense Base Closure and Realignment Commission (1991), which must consider all changes in military facilities. At the very least, such a change would require review by the Commission. OVERALL EVALUATION This option provides the conditions for a good balance of incentives for high-quality research, on the one hand, and responsiveness to Army needs on the other. However, it has its drawbacks. It would be contractually complex, in the first place. Overseeing a shifting collection of centers, each with its own administrative processes and traditions, would be challenging, to say the least. In addition, as mentioned earlier, implementation of this option would disrupt ARL quite thoroughly, dislocating personnel and interrupting some programs. Some government facilities might be closed. Many current employees would be displaced. In this committee's view, such disruption would be an acceptable price to pay for a laboratory that has a secure role for the future, and a deserved reputation for both excellence and responsiveness.

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THE ARMY RESEARCH LABORATORY: Alternative Organizational and Management Options REFERENCES Atwood, D.J. 1989. Laboratory demonstration program: Actions for improvement of the quality, productivity, and efficiency of DOD laboratories. November 20. Memorandum. Bement, Jr., A. L. 1994. Communication to the Committee on Alternative Futures for the Army Research Laboratory. March 4. Memorandum. Defense Base Closure and Realignment Commission. 1991. Report to the President. Washington, D.C. July 1. Dimmock, J. 1993. Personal communication by J. Dimmock, former Vice President for Research, McDonnell Douglas Aircraft Corporation. Richardson, J. 1993. Personal communication by James Richardson, Special Assistant, Advanced Research Projects Agency, Arlington, Virginia, August 31, 1993.