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UH President Greenwood renews the UARC contract without public review or input

July 18, 2013 by  

Guerilla theater at UH UARC meeting - "I (heart) secrecy"

Exemplifying the secrecy and lack of accountability of the University of Hawaiʻi administration, outgoing President M.R.C. Greenwood renewed the Navy sponsored Applied Research Laboratory – UH (ARL-UH), also known as a University Affiliated Research Center (UARC), without public review or input.  When the Board of Regents initially approved the UARC in 2008, one condition was that the UARC would be reviewed after several years.  No report has been released. Despite diligent efforts by Beverly Keever to request public information from the Navy and UH, the University and the Navy have given her the runaround. With this “stealth” renewal, the Greenwood administration seems to  have thumbed its nose at all the concerned faculty, students and community members who have sought transparency and accountability for this classified navy research facility embedded within the university system.

Alia Wong of Civil Beat has been digging deeper into the UARC issue. She writes:

The release explains that the Navy last March threatened not to extend the agreement because the university wasn’t demonstrating a strong enough commitment to the contract. So UH last September hired a retired Navy admiral, Mike Vitale, to direct the lab.

The lab has conducted $7.9 million in unclassified research since the first contract was finalized in 2008, according to the press release. Just $196,000 of that research was sponsored by the Navy, suggesting that most of the research was conducted by other military agencies that under the contract can also utilize the lab.

The university has yet to explain those other studies.

It is worth revisiting the purpose of UARCs. During World War II, the government felt that it needed to enlist the essential competencies of several research universities to provide research to the government.  By establishing a “trusted relationship” with a university through these specially insulated laboratories, the government would be able to order research tasks of the UARC.  The research product was “owned” by the government and covered by the UARC’s blanket security classification.  Research conducted by the lab would not be peer reviewed because of its classified nature.  In exchange, the university received a steady flow of sole source (i.e. no-bid) contracts.  This is why there are so few UARCs such as Johns Hopkins Applied Physics Laboratory and Federally Funded Research and Development Centers (FFRDC) such as Sandia Labs.

UARCs are not supposed to be mere contracting vehicles to circumvent the normal competitive procurement process. Yet, the driving impetus behind Project Kai e‘e and the ARL-UH was the quest for a sole source, open ended funding arrangement for military research programs in Hawai‘i.  As Mun Won Chang (Fenton) stated in 2001 “fast/efficient streamlined contracting for DoD customers…IS THE MOST IMPORTANT CORE COMPETENCE…”[1] This idea was echoed by UH President McClain in January 2007: “the UARC contract is simply a master agreement….”[2]

Irregularities in the procedures for establishment of the UARC have raised concerns about the Navy’s failure to follow established federal acquisition regulations for the procurement of the UARC to UH.[3]  Neither the UH administration nor the Navy have provided a satisfactory explanation nor justification why the sole source procurement of the UARC to UH deviated from normal competition requirements for federal contracts.  Public notice of the UARC procurement came after two years of negotiations and planning had already taken place between UH, ONR and NAVSEA.

At the recommendation of RADM Cohen, Chief of Naval Research, in May 2003, NAVSEA conducted a Review and Justification for Establishing a University Affiliated Research Center (UARC) at University of Hawaii at Manoa (UHM), which concluded in May 2004.   Based on this document, on May 21, 2004, Gregg Hagedorn, the Acting Executive Director of NAVSEA recommended the establishment of the UARC with the concurrence of John Young, the Assistant Secretary of the Navy (Research, Development and Acquisition) on June 5, 2004.[4]

A string of congratulatory emails followed.  One message that appears to be from Hagedorn stated: “Excellent news. I hope [Director of Defense Research and Engineering] approval is soon… We are on a sucess [sic] oriented schedule to award the UARC contract.  Gregg”. Admiral Cohen, who was also copied on the message replied “Good, tks, pls let me know IF you need my help. Jay”[5]

In a letter dated July 8, 2004, Ronald Sega, Director of Defense Research and Engineering (DDR&E) wrote “I approve the request to designate the University of Hawaii at Manoa Applied Research Laboratory (UHM-ARL) as a University Affiliated Research Center (UARC).”[6]

A congressional notification memo addressed to Senator Inouye, Senator Akaka and Representative Abercrombie was prepared in anticipation of Sega’s approval.[7]  But according to Pete Brown at NAVSEA, Lieutenant Commander Leda Chong, from the Navy Office of Legislative Affairs made personal phone calls to the Hawaii Congressional delegation rather than send the letter. Brown wrote, “CDR Leda Chong had spoken with SEN Inouye’s staff on 12, July 04.”[8]

Procurement Irregularities

Federal Acquisition Regulations (FAR) require full and open competition for most types of federal procurement actions. This is to ensure the fairness, quality and cost effectiveness of goods and services acquired by the government.

The law allows for some exceptions to full and open competition when there is a compelling need or extenuating circumstances.  Federal law 10 U.S.C. 2304 (c)(3)(B) permits “other than full and open competition” when “it is necessary to award the contract to a particular source or sources in order …to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center”.  However, the procedures for establishing this type of relationship with the government usually require exhaustive steps to justify the need for and to select a sole source provider of “essential engineering, research, or development capability”.

University Affiliated Research Centers (UARCs) and their closely related cousins, Federally Funded Research and Development Centers (FFRDCs) are considered “trusted agents” of the federal government that have access to privileged information and receive sole source research grants and contracts within their designated “core competencies”.   Because of their uniquely close relationship to the federal government and access to information and funds, UARCs and FFRDCs also must observe strict guidelines to avoid organizational conflicts of interest.

In the mid-1990s, inappropriate contracting activity involving existing UARCs and FFRDCs led to a review of these programs and tighter restrictions.[9]  To prevent the abuse of sole source funding through UARCs and FFRDCs, the Department of Defense (DoD) promulgated its own rules for management of UARCs.[10] A “Discussion Paper” from the Directorate for Defense Research and Engineering (DDR&E) that was distributed by UH administrators to researchers at UH Manoa clearly laid out the guidelines and requirements for the establishment of a new UARC:

Sponsorship comes first, driven by Defense program needs…. The determination to establish a new UARC is therefore internal to DoD, independent of a University’s potential desire to establish a UARC.

On the process of establishing a new UARC, the “Discussion Paper” stated:

The sponsor(s) must define the long-term requirement (with funding expected to exceed $10 M annually), in the context of the core capabilities to be maintained by the UARC. These required capabilities must be approved through the Service Acquisition Executive (SAE) and forwarded to the Director of Defense Research and Engineering (DDR&E) for final approval to establish a new UARC. The sponsors should then solicit proposals from all interested Universities for establishing a new UARC to meet the approved core capability requirements. The selection process should follow established procurement procedures.[11]  [emphasis added]

Basically, a DoD sponsor of a new UARC must clearly define why it needs a UARC and what work (core competencies) will be required of the UARC. Then the sponsor should follow competitive procurement practices, soliciting proposals from all qualified and interested Universities, before awarding the UARC contract.  This is logical since once the UARC is established it would enjoy access to an indefinite amount of non-competed funding.

However, NAVSEA did not follow these guidelines or processes for procuring the UARC to UH.   Perhaps because the UH UARC was the first new UARC to be considered by the Navy in 60 years, reviewers of the proposal seemed to be making up the procedures.   In fact on the “coordination page” of the Review and Justification for Establishing a University Affiliated Research Center (UARC) at University of Hawaii at Manoa (UHM), a hand written note by Sophie Krasik, Assistant General Counsel dated June 4, 2004 stated:

Note: I haven’t been able to find any guidance on establishment of UARC’s (vice FFRDCs, for example) but the criteria used here are reasonable ones.[12]

The public has gotten contradictory accounts of the procurement process for the UARC.  In a hearing before the State Senate Committee on Higher Education in 2005, Syrmos testified that there had been a Broad Agency Announcement (BAA), a widely distributed competitive procurement announcement, for the UARC.  But when an audience member pointed out that there was no BAA, Syrmos corrected himself and said that it was a Request for Proposals (RFP) that was issued on September 24, 2004.  But this was also a false statement.

There was no competitive solicitation of any kind. After Sega approved the designation of UH Manoa – Applied Research Laboratory as a UARC, NAVSEA issued a Presolicitation Notice N00024-05-R-6234 dated September 24, 2004, which stated:

The Naval Sea System Command intends to award a sole source contract for up to 315 work years to establish and further solidify a strategic relationship for essential Engineering, Research, and Development capabilities at the Applied Research Laboratory, University of Hawaii at Manoa (ARL/UHM), 2500 Campus Road, Honolulu, HI 96822. [emphasis added]

In a public meeting on April 7, 2005, it was pointed out to UH administrators that other federal sponsors, including the Army and NASA used full and open competition in procurement of new UARCs.  Syrmos blithely dismissed the information: “The Navy runs the UARC office differently than the Army.”

According to Federal Acquisition Regulations (FAR) Subpart 6.3, federal sponsors seeking to use one of the listed exceptions to full and open competition are required to conduct a rigorous written justification. The FAR spells out at least twelve elements that must be part of a justification.

Obtained through FOIA, the May 2004 Review and Justification for Establishing a University Affiliated Research Center (UARC) at the University of Hawaii at Manoa (UHM) produced by NAVSEA and transmitted to the Director, Defense Research and Engineering on May 21, 2004, only addressed the question of whether or not NAVSEA had a legitimate need for a UARC at UH.  While it is debatable whether the document fulfilled even this requirement, the Review and Justification did not address the justification required under FAR for a non-competitive procurement.

In one set of the correspondences obtained through FOIA, NAVSEA officials apparently had difficulty mustering enough interest in a UARC at UH from other military branches.


[1].       Mun-Won Chang, A proposed concept for Pacific Research Laboratory (PRL), Federally Funded Research Laboratory, A Subsidiary of RCUH/University of HI and University of Alaska, August 30, 2001.

[2].   David McClain, “In the Hot Seat”, Honolulu Advertiser, January 25, 2007.

[3].       Eric Szarmes, “Re: Requirement for a Broad Agency Announcement for the NAVSEA Applied Research Laboratory UARC procurement”, Letter to Peter Englert with attachments. April 12, 2005. Eric Szarmes. “Re: Procurement for New UARCs”, Letter to Peter Englert with attachments. May 13, 2005.  Eric Seitz. Letter to Walter Kirimitsu, UH counsel.  April 25, 2005.

[4].  Gregg Hagedorn, Acting Executive Director, NAVSEA, “Recommendation for Establishing a University Affilitated Research Center at the University of Hawaii at Manoa”, letter to the Director of Defense Research and Engineering, via Assistant Secretary of the Navy (Research, Development and Acquisition), May 21, 2004, with attached Review and Justification for Establishing a University Affiliated Research Center (UARC) at University of Hawaii at Manoa (UHM), Naval Sea Systems Command University Affiliated Research Center Management Office (NAVSEA 106), May 2004.

[5].  “Recommendation for UARC at UHM”, a string of emails dated June 8 – 9, 2004, produced through FOIA request to NAVSEA from the computer of Antonia Stine.

[6].   Ronald M. Sega, “Subject: Designating the University of Hawaii at Manoa Applied Research Laboratory (UHM-ARL) as a University Affiliated Research Center (UARC)”, Memorandum for Executive Director, Naval Sea Systems Command, July 8, 2004.

[7].      Leda Chong, “Subj.: Establishment of University Affiliated Research Center”, Memorandum for Interested Members of Congress, unsent congressional notification memo.

[8].       Pete Brown, “RE: Recommendation for UARC at UHM – Status of Notifications”, email to Michael Mcgrath, August 19, 2004.

[9].       Government Accounting Office’s August 1996 Report on Issues Relating to the Management of Federally Funded R&D Centers, GAO/NSIAD-96-112, notes that “[the] DOD’s internal advisory group decided to include university-affiliated research centers [in May 1995] when reviewing FFRDCs due to the similar manner in which the organizations function.”

[10].       See Department of Defense University Affiliated Research Center (UARC) Management Plan, 1996.  Commander, Naval Sea Systems Command, University Affiliated Research Center (UARC) Memorandum, June 24, 2002.

[11].       U.S. Department of Defense, Directorate for Defense Research and Engineering (DDR&E) Discussion Paper, undated.

[12].       Gregg Hagedorn, Acting Executive Director, NAVSEA, “Recommendation for Establishing a University Affilitated Research Center at the University of Hawaii at Manoa”, letter to the Director of Defense Research and Engineering, via Assistant Secretary of the Navy (Research, Development and Acquisition), May 21, 2004, with attached Review and Justification for Establishing a University Affiliated Research Center (UARC) at University of Hawaii at Manoa (UHM), Naval Sea Systems Command University Affiliated Research Center Management Office (NAVSEA 106), May 2004.

 

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