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Dec 15, 2010


Project On Government Oversight

Nice -- published, thanks!

Mandy Smithberger


I did some extensive research into FFRDCs when I was in college and just wanted to clarify your comment about caps on the amount of work by $$ that can be done by FFRDCs. Are you referring to something more than what they are appropriated each year? I didn't see something statutory when I was first looking but easily could've missed it.

~ Mandy

Observer V

MLD -- I sort of agree, but not sure the cap is meaningful due to the lobbying that sometimes succeeds. They also scrap with each other when a new oppty arises, e.g., at DHS a few years ago where they also had to compete with for-profits initially, too.

Also, FFRDCs have a conflict in finitum because they are sometimes asked to comment on or formally review for-profits' work. Their competitiveness takes hold sometimes, in places like the AF and Navy and NASA, where there is a vast gray zone of work that conventional contractors and FFRDCs can do.

No one's unconflicted, no matter what they say. And that goes for federal employees with all their understandable baggage of former and future work experiences, professional biases, and networks with the panoply of other government people.

LMUTT -- yes I have specifics, a couple of years old, that show various staff year costs for senior people, the kind of graybeards (sorry, ladies) that the FFRDCs insist they have in great depth. Labor category rates were on the order of 50-100 percent higher in the FFRDCs, mainly because of the extraordinary cost multiples, well north of 3.0. The direct pay is equiv to for-profits for these types. Just for fun, try to get rates and other pricing info (not proprietary cost info) from or about FFRDCs. They are quite successful, linking arms w their clients, in keeping those under wraps.

Another pernicious thing, if one wants to feed paranoia, is that the agreements for some FFRDC support are negotiated at the top and then dispensed by top officials to different offices within an agency. The offices don't have to budget for FFRDC support in the normal, bottom-up way. Thus it appears free to the end-users of the service, and that leads to waste, sloth and other naughtiness.


Observer -- Do you have any specifics about FFRDC labor costs? I'm curious to see how they compare to comparable for-profits of my acquaintance.


You overlook, or deliberately ignore, one crucial fact: FFRDCs have a ceiling of how much work (in dollars) they can do per year for the government. At the end of the day, private contractors have a responsibility to their shareholders that they meet their projected growths. FFRDCs have no such arrangement. Granted, they surely lobby to have their ceiling increased each year, but ultimately it is left up to government to decide.

Observer V

FFRDC staff year costs are on the order of double (2X) those of average large-firm contractors.

FFRDCs also, by virtue of their near perfect sole-source relationship with customers have a built-in conflict of interest with them. The concern is: will they upset their gravy train? Their answer is: being brutally honest is the only way to maintain that relationship. But another response that fits and unfortunately looks and sounds the same is: it is not good to upset the "sponsor."

Note the term "sponsor" instead of the terms customer or client that other contractors use. Sponsor is freighted with more intimacy than customer or client, by a country mile.

Every decade or so, the contracting industry gets concerned about the FFRDCs violating its turf, instead of just grazing on it casually. That time is here, again, because the WH has been well snookered by the FFRDCs and particularly their Defense clients. The only good thing about it is that the FFRDCs' considerable conflicts are more out in the open than profit-making industry's.

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