Ten consultants were employed by the National Institute of Education (NIE) to examine the state of educational research and development (R&D) with specific reference to the regional laboratories and the R&D centers established in the late 1960's. By confering with NIE officials, surveying the directors of regional laboratories and R&D centers, and questioning other interested educators, the consulting team was able to examine: (1) the nation's capacity to do research in education; (2) the relationship of the style of funding to the quality of research; and (3) the potential effects of alternative methods of funding. The report concludes with an extensive list of recommendations for legislators, researchers, and educators. (EMH)