In the summer of 1996, the Executive Office of the President undertook a
study to assess the progress of the Departments of Defense (DOD) and
Energy (DOE) and the National Aeronautics and Space Administration
(NASA) in implementing reforms directed in Presidential Decision
Directive (PDD) NSTC-5, Guidelines for Federal Laboratory Reform
(see Appendix A). These agencies already had reform efforts
underway, but the PDD specifically called for agency action in four
areas. The agencies were directed to streamline management practices,
regulations, and oversight that impede laboratory performance; clarify
and focus laboratory missions; reduce or eliminate low priority
programs; and coordinate laboratory resources and facilities to
eliminate unnecessary duplication.
The objective of the reforms mandated by the President is to maintain
the scientific excellence that is the hallmark of our national science
and technology enterprise while improving scientific productivity.
Beyond this important goal, successful reform will also have a
significant impact on the broader objective of making government work
better for less. The laboratory systems of DOD, DOE, and NASA are by far
the largest in the federal government, accounting for at least 20
percent of the entire federal research and development (R&D) budget,
and spending over 80 percent of the funds allocated government-wide to
federal laboratories. Collectively they play a major role in performing
R&D to serve national needs. Moreover, the individual laboratories
are rich in human talent and facilities, many of which provide unique,
state-of-the-art capabilities used by researchers from universities and
industry. The DOE and NASA laboratories are deeply integrated into the
fundamental science enterprise, while the overarching mission of the DOD
and DOE weapons laboratories is to serve national security requirements.
All the laboratories have been vital forces in advancing technology
associated with their missions, and most participate in partnerships,
collect ively supporting a broad range of industrial sectors.
To conduct this study, the Office of Science and Technology Policy
(OSTP) polled the subject agencies, sampled the laboratories, and
examined documents pertaining to agency and laboratory reform as well as
reports produced by other government agencies, including those of the
General Accounting Office. The Department of Energy invited OSTP to
observe its internal meetings as well as those of its Laboratory
Operations Board. This participation provided us with a deeper exposure
to DOE's progress and challenges than can be obtained via documentation
and discussion alone.
This status report provides a snapshot of an ongoing, dynamic reform
process in all three agencies and their laboratories. Section II
summarizes how the agencies have responded to the Presidential Decision
Directive, emphasizing aspects more or less common among the three
agencies. In Section III we propose recommendations for how to build on
the reforms accomplished to date, and include suggestions for next
steps. Section IV details our findings by individual agency, followed by
a brief summary in Section V. Appendices provide additional details from
each agency on the status of its reforms.
Considerable effort is being expended by DOD, DOE, NASA, and their
laboratories to plan, document, and implement the directives of the PDD
as well as the agencies' own independent reform initiatives. Both
reforms and downsizing have considerable momentum and are continuing,
since much remains to be done. White House and Congressional mandates,
along with budgetary pressures, are driving the changes.
1. Mission clarification and priority setting. Each agency is
engaged in a major strategic planning process, typically involving
employee and stakeholder input, with the plans available to the public
through their Internet home pages. None of the agency strategic plans,
however, includes a clear and specific vision describing the role and
nature of that agency's laboratory system--the 'end-point' of reform--in
sufficient detail to guide its evolution. Nonetheless, agency and
laboratory missions are being clarified substantially, refined, and
communicated. Few, if any, hard priority choices have been made, except
when forced by immediate budgetary pressures or specific Congressional
action.
2. Regulation, directive, and oversight reform. The agencies
are revising directives and orders, and the quantity of such documents
has been reduced markedly. In addition, staffing levels have decreased
and the number of contract compliance audits has declined. Despite what
agencies report to us about the progress they have made in this area, it
is too soon to assess reductions in administrative work resulting from
the decrease in directives and orders. To date, the substantial effort
invested in reviewing and reducing directives and orders tends to have
outweighed the savings. This effort is likely to abate as the reforms
mature. Beyond that, however, we found that declining numbers of
directives and orders do not necessarily translate into decreased
requirements (or even the number of pages in the directives and orders).
In addition, continuing micromanagement of the laboratories impedes
progress, particularly at DOE. The message from agency top management
for change is often not implemented a t the working level.
3. Management streamlining. Beyond the effort invested in
reducing directives, orders, and oversight, agencies and laboratories
have started to reengineer administrative and support functions. This
activity is coupled with the directives and oversight reform described
above, because inefficient administrative/support systems evolved to
meet agency directives and the requirements of procedures manuals. As
onerous requirements are eliminated, streamlining becomes possible.
Automation of administr ative systems and electronic communication are
simplifying administrative processes by reducing the number of steps and
the need for redundant information entry and processing by different
offices involved in each transaction. Simultaneously, the transaction
speed and the ability to check status of administrative processes are
increasing.
Management streamlining is proceeding at the agencies and individual
laboratories, tailored to each situation. Streamlining options and
progress, however, are limited by the requirements of federal personnel
rules and other regulations, over which the agencies and laboratories
have no control. If these requirements were relaxed or eliminated, the
laboratories would have considerably more latitude to reduce support
costs and increase scientific productivity and quality.
Staff reduction programs are having an impact on both technical and
support personnel. In some cases, these losses have weakened program
management capability at agency headquarters, and eroded scientific and
technical excellence and leadership at the laboratories. For research
laboratories with Civil Service staff, limits on the number of
high-GS-level personnel hamper the retention of highly qualified
scientists and engineers. Since the entry level for Ph.D. scientists and
engineers is GS-11 or 12, these technical personnel find their career
advancement slowed or blocked. In essence this policy encourages the
best people to seek employment elsewhere after a few years, to find
opportunities for promotion. Furthermore, nonvoluntary staff reduction
programs tend to reverse recent progress in workforce diversity, as
minorities, women, and the disabled typically have less seniority than
average.
4. Interagency, interservice, and interlaboratory
coordination. Cooperation and collaboration is growing among
agencies, laboratories, industry, and academia on R&D topics of
mutual interest. This cooperation is broader than the three agencies
included in the initial laboratory-reform effort, and can be credited in
part to tightening budgets and the Administration's emphasis on pooling
resources and forming partnerships, and in part to regular, formal
interactions via NSTC Committees. Contacts among agency and laboratory
personnel and programs close to the grass-roots level have been
important in formulating scientific initiatives and in advancing science
and technology. The computerized interagency Major Facilities Inventory
(accessible through the Internet at http://131.182.171.171/)
includes over 1700 R&D facilities operated by NASA, DOD, DOE, the
National Oceanographic and Atmospheric Administration (NOAA), and the
Federal Aviation Agency ( FAA).
5. Performance measures and tracking reform progress.
It is difficult but important to identify a set of measures (both
quantitative and qualitative) that accurately indicates reform progress.
However, the primary focus on cost savings and staff reduction as key
indicators paints at best an incomplete picture, and at worst can be
counter-productive. These metrics have no direct bearing on R&D
quality or relevance nor on the organization's contributions to national
goals. Agencies are investing considerable effort in developing
performance measures and collecting data. While some of this attention
and effort is useful, in other cases the cost of the measurement exceeds
the value of the information obtained. For quality of science the
somewhat subjective assessment of an external peer group remains the
most accurate metric. As recommended by the NSTC publication
Assessing Fundamental Science, it will be important to utilize
the maximum flexibility in the Government Performance and Results
Act to implement meaningful measures of R&D output, and to use
assessments of scientific productivity and quality in combination with
measures of efficiency and cost reduction to characterize reform
progress. Each agency and laboratory would be expected to have some
customized performance measures appropriate to its missions, but not
necessarily applicable or useful to other agencies and laboratories.
6. Comparisons and extrapolations. Meaningful comparisons
among the agencies and their laboratory systems are difficult, and
extrapolating from the experiences of one to the complex as a whole can
be subject to large error. Comparisons with regard to productivity
improvement are especially risky, since the laboratories and agencies
did not start at the same levels of efficiency nor did they have the
same problems. Moreover, readily available data are frequently not
comparable from agency to agency, among the laboratories, among services
within DOD, or even within a service. For the outcomes of greatest
interest--R&D quality, relevance/appropriateness, and
productivity--there are no generally accepted metrics, except for
qualitative evaluations obtainable via peer review. Data and metrics
that are available are only weak indicators of the desired outcomes.
7. Institutional Diversity. The agencies and their
laboratories differ substantially, making standardized reform
undesirable. Among the differences are civil service vs contractor
workforces; operation by the government vs profit contractor vs
not-for-profit contractor; and the specific missions and core
competencies. This diversity, in combination with the diversity provided
by industrial and academic research performers, is a strength of the
American R&D system. It should be modified only when doing so would
increase simultaneously the efficiency, productivity, mission
accomplishment, and innovation capability of the performers.
Standardization for its own sake is likely to be counterproductive,
although gains may be possible by ensuring that the institutional
characteristics of each laboratory are well matched to its mission.
The reform process is difficult--involving the disruption or termination
of long-established, if inefficient, ways of doing business.
Understanding the barriers to reform and developing mechanisms to
overcome these barriers will be the keys to success. We offer eight
recommendations to accelerate laboratory reform. These recommendations
fall into three categories, those aimed at enhancing scientific and
technical excellence, those that would streamline management and improve
productivity, and those intended to improve the utilization of
laboratory capabilities to address national needs. In addition, we
propose a ninth recommendation addressing next steps for the NSTC to
build on the progress that has already been made, and to extend the
reforms to the fed eral laboratories of other agencies.
To enhance scientific and technical excellence
1. Existing laws, regulations, and executive guidance must be reviewed
and modified to enable agencies and their laboratories to implement
personnel practices that promote scientific competence and renewal in
the workforce, especially at the government-op erated laboratories.
2. Performance measures (quantitative, qualitative, and peer review)
tailored to the unique character of R&D should be developed and
implemented to assess research quality, importance, and laboratory
productivity. (Reference: Assessing Fundamental Science and the
Government Performance and Results Act.)
3. Incentives should be developed to reward agencies and laboratories
for initiatives that preserve or enhance programmatic excellence and
productivity while reducing costs. Such incentives might include
allowing the laboratories to apply administrative savings to their
scientific programs, greater latitude for "Laboratory Directed
R&D," and reduced agency micromanagement and oversight.
To streamline management and improve productivity
4. Intensified agency leadership at the highest levels is needed to
ensure that the intentions of the reform process are reflected in
day-to-day operations and in requirements imposed on the laboratories.
5. Laws and regulations on any subject that impede laboratory reform
should be reviewed to identify candidates for repeal or modification.
6. The number and length of agency-specific regulations, directives,
and procedures should be reduced to the absolute minimum necessary for
safe, effective, and efficient operations. They should describe desired
outcomes, and set standards, but not mandate specific approaches. This
policy would mean, for example, that DOE should rely on external
regulation of its laboratories, except in specialized areas where the
operations are unique and hazardous and there are no appropriate
external regulators.
7. The Administration and Congress should conduct a pilot project to
fund R&D tasks at the laboratories on a multiyear basis, to
eliminate inefficiencies built into annual funding.
To improve utilization of laboratory capabilities to address
national needs
8. The NSTC should examine further and propose ways to reduce the legal,
financial, institutional, and cultural barriers to optimum utilization
of laboratory capabilities to promote greater cooperation among all
federal agencies and laboratories, and with the industrial and academic
sectors.
Next Step
9. The NSTC should establish an interagency working group on federal
laboratories to address these recommendations, review barriers to
laboratory reform, share lessons learned across government, and develop
and implement an action plan to continue the ref orm process.
