Federal Research and Development Contract Trends and the Supporting Industrial Base, 2000-2014

Abstract

As the current budget drawdown has progressed, numerous policy makers and informed observers have expressed concerns about the effect on federal research and development (R&D) efforts. Across the federal government, but particularly within the Department of Defense (DoD), there have been fears that the sharp downturn in federal contract obligations would disproportionately impact the R&D contracting portfolios within individual agencies and their major components. Looking at the period from 2000-2014, this report examines data for the four major R&D contracting agencies: the DoD, NASA, the HHS, and the Department of Energy. It also examines four hypotheses, generated by the study team from a review of the literature and consultation with experts, that test how the budget drawdown has affected the R&D contracting portfolios, and the industrial base that supports those efforts, within each R&D contracting agency. The main finding of this initial inquiry is that the conventional wisdom regarding how R&D contracting would be affected by the budget drawdown has not been borne out. Early stage, seed corn R&D has been relatively protected, cuts were not done within agencies on a salami slice basis, and large prime vendors have seen their shares of the federal R&D contracting market decline precipitously.