In 2006, the fed. gov¿t. spent $13 billion -- 14% of its R&D expenditures -- to enable 38 federally funded R&D centers (FFRDCs) to meet special research needs. FFRDCs -- including laboratories, studies and analyses centers, and systems engineering centers -- conduct research in military space programs, nanotechnology, microelectronics, nuclear warfare, and biodefense countermeasures, among other areas. This report identifies: (1) how fed. agencies contract with organizations operating FFRDCs; and (2) agency oversight processes used to ensure that FFRDCs are well-managed. The author reviewed documents and interviewed officials from 8 FFRDCs sponsored by the DoD, DoE, HHS, and DHS. Includes recommend. Illus.