FAR 35.017-2—Establishing or changing an FFRDC.
Plain-English Summary
FAR 35.017-2 sets the gatekeeping requirements for establishing a Federally Funded Research and Development Center (FFRDC) or changing its basic purpose and mission. It covers the need to show that existing alternative sources cannot meet the agency’s special research or development needs, to publish the required notices, to ensure sufficient Government expertise for objective oversight, and to notify the Office of Science and Technology Policy. It also requires controls to keep service costs reasonable, a clear statement of the FFRDC’s mission so work can be distinguished from non-FFRDC work, and reasonable continuity of support consistent with the sponsoring agreement. In addition, the FFRDC must be structured as an autonomous organization or separate operating unit, operate in the public interest free from organizational conflicts of interest, disclose its affairs to the primary sponsor, avoid quantity production or manufacturing unless authorized by law, and receive approval from the head of the sponsoring agency. In practice, this section is the checklist that prevents agencies from creating or repurposing an FFRDC without a strong justification, proper transparency, and adequate oversight.
Key Rules
No adequate alternative source
Before establishing or changing an FFRDC, the sponsor must determine that existing alternative sources cannot effectively meet the agency’s special research or development needs. This is the core justification requirement and helps ensure an FFRDC is used only when ordinary contracting or in-house capabilities are insufficient.
Required public notices
The sponsor must place the notices required by FAR 5.205(b). This ensures transparency and gives the public and potential stakeholders notice of the proposed FFRDC action.
Sufficient Government expertise
The agency must have enough Government expertise to evaluate the FFRDC’s work adequately and objectively. This requirement supports meaningful oversight and prevents overreliance on the FFRDC without informed Government review.
OSTP notification
The Executive Office of the President, Office of Science and Technology Policy, must be notified. This creates executive-level awareness of FFRDC establishment or mission changes and supports governmentwide coordination.
Reasonable cost controls
The sponsor must establish controls to ensure the services provided to the Government are reasonably priced. This is intended to prevent unchecked costs and to support fair, defensible pricing for FFRDC support.
Clear mission definition
The FFRDC’s basic purpose and mission must be stated clearly enough to distinguish work that belongs with the FFRDC from work that should be performed by non-FFRDC sources. A vague mission can lead to scope creep and improper use of the center.
Continuity of support
The agency must maintain reasonable continuity in the level of support, consistent with its need for the FFRDC and the sponsoring agreement. This reflects the long-term, stable nature of FFRDC relationships and helps avoid disruptive funding swings.
Autonomous structure and public-interest operation
The FFRDC must be operated, managed, or administered by an autonomous organization or as a separately identifiable operating unit, and it must operate in the public interest, free from organizational conflicts of interest, while disclosing its affairs as an FFRDC to the primary sponsor. This protects independence and accountability.
No manufacturing unless authorized
Quantity production or manufacturing may not be performed unless legislation authorizes it. This keeps FFRDCs focused on research and development rather than production activities unless Congress has specifically allowed otherwise.
Head of agency approval
The head of the sponsoring agency must approve the establishment or mission change. This ensures senior-level accountability for the decision and confirms the action is an agency priority.
Responsibilities
Sponsoring Agency
Document the need for the FFRDC or mission change, ensure alternative sources are inadequate, publish required notices, notify OSTP, establish cost controls, define the mission clearly, maintain continuity of support, and secure approval from the head of the agency.
Contracting Officer / Acquisition Staff
Support the sponsor in preparing the justification, ensuring procedural compliance, coordinating notices and approvals, and structuring the sponsoring agreement so the FFRDC’s scope, oversight, and funding expectations are clear.
Program / Technical Officials
Provide the technical basis for why existing sources cannot meet the need, help define the FFRDC mission, and supply the Government expertise needed to evaluate the work objectively.
Head of Sponsoring Agency
Review and approve the establishment of the FFRDC or any change to its basic purpose and mission, ensuring the decision is properly justified and aligned with agency needs.
FFRDC Operator / Parent Organization
Operate the center as an autonomous or separately identifiable unit, maintain public-interest performance, avoid organizational conflicts of interest, disclose FFRDC affairs to the primary sponsor, and refrain from unauthorized quantity production or manufacturing.
Office of Science and Technology Policy
Receive notification of the establishment or mission change, enabling executive oversight and awareness of the FFRDC arrangement.
Practical Implications
This section is a pre-establishment and mission-change checklist, not just a policy statement; if any required element is missing, the agency risks an improper FFRDC action.
The most common failure points are weak justification, an overly broad or vague mission statement, and insufficient documentation showing why ordinary sources cannot meet the need.
Agencies should be careful not to let an FFRDC drift into work that belongs in normal contracting channels, especially production or manufacturing activities that are not legally authorized.
Because FFRDCs are intended to be stable, agencies should plan for continuity of support and avoid abrupt funding or scope changes that undermine the center’s role.
Oversight matters: the Government must retain enough expertise to evaluate the work objectively, or the FFRDC can become too independent for effective management.
Official Regulatory Text
To establish an FFRDC, or change its basic purpose and mission, the sponsor shall ensure the following: (a) Existing alternative sources for satisfying agency requirements cannot effectively meet the special research or development needs. (b) The notices required for publication (see 5.205 (b)) are placed as required. (c) There is sufficient Government expertise available to adequately and objectively evaluate the work to be performed by the FFRDC. (d) The Executive Office of the President, Office of Science and Technology Policy, Washington, DC 20506, is notified. (e) Controls are established to ensure that the costs of the services being provided to the Government are reasonable. (f) The basic purpose and mission of the FFRDC is stated clearly enough to enable differentiation between work which should be performed by the FFRDC and that which should be performed by non-FFRDC’s. (g) A reasonable continuity in the level of support to the FFRDC is maintained, consistent with the agency’s need for the FFRDC and the terms of the sponsoring agreement. (h) The FFRDC is operated, managed, or administered by an autonomous organization or as an identifiably separate operating unit of a parent organization, and is required to operate in the public interest, free from organizational conflict of interest, and to disclose its affairs (as an FFRDC) to the primary sponsor. (i) Quantity production or manufacturing is not performed unless authorized by legislation. (j) Approval is received from the head of the sponsoring agency.