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A variety of activities are performed for government under contract. In the general area of research and development are included basic research, systems analysis, systems engineering and technical direction, testing, and manufacturing. In addition, the government contracts for policy planning, management of government facilities, technical assistance activities, educational programs, and management surveys. Many different types of private organizations are involved, including profit-making industrial, engineering, and consulting firms, and a number of non-profit institutions, such as foundations and research institutes, special-area interest groups, religious bodies, universities, and the non-profit corporation established solely to do business for government.

To many observers, the increased use of contracts appears as the only feasible way for the federal government to meet many of its critical needs, especially in science and technology. In the post-war period, faced with international challenges requiring the swift mobilization of scientific and technological capacity for defense purposes over a broad area, the government found the contract mechanism a handy tool. It provided a means for overcoming many of the administrative and political problems that might have resulted if efforts had been made to accomplish the same ends within the governmental structure. With relative rapidity, it brought to the service of government established and proven work groups and talented individuals in highly specialized areas--an accomplishment that might well have been impossible through other means, given the structure of the economy and the nature of the technology. To a government already burdened with numerous, large, complex administrative units, it offered a means for essential expansion and a substitute for direct growth in the administrative hierarchy.

For many of the same reasons, the contract system found application and use in non-defense areas. It has now become a generally accepted administrative device--one of the many tools an imaginative administrator can call upon when it is useful in fulfilling his mission. Even more, it appears to have become so favored as a means that it now is often turned to immediately, without consideration of other alternatives. Its very growth and success serve to sustain the system and expand it.

The use of contracts has been encouraged by some because it helps in the accomplishment of other objectives. The opponents of large government and of governmental competition with private business have found the contract system useful in serving their purposes. Advocates of federal aid to higher education have tended to support the extension of contracting for research and other programs as a means to that end. The proponents of federal support for science have found the contract and related grant systems conducive to their ends. Contracting has also been propelled by government officials and agencies that found in it a way of gaining a tactical advantage or overcoming a disadvantage. When the Air Force was established, for example, the contract system afforded it a ready means for overcoming the leads of the other Services in missile and rocket research, strategic planning, and the development of defense systems.

Experience in atomic energy constitutes a special case. The AEC has employed the contract system from the outset to bring private corporations into

an area of government monopoly and foster a significant new industrial development. This policy has been explicitly formulated and is consciously applied.

Important among the benefits presumed to inhere in the contract system is its usefulness in circumventing problems in governmental administration. Rigid and non-competitive salary schedules, personnel ceilings, and tortuous examination and appointment procedures often make it difficult for government agencies to build a qualified staff with sufficient speed. Through contractors, greater flexibility can be secured and already developed staffs can be put to work on government problems. The services of persons who would not be willing to undertake government employment can often be secured through contractors. The system also provides flexibility in other areas, such as procurement, planning and disbursement. It affords greater stability in funding by making moneys available in one fiscal year for projects extending beyond it, thus by-passing the uncertainties of the annual appropriation procedure.

The contract system makes possible the delegation of public authority to private institutions. It has created a substantially new managerial partnership between public and private agencies in the accomplishment of public purposes. It had led to the development of a new institution--the non-profit corporation whose business is in good part with government, whose operations are carried out in government-owned or financed structures, and whose "profits" in the form of a fixed fee over costs are not distributed to stockholders but used for research or educational work related to the corporation's contract activities. The nonprofit corporation is often a thinly disguised government agency. The contract is a transparent substitute for the governmental administrative hierarchy.

While public authority can be delegated through these means, public responsibility is not as easily returned. Contract regulations, administrative surveillance, and occasional Congressional investigations are not full substitutes for the spirit of public accountability fostered within government agencies by the need to respond continually to the demands of the total governmental system and to accept the rigors and austerity of its operations. The mantle of public office does not fall on the contractor as it does on the government official. In this disparity between authority and responsibility resides a major problem of the contract system.

A similar situation exists with respect to the impact of government contracts and grants on the nature and direction of research and education in colleges and universities. They have led to a markedly increased dependence on government for the support of research and the maintenance of expanded research staffs and facilities. Government decisions about the location of facilities and major projects help to determine the standing and role of particular institutions in particular fields. The recognition that the universities are a national resource that government can and should put to the service of national policy objectives is a departure from the traditional view of the universities' social role and relationship to government which is likely to have long-run implications. Government

supported research centers and action programs on university campuses certainly influence and may damage the university's ability to fulfill its more legitimate functions. Again, these outcomes of the contract system are rarely given systematic attention, although some of them may be considered in the process of making decisions on particular contracts or grants. As a result, the effect of contracting on universities is largely determined by other considerations.

More positively, greater efforts could be made to use the contract system for accomplishing long-run objectives in education, the economy, science, and other areas. It could be applied with advantage in urban renewal, foreign aid, and public welfare. Employed consciously and openly, with due regard to the full range of its effects, it can be a powerful tool of national development, serving to focus strong private efforts on the pursuit of public purposes.

Important constitutional issues are at stake here. The contract sytem delegates public authority to private groups that do not share the government's full accountability. It also provides a subtle means for nationalizing the private sector. Thus, its significance extends well beyond considerations of administrative technique to fundamental questions about the status of private institutions in a democratic society.

The national corporate charter may hold promise as a means for legitimizing the role of the private institution doing substantial work under government contract. As in the case of the professional association, such charters could be used to clarify the private institution's role and its relationship to government. Privileges and immunities and public responsibilities could be delineated for the mutual protection of the private group and the public. The entire relationship could be made more stable and we would be less likely to run the risk of losing its advantages as a result of effort to correct its present faults with stringent administrative regulations.

Apparently the new programs have already proceeded far enough to make some

evaluation of their impact on the educational work being done by the participating institutions possible. In a study made by Harold Orlans for the Brookings Institution the impact on the major participants is described as follows:

Federal aid has been neither "good" nor "bad," To those institutions participating substantially in Federal programs it has brought a whole new way of life, including a burgeoning complex of research administrators, research associates, graduate fellows, budget over seers, and accounting and clerical staffs. It has in some cases helped make rich institutions richer, created im balance in the academic program, and diverted the energy of good teachers into second-rate research. In other cases it has undoubtedly strengthened the academic program, helped to attract better teachers and students, and promoted research of an unprecedented variety and scale.

The above presumably pertains to the 10% of the 2,000 institutions, that is, it would refer to the 186 institutions which have used 97% of the research expenditures.

But the other 1, 800 have not been uninfluenced. Regarding these 90% he has this

to say:

Among institutions receiving little or no Federal research funds, the influence is less direct, but is is nevertheless present and of far-ranging significance. Probably the most important effect is in the content of instruction, which has unquestionably been advanced by giant strides in the sciences. Federal programs also have implications for even the smallest college, affecting the hiring and retention of faculty, the availability of high-quality teaching assistants, the stature of research as opposed to teaching, the personal contacts between students and faculty, and many other questions of basic importance to the educational structure.

In summary Orlans found that "the total impact of Federal funds on higher educa

tion is nothing short of staggering . . .

This conference will meet in the hope that Baptists will be able to walk and not to stagger into their future.

In connection with the discussion of church-state relations in research, it would be appropriate for the conference to endeavor to discern what kinds of research are vitally related to the message of our movement. All scientific advance and human betterment are of concern to Christians and to Christian churches, but these are concerns which are also present in public policies and programs. Over and above these, the churches need to be involved in research efforts which give meaning and relevance to the gospel. Such research cannot be anticipated from public funds or under public policy. Perhaps the distinctive research role of the Christian university requires some clarification in its relationship to the churches' basic reason for being.

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II. A Possible Rationale on Loans

The use of "government loans" by Baptist colleges has probably been the most

publicized, and perhaps the most controverted, type of relationship to government.

This does not mean that it is either theoretically or practically the most difficult type of church-state problem.

Title IV of the omnibus Housing Act of 1950, as amended by several subsequent laws, provides for the direct loaning of federal funds at low interest rates to assist institutions of higher learning in providing and improving housing facilities for students and faculty. The act makes the funds available to public and private, accredited, nonprofit colleges and universities and hospitals providing nursing and intern programs. The facilities these institutions may build include dormitories, student unions, dining

halls and infirmaries.

At the end of March, 1962, $1.9 billion had been committed for approximately 1,750 loans under the College Housing Program. In the ten years since the construction of the first College Housing project, the program has provided financing for housing for more than 385, 000 students, and apartments for 19,000 student families and 3, 100 faculty members. The loans also have financed about 330 dining halls and 135 college unions.

Administrative responsibility is vested in the Community Facilities Administration (currently under Commissioner Sidney H. Woolner) of the Housing and Home Finance Agency (currently under Administrator Robert C. Weaver).

The act says that the purpose of the program is to assist educational institutions "in providing housing and other educational facilities for students and faculties." In view of the intentions of the act as described by the Senate Banking and Currency Committee, by later provisions of the act, and by the actual administration of the program,

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