Senator Inhofe has sent some questions to UCAR, which have riled Climate Watch and others. Climate Watch headlined: Senator Inhofe Launches Inquisition Probing Climate Research Organization. Googling will turn up a few references. I’m not doing a detailed note on this, but am giving a few takes on it, since we’ve talked here about UCAR from time to time.
Inhofe sent a letter to the boss of NSF starting as follows:
Last October I asked you whether the National Science Foundation (NSF) planned to open a Cooperative Agreement to manage and operate the National Center for Atmospheric Research.(NCAR) to competition when the current Agreement expires in 2008. You responded that NSF intends to compete this Agreement and that you expected to issue the first formal competition announcement early in 2006. Please provide me with a copy of this announcement when it is issued as well as subsequent notices regarding this specific competition.
He went on to ask for an organization chart and staffing particulars. This request has caused preditable outrage from predictable people. See the above link. Also Daily Camera stated:
U.S. Sen. James Inhofe, chairman of the Senate Committee on Environment and Public Works, has asked for detailed information regarding the employees, research projects and funding sources of Boulder’s National Center for Atmospheric Research and its parent organization, the University Center for Atmospheric Research.
The request, made to National Science Foundation Director Arden Bement Jr. on Feb. 24, was brought to light March 11 by Climate Science Watch, a Washington, D.C.-based nonprofit group founded by Rick Piltz, a former UCAR employee. …
UCAR and NCAR officials met regarding Inhofe’s request on Friday. They issued a statement: "UCAR will assist the NSF to the full extent permitted by our policies in answering the request from Senator Inhofe’s office." Kevin Trenberth, an NCAR senior scientist, said the information needed to fulfill Inhofe’s request was public record, anyway.
I’ve done a quick take on this and I probably have a little more experience in reading financial statements and in reading between the lines of contracts of most people at this site. As a first impression, the UCAR-NCAR structure is very convoluted. As a rule of thumb, I’ve found that complicated structures are seldom designed to benefit the public.
Virtually all the money comes from NSF. NCAR (the National Center for Atmospheric Research) is the main operating institution, with most of the employees and does most of the work. (Ammann for example seems to be an NCAR employee, although UCAR (the University Corporation for Atmospheric Research) issued the press release about Ammann and Wahl’s "findings". It’s not a small organization – the combined annual budget is over $200 million.
Here’s the curious part to the organizational structure. UCAR "manages" NCAR under a contract with NSF. Although UCAR is only a "manager", UCAR’s audited financial statements are consolidated with those of NCAR. For oversight purposes, what you need to see is the unconsolidated financial statements. My guess is that UCAR has something like a cost-plus management contract. If they got a 10% management fee from NSF, which is not out of the question, they’d have $20 million in income. (Update Mar 25: It seems that a variety of NCAR administrative and facility functions were transferred to UCAR in the early 1990s; UCAR appears to charge a mark-up of around 49% on direct costs but their managemnt fee is either 3% or nominal. I can’t figure out so far whether these indirect charges appear in the total NCAR budget said to be about $87 million, as compared to consolidated UCAR budget of $205 million. These overhead mark-ups by UCAR are said to be consistent with federal practices and I have no reason to doubt that. However, that’s a different question as to whether the mark-up on NCAR direct costs less the actual cost of providing services to NCAR is a profit center to UCAR.) This might be a type of off-balance sheet funding for things like IPCC WG1, which is housed at UCAR (and hyphenates ucar in its website http://www.ipcc-wg1.ucar.edu. ) It’s not obvious to me why NCAR shouldn’t just have its own management and its own board of directors. Management fees seem like an odd way to fund things.
Regardless of the merit or lack of merit of this approach, the plan to put NCAR management out to competitive bid was already in existence at NSF before Inhofe, as a quick google turned up this reference:
Next Cooperative Agreement (FY09-13). The review for the next cooperative agreement to manage NCAR will likely begin sometime in 2006 or 2007. During the most recent review process, the NSF said that this agreement will be competed for the first time. Over the past few years, NSF has begun competing most of their large agreements, and we are planning for a competition
These management agreements seem to have 5 year terms. I turned up a little information about the negotiation of the existing management agreement. UCAR’s proposal to NSF in October 2002 ishere. One of the remarkable features of this proposal – at least to me – is that it doesn’t discuss the actual management fees anywhere in the proposal. UCAR reported on the process here. (Notice the process of "anonymous peer review" – a procedure which seems very strange for contract negotiation.
1.2 UCAR proposal for the next Cooperative Agreement
In September 2002 UCAR submitted its proposal to NSF to manage and operate NCAR for the next five years: UCAR Management of NCAR 2003-2008: A Vision for Leadership and Service in the Atmospheric and Related Sciences. NSF sent the proposal out for anonymous peer review and areas conducted a panel review on site December 17-19, 2002. The UCAR SPEC co-chairs, Bob Duce and Franco Einaudi, participated in the panel review. The NSF review process was comprehensive and thorough, and it resulted in a number of findings and constructive recommendations. We are pleased by the positive nature of the review and are working on implementing the recommendations, which challenge us and our primary partners”¢’¬?the NSF, other federal funding agencies, and the university community”¢’¬?to build upon the successful NCAR and UCAR programs for the next five years.
Some comments about the 1998 management contract renewal are here. This time the review panel was named (and included Jerry Mahlman, who’s been mentioned here before.)
Update Mar 23 : There has been some discussion below on the form of mark-ups by UCAR on NCAR direct costs. Roger Pielke suggests that UCAR management fee is about 3% and that other mark-ups are tied to physical plant and such. This would mean that the UCAR management fee was about $3 million per year. Whether NCAR should, on other grounds, manage itself seems to me to be an open issue, but if the mark-ups are only $3 million per annum, it’s not a big deal either way. If Inhofe is interested, they should look at the unconsolidated statements and confirm this for sure.