Sponsoring AgreementBetweenThe United States Air ForceandThe Aerospace CorporationFor Operation of the Aerospace FFRDC


(a) 10 U.S.C. Section 2304(c)(3)

(b) 10 U.S.C. Section 2367

(c) Office of Management and Budget (OMB), Office of Federal Procurement Policy (OFPP), Policy Letter 84-1 dated 4 April 1984

(d) Federal Acquisition Regulation (FAR) Section 35.017 (FAC 84-56 dated 7 March 1990)

(e) Department of the Air Force, Headquarters, Space Systems Division (AFSC), SSD Regulation 800-8 dated 13 March 1992

(f) The Aerospace Corporation's Articles of Incorporation (Adopted June 3, 1960, amended as of January 1, 1980)


A. This document is the agreement between the United States Air Force and The Aerospace Corporation (a California nonprofit mutual benefit corporation) for the sponsorship and operation of a Federally Funded Research and Development Center (FFRDC).

B. Except for those aspects which require a formal contract, this Agreement describes the special relationship between the Air Force and the Aerospace FFRDC, and defines the latter's purpose, mission, and general scope of effort. As such it constitutes the sponsoring agreement within the meaning of FFRDC regulatory guidance. A principal characteristic of this relationship, as discussed in FAR 35.017(a)(4) and hence made a part of this sponsoring agreement, is recognition that the special relationship is intended to be long-term. This encourages the Air Force to have an interest in the development and vitality of the Aerospace FFRDC and its personnel, and encourages the provision of sufficient physical and financial resources through contract continuity and reasonable funding stability from year to year so that the Aerospace FFRDC can maintain and develop the technical skills necessary to carry out its mission. The Air Force believes that this continuity enables the Aerospace FFRDC to: attract and retain high quality professionals; maintain currency in its fields of expertise; maintain objectivity and independence of judgment; preserve familiarity with the needs of the Air Force, Department of Defense (DoD), and other U.S. Government agencies; provide a quick response capability in addition to providing basic long-term support to the Air Force and DoD mission; and maintain an ongoing research and technology base.


A. Purpose and Mission Statement:

The purposes of the Aerospace FFRDC are to provide scientific and engineering support involving launch, space, and related ground support systems, as herein set forth: to engage in, assist and contribute to the support of scientific activities and projects for, to perform and engage in research, development and advisory services to or for, and to provide general systems engineering, engineering support, and systems integration support to the U.S. Government.

The mission of the Aerospace FFRDC is to aid the United States Air Force in applying the full resources of modern science and technology to achieve continuing advances in military space and space related systems which are basic to national security; to provide the Air Force's space efforts with an organization which is objective, possesses high technical competence, and is characterized by permanence and stability; to provide a vital link between the U.S. Government and the scientific and industrial organizations in the country with a capability and an interest in the space field; and, through its unique role, to help to ensure that the full technical resources of the nation are properly applied, and that the potential advances in the space field are realized in the shortest possible time.

The Aerospace FFRDC shall perform, under overall Air Force direction, advanced systems architecture, concept analysis and planning; research, experimentation, systems engineering and integration; shall recommend technical direction and provide general technical supervision in the complete field of U.S. Government national security space systems; and shall work closely with the U.S. Air Force in long range planning, systems analysis and systems comparison studies, including technical risk management, cost, and schedule assessments. The Aerospace FFRDC shall review ideas and concepts generated throughout industry and government, and help to ensure the proper integration between military requirements, technical capability and fiscal constraints. This detailed analysis, together with appropriate supporting experimentation, provides the soundest possible basis for the initial engineering specifications of systems, including the subsystem requirements, specifications, interactions and interfaces. This initial systems engineering work provides the basis for requests for proposals issued by the government to industry.

After a development program has been initiated, the Aerospace FFRDC, by virtue of its technical capabilities and its special relationship with the Air Force, shall support the U.S. Government through technical review, monitoring and steering of industry efforts, consistent with the economical and timely accomplishment of program and mission objectives. The Aerospace FFRDC shall ensure that technical deficiencies and weaknesses are isolated; and that the impact of new data, new developments and modified requirements on total systems concepts, technical performance, cost and schedule is properly assessed, and recommend appropriate changes to the Air Force.

In order to properly execute its responsibilities, the Aerospace FFRDC must attract and retain personnel of the highest technical capability. It seeks, through its policies and structure, to provide the type of environment that can ensure the development and retention of engineering and scientific experts and special facilities in the disciplines relevant to national security space systems, and to maximize support to the government by providing a cost-effective, highly efficient organization.

In accordance with the provisions of 10 U.S.C. Section 2367(a), work performed by the Aerospace FFRDC must be within its purpose, mission, and general scope of effort; except for applied scientific research under laboratory conditions authorized pursuant to 10 U.S.C. Section 2367(b).

B. General Scope of Effort:

The Aerospace FFRDC shall perform scientific, engineering, and technical oversight tasks in the following areas utilizing Members of the Technical Staff (MTS):

1. General Systems Engineering and Integration (GSE&I): GSE&I deals with overall systems definition; integration both within the system and with associated systems; analysis of system segment and subsystem design; design compromises and interfaces; review of hardware and software, including manufacturing and Total Quality Management; observation, review, and evaluation of tests and test data; independent launch readiness verification; support of launch, flight tests, and orbital operations; appraisal of the contractors' technical performance, through meeting with the contractors and subcontractors, exchange and analysis of information on progress and problems, and review of plans for future work; developing solutions to problems and technical alternatives for reducing program risk; providing cost/benefit analyses for changes or additions; and providing comments and recommendations in writing to the Government Program Director and/or Project Officer as an independent technical assessment for consideration in modifying the program or redirecting the contractors' efforts; all to the extent necessary to assure timely and economical accomplishment of program objectives consistent with mission requirements. Significant results of GSE&I shall be documented and used for maximizing effectiveness of new systems efforts and where appropriate as part of the Multi-Program Systems Enhancement Task.

2. Technical Review (TR): This is the process of appraising the technical performance of contractors through meetings, exchanging information on progress and problems; reviewing reports; evaluating presentations; reviewing hardware and software; witnessing and evaluating tests; analyzing plans for future work and evaluating such efforts relative to contract technical objectives; and providing comments and recommendations in writing to the Air Force Program Manager as an independent technical assessment for use in consideration of modifying the program or redirecting the contractor efforts to assure timely and economical accomplishment of program objectives.

3. Selected Research, Development, Test and Evaluation (SRDT&E): Includes research, development, test, and evaluation activities for which Aerospace is uniquely qualified because of the availability of specially qualified personnel, special facilities or background information obtained in support of other Air Force activities.

4. Plans and Systems Architecture (P&SA): Provides space system development planning support to SMC to provide future effective and secure military space systems that will satisfy user operational requirements. The development planning function includes: near term integrative planning support for SMC studies and planning for the evolution of current systems, as well as ad hoc studies of current issues in support of SMC; systems architecture that will provide a time phased plan for meeting the development goals; and systems planning that will define initial system characteristics for future space systems. This effort includes the definition of system requirements and concept definition; specification of system characteristics and overall system definition; and cost/benefit studies for new or modified systems and inter-operability considerations.

5. Mission Oriented Investigation and Experimentation (MOIE): MOIE consists of development of experimental and test capabilities critical to support the Space Systems Division acquisition process as well as analytical and experimental investigations in the sciences and technologies critical to space systems. The results of these investigations and the capabilities and experience developed by this effort will be used in the identification of system technology needs, new system designs, acquisition of future systems, and elimination of problems and constraints associated with current systems.

6. Multi-Program Systems Enhancement (MPSE): MPSE provides for a team action in performing horizontal systems engineering and integration involving ground, launch, space and support systems within SMC. Included under this category are efforts to review, analyze, develop and disseminate critical information in the areas of Total Quality Management, multi-systems engineering, engineering policy and resources, technical lessons learned, reliability, maintainability, standardization, inter-operability, parts engineering, parts policy, testing, Industrial Modernization Incentive Program (IMIP), productivity, manufacturing, quality assurance, life cycle cost, design-to-cost, value engineering, systems engineering, integrated logistics, support equipment analysis, documentation resource analysis, computer resources, transportability, human factors engineering, electromagnetic capability, systems security, and other areas involved in the systems acquisition support process; the tracking of program failures, anomalies and corrective actions; risk assessment, identification of risk trends, and recommendations for future risk avoidance; and maintenance of appropriate experience data bases and acquisition training support.

7. Engineering Methods (EM): EM consists of studies to facilitate the utilization and development of new/improved analytical techniques and other engineering tools applicable to space systems design, development, cost estimating, and the evaluation of new technologies and techniques for present and future space systems.

8. Foreign Technology Support (FTS). This support will provide foreign technology and intelligence and threat analyses to SMC in support of its planning and development efforts. This activity shall provide supporting analytical and evaluation programs and techniques, and provide detailed evaluations, studies, and presentations resulting from the exploitation and analysis of applicable foreign scientific and technical data.

C. The Aerospace Members of the Technical Staff (MTS).

Aerospace MTS are scientists and engineers who provide technical oversight and perform professional level technical work in the fields of Systems Engineering, System Integration, Engineering Sciences, Systems Planning and Basic and Applied Research, based on their extensive experience and technical education. The educational requirements for the MTS are a bachelor or advanced degree from an accredited college or university, except for rare instances. One MTS year is equivalent to 1810 direct labor hours of MTS effort. The cost of one MTS year includes the cost of MTS direct labor hours and the cost of the effort of supporting technical and administrative personnel, and all related expenses such as travel, computer usage, overhead, and fee.


A. The Air Force is the sponsor for the Aerospace FFRDC activities; that is, it funds and monitors specific work of a continuing nature and is the government party to the Sponsoring Agreement. As the sponsor, the Air Force acts to resolve policy matters with non-sponsors, if applicable, that may arise regarding the Aerospace FFRDC's activity.

B. Day-to-day management of the Aerospace FFRDC and its contract is carried out by the Space and Missile Systems Center (SMC), Air Force Materiel Command (AFMC). SMC leads discussions with interested parties to resolve matters which affect the performance of the Aerospace FFRDC. SMC also provides the Aerospace FFRDC with sufficient access to appropriate Government personnel, facilities, and technical and planning data to permit it to perform technical planning, architecture, risk management, and oversight functions.

C. SMC oversight of the Aerospace FFRDC activities includes setting broad program direction; oversight of ongoing development programs; review of annual work plans and manpower allocations; recurrent assessment of the Aerospace FFRDC efficiency and effectiveness; evaluation of the work performed by the Aerospace FFRDC; and resolution of intraprogram conflicts involving the Aerospace FFRDC.

D. The SMC Contracting Officer negotiates, awards, and administers the formal contract between The Aerospace Corporation and SMC regarding the Aerospace FFRDC, including modifications and determinations on contractual scope issues, and conducts periodic contract administration surveillance to ensure the proper use of the Aerospace FFRDC resources.

E. Criteria for use of the Aerospace FFRDC:

SMC ensures that the work undertaken by the Aerospace FFRDC is justified in terms of requirements for unique Aerospace FFRDC resources. Justification may be based on one or more of the following characteristics:

1. Freedom from bias due to predilections for a particular design, hardware and softwa re, or approach.

2. Need for state-of-the-art information developed in Government laboratories and universities.

3. Extent of access to DoD planning information.

4. Extent of access to U.S. intelligence.

5. Need for industry proprietary information.

6. Access to industry proposals.

7. Need for extensive background information.

8. Need for diversified skills.

9. Need for outstanding specialists in specific fields.

10. Continuity of effort.

11. Need for special facilities.


A. The Aerospace FFRDC shall promote technical excellence, and use its best efforts to achieve operating efficiencies and maintain an overall cost-effective operation.

B. Objectivity and Freedom from Conflict of Interest: The Aerospace FFRDC shall conduct its business in a responsible manner befitting its special relationship with the Air Force to: operate in the public interest with objectivity and independence; be free from organizational conflicts of interest; and have full disclosure of its affairs as an FFRDC to the sponsoring agency. In order to avoid organizational conflict of interest, the following policies are in place:

1. Non-Manufacturing: The Aerospace FFRDC shall not engage in the manufacture, production, or sale of any production systems (hardware or software) for operational use. The assembly or fabrication of prototypes, or test equipment required to perform development tests, are not included in this prohibition.

2. Non-Competition: It is not the Air Force's intent that its FFRDCs use privileged information, access to facilities, or assets obtained through the performance of FFRDC contracts to compete with the private sector. The Aerospace FFRDC shall not undertake work for any concern/organization having a commercial (for profit) or industrial interest. Pursuant to FAR 35.017-1(c)(4), the Aerospace FFRDC shall not compete with any non-FFRDC concern in response to any request for proposal issued by any Federal or international agency. However, the Aerospace FFRDC may compete for the formation and operation of an FFRDC, and with other FFRDCs for government work. Any other exceptions are at the specific written request of the sponsor.

C. The Aerospace FFRDC shall not disclose sensitive Government or industrial proprietary information coming into its possession to any individual, corporation, or organization, other than its own employees, without proper authorization.


A. Non-sponsor work shall be performed by the Aerospace FFRDC pursuant to Attachment 4 of SSD Regulation 800-8.

B. If the Aerospace Corporation proposes to engage in non-FFRDC activities consistent with its Articles of Incorporation (i.e. scientific activities for the U.S. Government) under separate contracts with DoD and non-DoD clients, it shall negotiate appropriate limitations with SMC.

C. Prior to implementation of any change, the Aerospace Corporation will advise SMC of any changes in the overall scope of its mission, tasking, or work programs for other organizations, and the potential impact, if any, on the Aerospace FFRDC operation. If the SMC Contacting Officer determines that non-FFRDC activities adversely impact FFRDC work, the matter shall be resolved by the SMC Commander and the President of the Aerospace Corporation. All work of the Corporation in its FFRDC and non-FFRDC activities will be reported to the Air Force/SMC annually.


A. Research and Development Activities

The Research and Development program consists of Mission-Oriented Investigation and Experimentation (MOIE) and Aerospace Sponsored Research (ASR). The Aerospace FFRDC will continue its Research and Development program to support its space systems engineering activities in accordance with references (a) and (c). The level and funding for the MOIE program is determined by the sponsor through contractual negotiations. The Aerospace Corporation's fee-funded ASR program is approved by its Board of Trustees, taking into consideration the negotiated fee and the DoD users' requirements and priorities.

B. Fee

The procedures prescribed in DFARS 215.972(b) (and 215.974 if applicable) shall be utilized in determining fee under the contract for operation of the Aerospace FFRDC. The SMC Contracting Officer shall also consider FFRDC-related proposed ASR, capital equipment, and fee for need in determining contract fees.


A. The Aerospace Corporation is organized and exists as a California nonprofit mutual benefit corporation without capital stock and shall not distribute assets to, or for the benefit of, any individual or entity. Since inception, its accumulations from fee and other income constitute its retained earnings which are used in part to fulfill working capital requirements and to further the scientific purposes of the Aerospace FFRDC.

B. The following addresses initial Aerospace capitalization as reported in the Third Report by the Committee on Government Operations, "Air Force Ballistic Missile Management (Formation of Aerospace Corporation)," 87th Congress, 1st Session, House Report No. 324, May 1, 1961. No capital was necessary for the 4 June 1960 incorporation and startup of The Aerospace Corporation. A letter contract with an effective date of 1 July 1960 was awarded by the Air Force less than a week later earmarking $1 million for the first item of work. Later that month the Air Force agreed to purchase certain facilities to be occupied, inter alia, by Aerospace employees from Space Technology Laboratories ( a wholly owned subsidiary of TRW) for $23.5 million and facilitated an agreement with Space Technology Laboratories and Aerospace for the transfer of certain leases and sale of certain leasehold improvements to Aerospace, subject to the lessor's approval. The Air Force provided Aerospace working capital in July 1960 by making a $5 million advance payment under the letter contract. All equipment used by Aerospace was purchased by the Air Force under facilities contracts as needed.

C. The Aerospace Corporation shall provide annually to SMC an accounting and reporting on the sources, uses, and balances of accumulated retained earnings, its plans for using the retained earnings for the next budget year and for the following budget year.

D. Any retained earnings from the performance of FFRDC contracts, and any personal or real property obtained by The Aerospace Corporation using such retained earnings, are to be treated as assets of the Corporation and disposed of as specified in Section VIII. below.


A. This Sponsoring Agreement shall be effective when executed by both parties. It will be in force for a five-year period, unless otherwise superseded or amended by mutual agreement or unilaterally terminated by the sponsor subsequent to a non-renewal of the FFRDC contract, a final termination settlement under the Termination clause of the FFRDC contract, or the conclusion of a phase-out plan negotiated by the parties. Before the Sponsoring Agreement can be renewed, the sponsor shall conduct a comprehensive review in accordance with FAR 35.017-4.

B. The Trustees shall not dispose of any of The Aerospace Corporation's real property or buildings without the consent of the Secretary of the Air Force. The Trustees shall have the right in time of financial need to employ The Aerospace Corporation's property as security in borrowing to meet The Aerospace Corporation's obligations within the purposes set forth in its Articles of Incorporation. To provide the Air Force the opportunity to eliminate the need for such action, at least sixty (60) days prior to any such borrowing the Commander, SMC and the Contracting Officer will be notified in writing setting forth the purpose and the amount of the borrowing.

C. In the event that the Air Force's requirement for the Aerospace FFRDC ceases to exist, the Air Force and Aerospace shall attempt to transfer the Aerospace FFRDC to another agency(ies). If transfer cannot be accomplished in a reasonable amount of time, the parties shall negotiate a phase-out plan consistent with the following terms.

1. Termination - Termination is defined as a termination or non-renewal of this Sponsoring Agreement. In the event of a termination, the disposition, if any, of Aerospace assets including retained earnings, after adequately providing for Aerospace's debts and obligations, shall be distributed as negotiated by the parties. In addition, the Aerospace Corporation agrees that upon such termination, all its assets, if any, after adequately providing for its debts and obligations, shall be applied to an objective that will benefit work in support of the U.S. Government. If such assets are sold, it is also agreed that the proceeds received from their sale (after adequate provision for Aerospace's debts and obligations) shall be applied to an objective that will benefit work in support of the U.S. Government.

2. Disposal of Assets - Upon the dissolution or winding up of The Aerospace Corporation, after adequately providing for its debts and obligations, the Trustees or person or persons in charge of liquidation shall turn over any remaining assets to the United States of America as the Secretary of the Air Force may direct. This paragraph of the Sponsoring Agreement shall remain binding on The Aerospace Corporation after the termination of the Sponsoring Agreement as described in Section VIII, paragraph A.

D. This Sponsoring Agreement obligates no appropriations and neither creates nor extinguishes any rights of the parties in assets that existed as of the date of the agreement. Funds are obligated and work is undertaken only in accordance with the terms and conditions of the contract between The Aerospace Corporation and the Air Force Space and Missile Systems Center.


BY: BY: _

Darleen A. Druyun E. C. Aldridge, Jr.
Deputy Assistant Secretary President