Sanitized ~ Approved Bob Rnipace : Cia-ROPEBBOOESSRoaN npzyoon acy ) Inspector General's Survey of the Office of Research and Development October 1972 Copy 1 RETURN TO RECORDS CENTER, IMMEDIATELY AFTER USE BOB LLB 797 sox cuAssinieD ay. EXEMPT FRC+ i Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 INSPECTOR GENERAL'S SURVEY OF THE OFFICE OF RESEARCH AND DEVELOPMENT OCTOBER 1972 ere Sanltized - Approved For Release : CIA-RDP88B00553R000100210001-5- Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Sree TABLE OF CONTENTS Page INTRODUCTION 1 ORGANIZATION 2 Office of the Director 2 . Support Staff 6 Procurement Management Staff 19 Physics-Chemistry Division 20 : Radio Physics Division 21 Applied Physics Division 22 Optics Division 23 Analysis Division 24 Medical and Behavioral Sciences Division 25 Biological Sciences Division 25 Special Projects Group 26 THE ROLE OF ORD 29 7 THE WORK PROGRAM 35 CONTRACTING PRACTICES 49 COORDINATION AND COOPERATION 59 MANAGEMENT "4 Policy Guidance : 16 1 Organizational Factors 8 Reporting al Looking Ahead 84 —en Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5.TT Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Sree RECOMMENDATIONS Page No. 1 rr No. 2 “4 No. 3 17 No. 4 28 No. 5 46 No. 6 53 No. 7 53 No. 8 56 No. 9 63 No, 10 80 No, 11 80 No. 12 a4 ennai Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5eect Sanitized - Approved For Release ; CIA-RDP88800553R000100210001-5 INTRODUCTION 1, We felt it necessary to limit the scope of this survey because of the highly technical nature of most of the work of the Office of Research and Development (ORD). We made no attempt to analyze or critique the scientific worth of ORD's programs nor to make any specific evaluation of the contributions those programs have made to the intelligence process, because to do so would have been beyond our competence. This report of survey thus is confined primarily to such matters as the clarity of the ORD mission; the adequacy of organi- vational structure; the manner in which R&D activities are planned, managed, and evaluated; and the efficiency of ORD's operations. 2. The major portion of the information-gathering phase of the survey was completed during the period from April through June 1972. Consequently, the situations that are described and the references that are made to the Director of ORD relate to the Director who was on duty during that period and not to the present Director who was assigned on 3 July 1972. Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5mcd, Q// #0 BOLE & sumpartai0o cemaoranaa ig 67 oF 7 Daas 7 ca anos worezaza | | xorsrara SHOMEIOS worstaa sioEroud| sorstma | | xursmeno} | uorstara| | Twuoravra saouTOS NOIStAIG ‘TWiogas orava ‘SOISAHA SOLO sqvoram| | TvoDotore SISKTVAY Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 swiooda 9 sua /GINESISSY TWOTNROEL Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5. Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 ee ORGANIZATION 1. The Office of Research and Development (ORD) is composed of the Office of the Director, two staffs, seven operating divisions, and one special projects group. Tt had 118 employees on duty at the time of our survey. Its ceiling as of 31 July 1972 was 105 positions. 25X1Ala ‘A chart showing the structural breakdown of the office and the distribution of personnel by component appears on the facing page. D —_ ostice of the Director 2, The staff of the Office of the Director, ORD, consists of the Director himself, a Deputy Director, an Executive Officer, a ‘Technical Assistant for Plans and Programs, a Scientific Advisor, a Technical Assistant to the Scientific Advisor, and three secretaries. ‘The Deputy Director had been on sick leave since January and, as of the last report we had, the prospect of his returning to full duty was not promising. The Scientific Advisor was serving as Acting Deputy Director in addition to his other duties. 2 - : Se. z Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : C1A-RDP88B00553R000100210004-5 SES t 3, Individual responsibilities of those assigned to the Office of the Director, with few exceptions, are not clearly delineated, The work of the Office is apportioned among them largely on the basis of the individual's own background. The Director (a physicist) and the Scientific Advisor (a chemist) concern themselves primarily with the work of the divisions dealing with the physical sciences. The Deputy Director (a doctor of medicine), before his illness, concentrated on the work of the two divisions dealing with the life sciences. The Analysis Division, which is engaged primarily in exploration of computer applications, hae no "'steward" in the front office, although the Technical Assistant for Plans and Programs was formerly designated as the Technical Assistant for automatic data processing. The Executive Officer monitors administration, support, and internal Heison, The Technical Assistant to the Scientific Advisor has been given special assignments, but he has not been assigned any specific duties of a regular and continuing nature. 4, The Technical Assistant for Plans and Programs has an assortment of jobs, many of which have little or nothing to do with plans and programs. It is our understanding that his present responsi- bilities grew out of and are in addition to the functions originally -3- eee Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00653R000100210001-5 Sree assigned to him in the field of automatic data proc ing. He does prepare the office program call, the annual budget proposals, and assembles the information needed for the quarterly project review meetings with the DD/S&7. He spends part of his time writing technical studies and reviewing scientific journals and Agency publications for leads that may stimulate technical innovation in the various divisions. He has prepared a large number of technical papers, some of which have been published by professional societies. We tried, without success, to discover of what value these papers may have been to ORD in carrying out its responsibilities. He has also participated extensively in a variety of internal and external training courses, has devised scientii ic training courses for the Agency, and serves as an instructor in some of them. He appeared to us to be an aggressive and hard-working individual with many irons in the fire. The results of his diverse activities are no doubt of some benefit to the Agency, but we fear that the miscellaneous tasks in which he is engaged interfere with the proper fulfillment of his primary role as plans and programs officer. 5, The Scientific Advisor is used by many ORD officers as @ sounding board for ideas, as a gauge of the political climate, and Sanitized ~ Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00853R000100210001-5 Sree as a source of advice on Agency procedures, The Director of ORD uses him in much the same way. He also is often the office briefer and serves as office representative on several boards and committees. He, as well ae others in the front office, reviews the Blue Books (project proposals). Although the reviewers themselves no doubt think otherwise, we have the distinct impression that these reviews are quite superficial, goirig little beyond ascertaining that the required papers are in place and are reasonably well written, 6.° With the exception of the Technical Assistant to the Scientific Advisor, who has no regular work, everyone in the Office of the Director appeared to be fully occupied, but the arrangements for overseeing the work of ORD seemed to us to be very loose and unstructured, ‘The staff takes care of the usual routines of pushing papers through the front office, of responding to problems as they arise, and of attending meetings. However, many of the tasks that occupy them are self-generated as a consequence of a personal interest in a particular subject. Staff members commented that they had occasionally ‘made studies of or recommendations on ways of improving the work processes of the office. A few of these had -5- . 5 “Sree Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP&8B00553R000100210001-5 SSS evoked comment from the Director, but none of the staff members could recall an instance of action having been taken on any of thom. 7, The atmosphere is casual and easy-going, and all of the staff members appear to have satisfactory personal relationships with the Director, but they receive little guidance from him and see Little visible evidence of his interest in their work. One staff officer remarked that he never knew if he was doing well in his job or not, because the Director never commented on his work--one way or the other, Support Staff 8. ‘The position of Administrative Officer was established in ‘ORD in 1963, and @ technical officer from within ORD was assigned to the position, Various duties accrued to him, and gradually a support staff of a sort evolved but not along conventional lines, ‘The Administrative Officer interested himself in or was directed to engage in a variety of activities not normally delegated to a support officer, and not enough attention was paid to the specialized administrative and routine housekeeping tasks for which a support staff is normally responsible. The Security Officer, the Finance Officer, and the Librarian were not under the Administrative Officer but reported directly to the Executive Officer. -6 . ee Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5‘Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 etnies 9. That arrangement semained in effect until 3 April 1972 when the present Support Staff was established, A professional support officer was named to head it, and the former Administrative Officer was reassigned to another Agency component, ‘The present Support Staff of 4 people is ozganized along conventional Lines: finance, logistics, security, registry, brary, and personnel. In the eneuing months a number of actions have been initiated designed to raise the standards of support service and administration in ORD to the levél that prevails generally in other parts of the Agency. Housekeeping 10. The space occupied by ORD on the 5th, 6th, 7th, and 12th floors of the Ames Genter Building is well laid out and is adequate for ORD's needs. We noted at the beginning of our survey, however, that poor housekeeping practices prevailed in many of the offices. Offices were cluttered with unneeded administrative equipment and with disorderly and untidy accumulations of books, pamphlets, and other documents, Prototype and pre-production pieces of equipment were stored in some offices, contributing to the clutter and in some instances representing possible safety hazards, The work area Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 melee occupied by the Registry was overflowing with boxe of documents and with equipment haphazardly stored and seemingly forgotten. ORD initiated a clean-up campaign while our survey was in progress, which resulted in a noticeable improvement in the appearance of many of the offices. Property Management Ul, ORD is responsible for property valued at approximately $6 million consisting of (a) administrative or operating property for which it is accountable on consolidated memorandum receipt, (b) government-furnished equipment provided to contractors, and (c) prototype or pre-production items of equipment received from contractors. An audit report for the period ending 30 September 1971 called attention to certain deficiencies in ORD's management of ite property: discrepancies in the records on property held under consolidated memorandum receipt, excess and/or unserviceable property on hand, and lack of central control over prototype and pre- production items received from contractors. ORD has taken steps to correct these deficiencies, but continued monitoring and enforced discipline by ORD management will be required to ensure that they stay corrected. -8- . [eeGeliniinlee Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Ly. rSanitized - Approved For Release : CIA-RDP88B00563R000100210001-5 Security I2, -ORD receives some 2,000 documents each month of which about 500 are TOP SECRET codeword. Large numbers of contractors visit ORD's offices in Ames Building for consultations or briefings, and ORD currently is using some 30 outside consultants on an inter- mittent basis. Arrangements with some contractors allow for their use of ORD computers, and some contractor representatives have no-escort badges. Contractual arrangements with industrial concerns and with educational institutions require constant appraisal and re- appraisal to ensure that proper security standards are maintained, e ORD has had significant problems in the past in connection with the control of ID cards and visitors! no-escort badges, compliance with courier and mailing instructions, and clearance and control of visitors, ‘The present Security Officer has recently made studies and has issued notices designed to improve ORD's security posture and practices. ‘This isa good start, but what is needed additionally is strong support for the security program by the Director of ORD and by his division chiefs, Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5‘Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 eee Contract Information Systems 13, Most of ORD's work relates to contracts awarded to industrial concerns and to educational institutions. As a con- sequence, much of its reporting and record-keeping relates to such things as the Status of finds available for contracting, the pre-award work required prior to entering into contracts, contractor progress reports, and project officer inspection reports. At the time of our survey ORD was involved in the care and feeding of four separate contract information systems. Two of them, the DD/S&T Contract Information System (CIS) and the Office of Logistics system (CONIF), were designed primarily to serve certain Agency-wide needs for basic information regarding contracts and the management of them, The other two are internal ORD eystems. One is known as the ORD Contract Management System (CMS), which is run on ORD computers using the ADEPT software package. The other, known as CHEQUE, is a manual system based on a Kardex card file. The two ORD systems were created to satisfy needs for contract information that were felt not to be met by the two Agency systems. 14. We believe there is an urgent need to take a close look at the manifold contract management systems now in use in ORD. The -10- Sita Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 eae duplication of effort and the paperwork involved in supporting these four systems need careful examination, as does the use of--or the failure to use--the reports derived from them. Each of these systems does something that none of the others will do, but essentially similar data is input to each of the four systems, The information contained in the reports derived from any one of these systems is not synchronized with information derived from the other systems, and in many instances the information is not fully usable for management purposes without laborious manual reconciliation and remenipulation, 15, We realize that this is a complex subject on which widely differing views are held and that studies are now under way concezn- ing possible improvements in the CIS and CONIF systems, Presumably these studies will give attention to refinements needed to provide information required for contract management purposes at the levels of the office, division, project officer, and contracting officer. 16. Meanwhile, we believe'that ORD must begin preparing to adjust itself to abandoning its internal CMS machine-operated system. ‘The former Administrative Officer who programmed and maintained the system has left, and there is no one in ORD available to continue the work.’ Also, the DD/S&T has decided that the ORD computer is to -n- oe Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 ees T be removed, which means that no machinery will remain in ORD on which to run the system. Moreover, this system is designed specifically for operation using the ADEPT software package and cannot be run under the software system commonly used by the Office of Computer Services. And, finally, the ORD CMS system and the DD/S&T CIS system are to a very large degree duplicatory; two systems are not needed where one could be made to serve, Recommendation No. } ‘That the DD/S&T have a review made of the Contract Information System to determine if its content can be expanded or otherwise revised so as to make unnecessary the continuation of ORD's Contract Management System. Library 17. ‘The ORD library contains some 950 technical books and standard reference works; an assortment of studies by various learned societies, private companies, universities, DoD, and other Government agencies; and various Agency publications. The library also now keeps one copy of each final ORD repozt, although these items have not been catalogued and the collection is far from complete. The library subscribes to 68 technical periodicals and receives semi- the Defense monthly listings from two Government clearing house: -12- Sree Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5CIA-RDP88B00553R000100210001-5 Sniinicniniinl! Documentation Center and the National Technical Information Service. ‘These listings contain abstracts of reports of current RED work done by the Government or under contract to the Government, Some of these documents are classified; come are not. In addition, "Topical Announcements" of unclassified documents in specialized fields are received from the National Technical Information Service and are routed to appropriate divisions of ORD for review. 18. The librarian catalogues the holdings, monitors checkouts of Nbrary materials, and responds to requests for book or document searches in the ORD library or for the relay of requests for other searches by the CIA central library, Some ORD project officers use the library and brary search facilities quite extensively; some use them infrequently or not at all, Books checked out to individuals often are held for long periods of time, and some ORD officers have ignored the librarian's requests for their return, Thirty-one books wets reported as lost or unaccounted for ot the time of-eur eurvey- There is a need for senior ORD management to take a hand in enforcing discipline in the use of its library. 19. We note that there are two other libraries in Ames Building: one maintained by the Office of Communications and anotlier' by the . -13- ntinlnieliociintio Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : C{A-RDP88B00553R000100210001-5 Seieiinitl Office of Logistics. We question whether there is need for three separate libraries in one building--each with its own unique cataloguing and indexing system--occupying in all five roome in the building and requiring the services of five employees to operate them. When we asked about the feasibility of merging them and operating the combined facility as a branch of the main Kibrary, we were told that this had ‘been considered in the past but that the idea was abandoned in favor of keeping them separate, It was felt then that a merger was not practical in view of the difforing needs of the three offices and of the complications that would attend trying to manage a combined facility through coordination among three Directorates. We are not convinced that these are good enough reaséns for maintaining three separate Kbraries if combining them would result in savings, especially of personnel. We suggest that additional study be given the matter. Recommendation No. 2 ‘That the DD/S&T take the initiative in exploring with the DD/S and the DD/I the feasibility of combining the three libraries in Ames Center Building and operating them as a branch of the main library. -M4- iene Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Criiininl Personnel Management 20. The Support Staff provides certain services of common concern in the area of personnel administration, but personnel management is handled primarily at the division level, ORD has a Career Service Panel that was established in February 1967. It confines itself to matters affecting the careers of professional employees. A special panel for career development of secretarial, clerical, and administrative personnel was established in April 1971, It conceins itself with career matters affecting ORD's clerical employees and those support and adminietrative personnel who do not belong to the DD/S&T career service. The criteria used in the past by the Career Service Panel in ranking ORD professional employees were ill-defined and inconsistently applied. The Panel recognized thie, and improved ranking criteria have been devised. i ‘The new criteria had not yet been applied at the time of our survey, but a new competitive xanking using them was about to be undertaken, 21, The minutes of the Career Service Panel meetings reveal that the eubject of rotation has beon discussed repeatedly, but Little | has come of thie talk. Two officers from ORD's Analysis Division | are assigned to the Intelligence Directorate to work on computer -15- . Steel | Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5ee s Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Satan applications. OMS has detailed a psychologist from the Psychological Services Staff to work in ORD to improve understanding between the two offices, An OSI specialist in BW/CW is working inORD. These ion appear to have been of appreciable attempts at crose-fertiliz benedit, buf itis a minimal effort, We believe that an effort should be made to expand it, The reasons are many. ORD's project officers are very much isolated from the rest of the Agency and have little familiarity with the work of the offices whose missions they are trying to support. Likewise, few outside of ORD have any real understanding of ORD's capabilities or of its approaches to R&D. Rotation would ee ee also help to relieve the parochialisms and the antagonieme that now exist and almost surely would broaden and enrich the talents of the officers concerned. 22, We are aware that recent efforts to encourage inter~ Directorate transfers came to nought, but we wonder if an effort confined to the technical field might not have a somewhat better chance of success. Within the last four years we have surveyed six of the Agency components with major R&D responsibilitie: Hach of the offices has a few technical officers working in very narrow specialities, but, for the most part, all of the technical -16- eT - Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 EL officers are doing essentially the same sorts of things in basically the same ways. The work of an electronics engineer in ORD, for example, differs little from that of an electronics engineer in TSD, OSP, OEL, or Commo. We believe it would be feasible and beneficial to encourage movement of technical officers among these technical components. Whether this is accomplished by scheduled rotations ona tour basis, by two-way exchanges, by unilateral assignments from one component to another, or by temporary details matters little--as long as the exchanges are made with the deliberate intent of benefiting both the individual and the Agency. Recommendation No. 3 That the DD/S&T take the initiative in exploring with the other Deputy Directors the feasibility of an expansion of rotation of technical officers among the various Agency technical offices. : 23. ORD has been most generous in sponsoring training for its employees. About five percent of its work force was in a training status during FY 1971, and 4,8 percent of man-hours spent in a duty status was devoted to training. ORD employees are given wide latitude in choosing the courses they wish to attend. They have participated in both internal and external courses devoted to both -- ee Sanitized - Approved For Release : CIA-RDP88B0063R000100210001-5OE Sanitized - Approved For Release : CIA-RDP88800553R000100210001-5 bed technical and managerial subjects. While we think it proper that ORD should sponsor a variety of training for its employees, it has been too lax in acquiescing to requests from employees for training that is of interest to the individual and perhaps of personal beneiit to him but not to the Agency. There is need for a more careful review of training requests in order better to relate the potential benefits to the needs of the Agency, The new Chief of Support for ORD has taken recent steps to sharpen the review of training requests. This should place the Director of ORD in a better position to judge the worth of the proposed training before he approves it. 24. We received only one formal complaint on personnel matters from those we interviewed. That complaint alleged personal misconduct by certain named employees. Since there were distinct security implications in the allegation, we referred the matter to the Director of Security for investigation, We did not pursue the matter further and take note of it here only for the record, 25. On the whole, we heard remarkably few adverse comments about personnel matters of a type that usually are the subject of criticism; for example, rate of promotion, working conditions, -B- eae Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Soe fitness reports, and unfair treatment by supervisors. There were no complaints about uninteresting or unchallenging work; on the contrary, most of those with whom we spoke liked their work and were enthusiastic about it. Most of the criticisms that were made to us arose from a deeply felt concern about matters of major import: permissive and inefficient ORD management, lack of clear policy guidance, uncertain delegations of R&D responsibilities, and inter- and intra-office rivalries and disputes, We discuss these subjects in detail‘in later sections of the report. Procurement Management Staff 26, The Procurement Management Staff was established in February 1969 and was given responsibility for reviewing, negotiating, and executing ORD's contracts with its suppliers. The Staff consists of a chief, two contract negotiators assigned from the Office of Logistics, an auditor assigned from the Office of Finance, an industrial security officer assigned from the Office of Security, and a clerical staff of three. ‘The auditor reviews the accounting and cost systems and the financial reliability of the contractor. The security officer examines personnel and physical security. The negotiators review the business and legal aspects of contract -19- SOc Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5€ Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 ee proposals and work out the technical details with the project officer with whom they jointly negotiate the contract, 27, Although the Procurement Menagement Staff met with some hostility within ORD when it was first established, the relationships between the Staff and the division chiefs and project officers are now good. ‘The team approach has worked well in practice and hee resulted in noticeable improvement in ORD's con- tracting practices. 28... The Procurement Management Staff is responsible for only about two-thirds of ORD's contracts. The other one-third 25X1A6a_ are negotiated and administered by the Office of Losteties WEE, 12 chic! 0f the Procurement Manage- 25X1A6a ment Staff acts in an advisory capacity to the Director of ORD on some aspects of these contracts and coordinates the activities of his own staff with those of the iE The separation of the two staffs poses some awkward problems of 25X1A6a communication, record keeping, and reporting. Physice-Chemistry Division 29, The Physics-Chemistry Division, which was formed in 1964, initially focused its efforts on the nuclear area but did some : ~ 20 - inSain Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Sainte work on power, materials, and electro-mechanical systems. Over the years, the scope of ite program expanded, and the emphasis changed. It now is engaged in a broad program of exploiting science and technology to enhance intelligence collection capabilities. Included r a = among its objectives ar: weapons detection and characterization, diagnostic collection against weapons teste and reactor operations, | clandestine sampling techniques, remote technical collection, delivery systems, and power sources. 30. The division consists of the chief, eight technical officers, and two secretaries, The division administers 20 active contracts 25xX1A1a Daring the period from 1964 through 1971 the Physics-Chemistry Division completed 13 R&D projects that were identified by ORD as being technically successful. Seven of the 13 projects became operational. The division chief does not believe in carrying any project beyond the prototype stage. It is then turned over to the operational element for development of an operating capability. Radio Physics ion 31, The Radio Physics Division was established in February 1963 and was assigned responsibility for conducting research and -a- : ene Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 nical development on electromagnetic antennas, propagation, over-the- horizon radars, electromagnetic surveillance systems, stay-behind program has since been expanded to include long-range emplacement 32. The division consists of the chief, eight technical officers, ee HB «. correntty aaministere 20 active contracts. During the period from 1964 through 1971 the Radio Physics Division completed 15 R&D projects that ORD characterized as being technically successful. ¢ Five of the 15 projects became operational. Applied Physics Division 33. Work in the fields of audio surveillance and audio counter- measures was begun in the Radio Physics Division in 1963. ‘The division was split in February 1965 with the audio-related work and the people associated with it forming a new division, Audio Physics. The name was changed to Applied Physics Division in the fall of 1966. The division concezna steelf with R&D in the fields of audio surveillance, audio surveillance countermeasures, emanations intelligence, advanced penetration systems, and microtechnology. ( +22 - : ee Sanitized, Approved For Release : CIA-RDP88B00553R000100210001-5a 25X1A1a 25X1A1a Sanitized - Approved For Release : CIA-RDP88800553R000100210001-5 ed 34, The division consiste of the chief, eight technical officers, MRI rng tne poston 1965-11, the civiston completed 44 RED projects that ORD categorized as being technically successful. Nineteen of the 44 projects became operational. Optics Division 35, ‘The Optics Division was established in January 1963. Initially, it directed ite efforts to optical collection devices, primarily in direct support of OSA's overhead collection systenis, In-recent years, its interests have expanded to include fields that are only indirectly related to optics. Developing and testing ‘lying platforms ie an example, 36. ‘The division consists of a chief, eight technical officers, [RBIS 2> eiviston te currently administering about 33 contracts, Fourteen of the projects that Optics Division completed during the period 1964-71 were classified by ORD as being technically successful. Five of the 14 were put to operational use within the Agency, and another three were used by the Department of Defense. ~23- Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Analysis Division 37. The Analysis Division was formed in 1964 and was given responsibility for research and development of information handling devices, of techniques and systems at or near the edge of the state of the art, and of developing computer technology that could not be tested in an operating environment, Its work has evolved over the years to include such things as improving computer networks, time sharing, computer security, interactive processing methods, mass memories, display technology, microprogramming, and communications technology. 38. The division consists of a chief, 17 officers, and three 25X1A1a secretaries. At the time of our survey, the division had 41 active contracts and was doing a considerable amount of in-house research using ORD's IBM 360/50, a PER-3 graphics processor, and the hybrid analog-to- 25X1ASa1 digital computer equipment located in the Sis ORD categorizes 28 of the division's projects completed during the period 1964-71 as having been technically successful, Eleven of them were put to operational use. ~24- Taine Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 eel Medical and Behavioral Sciences Division 39. The Medical and Behavioral Sciences Division, as presently constituted, came into being in June 1965 when the former Life Sciences Division was split, forming two new divisions. Its concer. is with the exploration and application of advanced technology to enable the development of systems or methods that will enhance the Agency's capability to measure, assess, predict, influence, and control human behavior. Its work includes an important program having to do with narcotics and dangerous drugs. 40. This is a small division consisting of the chief, four officers, anda secretary, The officers do a small amount of in- house research, but the mejor portion of its R&D work is done under PHRBB.. 020 records reveal that the division completed 15 major projects during the period 1965-71 that were considered technically successful. Six of them weré put to operational use. iological Sciences Division 41, The Biological Sciences Division was the other division formed in 1965 by the splitting of the former Life Sciences Division, The division was given the mission of studying biological systems -25- Sree Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 —erel and their application to the intelligence process from the standpoints of covert action, collection, and processing. While human factors engineering would seem to be more appropriately placed in the Medical and Behavioral Sciences Division, by agreement between the two division chiefs it has been retained in the Biological Sciences Division. The division gives highest priority to its work in BW/CW detection. 42. The division consists of a chief, seven technical officers, 25X1A1a __ 8nd two secretaries. MIR se aat9 sctive contracts at the time of our survey. ORD records reveal that 14 technically successful projects were completed during the period 1965-71, Only two of the 14 were put to operational Special Projects Group 25X1A2g 43, The EET program was begun in ORD's Applied Physics Division. It soon blossomed into a large multi-faceted program in which almost all technical components in the Agency eventually became involved. The Special Projects Group was formed = 26- : Se . Sanitized - Approved For Release : CIA-RDP88800553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 cemenememead 25X1A2g in mid-1966 to consolidate the [MMMM efforts and to bring them under centralized program management. The group consisted of the program, manager, five engineers, and two secretaries, The R&D phase o «- terminated in July 1971 when the program was transferred to OSA. The program was completely abandoned in December 1971. 44, To see almost six years of work go down the drain was a traumatic experience for the members of the Special Projects Group, “Their situation was made worsgaby, hy fact that the group continued in being after July 1971 when = transferred to OSA but without any specific guidance or direction as to its future mission or area of responsibility, The group chief has found other assignments for two of the technical officers and one of the secretaries. He has worked out @ program for those remaining that includes long- range collection systems, payloads, emplaced sensors, and clectro- magnetic collection systems, 45, This program, no matter how imaginative it may be, does not justify the continued existence of the Special Projects Group a8 a separate entity. Rach of the elements of its program directly ~27- rene Sanitized - Approved For Release : CIA-RDP88B00653R000100210001-5SEES EES cea EES SEES TE EESSEEESTE OTST ESSE TEEESTEEESTETESTEEESTEEESTEEESETSESESTESTSTEESSTEESSTTESTEESSTECETESSEISSTIESTEIESIETESI CEST CEEESITESIETESTETETIETESOOIEE : Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 eno relates to work being done in other ORD divisions or is being carried ions. With out as 2 follgy? pp to work previously done in other divi the demise of BIBI the need for 2 Special Projects Group ceased to exist, and we believe that the people still assigned to it could be used more profitably elsewhere in ORD. Recommendation No. 4 ‘That the Director of ORD abolish the Special Projects Group and reassign its members to other elements of ORD. - 28 - . SS Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5EEE EEE DTIEBESS SO Sanitized - Approved For Release : CIA-RDP88800553R000100210001-5 THE ROLE OF ORD 1, The Directorate for Science and Technology had its beginnings in February 1962 when the position of Deputy Director (Research) was established. ORD came into being, on paper at least, in July 1962, but it did not begin taking shape as an office until November 1962 when the Assistant Deputy Director for Research was assigned thé Deputy, Directosifor/Reses= ch additional duty of serving as Acting Assistant Director, Office of Research and Development, 2, ORD!s founders envisioned that all Agency R&D activities would be centralized in ORD, but this concept promptly ran afoul of opposing views held elsewhere in the Agency. The opposition is understandable, because ORD was a Johnny-come-lately into an area in which some Agency offices had worked for nearly two decades and in which there were well entrenched operational and proprietary interests. Those opposed to centralization argued that: --- It would be insecure and inefficient. --+ It ran contrary to the already established concept that the diversity of the Agency's activities required that it operate on a decentralized basis. ~ 29- . eT - Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5eo Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Sale --+ Operations would suffer if they were divorced from the R&D required in support of them. ” The opposition won. 3. ORD is only one of seven Agency offices charged with major RkD responsibilities, and the R&D responsibilities collectively delegated to the other six embrace almost all of the scientific disciplines in which ORD engages. --- OSA conducts R&D in methods for conveying advanced technical collection devices. OEL supervises or conducts RED required for Agency ELINT and related COMINT activities, ~-- OSP has a large R&D program in its field of special interest. --- Commo formulates and implements policies and programs for applied research; develops and engineers electronic ‘equipment to meet special needs of the Agency; and develops techniques, procedures and facilities and under- takes research, development, and analysis programe to support activities of Agency componente in the special intelligence field, --- NPIC conducts R&D to enhance the exploitation process ‘by introducing improved equipment and technology for interpretation of imagery acquired by the various collection systems, _ - 30- Seer Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-51 } i ; ‘p emay dic onereias ope NOMLWANITORO (© | “wueuod vtadly a2qyo of ASojoumae} ant 50 uoryEonitose om ty as195e GD fsuopeqtueaz0 seyuE IaqIO PUB Tou, ‘pire eomspg Aouasy eiq{' 0} poddrie eywpdordde opyaoad (y) ‘renee Pntdeaepew aston Pao du 30 sinddes wy mossyuoo TumepsD “sp Teds. AstupE pe eyeATET (3) : tuoppondds. qieamony we avy Sour wduppays ss0ty Ar yUep) PHY yuawdoraaop pou Yoreasor paowss = -ps Bupmopred sopuase qusuusaep, ‘en satyo, Fy wosTeN sNPUCO () AAACONP IBAUOTEE se, TAA 0, sinBsBONE quoMTOTSAO po ssgosax oppa-pIsoA 70 UoREArEhs te oxy Poagzop suszyee pu sudnbe ‘somposted “orknaoy- eq ‘repdaxize ey “opzodoon (6 cores ah pure daiady: ot of oIaerTE4s squsuog sy sem ‘iaoneydepe oyusdendes wont) “puw Ayununuca Dyupee ax Dae asydraqa oeaH q pooNpuoS Garvseay omOU (P) fusouos peopuEa) uomNGs yo swo4eks pa ‘myuouoduzeo ‘sonbquyoay uo soypnas imigyeeey pws yareacax sonpuoD (9) somage6s 2owaIO9E eoumapa yo Atmayuay qwormyod4 amy,04 se syesyeuy renjdaoueo eplscad (a) fsssoond someday om 430d 9 suresBaxd pup ‘susyd eressay paridde pure say “Aousdy 9m Ss0qh0 BARGE Jor WA wPpeTIpLOGD a. ‘yuamardI pre AozaA=p (W).- a suaudoassc paw yotuosatt 16 severe au, “Toon IO reaTEN, ay lao 0} perESe{op ATedipibads ate USMS somATION AuaTAdOTOAAD Yue Nareoser epniouy jou s90p “aymqpundsen, sya, souTICToSTP reoTTSo9 Sopra toss pouTRAe sEpaqaotey 79-woMEOTae‘agy wanAIT mau nat aig smTAS qustadojeuoc pow Yarwase J0'sG;94NC 9, “SNOTLND (®) 4 caoqestur. s,fouaSy-og} 40 quouyEAMOIIE oT eesorar syuamrdoressp feoyBoyon.ooy pus Suu JP wo}FEBRsoANy ony oy sqqCOdsaE ay yNoNdopPAE PUD YareaswyT TO LA ALL 'NOISSIN (1) INEHAOTGASG CNV HOMVESHA AO BOLLIO P NOLLVZINVDEO - Approved For Release : CIA-RDP88B00563R000100210001 Sanitized‘Sanitized - Approved tor Kelease ; GIA-KUPoBtsuUD99RKUUU 1UUZ 1WUU 1-2 iniinininicin ++ TSD conducts a program of development and engineering designed to produce new or improved capabilities, equipment, materials, and techniques to support Clandestine Service activities. In addition to the major R&D programs cited above, the Offices of Security and of Medical Services conduct minor research programs in support of their operations, These other technical offices conduct RED as an adjunct to and in the furtherance of their regularly assigned missions. ORD, however, is charged with conducting R&D of common technical concern to all Agency components, and R&D ia ite only mission. 4. The first draft of a statement of ORD's mission and functions for publication in Agency regulations wae prepared in 1962, It took over eight years to reach agreement on the text of the statement, reportedly a record and one of which we have no cause to be proud. ‘The text of the published statement is reproduced on the facing page. A review of the records pertaining to efforts to coordinate the statement reveals that the delay in publication was attributable primarily to strong differences of opinion among the various Agency technical pffices as to precisely what ORD's role should be and as to the extent and nature of coordination between ORD and the other technical offices. SS Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5ee ‘ ieee ‘The final text was the best compromise attainable among those con- tending views. It is an ambiguously worded document that tends to institutionalize and perpetuate the conflicts and differences of opinion on RED responsibilities, rather than to resolve them, 5. The functions that ORD actually performs bear little resemblance to those enumerated in the regulation, Most of its activities relate to the function assigned in subparagraph d(2)(g): “initiate and administer specific external contracts in support of approved research and development programs." The function of serving as essentially a bridge between Agency technical components and the rest of the scientific world, to the extent it is performed at 4 a a all, is not carried out through any orderly mechanism, There is ee ianenaan no provision for ORD's undertaking R&D work on behalf of other 4 25X1A1a_ Government agencies; yet, it has done so to the tune of as much as MR 20 yoo. 6, It might also be noted that the definition of ORD's mission in HR I-lld is in conflict with the provisions of a memorandum from the Executive Director-Comptroller to all of the directorates dated 8 March 1972 on the subject of R&D, which defines three types of RED -32- inne : Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : GIA-RDPbsisUUDDSKUUUTUUZ uUU Seno efforts to be conducted by the Agency: (a) Exploratory R&D to probe new areas that may potentially contribute to CIA's mission, (b) Direct, support R&D to support ongoing operations through the development of new equipment and techniques closely related to ongoing operational needs, and (c) Multiple application R&D involving the support of more than one current need or operation. That memorendum assigns primary responsibility for direct support R&D to the respective operating directorates, assigns responsibility for exploratory R&D to the DD/S&T, and provides that multiple application R&D efforts may be routed through the newly created R&D Board for determination of the assignment of a particular R&D effort to an appropriate technical office. The memorandum also establishes a Technical Coordinating Committee to foster technical exchange, coordinate programs, surface gaps and redundancies and other special problems, and makes important provisions for reporting on R&D activities. 7. We were tempted to recommend that ORD revise the statement of its mission and functions to conform with its actual role, but we were dissuaded by the realization that this would be a hopeless exercise. The present statement is a compromise document, and ose intial Sanitized - Approved For Releast CIA-RDP88B00553R000100210001-5 ——_____,. ae it ie unlikely that ORD would be able to negotiate a new statement that would be any more realistic, Furthermore, the mechanisms eatablished by the Executive Director-Comptroller's memorandum of 8 March have not yet bad time to prove their worth. Experience may demonstrate that modifications are necessary, although the general concept seems eminently sensible and workable. ~34- ° ae + Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 ee,THE WORK PROGRAM 1, In simplest terms, ORD is charged with conducting R&D of common technical concern to all Agency components, and R&D is its only assigned mission. It is charged with "the inveatigation of scientific and technological developments relevant to the accomplishment of the Agency's mission," The statement of functions in HR 1-1ld provides that ORD will devo- top and implement, in coordination with other R&D offices of the Agency, basic and applied research; will provide conceptual analysis as to technical feasibility of advanced systems; will conduct research and feasibility studies on techniques, com- ponents, and systems of common technical concern; and will administer specific external contracts. 2, These broadly stated responsibilities are broken down by division into a sories of epecific objectives. The following list of these objectives ie not all-inclusive, nor are all of them being worked on at any one time, but the Hist does give @ feel for the very wide range of scientific and technical areas with which ORD io concerned, -35- eet tized - Approved For Release : CIA-RDP88B00653R000100210001-5 a25X1D0g Sanitized - Approved For Release ; CIA-RDP88B00553R000100210001-5 | Next 3 Page(s) In Document Exempt Sanitized - Approved. For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 25X1D0g * 3. ORD does some internal research, but not very much, A. few of its objectives can be met by monitoring the work of others at no cost to the Agency; however, most of its work program is in the form of external contracts with industriel concerns dr educational ~40- —halininialinte Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-52aniuzea - Approve ror Kelease : GIA-RDP88BU0SSSRU00100210001-5 Setinliniielinile institutions. Some of the contracts, especially those calling for the building of hardware, ave relatively short-term efforts; some of them, especially those involving exploratory reacarch, run for ee eee million that had been spent at the time of its termination, reportedly the largest single Agency R&D program funded entirely with Agency money. 4, The results of ORDIs work program are difficult to evaluate. A majoi problem in this regard arises from differing definitions of what constitutes success in an R&D effort, ORD takes the long= range view that continuous exploration into the state of the art is necessary to acquire the knowledge needed by the Agency to adapt and to improve its processes, ORD considers an R&D project to have been successful if it realized its intended technological objective. ‘The customer components take @ shorter range view. They consider an R&D project to be successful if it yields a product that is needed. at the time it is developed, that can be engineered and produced at an acceptable cost, that is suitable for use in the expected opera- tional and security environment, and that will do the job intended for it -41- Se Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5— SS. . Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Sees tr 5. Thus, many of ORD's completed R&D projects are : evaluated as successes by ORD's definition but as failures by ORD's customers! definition, Some of them achieved the techno- logical objectives that were sought, but there was no requirement se for the product at the time it became available, Some of them found application in operations, but the benefits derived from them were minimal, Some had the potential for yielding significant benefits but at a cost that would have been prohibitive. Even a project that was unsuccessful by ORD!s definition may have made a major contribution in the form of a fallout of useful knowledge or a by-product with application elsewhere, An unsuccessful project that disproves a poptilar theory may form the basis for ero aay a larger undertaking destined to end in costly failure, is an example of a project that ended short of achieving its objective yet added significantly to our R&D inventory. 6. ORD recently made a statistical tabulation of its technically | successful projects that were completed during the eight-year period from 1964 through 1971, with these result: --- The total of R&D funds expended on RED projects during the period (exclusive of management-support costs and funds transferred from other government agencies) was approcima(<| 25X1A1a - 42 - . er : Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5ee Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 Seti > Approximately 42 percent of the funds were spent on projects that were technically successful; 58 percent 1 on projects that were not successful, ” c+ There were 150 technically successful projects. The unsuccessful projects were not tabulated. ~-+ Of the total of 150 successful projects, 55 were imple- mented by Agency operating components; 95 were not. --+ Of the 55 projects that were implemented, 35 were developed in response to formal raquizements levied on ORD; 20 were developed without a formal require- ment, although some were started with the acquiescence of an operating component. +> Approximately 20 percent of the total funds spent was devoted to projects that were successful and were imple- mented; about 80 percent was spent on projects that were either unsuccessful or, if successful, were not implemented. 7, We doubt that those statistics provide a basis for any broad conclusions about the worth of ORD's work program, not does ORD s0 represent them, Perhaps the most significant of the findings was that only about 20 percent of the RED money was spent on projects that resulted in usable end products, but even this finding has little meaning in the absence of a fixed goal against which to measure it,” 8, It can be (and has been) argued that success-to~failure ratio is not a fair measure of the value of R&D efforts, and this is a thesis with which we tend to agree, When one is working at the far fringes of the state of the art, as ORD often is, there are a -43- SSS Sanitized - Approved For Release : CIA-RDP88H00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 ee great many unknowns, Sometimes the only way to discover whether something can or cannot be done successfully is to try ft, ORD ” cannot be faulted for its failures, or at least not for too many of them, Where it can be faulted, in our opinion, is in the very large successful but fed as being " number of projects that were identi not implemented" (63.3 percent of the total of technically successful Projects). In our interviews in the components using ORD's ser= vices, these were the reasons most frequently cited for failing to use an ORD product: ++ There was no requirement for the product when the project was started, and there was no application for it whon it wae ready for delivery. v-+ There was a requirement for the product at the time the project was launched, but the requirement had vanished before the project was completed. ++ The ORD project was designed to meet a requirement, but the product it delivered was not configured to Hit the specific need or could not be used in the operational or security environment of the operating site, =-+ There was a requirement for the product, but by the time it was completed a better or less costly product had become available from another source. --- The product that was delivered would not effectively do the job intended for it. Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 een 9. Over the years, various mechanisms have been created i for achieving a better match between operational needs and R&D ” programs. Some of the mechanisms worked poorly or not at all; none of them worked well. Committees or panels of distinguished scientists have been formed to examine future R&D needs. Their reports have been of value, but it is difficult to judge what real impact they have had, We are inclined to doubt that it is possible to build an effective bridge between operations and R&D when thoy are widely separated, both physically and organizationally, We noted in a recent survey of TSD that, in our opinion, one of the major impediments to more effective performance in the audio field was that development and engineering was too far removed directorate away from most of the operations it supports, 10. Many of the officers that we interviewed in ORD's customer components highly value ORD's advisory services on technological matters and the assistance ORD gives them on their own R&D programs, They consider this advice and assistance to be of more benefit to them than are the results of the formal RED projects undertaken by ORD. Admitting that our sources have @ -45- Saline Sanitized - Approved For Release : CIA-RDP88B00563R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001.5 Sateen bias in this regard, we still believe there is merit in their point of view. ‘The role assigned to ORD includes evaluation of world- wide R&D programs as woll as scientific discoveries, monitoring of research conducted by private enterprise and the academic community and making its benefits available to the Agency, and conducting liaison with other Government agencies to identify findings that have intelligence application, ORD does some of thie, sometimes on apecific request, but more often on a sort of as-we- seerfit or as-time-permits basis, In our view, maintaining a capability to advise and assist others shouli{be a deliberalely scheduled segment of ORD's work program, It is not, We found no evidence of any established mechanism for performing these functions or any systematic method of disseminating information to other components of the Agency to keep them apprised of current RED activities clsewhere in the scientific and technical community. No. 5 Recommend: That the Director of ORD establish a formal mechanism within his office for the conduct of those functions specified in BR 1-11d(2)(4), (8), and @. 25X1A1a LL, ORD received AMM curing FY-72 by transfor from other Government agencies, most of it from the Department of - 46- ad Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 eT 25X1Aia Defense. In FY-T1 the Agency as a whole received R&D money, all of it from elements of the Depastment of Defense, and ORD's share of the total was approximately i We note that the statement of mission and functions of ORD does not provide for the conduct of R&D for other agencies of the Government, although it has been done for several years. We encountered differing views within ORD as to the appropriateness of ORD!s engaging in R&D activities on behalf of other agencies, There are many who believe that a net benefit accrues to ORD from access to the much larger pool of R&D money available to the Department of Defense and from the technical spin-offs that result from this xesearch, Also, many of the projects have direct application to Agency operations, There are others in ORD, however, who believe that the time and talent expended by ORD on behalf of other agencies could more profitably be used on higher priority Agency-funded projects. There are some who look on these external funds asa | means of reviving a project proposal that was disapproved for fund- ing with Agency money. 12, We are in no position to choose between the contrary points of view, although we lean in favor of the position that external -4aT~ ae Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5. Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 aielinGnliniinii> funding of R&D projects results in a net gain to the Agency. It is ‘ something that should be kept under close scrutiny, however, to a avoid allowing an imbalance to develop between the work ORD does for the Agency and the work it does for others, Certainly, external fanding should not be employed as a way of circumventing the pro- ject approval process. We understand that the DD/S&T now requires ‘his specific approval of each externally funded R&D project. aa : er _ Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R00010021 (0001-5 EST CONTRACTING PRACTICES 1. ORD had 663 outstanding contracts at the time of our survey. Of this total, 218 were active contracts and 445 were inactive, The large number of inactive contracts is attributable to the fact that the Department of Defense does the final audit of overhead rates on most of these contracts, and final closing must await completion of audit. Roughly two-thirds of the contracts 25X1A6a were negotiated and administered by ORD's Procurement Manage- 25x 4AGq mont Staff; the othor third were handled by Logietice IS MERBREE "2 =o coxomont Management Stott handles the negotiations for about 175 funded contracts each year and executes an average of about 225 unfunded contract amendments, Contracts under $50,000 are approved by the Director of ORD, those between $50,000 and $150,000 are approved by the DD/S&T; and those over $150,000 require the approval of the Executive Director-Comptroller. The majority of new contracts executed i for ORD are for exploratory research involving less than $50, 000; however, in many cases there are follow-on amendments that carry the contracts into the category that requires approval by the DD/S&T. ~49- il Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5LL ee Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 cae 2, The ten contractors having the largest dollar value of outstanding contracts with ORD at the time of our survey were as follows: Contractor Dollar Value 25X1ASa1 3. Most of ORD's contracts are let on the basis of informal proposals received from one or more contractors, rather than through formal competitive bidding. ‘The follow-on nature of the“ R&D work covered by many of these contracts is often used as the justification for sole-source contracting. A written justification for sole-source contracting is required in each instance, The Pro- curement Management Staff scrutinizes these justifications carefully, = 50 ~ . Satan Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 inna recommends the solicitation of proposals from other contractors when it thinks appropriate, and refers doubtful or contested cases to the Contractor Selection Board or to the Director of ORD, Over the last two years, efforts have been mate to increase reliance on the formal compotitive bidding process, and some progress has been made. Seventeen such competitions were run in F¥-71, and twenty were expected to be run by the end of FY-72, 4, In the case of formal competitive bids, the Procurement Management Staff contracting officer, as required by law, receives all bids and maintains strict control of them to prevent direct communication between the contractor and the ORD project officer until the contract award is made. However, most informal con tract proposals are solicited by and received directly by the pro- ject officers. The Procurement Management Staff contracting officer usually does not see these informal proposals until after the Blue Book * has been prepared and approved by an ORD division chief. 5, We believe this practice should be changed and that all contract proposals should be routed immediately upon receipt to the * The Blue Book consists of all the documents (bound in’a blue cover) xequired for the approval of a contract. -51- : —pesetetintie Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5eee Sanitized - Approved For Release : CIA-RDP88B00853R000100210001-5 ninblialince Procurement Management Staff for review, recording, and acknow~ ledgement. They should then be forwarded to the project officer for further study and review and for refinement of specifications and work statements and the like. There are a number of reasons why it would be desirable for the contracting officer to receive a contract proposal at the earliest possible dats =++ To allow for an early check on the contractor's pre~ vious performance under other contracts with the Agency or with the Department of Defense, --- To ascertain if other divisions of ORD or other components of the Agency are currently negotiating other contracts with the same contractor and, if 80, the type of fees that are being negotiated. ~-+ To examine the availability of alternate sources before the proposal becomes s0 specifically tailored that only one sources can be considered. =-+ To call attention to a possible need for refinement of specifications and work statements, --~ To identify as early as possible any legal, patent, or other similar problems that may need clarification, -+ To prevent informal negotiations from proceeding to the point where moral obligations become binding. =-+ To provide the ORD Contractor Selection Board with the information needed for an objective selection of the best contractor. - 52 SPoea, Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanltized - Approved For Release : CIA-RDP88B00553R000100210001-5 mesial Recommendation No. 6 ‘That the Director of ORD require that all contract proposals be forwarded immediately upon receipt to the 2 contracting officer in the Procurement Management Staff for acknowledgement, recording, and review. 6, In further expansion of this point, we note that the ORD Contractor Selection Board's review of contracts is concerned primarily with a review of the justification given for sole-source contracting, and this review is conducted after the Blue Book has been completed, We bolieve that this review should take place much earlier in the selection process and that it should encompass all factors having bearing on the selection of the best contractor for a particular R&D effort. Recommendation No. 7 That the Director of ORD consider revising the echeduling of contract proposals for review by the Contractor Selection Board to allow for the earliest possible Board review. The first formal step in the contracting sequence is the initiation of the CHEQUE, The CHEQUE system is the internal, manual ORD contract information system, It is a 5x8 Kardex file, and the paperwork begins with the completing of the first entry on the CHEQUE card, ~53- ee Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5: ‘Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 aielininioe The DD/S&T Project Officer's manual sets forth certain standards and criteria for the guidance of technical officers in s doing the pre-contract award work and the management of contracts. ‘The manual provides that, before initiating a request for funds, the equivalent of a literature search be completed to determine whether any applicable work or studies are available, Certain key areas should be checked to make sure that there is no duplication. 9. There is great variation among ORD technical officers in complying with these standards, We reviewed a large number of contract folders and found no written evidence in any of them that the technical officers had done all of the required pre-contract work, We did note that some of the initial CHEQUE proposals contained brief statements about the state-of-the-art in justifying the proposal. We were assured that ample oral discussion takes place before the CHEQUE proposal is submitted, 10, In order to test the validity of these assurances, we reviewed three new projects proposed for FY-73, with these results: a, In one case, the technical officer who signed the CHEQUE denied ever having heard of the project. He referred us to another technical officer who aleo disclaimed any knowledge of the project, We then checked with the - 54 . niin Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 —ieienialinlis division chief, He assured us that considerable discussion had taken place with other components of the Agency and commented to us that neither he nor the Director of ORD requires any writtes evidence of pro-proposal inve: iga~ tion, other than whatever might be noted on the CHEQUE card. b, In the second case, the responsible technical officer was on leave, but we were told by another officer that he had actually prepared the CHEQUE in the absence of the responsible officer and that he had had numerous discussions in ORD arc with the contractor, There was c. In the third case, the responsible technical officer also'was on leave, The division chief informed us that the work statement was in the process of being prepared and that the required technical and scientific review was being made concurrently with the preparation of the work statement, 11, With regard to the third case cited above, the division chief stated that the internal budget cycle operates in shion that -55- ae Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5 | oetinininial makes it impossible to do all of the homework that is specified as a prerequisite to submitting the CHEQUE proposal. He also ” commented that this particular project was a "fishing trip" and that he submits many proposals of a similar nature, He knows ‘that a number of them will be turned down, but by submitting many of them the chances are that a few will eurvive the approval process, 12, We believe the evidence supports the conclusion that ORD technical officers fax too often fail to make a reasonably complete background investigation and scientific review before initiating a project proposal, We have no reason for disbelieving the asaurances given us that there are preliminary oral discussions of proposals, but we axe troubled by the fact that these conversa~ tions are lost to the record, If the Director of ORD required that ‘a properly documented record of pre-contract work accompany the 1 project proposal, fewer contracts would be proposed (which might be all to the good), but those that were submitted would include the basic detail necessary for informed judgment. Recommendation No. 8 ‘That the Director of ORD consider establishing a formal mechanism for recording the substance of scientific and technical reviews conducted prior to submitting project proposals for review. = 56> . intentions : Sanitized - Approved For Release : CIA-RDP88B00553R000100210001-5