1. Independent Research and Development (IR&D) Program
IR&D activities are planned, performed, and funded by companies in order to maintain or improve their technical competence or to develop new or improved products. Industry IR&D efforts amount to more than $2 billion annually. A portion of a company's annual IR&D expenditures and its companion Bid and Proposal (B&P) costs can be recovered later in the overhead portion of its contracts with commercial concerns and with DoD. The FY92 Defense Authorization Bill simplified the procedure used to reimburse companies for relevant IR&D work. Beginning in FY96, contractors were reimbursed for up to 100 percent of their IR&D expenditures that meet "potential interest to DoD" criteria.
Prior to FY93, company IR&D programs were assigned to a lead Service for purposes of technical review and cost-recovery negotiations. The new law eliminates these assignments and focuses on utilization of industry's significant IR&D technology resources through technical interchange meetings. IR&D technical interchange meetings are arranged by mutual agreement of the company and the government to review and discuss a focused set of technology and/or product development projects. These meetings promote face-to-face technical interaction between contractors and the government, provide feedback to companies so that IR&D activities are aligned with future government needs, and permit government participants to visit the contractors' facilities and view operations. Many of the Service and company assignments established prior to FY93 have proven to be mutually beneficial and will be continued voluntarily. Company and Government personnel are free to continue frequent informal dialogue and technical information exchange even though they no longer maintain a formal assignment to one another. There is no required frequency of meeting, but most contractors express a desire to meet at least annually. (The Army IR&D information exchange process is shown in Figure VII-5.)
Figure VII-5. Independent Research and Development (IR&D) Communication Process
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The projected downward trend of DoD expenditures affects the future of industry IR&D activities. Rigorous cost competition in the defense industry has caused pressure to reduce overhead (including IR&D), and decreasing sales have reduced the base against which IR&D costs can be charged. The likely result--erosion of industry's IR&D technology base--led to the new cost recovery process and a broadened set of cost-recovery criteria as means to limit this loss of U.S. technical strength and encourage interest in defense conversion and in dual-use technology. The new criteria for reimbursement are to:
- Enable superior performance of future weapon systems and components.
- Reduce acquisition costs and life-cycle costs of military systems.
- Strengthen the U.S. defense industrial and technology base.
- Enhance U.S. industrial competitiveness.
- Promote the development of critical technologies (as identified by DoD).
- Increase the development of technologies useful in both the public and the private sectors.
- Develop efficient and effective technologies for achieving environmental benefits.
Improved communications between industry and government on IR&D is the heart of successful leveraging of IR&D, and continues to be an area of broad emphasis through frequent interaction of Army leadership and industry IR&D representatives. Recent improvements to the IR&D reporting and review processes will significantly enhance the Army's ability to strategically leverage IR&D developments. These improvements include CD-ROM technology applied to the IR&D data base at the Defense Technical Information Center (DTIC), a new DoD Instruction on IR&D that will ensure more complete reporting of IR&D to government and more complete review of appropriate IR&D by the Army. An IR&D Web site on the Internet is coordinated by the Air Force IR&D manager. This service will provide contractors access to relevant DoD planning information to focus their IR&D expenditures on relevant DoD technology needs. The bulletin board will also contain a schedule of IR&D Information Exchange meetings to inform and encourage government personnel participation in these important information exchanges with contractors as well as other government personnel.
Prior to FY94, the Army received IR&D technical information through several means: paper reports submitted by industry, on-site review meetings, access to the IR&D data base at DTIC through dedicated computer terminals connected to the DTIC mainframe computer, and the Army IR&D database maintained by ARO. The IR&D data base on CD-ROM, issued by DTIC beginning in FY94, has significantly enhanced the Army's ability to leverage IR&D. The CD-ROM contains the entire data base of current industry IR&D technology developments, and permits every Army activity to maintain the complete IR&D data base of Industry's IR&D expenditure on a personal computer. Once full industry IR&D reporting to DTIC is achieved, as emphasized in the new DoD Instruction on IR&D, the CD-ROM will become a reliable and comprehensive source of industry technology.
Through utilization of the IR&D data base on CD-ROM, local Army IR&D managers should be able to better target IR&D projects of interest, vector those project write-ups to local scientists and engineers, and follow-up positive in-house response by establishing technical information exchange meetings. These meetings are the vehicle whereby the Army communicates technology needs to industry, and industry communicates IR&D progress and plans to Army scientists and engineers. Results of this process are Army programs and systems enhanced by IR&D and industry IR&D more focused on Army technology needs.
There are many "Success Stories" of technologies and system concepts developed or matured under IR&D which have been fielded by the Army. A recent example is the Crusader Program, formerly the Advanced Field Artillery System and the Future Armored Resupply Vehicle (see Figure VII-6). Many of the supporting technologies, including the basic concepts for these vehicles, were initiated in company IR&D programs. Some of the basic technologies which form the performance base for the Crusader in meeting its direct and general fire-support missions include the regenerative liquid propellant gun and its propellant, advanced techniques for technical and tactical fire control, MIMIC chips for fuze processing, polymer reinforced lightweight vehicle structures, and automatic ammunition handling and man/machine interface technologies.
Figure VII-6. Crusader Self-Propelled Howitzer