From Reform to Reduction: Reports on the Management of Navy and Department of Defense Laboratories in the Post-Cold War Era J. Eric Hazell A joint publication of the National Defense University and the Naval Historical Center Washington, DC 2008 C ONTENTS The Author .....................................................................................................v Acknowledgments .........................................................................................v Foreword .....................................................................................................vii Preface .........................................................................................................ix List of Reports ..............................................................................................xi List of Tables .............................................................................................xvii Introduction ..................................................................................................1 Purpose and Scope ........................................................................................1 Using this Book .............................................................................................3 Overview of the Navy Laboratory System ........................................................3 Themes and Conclusions................................................................................6 Chapter One — Navy Laboratories at the End of the Cold War ...................11 Starting Points — The Packard Commissions and the Defense Science Board on Technology Base Management ......................... 12 The Second Packard Commission ............................................................ 15 The Defense Science Board on the Technology Base and Laboratory Demonstration Program .................................................. 17 General Overviews of the Technology Base.................................................... 19 Inherently Governmental Functions......................................................... 22 Smart Buyer .......................................................................................... 23 Goldwater-Nichols and the Defense Management Review (DMR) ..................... 24 DMR Implementation ................................................................................... 26 Laboratory Consolidation Studies .................................................................. 32 Laboratory Demonstration Program (LDP) ..................................................... 35 Pre-BRAC Inter-Service Reorganization ......................................................... 36 BRAC 91 ..................................................................................................... 37 The Adolph Commission ............................................................................... 41 Chronology of Navy Warfare Centers/Corporate Lab Standup .......................... 46 Chapter Two — BRAC 1993 and 1995 .........................................................49 Background ................................................................................................ 50 BRAC 93 ..................................................................................................... 51 BRAC 95 ..................................................................................................... 55 Chapter Three — The Triumph of Efficiency ................................................65 Background ................................................................................................ 65 Overview of the Studies ......................................................................... 66 The DSB on Laboratory Management ............................................................ 67 National Science and Technology Council Interagency Review of Federal Laboratories ................................................................................ 70 The Laboratory Infrastructure Capabilities Study ...................................... 70 The Interim Response ............................................................................ 74 The DOD Response ............................................................................... 77 The BRAC 95 Addendum ........................................................................ 80 The Office of Science and Technology Policy (OSTP) Final Report .............. 81 Defense Conversion ............................................................................... 81 The Commission on Roles and Missions of the Armed Forces (CORM) .............. 82 CORM and Outsourcing Commercial Activities .......................................... 83 The Center for Naval Analyses on Outsourcing .............................................. 85 The DSB’s Unqualified Advocacy of Outsourcing ............................................. 88 Re-Investment and Infrastructure ................................................................. 93 Infrastructure Reduction .............................................................................. 96 Chapter Four — Outsourcing and its Discontents .....................................101 Introduction .............................................................................................. 101 Smaller Equals Better? ............................................................................... 102 Contracts Equal Efficiency?......................................................................... 103 Defense Department Equals Obsolescent? ................................................... 107 The S&T Investment Process...................................................................... 109 Efficiency and Competition ......................................................................... 110 Conclusion ................................................................................................ 114 Chapter Five — Effectiveness Defeated .....................................................117 Introduction .............................................................................................. 117 The Laboratory Community on Barriers to Effectiveness ............................... 118 The Naval Research Advisory Committee ..................................................... 121 Leveling the Playing Field — A Common Financial System ............................ 126 The Laboratory Quality Improvement Program (LQIP) ............................ 127 The LQIP Financial Subpanel Report ..................................................... 127 The Cost-Based Management Tool (CBMT) ............................................ 130 Migrating DOD Labs to a Working Capital Fund ...................................... 132 LDP and LQIP Successes and Failures ......................................................... 134 Other Congressional Attempts at Laboratory Reform .................................... 135 Section 912(c) Technology Leaders Workshop ....................................... 135 Section 246 Pilot Program .................................................................... 135 Other Legislation ................................................................................. 137 Bibliographic Note — Other Studies on Lab/Center Effectiveness ................... 137 Cost Visibility/Comparability Chronology ...................................................... 139 Conclusion .................................................................................................141 Bibliography ..............................................................................................147 Appendix A — Sources on the Management of Navy/DOD RDT&E ...........157 Overview of NRL Archive ............................................................................ 157 Box Index (September 2007) ............................................................... 159 Overview of Cold War-Era RDT&E Management Archive, Naval Historical Center (NHC) ..................................................................... 162 Box Index ........................................................................................... 163 Appendix B — A Brief Overview of the Navy’s Industrial Funding ............169 Acronyms ...................................................................................................171 Index ......................................................................................................175 The Author J. Eric Hazell has been an archivist and historian for the Navy’s laboratory community for 14 years. He has published or co-published articles in the Naval Institute Proceedings, International Journal of Naval History, and Acquisition Review Quarterly (now Defense AR Journal), and written for other publications such as the Philadelphia Inquirer and Landscape Architecture. He received his Ph.D. in history from the University of Maryland, where he also teaches in the Professional Writing Program. He resides in Bowie, Maryland, with his wife and three children. Acknowledgments I wish to thank Dr. Hans Binnendijk, Director of the National Defense Uni- versity’s Center for Technology and National Security Policy, for supporting this project. Rear Admiral Paul E. Tobin, Director of the Naval Historical Center, and Dr. Edward Marolda, the Center’s Senior Historian, both reviewed the manu- script. Lea Chartock, Director of the Professional Writing Program at the Univer- sity of Maryland, offered many helpful editorial suggestions. Kathy Parrish and Donna Gloystein