susceptible to competitive bidding on fixed specifications, the legislation 

 creating the National Research Foundation should free the Foundation from 

 the obligation to place its contracts for research through advertising for bids. 

 This is particularK' so since the measure of a successful research contract lies 

 not in the dollar cost but in the qualitative and quantitative contribution 

 which is made to our knowledge. The extent of this contribution in turn 

 depends on the creative spirit and talent which can be brought to bear within 

 a research laboratory. The National Research Foundation must, therefore, 

 be free to place its research contracts or grants not only with those institu- 

 tions which have a demonstrated research capacity but also with other insti- 

 tutions whose latent talent or creative atmosphere affords promise of research 

 success. 



As in the case of the research sponsored during the war by the Ofhce of 

 Scientific Research and Development, the research sponsored by the National 

 Research Foundation should be conducted, in general, on an actual cost 

 basis without profit to the institution receiving the research contract or grant. 



There is one other matter which requires special mention. Since research 

 does not fall within the category of normal commercial or procurement 

 operations which are easily covered by the usual contractual relations, it is 

 essential that certain statutory and regulatory fiscal requirements be waived 

 in the case of research contractors. For example, the National Research 

 Foundation should be authorized by legislation to make, modify, or amend 

 contracts of all kinds with or without legal consideration, and without per- 

 formance bonds. Similarlv, advance payments should be allowed in the 

 discretion of the Director of the Foundation when required. Finally, the 

 normal vouchering requirements of the General Accounting Office with 

 respect to detailed itemization or substantiation of vouchers submitted under 

 cost contracts should be relaxed for research contractors. Adherence to the 

 usual procedures in the case of research contracts will impair the efficiency 

 of research operations and will needlesslv increase the cost of the work to 

 the Government. Without the broad authority along these lines which was 

 contained in the First War Powers Act and its implementing Executive 

 Orders, together with the special relaxation of vouchering requirements 

 granted by the General Accounting Office, the Office of Scientific Research 

 and Development would have been gravely handicapped in carr)nng on 

 research on military matters during this war. Colleges and universities in 

 which research will be conducted principally under contract with the 

 Foundation are, unlike commercial institutions, not equipped to handle the 

 detailed vouchering procedures and auditing technicalities which are re- 

 quired of the usual Government contractors. 



VIL Budget 



Studies by the several committees provide a partial basis for making an 

 estimate of the order of magnitude of the funds required to implement the 

 proposed program. Clearly the program should grow in a healthy manner 

 from modest beginnings. The following very rough estimates are given for 

 the first year of operation after the Foundation is organized and operating, 

 and for the fifth year of operation when it is expected that the operations 

 would have reached a fairlv stable level: 



39 



