Perspective: Independent R&D: Three viewpoints: A key question is to what extent IR&D costs should be reimbursed by Government agencies and under what controls

Research and development effort by contractors to U.S. Government agencies is either “directed” or “independent.” Directed R&D is that done by a contractor in a specific technical area selected by the agency awarding the contract or grant. Independent R&D (IR&D) is that done by a contractor as the result of his own decision as to the kind of research projects and programs he will pursue. A contractor is reimbursed by an agency for all directed R&D costs (under the terms of the contract) and for some IR&D costs. There is little quarrel over the policy of reimbursement for directed R&D costs. But IR&D cost reimbursements have been a seat of controversy ever since Congress first became involved directly in the IR&D area in the late 1960s.