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.

The University of Hawaiʻi is poised to renew a contract with the Navy to operate a controversial Navy sponsored University of Hawaiʻi Applied Research Laboratory, otherwise known as a University Affiliated Research Center (UARC).

The UARC was approved in 2008 despite fierce opposition and a civil disobedience campaign that culminated in a week-long occupation of the UH President McClain’s office. The UARC was intended to be a no-bid contracting pipeline for UH to receive military research contracts through the classified research center.

WHAT YOU CAN DO:

1. CONTACT UH PRESIDENT GREENWOOD ASAP and urge that she not renew the Applied Research Laboratory contract. Request that she instead refer the matter back to the Board of Regents and allow them to review a full accounting of the program and have a public discussion of its risks and liabilities.

• Email: mrcgreenwood@hawaii.edu
• Tel (808)956-8207
• Fax (808)956-5286

2. SUBMIT WRITTEN COMMENTS TO THE BOARD OF REGENTS BY WED. JULY 17th:

• Email: bor@hawaii.edu

BACKGROUND:

Anticipating the expiration of the UARC contract, Keever sought out information about the contract and all task orders performed by UH for the Navy under the UARC through public information requests.  All she got was the runaround. In articles published in the Civil Beat and Hawaii Independent:

Not since the Vietnam War and other protests of 40 years ago had the Manoa campus seen anything like the furor that erupted in opposition to establishing a military research laboratory at the University of Hawaii.

Students and faculty sounded off with blowhorns at assemblies, hung banners from rooftops, held nighttime vigils at the UH President’s mansion and petitioned the Board of Regents at a marathon, six-hour hearing.  With backpacks and sleeping rolls, they swooped up the stairs of Bachman Hall, invaded the president’s office, and settled in for a six-day sit-in and sleep-in that garnered negative headlines around the globe and lured the nation’s leading academic newspaper to send its own staff reporter to the scene.

“The last time the U.S. Navy built a laboratory on a university campus, Franklin D. Roosevelt was president and the United States was a war with Axis powers,” Kelly Field reported to the Chronicle of Higher Education. “Sixty years later, as the nation battles terrorism and an insurgency in Iraq, the Navy is encountering fierce resistance at home over its plans to develop a laboratory here at the University of Hawaii-Manoa.”

When the UARC was proposed in 2004, there was strong opposition to the UARC led by a dynamic coalition of students, faculty and community that raised awareness, mobilized creative actions and occupied the UH President McClain’s office for a week. Kanaka Maoli students and faculty were at the head of efforts to oppose the UARC citing the threat this classified naval research lab posed to UH as a “Hawaiian place of learning”.   The UH Mānoa Faculty Senate, UH Mānoa undergraduate student association, and even the UH Mānoa Chancellor opposed the UARC.  But the UARC, intended to be a no-bid contracting pipeline to funnel military research funds to Hawaiʻi and military research facilities at the Pacific Missile Range Facility, was moved from the UH Mānoa Campus to the UH System level and eventually approved by the Board of Regents in 2008.

GENEALOGY OF THE UARC

The UARC originated with an earlier secretive contract named “Project Kai eʻe”, which means tsunami in Hawaiian. Project Kai eʻe involved UH researchers, the Research Corporation of the University of Hawaiʻi (RCUH), the Office of Naval Research, several admirals and Senator Inouye.  It became the focus of a scandalous Naval Criminal Investigation Service (NCIS) investigation of possible fraud, abuse, and conflicts of interest.

Project Kai eʻe was intended to be a $50 million multi-faceted military research project awarded to RCUH to conduct military research based at the Pacific Missile Range Facility.  As RCUH Executive Director Harold Masumoto reported to the RCUH Board in October 4, 2001:

This may become a major project – about $50 million if funding comes through. As more of these types of projects become reality, there may be a need for a separate entity to manage them because of their focused objectives.

On December 4, 2001, Masumoto reported to the RCUH Board of Directors that:

RCUH was asked to submit a proposal and has done so for an ONR project with a potential price tag of $48 million over four years…A Phase 2 proposal may also be submitted. This project is basically in support of the Pacific Missile Range Facility on Kauai.

At the June 6, 2002 RCUH Board of Directors meeting, Masumoto reported:

Project Kaiee – We are still awaiting award of the contract. In the meantime, we will receive $800k of funding to get started (hiring an Executive Director and a Technical Director as well as some other support/technical personnel). The project will be incubated by RCUH. Plans at this time include evolving it into a UARC (University Affiliated Research Center).

RCUH was involved in providing services for the Navy funding agency as well as using this privileged information to submit the Project Kai eʻe bid.  This raised flags about conflicts of interest issues.   As a result Harold Masumoto moved several “services” contracts to the Pacific International Center for High Technology Research, a quasi-public corporation with historical ties to UH where he also held an executive position.

The NCIS reported that an Office of Naval Research program manager Mun Won Chang-Fenton and Admiral Paul Schultz:

planned to benefit from their NAVSAIRSYSCOM affiliation by orchestrating the award of a proposed contract, N00421-02-D-3151, to a company [they] were developing, Pacific Research Institute (PRI), also referred to as PROJECT KAIE’E’.

ONR Project – The proposal for Project Kaiee was withdrawn due to circumstances beyond our control. RCUH will pursue other avenues of funding for these types of projects.

Now, fast-forwarding to five years later, Senator Inouye has passed on and on July 14, the UH’s contract expires with the U.S. Navy’s Sea Systems Command, its war-fighting, weapons-development arm.

Without discussion by or disclosure to the public, UH is set to sign a new contract with the Navy. “Because there are no planned changes to the contract other than the timeframe, this modification would be signed by the Vice President for Research with the approval of the President,” according to the response to my e-mail made by a representative of Lynne T. Waters, UH’s associate vice president for external affairs and university relations. UH is now selecting replacements for both the Vice President for Research and for the President.

Before UH administrators sign the new contract, however, the Board of Regents has been urged to have a designated UH administrator explain fully the amount, scope, costs, revenues, locations, outcomes of UH’s ARL-conducted research and the kinds of censorship placed on dissemination of all research results. The Board is scheduled to meet on July 18 at the UH Cancer Center in Kakaʻako.

Alia Wong of the Civil Beat wrote a follow up article exploring the secrecy surrounding the renewal of the UARC contract:

Kitty Lagareta, who chaired the Board of Regents between 2005 and 2007, said she and other regents approved the plan on strict conditions, including that none of the initial research be classified, and after long-drawn-out consultations with stakeholders.

She said regents also called for a review of the lab’s research after a few years.

“An agreement’s an agreement,” she said. “The university ohana as well as the public are probably deserving of some sort of a recap.”

Ian Lind writes:

The secret Navy laboratory set up by the University of Hawaii five years ago, which was sold as a way to tap into a lucrative stream of defense-related contracts, has instead turned into a money pit draining resources from the rest of the UH system.

Lind points out that with both the UH and the Navy failing to respond substantively to Keever’s public information requests amounts to another example of UH’s lack of transparency:

Does Hawaii’s public records law allow the university to fail to respond to a request for public records and instead punt to a third-party, especially when the third party then delays because it kicks the whole request back to UH? At best, it’s unclear.

At worst, it feels like this is another in a long series of examples of UH miserably failing the to live up to standards of transparency mouthed in public by the president and other top administrators.

Keever’s reporting suggests another question. If this secret lab failed to land significant amounts of work while Senator Inouye was alive and pushing for it, what are its odds of turning that around in the absence of his seniority and political clout? And that’s sidestepping the continued opposition on the Manoa campus to the whole project.

In any case, the UH administration really should be providing a relatively full accounting before committing resources for another contract period.

Both Keever and Wong have been unable to confirm whether the UARC would be discussed by the Board of Regents at its July 18 meeting.  The agenda does not list the UARC as a discussion item, but since the contract renewal is a delegated authority to UH President Greenwood, she could have it signed without going to any public discussion or Board decision-making. The public has a right to know the full accounting of the UARC.  Greenwood could refer the UARC renewal back to the Board of Regents for a full review and public hearing.  This seems to be the most ethical and politically wise option for her in order to avoid being saddled with another controversy at the end of her tenure, and to let the Board of Regents take the heat for whatever the fallout may be.