Summary: For many years, the Defense Department (DOD) has sponsored research and development either directly, by issuing a contract or grant, or indirectly, by allowing contractors to include Independent Research and Development/Bid and Proposal expenses in overhead costs. DOD does not now gather information on whether contractors' Independent Research and Development/Bid and Proposal expenses are addressing technologies considered central to the long-term qualitative superiority of U.S. weapon systems. GAO surveyed 121 contractors in this program; 92 reported that in 1990 they spent $2.9 billion, or almost half, of their expenditures on the goals listed in DOD's Critical Technologies Plan. They also said that most of their firms' total Independent Research and Development/Bid and Proposal work is on near-term development efforts aimed at designing, developing, or testing a new or improved product. Sixty percent or more of the contractors GAO contacted said that recent legislation--Public Law 101-510--will have little or no effect on their investments in critical or environmental technologies, and almost 45 percent believe that the law will have little or no effect on the work being done on dual-use technologies.
