This emphasis on research and development conducted by the private sector had important repercussions over the next three decades. For many large weapons programs, project managers tended to avoid “in-house” arsenals and laboratories except where no qualified commercial sources were available. In the 1960s, the National Aeronautics and Space Administration and the Department of Defense let enormous base operation contracts, by which companies provided support services for entire installations - everything from trash collection to computer programming to mission control. The rationale was that this was the only way to assemble quickly the manpower needed to accomplish goals of national importance and (in theory) to disperse it when those goals were accomplished.

The Post-War Period: Origins of Government by Contract (1946 to 1957)

In 1945, very few people expected that American science and technology would return to its pre-war state. The genie had been let out of the bottle, and there was little inclination, even had it been possible, to put it back in. In his July 1945 report to the President, Science — The Endless Frontier (published in the same month as the Alamogordo test explosion, which it did not mention), Bush sketched an ambitious program of Federal support for basic research. For our purposes, the post-war period from 1946 to the launching of Sputnik in October 1957 can be taken as the period in which the basic institutional arrangements of American science came into being, some by act of Congress, some by executive order, some by agency regulations, and some by informal agreement between the sponsoring agencies and what, for lack of a better word, may be called their clients. Important long-term changes occurred in: Federal policies toward the support of basic research; Federal procurement policy; use of captive research organizations; policy regarding the uses of atomic energy; and philosophies of project management, especially in the larger weapons programs.

First, the Federal Government would continue to support basic research, and would do this through several agencies. Although the National Science Foundation was chartered by Congress in 1950 with the mission of supporting basic research, it was clearly understood (and affirmed by executive order in 1954) that this in no way preempted the research sponsored by other agencies. In 1946, the Navy had taken the initiative in sponsoring research when Congress created the Office of Naval Research, with the aim of sponsoring free, non-directed research, almost none of which was classified. In the same year General Dwight Eisenhower, as Chief of Staff of the United States Army, drafted a memorandum which was a blueprint for a continuing relation between the

services, civilian scientists, industry, and the university. The principles set forth in this document have dominated Federal research policies to this day:

“(1) The Army must have civilian assistance in military planning as well as for the production of weapons...

(2) Scientists and industrialists must be given the greatest possible freedom to carry out their research . . .

(3) The possibility of utilizing some of our industrial and technological resources as organic parts of our military structure in time of emergency should be carefully examined. . . There appears little reason for duplicating within the Army an outside organization which by its experience is better qualified than we are to carry out some of our tasks . . .

(4) Within the Army we must separate responsibility for research and development from the functions of procurement, purchase, storage and distribution . . . The inevitable gap between the scientists or technologist and the user can be bridged, as during the last war, by field experimentation with equipment still in the development stage...

(5) Officers of all arms and services must become fully aware of the advantage which the Army can derive from the close integration of civilian talent with military plans and developments . . . In general, the more we can achieve the objectives indicated above with respect to the cultivation, support and direct use of outside resources, the more energy will we have left to devote to strictly military problems for which there are no outside facilities or which for special security reasons can only be handled by the military." (ref. 39.)

Implied in Eisenhower's memorandum was the distinction between basic theoretical research and development which was at the heart of the Manhattan Project. Without the theoretical research on the structure of the atomic nucleus and the applied research devoted to isotope separation and the creation of transuranic elements, the production of weaponsgrade material would have been impossible.

Science, then, was to be more closely integrated with national technology development goals than at any previous time. But this meant that the legal framework within which research and development was pursued would have to be overhauled. In 1947, Congress passed the Armed Services Procurement Act which, while affirming the principle that contracts for services and supplies were to be let by advertising for bids, listed seventeen exceptions; the most important of these were

services purchased from educational institutions and services for experimental or developmental work (ref. 40). In 1948, Congress further authorized long-term research and development contracts, and provided for indemnifying contractors for losses incurred in certain kinds of developmental work. In 1949, many of these powers were delegated to civilian agencies. In the same period Congress did something to enable Federal agencies to compete with industry for the best engineers. In 1947, Congress authorized the Secretary of Defense (and subsequently, certain civilian agencies) to fill forty-five scientific and professional positions at salaries from $10 000 to $13 000, a range then equivalent to that of the highest ranking government officials. Congress intended these "Public Law 313" positions to be used for recruitment rather than retention, and each agency head was empowered to determine the appropriate salary within the bounds set by legislation.

Yet to officials in the new Department of Defense (DOD) and the Atomic Energy Commission (AEC), even these institutional arrangements did not go far enough in giving the agencies the expertise they needed. Particularly in weapon system development, where one firm might design the system and then bid on the hardware, there were serious conflict-of-interest problems. What DOD and the AEC attempted was, for quite different reasons, to create "captive" non-profit contract research organizations working for one sponsor. The best known of the defense-oriented centers are the RAND Corporation (which began as a contract between the Army Air Corps and Douglas Aircraft in 1945) and the Institute for Defense Analyses. The idea underlying these organizations was that they could provide disinterested advice to their sponsors; that individual researchers, freed from routine administrative tasks, could conduct research well in advance of the sponsoring agency's current needs; and that, by their existence, they would serve as catalysts for innovation in the client agency (ref. 41). Although practice did not always conform to theory, an organization like RAND could play a significant role in shaping agency programs at the earliest, the conceptual, stage.

The AEC, on the other hand, created a different kind of captive organization. Established by Congress in 1946, the AEC was charged with three different, and not entirely compatible, tasks: to produce weapons-grade nuclear materials for the Department of Defense; to develop and then transfer reactor technology to the private sector; and to regulate commercial reactors, once they came on line. The AEC deliberately chose not to operate its own laboratories, although the Atomic Energy Act of 1946 specifically provided for Federally-conducted research and development. Instead, the AEC contracted with private organizations — universities and for-profit firms to operate its laboratories: Los Alamos, Oak Ridge, Argonne, Hanford, Lawrence's

Radiation Laboratory, and the rest. The universities received almost two-fifths of the funding for R&D contracts (ref. 42). AEC managers were aware of the role played by university-managed laboratories in the Manhattan Project; and they assigned to the universities functions performed by other agencies in their own laboratories.

The first success of the new Atomic Energy Commission was the creation of the first thermonuclear weapons. Under Edward Teller's leadership much of the basic conceptual work had begun during the war. When the war ended, there was great pressure to dismantle the nuclear weapons complex, and many people involved in nuclear weapons work returned to their pre-war pursuits. There were a few, however, among them Norris Bradbury who succeeded J. Robert Oppenheimer as Director of Los Alamos, and a group of people around Ernest Lawrence in Berkeley, who recognized that the nuclear weapons complex created by the Manhattan Project would have to be maintained and expanded. In their post-war work on thermonuclear explosives, Teller and his collaborators drew on the people and the facilities of Los Alamos and the other institutions of the old Manhattan Project that became part of the new Atomic Energy Commission. The Commission retained the institutional arrangements under which the Manhattan Project operated, and the University of California stayed on as the contractor that operated the Los Alamos Laboratory.

Because the nuclear weapons complex remained more-orless in existence at the end of the war, it was possible to verify Teller's brilliant theoretical insight quickly and show that it would indeed be possible to create thermonuclear explosives. However, the political controversy surrounding the decision to develop these weapons also had another consequence relevant to the management of technology development. Teller and some of his collaborators felt that in the effort to spawn new technologies that were highly classified and politically controversial, it would be important to introduce an element of competition within the government-contractor community. Accordingly, they proposed that another nuclear weapons development laboratory be established with roughly the same functions as those carried out by Los Alamos. As a result of their proposal, a branch of Ernest Lawrence's Berkeley-based Radiation Laboratory was established at Livermore, California (about 65 kilometers east of Berkeley) in 1952. In due course, the new laboratory became independent of its parent (it is now called the Lawrence Livermore National Laboratory) and it has, along with the Los Alamos Laboratory, made vital contributions to the development of nuclear weapons (fig. 15). The competition that Teller felt was necessary has proved to be very beneficial and indeed, other agencies have found it worthwhile to build "internal" competition of this kind into their programs.

University of California, Lawrence Berkeley Laboratory FIGURE 15.-An aerial view of the Lawrence Livermore National Laboratory which was established in 1952 to develop thermonuclear weapons technology. The Laboratory's administrative building is in the corner near the bottom of the photograph.

The policy of contracting out technology development was compatible with as much or as little technical direction as the AEC considered desirable. At one end, the basic research carried on at the national laboratories was almost entirely free of technical control, except where the quality of the scientist's work was being evaluated. At the other end, the AEC was heavily involved in project-type work, notably in the development under Captain (later Admiral) Hyman G. Rickover (fig. 16) of reactors for the propulsion of submarines and other naval vessels. The important point, as far as Rickover was concerned, was that although he was a military man, he was forced to work through a civilian agency to achieve his ends. Rickover succeeded by inventing a unique organizational method. He had himself appointed to two jobs: one as head of the AEC's Naval Reactors Program, and the other as Director of Nuclear Propulsion in the Navy's Bureau of Ships. Rickover saw that by occupying similar positions in both agencies, he could cut the usual red tape, allowing him to justify the program for military reasons in his capacity as a naval officer and then using his position of authority in the AEC to organize the development laboratories needed to create the reactors. Once the reactors were developed by the AEC, the process of transferring the technology back to the Navy had to occur. This arrangement proved to be highly effective and it remains in force to this day. Rickover also adopted Teller's idea of competitive technology