White House Office of Science and Technology Policy (OSTP)

National Science and Technology Council (NSTC)

Committee on Science

**Regional Forum on Research Business Models**

### Common Practices among Agencies

**WORKSHOP SUMMARY**

University of Minnesota

Office of the Vice President for Research

November 12, 2003

Prepared By:

Rose Li and Associates, Inc.

December 4, 2003

White House Office of Science and Technology Policy (OSTP)

National Science and Technology Council (NSTC)

Committee on Science

Regional Forum on Research Business Models

# Common Practices among Agencies

University of Minnesota

Office of the Vice President for Research

November 12, 2003

# Executive Summary

The second Regional Forum on Research Business Models was held at the
University of Minnesota on November 12, 2003 at the Theatre of the
Coffman Memorial Union in Minneapolis. The goal of this second of four
regional forums -- which are sponsored by the Subcommittee on Research
Business Models, under the White House Office of Science and Technology
Policy (OSTP) National Science and Technology Council (NSTC) Committee
on Science -- was to solicit suggestions from the research community on
common practices among funding agencies, in an effort to improve the
Federal research process. Although the U.S. research enterprise is
considered to be among the best in the world, it is recognized that
improvements can make the process more reasonable and efficient.
Participants wanted Federal agencies to understand where policies
originated, recognize the "trickle-down" effects of new rules and
regulations, and revisit them in light of the changing times, in which
there now is greater emphasis upon multidisciplinary research. Policies
that appear to be working, such as the Bayh-Dole Act, should not be
changed. The Minneapolis forum echoed many of the public comments
received by the Subcommittee and highlighted a number of pressing
concerns shared by research institutions about inefficiencies and
administrative burdens imposed upon them by Federal granting agencies.
There were also numerous suggestions for improvements.

Regulatory burdens impose real costs. A major underlying theme was the
request to simplify, streamline, and provide uniformity to compliance
requirements. Compliance requirements imposed by regulations -- ranging
in scope from select agents, the Patriot Act, Health Insurance
Portability and Accountability Act (HIPAA), hazardous waste storage and
disposal, occupational safety and health, animal care, human subjects
protection, and Homeland Security, to those rules related to
inventories, certification programs, training programs, legal counsel,
construction, renovation, and operation of facilities -- are only the
tip of the iceberg. State and local laws need to be examined, as well,
because they are sometimes even more stringent than Federal laws.
Universities are increasingly defensive about having to follow new rules
and regulations, which distracts them from their primary
responsibilities of research and education. There is also a disconnect
between agencies promulgating rules and then not providing adequate
resources to enable institutions to comply with them.

Speakers pressed for greater consistency in core administrative
requirements (e.g., A-110) and treatment of major equipment and facility
needs. Opportunities to streamline and simplify awards to national labs
and their collaborators were especially apparent. Awards to national
labs place burdensome expectations upon the awardee institution, which
is expected to take all the risk, advance funds, and indemnify the
government. These examples suggest that the Federal government needs to
do more to discourage rigidity and reward flexibility, in order to
advance science.

Much frustration was expressed about the delay in establishing a single,
government-wide, electronic grants management system. The proliferation
of agency proposal and award management procedures is seen as a major
barrier for institutions. The Federal government is perceived to lack
the understanding or willingness to develop a uniform system that will
work in university environments. Instead, the government is seen as
expecting institutions to modify their systems and practices to
accommodate a myriad of different processes and procedures tailored to
each Federal agency.

Perhaps the most vocal calls were for relief from the caps on
cost-recovery and from effort certification requirements. Cost-recovery
is currently heavily discounted, and the administrative component is
capped; however, universities are being asked to shoulder greater fiscal
responsibilities associated with the support of scientific projects.
Capital funding for facilities has become largely an institutional
commitment. It is clear that universities must establish safeguards
against vandalism and terrorism; if an event were to occur, every aspect
of the legal structure would need to be brought to bear, adding further
to the cost of the research enterprise. The support and infrastructure
necessary to perform clinical trials in the current regulatory
environment are enormous, with new regulations added every day. These
costs of compliance currently cannot be recovered through cost
reimbursements. In addition, the business responsibility of taking the
first steps toward commercialization following successful clinical
trials is increasingly devolving to the university.

Universities always have had to cross-subsidize the cost of research,
but for a public university (and probably for private universities),
sources for cross-subsidizing research have diminished significantly. In
addition to seeking relief from the Federal government, universities
increasingly will need to adopt a multi-sector approach, partnering with
for-profit companies and non-profit organizations in order to meet
targets. These types of partnerships create a synergy that permits the
university to put knowledge to work and accelerate commercialization.

It is recognized that multidisciplinary research will require more
personnel at all levels, specialized research facilities, and
administrative responsibilities by all participants. It is expected to
be more costly than investigator-initiated, small scale research, and it
will to lead to rapid technological changes that facilitate further
collaborations. A change in the dynamics of the research enterprise is
also expected, which will challenge the existing administrative
structures of Federal agencies and universities. Of particular concern,
interdisciplinary research threatens to increase training and delay
career independence of aspiring investigators. An examination of a
number of Federal agencies that fund graduate fellowships finds a range
in fellowship duration of anywhere between 1 and 5 years, with
variations in stipends and conditions. Government agencies might help
by:

-   encouraging more rigorous science and mathematics training prior to
    graduate study;

-   establishing consistent stipends, benefits, tuition, training, and
    length of support; and

-   resolving issues surrounding foreign trainees (visa application
    processing; returning visas for scholars who leave the country).

The problems noted by forum participants are amplified in smaller
institutions. These schools often must rely upon their educators to
serve on more and more committees to handle compliance work, which can
be demoralizing for faculty. Sponsored program offices, particularly at
smaller institutions with fewer staff resources, tend to apply the most
stringent rules in order to ensure compliance and ease management
burden, even if Federal agencies do not require them. Unfortunately,
such an approach can diminish an institution's competitive edge, to the
detriment of science. Requirements for cost-sharing put smaller
institutions at a further disadvantage in the competition for research
funds. The University of Minnesota grants management software, available
free of charge through a license agreement, may be of particular help to
some smaller institutions.

Participants suggested a number of specific action items for the
Subcommittee to consider, including the following:

***Cost accounting***

-   Eliminate the 26 percent cap on Financing and Accounting (F&A)
    rates.

-   Reinstate administrative support as a reimbursable direct cost.

***Relief from administrative burdens***

-   Eliminate effort certification.

-   Make clear at time of award whether Expanded Authorities apply.

-   Remove unacceptable publication restrictions and indemnification
    clauses in subcontract agreements.

-   Simplify the entire subcontracting process, including monitoring and
    auditing aspects for subgranting relationships.

-   Have NIH streamline further their Materials Transfer Agreement (MTA)
    template.

-   Extend active duration of certifications to multi-year periods,
    relieving institutions of the requirement of having to do yearly
    certifications.

-   Encourage larger institutions to take on a more regional
    perspective, to help smaller institutions.

***Clarification of policies and procedures***

-   Clarify that cost-sharing considerations should not influence
    reviews of technical merit.

-   Clarify reporting and invoicing requirements.

-   Clarify the criteria for sharing research data with collaborators
    when the research is deemed to be classified or sensitive.

-   Carefully review the impact of the Bayh-Dole Act on university
    accounts, and clarify administrative or management solutions to
    perceived conflict issues.

***Coordination of efforts and approaches***

-   Accelerate and impose deadline dates for the implementation of
    *grants.gov*

-   Explore implementing a single compliance protocol, possibly modeled
    after the OHRP system for Federal assurances, or leveraging the DUNS
    numbers that all recipients are required to have, and hold the
    institution more accountable.

-   Streamline the data fields for electronic grant application
    submissions, so institutions need enter their data only once, then
    have the Federal agencies populate this data throughout their
    systems.

-   Encourage Federal agencies to regularly share their future plans
    related to electronic systems in development, in order to assist
    institutions in planning and developing their own systems.

-   Have NIH and NSF resolve differences in interpreting the
    government-wide misconduct policy.

-   Endorse establishment of the National Academy Biomedical Scholars
    and encourage multi-agency commitment to undergraduate education.

-   Bring the audit community into the Subcommittee's deliberations.

-   Increase coordination with Federal Demonstration Partnership (FDP)
    activities to explore modifications to A-21, and implementing the
    proposed annual payroll certification system that would reduce
    unnecessary administrative burden.

White House Office of Science and Technology Policy (OSTP)

National Science and Technology Council (NSTC)

Committee on Science

Regional Forum on Research Business Models

# Common Practices among Agencies

University of Minnesota

Office of the Vice President for Research

November 12, 2003

# Meeting Summary

## 

## Opening Remarks

Dr. David Hamilton, Interim Vice President for Research at the
University of Minnesota welcomed participants to the meeting. He
reported that the Berkeley forum was extraordinarily interactive, and he
hoped that the Minneapolis forum could be the same. Dr. Kathie Olsen,
Associate Director for Science, Office of Science and Technology Policy
(OSTP), echoed this sentiment, and added that the group's participation
will be enormously helpful to the Federal staff in attendance. She added
that efforts to improve the Federal research process can be sustained
more easily if participants can see the rewards. Scientific discoveries
increasingly are made at the intersection of different fields; research
infrastructure costs and requirements have soared; and science has
become more global. In light of all this, it is important that Federal
funding processes be responsive to today's changing climate. Dr. Olsen
acknowledged that the system we seek to improve is literally the envy of
the world; the current system is flexible and has excellent mechanisms
for collaboration across agencies and universities, particularly when
compared with other countries. The key question is whether the current
structures and funding mechanisms are adequate to foster productive
scientific research.

Dr. Olsen explained the structure of the Federal agencies overseeing
possible improvements to Federal research funding processes. The work of
the National Science and Technology Council (NSTC) is achieved through
four committees, which in turn have subcommittees and working groups.
Today's forum was sponsored by the Subcommittee on Research Business
Models, under NSTC's Committee on Science. Dr. Olsen co-chairs the
Committee on Science with Dr. Rita Coldwell at NSF and Dr. Elias
Zerhouni at NIH. The purpose of the RBM Subcommittee is to (1) identify
and address important policy implications arising from the changing
nature of scientific research, and (2) examine the impacts of these
changes upon the conduct of scientific research that is funded by the
government and carried out by academic, industrial, and governmental
entities. The NSTC is coordinating the development of documents designed
to drive budget decisions and strengthen the output of the Federal
research process.

The comments received to date have included misgivings about the
emphasis upon "business processes," and concern about defining outcomes
for research grants. Dr. Olsen clarified that the term "business
processes" is meant to convey a whole array of activities that take
place outside the laboratory in support of research, which are deserving
of further review.

Looking ahead, the Committee will consider all public comments received
up until the full Committee meeting, which is scheduled to take place
December 9-10 in Washington, DC. The committee is committed to focusing
upon the "low-hanging fruit," to show quick progress, while
simultaneously tackling the more substantial, far-reaching issues. Dr.
Olsen believes that the RBM Subcommittee can serve as a good role model
for the rest of NSTC. She concluded by thanking the key staff members
from participating partner agencies at the NIH, NSF, and USDA for their
efforts on behalf of this endeavor.

## Summary of Public Comments

***Geoffrey Grant, Staff Director, Subcommittee of Research Business
Models (RBM) and Deputy Director for Management, Operations & Policy,
Office of Budget, Finance & Award Management, National Science
Foundation***

Mr. Geoffrey Grant represented those public comments received by October
6. The Committee has tried to reach out broadly to the research
community, and the summary of comments received represents a growing
body of work. Mr. Grant summarized the written comments provided to date
by 46 respondents. Written comments are still being accepted through
December of 2003; additional feedback, including comments provided
during the October 27 forum, will be added continuously. Verbatim
comments are available on the RBM Subcommittee website
(*http://rbm.nih.gov*), and a preliminary analysis of the comments soon
will be available on that website, as well.

By October 6, 46 respondents had sent in a total of 150 written
comments, of which 12 were from professional associations, 2 from
Federal agencies, 10 from individuals, 3 from industry or small
businesses, and 19 from universities. The comments are separated into 12
themes, corresponding to the Request for Information. Some of the
categories had many (and sometimes conflicting) comments. One
recommendation repeated across all categories was to establish
consistent policies and regulations across all agencies, which would be
applied across the board -- i.e., in accounting practices, other
regulatory requirements, or best practices. Standardized rules would
simplify the research process enormously, since each participating
institution would need to learn and implement only one process (which
would be the same for all). Respondents also offered comments on state
and institutional requirements.

**[(1) General (18 comments)]{.underline}**

In highlighting the major themes from the general comments, Mr. Grant
first discussed the need for caution regarding the overuse of a
"business model" perspective. He emphasized that research spending
should be considered more as an "investment" and less as a matter of
"procurement." Adherence to a business model would suggest that agencies
might coordinate "portfolios" of interconnected activities. It is
important not to put an undue emphasis upon outcome evaluation --
especially because, unlike in the business world, the elements of risk,
negative findings, and "failures" are (and should be) an integral part
of the research process.

**[(2) Principles of Partnership (18 comments)]{.underline}**

In discussing comments that were centered upon principles of
partnership, Mr. Grant stated that consistent interpretations must be
developed for agency and institutional best practices, norms, and
standards. The assistance nature of the relationship also needs to be
reaffirmed. Success depends upon stability, transparency, and a
reasonable level of predictability. Concerns were raised that policy
changes could have unintended, adverse consequences upon the research
enterprise. The system must be flexible, competitive, and responsive, as
well as supportive of the individual investigator, with funding
decisions based upon merit. The financial investment must be diverse, in
terms of the fields supported and modes of support. The process must be
open to new ideas and investigators from all research institutions,
regardless of size. We need to seek agreement among the funding agencies
and members of the audit and research communities, regarding acceptable
business principles and standards.

**[(3) Accountability (20 comments)]{.underline}**

Twenty (20) comments were received regarding accountability. Respondents
placed a high priority upon striving to return to a costing and
regulatory system that is equitable and effective, and appropriately
reflects the diversity of research providers. This was considered to be
even more pressing than articulating a new business model. The principle
of full-cost reimbursement was seen as vital. Two central considerations
were costs (including how they are charged and compensated) and
administrative regulations (including how they are complied with and
imposed). It is especially important to establish an ongoing process and
dialogue. Commentators also noted that a good business model cannot
tolerate a hybrid of conflicting goals. Accountability should be defined
in terms of scientific outcomes, not just in terms of
financial-administrative compliance, and should be evaluated through
publications and progress reports.

Comments also included a number of more detailed suggestions regarding
how to improve accountability. The NSTC was encouraged to examine NIH
GPRA goals, as appropriate, and to avoid requiring other new performance
goals. Federal agencies were asked to reduce or eliminate multiple and
overlapping agency audit requirements. This request was made because a
number of agencies currently insist upon performing their own audits and
are eliminating or streamlining subrecipient monitoring --- which is at
odds with increasing collaborative networks over the last 5 years; they
also eliminate Cost Accounting Standards requirements, or only
incorporate the principles of those requirements, rather than imposing
the standards as an unfunded mandate upon recipients.

Respondents also recommended applying a business-to-business model to
scientific collaborations; for example, if common standards were
adopted, one could consider "accrediting" institutional oversight
systems that deploy these standards and practices.

**[(4) Inconsistency of Policies and Practices among Federal Agencies
(21 comments)]{.underline}**

A surprising number of comments in this area suggested that the basic
principles are sound, but that the recent changes are burdensome. In
addition, agency practices vary considerably -- i.e., the variations in
implementing A-110 and the FAR. Accountability should be based upon a
business partnership and should emphasize scientific outcomes; it should
not be a matter of overlapping financial and administrative audits.
Continued increases in substantial compliance costs cannot be borne by
recipients without impeding the research enterprise. For scientific
partnerships to be successful, the principle of full-cost reimbursement
is vital. Thus, the administrative and salary caps, as well as caps on
stipends and tuition costs, are inconsistent with the basic objectives;
they also shift the legitimate research costs to the awardees. Imposing
salary caps can make it difficult to recruit and retain
physician-investigators. Perhaps more problematic are the cost-sharing
requirements in small institutions, where hiring decisions often are
affected by decisions regarding total support and cost-sharing
requirements.

Mr. Grant said that Cost Accounting Standard (CAS) and Disclosure
Standard-2 requirements cost an estimated \$20 M in start-up costs for
the top 100 universities, yet only 25 of those have been audited and
approved. Respondents also sought coordination of the RBM with similar
ongoing processes, especially the Initiative to Reduce Regulatory
Burden.

There is a strong preference for a government-wide policy regarding both
conflict of interest and misconduct in science. The NSF clarification on
cost-sharing was welcome, but some argued that it should be applied as
standard policy across all agencies. Requests also were made for
standard template award notices, with reference to terms and reporting
procedures. At the same time, it was the hope that flexibility be
preserved regarding the types of institutions receiving funds, not all
of which are research universities (e.g., Federal research
laboratories). To the extent that collaborations are encouraged with
national laboratories, more should be done to facilitate such
collaborations. It also is problematic to make awards for research that
is sensitive but unclassified. In addition, payment of an academic year
salary is inconsistent among agencies and even within some agencies.

**[(5) Regulatory Requirements (17 comments)]{.underline}**

Concerns were raised about HIPAA as an impediment to clinical research,
while others sought to rationalize EPA hazardous waste requirements;
implement best practices; reduce redundancy and overlapping requirements
in animal welfare regulations; and enhance and promote alternatives to
animal use.

**[(6) Multidisciplinary Research (13 comments)]{.underline}**

Comments regarding multidisciplinary research called for eliminating the
existing political and practical barriers for projects that transcend
disciplines and/or specific agency missions. Multidisciplinary research
often requires greater administrative support. Teams need special
support, especially for young faculty members, who need to develop
independence within their disciplines by demonstrating independent
research and publications. There also should be more balance in the
research portfolio, to (1) encourage collaboration between Federal
laboratories and organizations within private industry, and (2)
eliminate artificial distinctions among research, education, and public
service. Other comments on this topic asked agencies to:

-   examine the sufficiency of "mid-size" multi-investigator funding;

-   improve oversight and extend its use more broadly;

-   coordinate inter-agency communication on project funding; and

-   increase the average amount and duration of individual awards, due
    to the large degree of effort that must go into producing them.

**[(7) Research Infrastructure (10 comments)]{.underline}**

In terms of research infrastructure, academic institutions have assumed
the burden for constructing new facilities. Multidisciplinary research
requires more (and predictable) levels of support for specialized
facilities and instrumentation support, independent of individual
project grants -- i.e., for sophisticated instrumentation, primates,
recombinant rodents, and other animals. Service centers should be able
to accumulate costs for replacement equipment or changes in technology.
Implementation of a Federal facility loan guarantee program also was
endorsed, and increased support was requested for specialized, shared
instrumentation, such as MRI and PET scanners or mass spectrometers.
Respondents also sought more cross-disciplinary support for special
facilities and Federal labs. Underscoring the need for actual
cost-recovery, a 2003 study by the Council on Governmental Relations
(COGR) reported a \$1 billion under-recovery, due to the administrative
cap. This is consistent with a RAND report for OSTP that estimated
under-recovery to be between \$700 million and \$1.5 billion.

Institutions are seeking relief from the administrative cap, to (1)
increase reimbursement for utility cost adjustment for all institutions,
(2) remove agency policies that provide less than full reimbursement,
and (3) promote fair rate negotiation. Others advocated that A-21 be
modified to allow direct charging of administrative services that are
directly linked to the performance of research. There was a call to
emphasize "rate determination," as opposed to "rate negotiation."

**[(8) Information Technology (9 comments)]{.underline}**

Comments in this category endorsed establishing one eGov solution, as
opposed to multiple agency solutions -- including national, uniform,
interoperative clinical information systems to support clinical trials.
Agencies should move more quickly to develop or support common
interfaces.

**[(9) Technology Transfer Optimization (7 comments)]{.underline}**

Respondents sought to:

-   reaffirm the Bayh-Dole tech transfer principles;

-   minimize agency-specific limitations on property rights;

-   address concerns about agency departures from principles and
    potential restrictions on royalties; and

-   promote exchange of tools among investigators while protecting
    proprietary rights.

**[(10) Inconsistency of Policies and Practices among Universities (11
comments)]{.underline}**

A few comments were received regarding inconsistent policies and
practices among universities. Some institutions do not waive or reduce
an award's facilities and administrative (F&A) costs that have not been
paid by sponsors, even though there may be good reasons for the
different treatment among the various institutions. Institutions also
vary in their acceptance of terms and conditions, e.g. restrictions upon
publications.

Four (4) comments addressed State and Institutional Requirements,
primarily seeking to reconcile stringent state requirements. No comments
have been received yet on the theme of Research Support, although one
general comment recommended the consistent application of the peer
review process across all agencies.

In closing, Mr. Grant highlighted two important subthemes within the
area of administrative cost: (1) the call for administrative support for
investigators and their laboratories, and (2) fair reimbursement of
costs for compliance issues.

## Panel Discussion: When Policies and Practices Collide

Dr. David Hamilton introduced and moderated the panel.

##### Mary Ellen Sheridan, Ph.D., Associate Vice President for Research and Director, University Research Administration, University of Chicago, and Chair, Board of Directors, Council on Governmental Relations

Dr. Sheridan directed her remarks toward how success is measured and how
to improve the business process model to make it more relevant to the
research enterprise. She described academe as a marketplace of ideas,
where it is difficult to quantify the value of the ideas even though
success is tied to intellectual merit. Faculty business models value
risk-taking, push science ahead, and produce educated students;
productivity is measured by students, publications, promotion and
tenure, and peer recognition. Peer review is used as a "value"
estimator, but is not a good way to forecast economic success.

For a university, research success comes from being recognized as a
cautious risk-taker, which involves simultaneously financing and
managing both the research and education enterprises. She recognized
that the private sector cannot apply the same indicators of success or
return on investment to its business endeavors. This explains the
concerns expressed by the research community about using "business"
models. Universities also are concerned about how to comply with ongoing
regulations without completely stultifying the marketplace of ideas.
Academic institutions pursue a deliberate system of checks and balances,
and also try to deal with expected needs -- e.g., renovating buildings,
improving infrastructure, and building structures that will serve the
university's needs for decades.

In describing a government research business model, Dr. Sheridan
suggested that the government and private sectors should have different
R&D expectations and goals. The government is not answering to
stockholders; it has national priorities and must answer to the nation
and/or to an even broader public. Dr. Sheridan expects that the
government research model should be to fund universities for research
about issues of national importance, and look to universities for
unbiased, neutral, and rigorously-obtained information. As the
government invests public funds in the creation of knowledge, it should
do its best to attract the best business partners.

In order to make the marketplace more efficient, Dr. Sheridan argued
that we need to (1) concentrate on value, (2) strengthen collaboration
in research, (3) encourage a collective approach to formulating and
solving problems, and (4) create incentives for all stakeholders. The
government plays an appropriate role in supporting "big science," as
reflected in its "Grand Challenges," such as for the human genome and
space. The articulation of national priorities serves to invigorate
scientists. She acknowledged that NIH and NSF have a multitude of
funding mechanisms at their disposal to move science forward.

Dr. Sheridan then provided a specific example of the financial
commitment and administrative burden that the University of Chicago had
to endure in order to see a project through to completion. The
University of Chicago received one of the NIAID Research Centers of
Excellence awards, which also covered regional coordination activities.
The university was required to provide 25 percent cost-sharing on this
fast-moving project. The award was made on September 29, and 14
agreements had to be ratified before work could begin. One of the
agreements was with Michigan State which was also a subrecipient to the
University of Chicago. Subrecipient monitoring costs money. Because the
funding was late, the first budget period was for 6 months. The
University requested an automatic carryover that would obviate the need
to send in reports for a 6-month period (since such reports would have
indicated little progress due to the abbreviated time frame), but the
request was rejected. She cited examples of contracts between the
Department of Energy (DOE) and the Argonne National Laboratory (which is
administered by the University of Chicago) that place burdensome
expectations upon the university -- i.e., the university is expected to
take all the risk, advance funds, and indemnify the government. These
examples suggest that the Federal government needs to reduce the
rigidity of its current funding system, in order to reward flexibility
and thereby promote sound and productive scientific research.

There are other examples of such government funding barriers and
inconsistencies. Dr. Sheridan called for breaking down the existing
agency and institutional silos. There is a government-wide misconduct
policy, but only about 5 agencies have implemented it. We also need to
press for consistency in core administrative requirements (e.g., common
rule for A-110) and treatment of major equipment and facility needs. She
observed that, with school-based budgets, academic institutions
generally have budget models that discourage cross-campus
collaborations. She called upon universities to pursue more aggressive
inter-institutional research initiatives and to recognize contributions
to interdisciplinary research.

Dr. Sheridan also cautioned against "compliance nesting syndrome" --
wherein institutions set up offices with the name "compliance," rather
than working to effectively inculcate a culture or climate of proper
behavior and informed expectations.

The proliferation of agency proposal and award management procedures is
also a major barrier for institutions. The Federal government is
perceived as lacking the understanding or willingness to develop a
uniform system that will work in university environments. Instead, the
government is seen as expecting institutions to modify their systems and
practices to accommodate a myriad of different processes and procedures
tailored to suit each Federal agency.

Dr. Sheridan concluded by posing two questions for consideration:

-   Is the government dooming the fundamental research model through
    micromanagement?

-   Is the current model a fair and reasonable business relationship?

##### Frank B. Cerra, M.D., Senior Vice President, Academic Health Center, University of Minnesota

Dr. Cerra spoke from the perspective of a major land grant institution,
whose largest source of funding has been provided by the NIH. His
presentation also was made in the context of the University of
Minnesota's experiences during the mid-1990s, which caused the
university to fundamentally change how it conducts business, including
in partnership with Federal agencies.

In the mid-1990's, the University of Minnesota was not meeting Federal
expectations for grants management, with a research culture that was
inattentive to compliance. The Federal government sent the university a
letter indicating that they were an "exceptional" institution, and that
this special designation had led to the loss of many privileges and
would necessitate developing a work plan to bring the university into
compliance. The ultimate result was the creation of a research culture
that is now much more attentive to compliance. Their compliance plan
(which is part of the Federal sentencing guidelines) essentially
redefined the university's policies and procedures regarding:

-   conflict of interest;

-   roles and responsibilities (i.e., who is conducting what research,
    what must be done, how the researchers are doing it, and who needs
    to be certified); and

-   education and training required, and expectations.

The new compliance plan also accomplished the following:

-   established new support systems (electronic grants management,
    financial support software);

-   increased efficiency and effectiveness of clinical trails --
    creating a new interface with hospitals;

-   supported Investigational New Drug (IND) Applications and
    Investigational Device Exemptions (IDE);

-   introduced better oversight mechanisms and an office of regulatory
    affairs;

-   addressed management of conflicts of interest; and

-   initiated a university-wide compliance program for all aspects of
    the university.

According to Dr. Cerra, everything was proceeding well, when a curveball
appeared in the form of Health Insurance Portability and Accountability
Act (HIPAA). Fortunately, all the work that the university had done to
develop the sponsored-projects infrastructure helped them not just to
meet the HIPAA compliance requirements, but to meet them ahead of
schedule -- including training 20,000 employees in the HIPAA
requirements.

The remainder of his presentation focused upon the university's work
plan for enhancing research oversight, which emphasized infrastructure
and costs. Dr. Cerra underscored that rebuilding an institution's
infrastructure takes a great deal of time and effort and is very
resource-intensive. In addition, the new infrastructure must be amenable
to undergoing continuous quality improvements. The University of
Minnesota is just beginning to add up what it has cost to implement
HIPAA requirements; Dr. Cerra expects that it will be in the millions of
dollars -- and there is no specific source of funding for these
activities.

The result of all their efforts has been a stronger culture of
compliance, accompanied by an enhanced attitude of problem-solving. They
also have developed a very positive partnership with Federal agencies.
Dr. Cerra advocated entering into a "learning partnership" with Federal
agencies, with the common goal of producing new knowledge with
accountable outcomes, such as commercialization of research
technologies. In conclusion, he shared four observations:

1)  Performing research with Federal dollars involves forming a
    partnership with the government, in which the Federal agency
    sponsors the research and the institution performs the research.
    This is accomplished by establishing rules and regulations that form
    the terms and conditions of the relationship. All grantees must
    comply with Federal requirements, but forming university-government
    partnerships could make the research proceed more smoothly and
    productively, without any increase in cost. Given that good and
    relatively inexpensive systems exist, and that everyone uses the
    same accounting standards, it should be feasible to share the
    business of research (whether plant, animal, or human) using a
    common platform. For example:

    a.  There is no single grant application form, nor is there one
        standard set of definitions. Why not?

    b.  Why is the process still a paper chase, rather than being
        entirely electronic?

    c.  With big research institutions, why are we not talking about
        institution-to-institution agreements, instead of thousands of
        different contracts that must go through legal review, project
        review, and the review processes at multiple offices of
        sponsored research?

    d.  In this era of increasing demands for interdisciplinary science,
        research institutions should have the right to ask for more
        interagency cooperation, (including within individual Federal
        agencies), in order to promote a common outcome.

    e.  Everything possible should be done to keep politics out of the
        peer review process.

2)  In a setting of new and incessant regulatory requirements, it is
    increasingly difficult to support the infrastructure for research,
    without revenue attached. As an example, NIH funding covers
    approximately 85 percent of the direct and indirect costs for a
    specific piece of research. Thus, cost-recovery is heavily
    discounted and the administrative component is capped. Universities
    have always had to cross-subsidize the cost of research, but for a
    public university (and probably for private universities, as well),
    sources of cross-subsidizing are drying up. A main source of
    cross-subsidies -- the margins on practice plans for university
    physicians -- have disappeared, as have the margins for
    fee-for-patient care, which have been used in the past to
    cross-subsidize education and research. University physicians must
    now compete for funding with community physicians -- even though
    they still must support 25 percent of their teaching hospital's
    expenses. Public support is down and the ability to earn revenue is
    down. In addition, private money is very difficult to obtain for
    infrastructure, because most donations are made by people who are
    very business-savvy, who refuse to cover overhead with their
    contributions.

3)  Capital funding for facilities has become largely an institutional
    commitment. In the face of declining state revenues, it is difficult
    to secure private donations for facilities. Federal agencies have
    made major investments over the years in joint research enterprises,
    but the question is: What responsibility should the university and
    Federal partner(s) have for providing resources to ensure the safety
    and security of both the investigators and the research facilities?
    It is clear that universities can be targets of vandalism and
    terrorism, and every aspect of the legal structure will need to be
    brought to bear, which adds further to the cost of the research
    enterprise.

> Clinical trials and clinical science are what health profession
> schools are all about. The support and infrastructure needed for
> clinical trials in the current regulatory environment are enormous,
> with new regulations added every day. These costs of compliance
> currently cannot be recovered through cost reimbursements.
>
> More clinical trials need to be developed and supported by Federal
> agencies. It used to be that commercialization was the next step after
> knowledge discovery. The requirement now, imposed for example by the
> pharmaceutical industry, is to add enough value to either obtain the
> next grant or interest an investor in commercializing the technology.
> Thus, the research institution now needs a good manufacturing practice
> facility in order to go beyond base knowledge and ramp up production
> to reach Phase 1 or Phase 2 clinical trials. This core business
> responsibility has devolved to the university, and universities must
> now monitor and regulate the whole process, and most importantly,
> figure out how to fund it.

4)  Leave the Bayh-Dole Act alone, because it works. It has the proper
    incentives on the front end, and on the back end it allows
    universities to use funds to help pay for research needs. The
    government benefits from the new companies both directly and
    indirectly, i.e., in terms of taxation, etc. If one looks at royalty
    paybacks, and contrasts them to Return on Investment (ROI) models
    (excluding royalties that instead rely upon generating new
    businesses and taxes, etc.), the return is about 50 times that
    earned through royalties.

##### Question & Answer Period:

A number of participants echoed Dr. Cerra's support of the Bayh-Dole
Act, with one participant pointing to its application in the
agricultural biotechnology domain, where high tech research with no
commercial potential in the U.S. can be "recycled" to benefit developing
countries. A participant from the University of Iowa also underscored
the benefits of the Bayh-Dole Act to universities, but recognized that
it has caused problems for universities, for example in the exchange of
research tools that universities are creating. Difficulties in
negotiating materials-transfer agreements stem from the fact that
institutions are reluctant to relinquish something that they perceive to
be of value; this effectively stalls some Material Transfer Agreements
(MTA) for years. The Bayh-Dole Act also has been problematic for faculty
startups, conflict issues, and contracting back to universities. Thus,
while the act itself is basically good, it would be helpful for the
government to more carefully review the impact of Bayh-Dole. Dr. Cerra
responded that many of the problems identified with Bayh-Dole involve
management. Rather than change the source document, he would rather see
institutions deal with these problems on the administrative or
management side, as the University of Minnesota has done for many of
these issues.

A member of the U.S. General Accounting Office (GAO) staff asked what
university representatives considered to be the emerging issues, as the
Department of Homeland Security looks to this country's laboratories and
universities for national security research. In response, Dr. Sheridan
echoed Dr. Cerra's concern for secure facilities, but also underscored
that universities need to encourage free movement, and reward open
discourse. Universities are not the places for carrying out classified
work. National laboratories are more appropriate venues for classified
research, since they have secure facilities and a perimeter that
restricts entry. Universities and national labs need to ensure that
their partnerships do not undermine their respective missions (e.g.,
unrestricted dissemination of learning versus national security), and
that their work aligns with their administration, management, and
financing requirements. Scientists are pursuing these collaborations,
even in the absence of specific mechanisms to foster such
collaborations. Dr. Cerra added that substantial pieces of work
regarding homeland security necessarily will be more expensive than work
conducted in traditional research facilities, just because of the nature
of the select agents with which the researchers must work. Dr. Sheridan
added that there must be ways to collaborate without compromising
educational values. Others echoed this sentiment that the increased cost
of compliance should not come at the expense of actually performing the
research.

A member of the University of Minnesota Sponsored Projects Office
reported on the administrative burden associated with DOE and NASA
national labs. Some awards to national labs have five pages of terms and
conditions; others refer awardees to websites. It would be enormously
helpful to have more consistency (and fewer hoops to jump through) among
the award mechanisms from different national labs. Some awardees have
found that, after responding to the grantor's requests for
documentation, they have received no response from the cost-analysis
department. Dr. Sheridan was not surprised by the University of
Minnesota's experience, and added that the term, "work for others"
(which is conventionally used by the funding agencies in reference to
the national labs) is not well-received by participating investigators,
who see themselves as collaborators.

Another participant expressed concern about the restrictions upon
publications by non-U.S. researchers and the decrease in access by
people from other countries to non-classified research. Dr. Sheridan
added that student and employee assessment systems are unfunded
mandates.

Dr. Hamilton remarked upon the similarities between Mr. Grant's summary
and the participants' comments. He speculated that some audience members
may not have been forthcoming because they felt that their concerns have
already been voiced -- i.e., regarding the burdensome workload
associated with Federal regulations and the agencies' inflexibility. Mr.
Grant expressed the hope that the Federal agencies will hear and attend
to these concerns.

A participant from a small undergraduate institution shared her
perspective that the onerous Federal regulations are even more
burdensome for smaller institutions, which often have already
overburdened, one-person offices. She asked that the plight of such
schools be kept in mind.

## Luncheon Speaker

##### Elson Floyd, Ph.D., President, University of Missouri System

Dr. Olsen introduced Dr. Elson Floyd, President of the very diverse
University of Missouri system. Prior to this, Dr. Floyd was President of
Western Michigan University, and Executive Vice Chancellor at the
University of North Carolina, Chapel Hill. He has a B.S., M.S., and
Ph.D. in higher education administration.

Dr. Floyd shared his perspective about some of the issues affecting the
research landscape. He began by praising the NSTC for organizing these
forums, with the goal of gaining input that hopefully will improve
efficiency, effectiveness, and accountability. There is a clear sense
that the business model must be revisited, in order to make it relevant
for today's research institutions and agencies. The division between
basic and applied research is becoming increasingly blurred, and
collaborative, multidisciplinary projects are increasing. If the nation
is to remain preeminent on the world research stage, it needs to focus
its increasingly-limited resources for research in innovative ways. The
common denominator is making the most use of available research dollars.

The multidisciplinary research approach will be the dominant model for
the future, but the problems posed by such research are increasingly
complex and daunting. Many of the challenges will require input from
diverse sources to overcome. For example, to protect the nation's
agricultural systems from terrorism, research teams are needed with
shared expertise in agriculture, human and veterinary medicine,
engineering, biology, etc. The University of Missouri system is pursuing
this type of team approach and is developing a set of best practices for
a multi-campus approach. It is rare for even a large multi-campus system
to command all of the intellectual resources to tackle effectively and
consistently the complex research problems being addressed. Resources
should be leveraged through strategic partnerships, to assemble a
critical mass for such efforts. The University of Missouri is reviewing
strategic plans for each of its four campuses, to identify ways to
encourage inter-campus efforts in such fields as bioinformatics and
molecular and structural biology. Missouri is developing a biotechnology
and computational infrastructure that is intended to serve all its
campuses, and it will facilitate bioinformatics research collaboration
among all campuses and beyond the university.

Another aspect of the new research paradigm is the need for a
multisector approach. The University of Missouri increasingly is
partnering with both non-profit and for-profit companies (like Sprint
and Monsanto), in order to meet targets. These types of partnerships
create a synergy that permits the university to put knowledge to work;
it also accelerates commercialization.

The Association of American Universities (AAU) and COGR have identified
several issues related to research business models. These organizations
believe that better ROI could be obtained if certain adjustments were to
be made. University officials are inundated with regulatory
requirements. Great disparities exist from one agency from another, and
there is no support for infrastructural needs; thus, less money is going
toward actual research. It is important to keep in mind that research
universities not only advance scientific knowledge and understanding;
they also train the next generation of researchers. This unique role of
universities (conducting research, while training tomorrow's
researchers) should be recognized by funding agencies. Citing Research
Triangle Park as an example, Dr. Floyd described research universities
as the catalysts for new knowledge and business development.

Dr. Floyd encouraged colleagues to collaborate with the Subcommittee on
Research Business Models. By working together, an approach can be
created that reduces the regulatory burden upon universities while
maintaining accountability; enables universities to recapture costs; and
supports the unique role of universities as centers of research and
education. As Dr. Floyd observed, this is all for the good of research
universities, and the nation.

These are daunting times for public universities, and changes are
occurring in fundamental ways. Virtually every state is involved in some
type of budget retrenchment. We need to be vigilant that entrusted funds
are well spent. Before accepting funds, universities need to be very
clear about performance expectations, and must make sure that the
balance is not skewed away from scholarship and academic integrity.
There is huge pressure both internally and externally to focus upon
economic development. It is the responsibility of universities to be
engaged in research that will contribute meaningfully to improving the
quality of life for all citizens. It is equally important not to
overlook the undergraduate institutions, which are the source of
graduate students. Universities must provide rewards and incentives for
faculty members to engage in collaborative activities. With the
proliferation of information, there is no single discipline that can
claim to hold all knowledge, and collaboration is important throughout
the whole spectrum.

Dr. Floyd then cited his experience as President of Western Michigan
University (WMU), where he was involved in an unusual experiment.
Colleges and universities across the country were building business
technology and research parks, and there was huge pressure from Board of
Trustees to pursue something similar. Instead of creating a
biotechnology research park in the traditional way, WMU strategized
about the core competencies sought by businesses that were willing to
relocate. They focused upon fields such as the life sciences,
engineering, and information technology. WMU decided to house a new
college of engineering, thereby creating a dynamic economic engine for
the region. This gave the private sector an opportunity to invest in the
university, while it provided learning opportunities for students. Dr.
Floyd predicted that such collaborations will increase over time, with
more experience.

As President of the University of Missouri system, Dr. Floyd seeks to
give faculty members the tools they need to teach classes, conduct
research, and pursue scholarly endeavors. Policies and procedures should
support and not impede the faculty's work. All participants in public
higher education have a fiduciary responsibility to better articulate
their role and responsibility. Universities must add to their "brain
power," to be answerable to citizens who support the enterprise. Failing
to do so is a failure of fiduciary responsibility.

##### Question & Answer Period:

In response to a question about how best to convince citizens that
research is important, Dr. Floyd stated that the public needs to
recognize the role of a public university. The challenge for
universities is to communicate how scholarship will benefit the overall
quality of life. Thus, it is helpful to talk about research very
pragmatically and in layman's terms -- e.g. focusing upon the human
sciences, plant sciences, agriculture, etc. It also helps to have
faculty members publicize their research. Especially from a public
university perspective, research benefits need to be discussed in terms
of investments, as opposed to strategic plans.

To provide a sense of the university's magnitude, Dr. Floyd stated that
there are 62,000 students in the University of Missouri system, with
four campuses and a variety of outreach services. Missouri relies upon
digital technologies to engage all members of the university system --
relying heavily upon the Internet for the electronic movement of data,
research, and clinical findings. Dr. Floyd advised that technology is
essential for today's universities, and concerns about security issues
should not deter the use of it, particularly since steps already are
being taken to mitigate security risks.

An administrator from the University of Minnesota contended that
researchers need to be doing the science, instead of trying to deal with
burdensome administrative tasks. She reported on the difficulties that
faculty members encounter when trying to conduct research within a wide
variety of systems (i.e., the need for numerous passwords, etc.)

Dr. Floyd welcomed discussion about hiring and selecting faculty members
to meet today's teaching and research needs. Recruitment of new faculty
members must take place across the disciplines, and promotion and tenure
policies should be integrated into the hiring system in a way that
recognizes cross-disciplinary scholarship. Most young faculty members
recognize the need for collaboration, but conducting work across
disciplines may be difficult for many senior faculty members, who have
spent their careers working in discrete disciplines. Any new hiring and
reward systems will need to be clear (especially with junior faculty
members) about the expectations for research. Additional thought also
should be given to recruiting certain faculty members for teaching and
others for research; in which case, evaluation and promotion criteria
would need to be made specific to their respective careers.

Dr. Hamilton noted that the idea of team research has been highlighted
by the NIH Roadmap. This is another reason institutions should find ways
to give credit to young faculty members.

An editor of a scientific journal described how he has ended up a
surrogate member of tenure and promotion committees. He was uncertain
whether this is a good development. He applauded Dr. Floyd's effort to
redefine measures of success and suggested that we should rely less
heavily upon such surrogate reviews.

Dr. Floyd ended the session by stating that the operative word is
*flexibility*. Each institution is unique, with respect to its financial
and support structure and how overhead receipts are allocated. Anything
that can be done to promote flexibility would be helpful, and
investigators should work out appropriate arrangements with agencies.

## Panel Discussion: Moving Toward the Future

Dr. Hamilton introduced the speakers and moderated. He challenged the
panel to answer the question: Given increasing emphasis upon
multidisciplinary research, (1) what new models should be considered for
graduate and post-doctoral training, as it relates to interdisciplinary
research, and (2) how do we maximize the time of the investigator?

##### William R.Galey, Ph.D., Director of Graduate Education Programs, Howard Hughes Medical Institute 

Dr. Galey was with the Office of Research at the University of New
Mexico School of Medicine, before coming to the Howard Hughes Medical
Institute (HHMI) as director of graduate education programs. One of his
tasks over the past year has been to explore new initiatives in graduate
education, especially as they relate to interdisciplinary research.

Graduate and postdoctoral students are important to the research
enterprise, because they do most of the work. These students need to
understand not only their own work, but also the other contributing
sciences, and they should be able to communicate and collaborate with
research colleagues from partner disciplines. These students are the
future scientists who will design tomorrow's research; we want them to
be able to exploit established connections with other disciplines.

Clearly, interdisciplinary research is coming of age. NIH, NSF, and HHMI
are all initiating or have in place major efforts in interdisciplinary
biological research. Examples include the NIH Roadmap, NSF's increased
involvement in interdisciplinary research, and HHMI's stand-alone
interdisciplinary research venue.

There is a growing recognition that future major advances in the
biomedical sciences will require interdisciplinary research at the
interfaces where biology and the biomedical sciences meet the physical,
engineering, and computational sciences and mathematics. Training
graduate and postdoctoral students must be part of the effort to foster
such interdisciplinary work.

Dr. Galey raised a number of issues regarding graduate and postdoctoral
training in the biomedical sciences. In his experience:

1)  Length of the training period is too long.

2)  Training experiences (at least in biology and the biomedical
    sciences) are too narrow to support interdisciplinary research.

3)  The trainee population lacks diversity.

4)  University structures and policies fail to support interdisciplinary
    or team science.

5)  Barriers exist that prevent the participation of well-educated
    foreign trainees and researchers.

6)  Trainee support mechanisms are inconsistent, uncoordinated, and
    often inequitable.

7)  There is inadequate data to (a) evaluate the biomedical research
    workforce, and (b) determine whether there are too many or too few
    people entering the field of biomedical research.

In elaborating upon these points, Dr. Galey presented data regarding the
length of training periods, which showed that:

-   earning a bachelor's degree takes 4-5 years, and age at completion
    is approximately 23;

-   earning a Ph.D. takes close to 7.2 years, with age at completion
    close to 30; and

-   postdoctoral training lasts 5-7 years, with age at completion
    approximately 35.

This is problematic, because compensation is inadequate for maintaining
students in the academic research environment. Clearly, the situation
discourages those who also have financial responsibilities, such as
those associated with supporting a family.

Of particular concern, interdisciplinary research threatens to increase
the training period, which delays career independence. Most importantly,
trainees end up working on projects based upon the ideas of others, just
during the most creative period of their lives.

With respect to the narrowness of the training experience, career
preparation in the biomedical sciences is based primarily upon academic
research, most of which is conducted in medical school. There are few
opportunities to (1) gain and apply interdisciplinary knowledge, (2)
work in teams, (3) learn about conducting research in nonacademic
environments, (4) gain appreciation for the medical relevance of their
science (for example, in private enterprise), and (5) learn teaching
skills.

Scientific specialization within the biological sciences has been
extreme. Research and training are often focused upon detailed work
conducted in a very small field of biomedical sciences. Research is
primarily "reductionistic," rather than synthesis- or
integration-oriented. As Dr. Galey observed, we need to focus less upon
molecules and more upon the entire living organism. There is a paucity
of physical and computational science and mathematics in biomedical
education. Few biology majors are prepared to utilize the more
mathematical approaches of the "hard" sciences.

Although most biomedical science trainees work in medical school
settings, few trainees gain an appreciation for the role of their
research in medicine and public health --- nor do they understand the
most important science-related problems facing clinical medicine.
Current trainees also lack the opportunities and incentives for
interdisciplinary and team-science training. Inconsistencies in trainee
funding mechanisms by government funding agencies complicate the support
of trainees who work in interdisciplinary teams, especially if funding
comes from multiple agencies, where issues are inconsistent and
complicated (i.e., stipend levels, benefits, tuition, and research
supplies).

In terms of the lack of diversity in the trainee population, Dr. Galey
reported that biomedical science training is nearly gender-equal, but
much remains to be done yet in terms of race/ethnicity. Barriers also
exist for foreign trainees. Although NSF has made significant efforts to
document the size of its graduate student body, little is known about
the size and employment status of the biomedical research workforce.

Looking at a number of Federal agencies that fund graduate fellowships
(e.g., NSF, NIH, NASA, DoEd, EPA, DOD), the duration of fellowships is
usually 1-5 years, with variation in stipends and conditions. Government
agencies could help by:

-   encouraging more rigorous science and math training prior to
    graduate study;

-   establishing consistency of stipends, benefits, tuition and
    training, length of support;

-   resolving issues surrounding foreign trainee (visa application
    processing; and

-   issuing return visas for scholars who leave the country.

##### Carole Liedtke, Ph.D., M.B.A., Professor, Pediatric Pulmonology, Case Western Reserve University and Federal Demonstration Partnership Faculty Representative

Dr. Carol Liedtke described the Federal Demonstration Partnership (FDP)
as a formal collaboration involving 12 Federal agencies and more than 90
institutions of higher learning. FDP is designed to streamline the
administrative process and minimize administrative burdens, in an effort
to increase research productivity and maintain effective stewardship of
Federal funds. FDP also seeks to be a proving ground for new approaches,
and to address the challenges arising from the multiple policies and
regulatory frameworks that govern organizations in the research
partnership.

Multidisciplinary research projects, large scale research, and team
science have been a key focus of the FDP. Multidisciplinary research
will entail more researchers (faculty, staff, students, and post-docs),
facilities (libraries, classrooms, and specialized research space, i.e.,
animal facilities and those dedicated to bioterrorism studies), and
administrative responsibilities (by Federal agencies, universities, and
faculty researchers). It may be more costly than investigator-initiated,
small scale research, and will lead to rapid technological changes
because we will need better research tools and information technology to
facilitate collaborations. A change in the dynamics of the research
enterprise is also expected, which will challenge the existing
administrative structures of Federal agencies and universities.

Dr. Liedtke noted a number of impediments to the multidisciplinary
research enterprise, which parallel the categories already mentioned,
including inconsistent policies and practices among funding agencies --
such as those relating to the grant review process, selection of
research proposals for funding, conflict of interest, intellectual
property, time/effort reporting, negotiated cost-sharing, and Financing
and Accounting (F&A) rates. She also noted as barriers:

-   regulatory burdens;

-   onerous funding agency rules and regulations;

-   Homeland Security requirements;

-   research infrastructure requirements (including numerous unfunded
    mandates, such as facilities upkeep and construction, safety and
    security issues, review committees);

-   auditing community demands; and

-   multiple processes, rules, and expectations (which cause high
    overhead and chances of error in processing awards, and accounting
    for and reporting results).

There are cross-institutional issues that also create barriers to
multidisciplinary research, such as:

-   different F&A rates (including different ways to charge direct
    research costs and differences between state and university
    policies), including F&A waivers or reductions;

-   adverse impact upon promotion and tenure decisions that afford less
    recognition for members of research teams;

-   education and training of future scientists (including recruitment
    and selection, compensation, impact of visa restrictions and
    unannounced rule changes, and funding of trainees),;

-   conflict of interest policies;

-   intellectual property and technology transfer policies,;

-   terms and conditions of funding (e.g., restriction on publication,
    transfer of research reagents);

-   accounting systems and procedures; and

-   conformity with cost accounting standards.

She emphasized that regulatory burdens impose real costs. For example,
visa restrictions have led to a 30 percent decline in foreign students.
Homeland Security also has become a problem. Dr. Liedtke observed that
the very day she was speaking was the deadline for meeting the "select
agent" rule requiring faculty members to be registered; however, only
approximately 50 percent of requests had been acted upon by the agency.
This is troublesome and stressful for investigators. More faculty time
also will be needed to serve on oversight or review committees.

Dr. Liedtke enumerated the compliance burdens imposed by regulations
that range in scope from hazardous waste storage and disposal,
occupational safety and health, animal care, human subjects protection,
and Homeland Security, to rules regarding inventories, certification
programs, training programs, legal expenses, construction, renovation,
and operation of facilities.

She suggested that Federal agencies serve as leaders in developing and
implementing more uniform policies. It is important to take risks, to
invest in a wide variety of ideas, methods, and investigators, and to
treat research outcomes as the principal means for accountability.

She also emphasized that the dual demands of (1) the increased
administrative workload for faculty members and administrators who are
engaged in multidisciplinary research, and (2) the rising costs of
compliance with Federal requirements calls for a re-examination of F&A
rate structures. She requested that the 26 percent cap on F&A be
eliminated, and that administrative support be reinstated as a direct
cost.

Her final comments centered on the Electronic Research Administration
(ERA). With the backing of Public Law (PL106-107), a plethora of ERA
systems developed, each with different transaction sets and agency
specific requirements. NSF, with its FastLane, appears to have been the
most successful agency in implementing ERA. NIH and ONR also have been
making strides. Dr. Liedke called for the expansion of ERA to encompass
Information Technology and all aspects of research grant administration,
and recommended standardizing the transaction sets across Federal
agencies. She considered eGov to be a step in the right direction toward
achieving a single portal to apply for Federal funds.

##### James Gentile, Ph.D., Dean of Natural Sciences, Hope College

Dr. James Gentile began by pointing out that small colleges produce
approximately 20 percent of the scientists who go on to earn PhDs, even
though they account for only 8 percent of all undergraduates. Turning to
NIH data, he reported a decline over the last decade in the proportion
of grants awarded to individuals aged 35 and under, from 12 percent to
3.8 percent. For NSF, about 17 or 18 percent of grants are awarded to
young investigators fairly consistently.

As Dr. Gentile teaches in his grants workshops for faculty, it is an
open secret that successful grantsmanship often demands that
investigators to do all the work, then apply for money to pay for work
already done, in order to work toward the next grant. Start-up money
comes from overhead generated by grants. This process stifles
innovation. He applauded the HHMI experiment, which granted \$1 million
to investigators to spur creativity. He reported being eager to see if
such a model can be successful. He also praised NSF for its remarkable
effectiveness with investigator career-development awards, but wondered
if such awards will help with tenure reviews at all institutions, not
just at the predominantly undergraduate institutions (PUIs).

At any PUI, the education and the research enterprise are inseparable.
It is a good business model for PUIs to invest in training the people
who will do the work. Given that advances in science increasingly blur
boundaries, it has become problematic to ask people who were trained in
silos to produce in interdisciplinary ways. We need to find ways to
reward institutions and individuals for encouraging cross-disciplinary
training and research.

The NSF's Research Experiences for Undergraduates (REU) is an effective
way to help students clarify their career goals by experiencing the joys
and frustrations of research on a first-hand basis. It is critical to
bring research into the classroom and to support hands-on experience
with research. Many colleges urgently need to upgrade their facilities
and research infrastructure. Generally only private funding, not Federal
monies, is helping to retool academic infrastructure in the U.S.

A recent report by the National Research Council, *Biology 2010*, tries
to project what kind of training will produce the life science
researcher who will be a leader in 2010. There are many innovative
aspects to this report, which was a partnership (led by Bruce Alberts at
the NAS) between NIH and HHMI. Among other recommendations, the report
advocates creating a teaching institute for top research scientists, as
identified by their own institutions. The institute will focus upon
issues of education and student learning, and participants will be
called (tentatively) National Academy Educational Scholars. If NSF joins
this activity, the collaboration would make a strong statement,
underscoring a commitment to undergraduate education. The next step
would be to make conducting research another key component of the
learning process.

Dr. Gentile closed with the concept of what constitutes "big" versus
"small" research. Today there is a need for large-scale research, with
its associated complexities, but often many innovations in research
result from small-scale initiatives. It is not always optimal to
harmonize and/or synchronize research funding, but it is important not
to lose the human touch. Program officers at Federal agencies are the
keys to providing that human touch, because they can help researchers
navigate the funding requirements. The rules should be not only improved
but also made uniform for all PUIs, regardless of whether funding
recipients are large research universities or small liberal arts
facilities.

##### Question & Answer Period:

In discussing how to balance the desire to shorten graduate student
training periods with the need for increased training and/or exposure to
more disciplines, Dr. Galey called for better undergraduate training for
biologists. In addition to mastering the basic principles of biology,
these scientists need to acquire tools in mathematics, physics, and
chemistry. With these skills, they can conduct interdisciplinary work in
graduate school, and can communicate and interact with researchers in
other fields. Another participant suggested that the key may be to teach
students how to think and problem-solve, rather than cramming them with
information. Students can acquire information on their own by reading
journals, conferring with colleagues, and consulting a variety of
reliable sources.

## Participant Comments

Dr. Cooley encouraged people to speak, contribute written comments, and
suggest next steps to influence deliberations in Washington, D.C. on
December 9-10. This session gave attendees an opportunity to brainstorm,
and to be heard by representatives from not just OSTP but also the NIH,
NSF, and other Federal agencies.

Dr. Brian Harvey, Director of Sponsored Programs at the University of
Iowa, expressed appreciation for the efforts being made by Federal
agencies to solicit input. He contended that there is nothing more
critical than a uniform process for grants management. Government
agencies are supporting duplicative systems and a plethora of agency
processes. The process should be streamlined, and ambiguous and
burdensome cost-sharing requirements eliminated. For example, it should
be clear at the time of award whether Expanded Authorities apply.

Dr. Harvey observed that, with collaborative and multi-institutional
research increasing, subcontract agreements include what he considered
to be unacceptable publication restrictions and indemnification clauses.
The entire subcontracting process, including monitoring and auditing,
needs to be simplified for subgranting relationships. Universities are
causing delay by pushing these subcontracts through the procurement
process. Similar problems occur with Material Transfer Agreements (MTA).
Providers of research materials pose excessive indemnification
requirements that preclude access by researchers. Although a good start,
the MTA template that NIH developed needs to be streamlined further and
more consistently applied. He further noted that the NIH is often too
rigid regarding MTAs. Finally, in an effort to force universities to
document and justify F&A costs, researchers are now being asked to
document their time and effort, thus carrying accountability to
unreasonable extremes. This is a serious distraction from the main
purpose of performing research.

Requirements imposed by select agents, the Patriot Act, HIPAA, and OSHA
are only the tip of the iceberg. The Director of Institutional
Compliance at the University of Minnesota asked what institutions can do
to make the case that these compliance obligations need to be funded in
order to be fully met. Others observed that there is a disconnect
between the agencies promulgating rules, and then not providing the
resources institutions would need to comply with them. State and local
laws need to be examined, as well, since they sometimes are even more
stringent than Federal laws. Universities want to be good citizens, but
they also want agencies to recognize the "trickle-down" effects that new
rules create. Universities are increasingly defensive about having to
follow new rules and regulations that distract them from their primary
responsibility -- to educate students, conduct research, and promote
safety.

To further support the observation about ambiguities and inconsistencies
with respect to policy interpretations, the compliance coordinator for
the University of Wisconsin, Madison reported that site visitors to
their institution often interpret guidelines very differently than do
the institutions themselves; this difference has never been resolved.
Others cited the differing requirements for Letters of Intent, and the
extent to which institutions are permitted to use service centers to
upgrade equipment, as other cases in which greater clarity or
consistency would ensure that grant recipients are following policies
correctly. Other participants echoed the urgent need to increase
consistency among practices and guidelines, and to lift the cap on
reimbursable administrative costs. A representative from COGR reported
that COGR has submitted to the Subcommittee their view regarding the
changes required to facilitate interdisciplinary research.

Forum participants also discussed the issue of effort certification,
without clear and consistent guidance about how effort should be
tracked. This is one of the most expensive activities in research
management. The University of Minnesota estimates that they spend \$200
million a year to comply with effort certification requirements.
Attendees recommended that (1) the Subcommittee work with the FDP
project to explore a change in A21, and (2) implementing the proposed
annual payroll certification system would reduce unnecessary burden.
Universities still would have the proper controls, and more importantly,
relief from effort certification would allow researchers to focus upon
conducting their research.

There were a number of comments about further streamlining processes.
Dr. Sheridan remarked that there is a single audit concept; why can't
there be a single compliance concept? Following the model with OHRP for
Federal assurance, or negotiation of F&A, she suggested that all those
certifications and assurances could be bundled together for one
institution; the institution then could be held accountable. She also
called for multi-year institutions, which would relieve institutions of
the requirement to conduct yearly certifications. This would be an
obvious step toward the wholesale reduction of paperwork. Another
participant added that having so many institutions reproduce systems did
not seem to be responsible stewardship of Federal funds. She went
further, calling for not just one set of certifications, but also
uniform award notices and submission systems across all agencies. A
later comment suggested that a central contract registration be
assigned, such as a DUNS number, which every institution already is
required to have. The DUNS system would seem to be an ideal database in
which to add some of the information (i.e., certifications). It might
even be expanded to accommodate other data fields.

A plea was made to at least streamline the data fields for electronic
grant application submissions -- i.e., to ask institutions to enter in
their data only once, then have the Federal agencies populate this data
throughout their systems. Federal agencies also were encouraged to
regularly share their future plans regarding electronic systems in
development, in order to assist institutions planning and developing
their own systems.

Many of the concerns expressed are amplified in smaller institutions. A
participant from a small university in Iowa described a lean
administration, and commented that their institution, like many others,
is so small that they must rely upon educators to serve on more and more
committees to conduct compliance work. This has been demoralizing to
their faculty. In addition, it is a challenge to train new staff in the
many different grants management systems promulgated by different
Federal agencies. Sponsored program offices, particularly at smaller
institutions with fewer staff resources, tend to apply the most
stringent rules to ensure compliance and ease management burden, even if
Federal agencies do not require this. Unfortunately, such an approach
can make an institution lose its competitive edge, to the detriment of
science. One participant from a small institution believed that more
assistance seemed to have been available in the past, for example to
understand which rules apply to PhD-granting and non-Ph.D. granting
institutions. Another noted that requirements for cost-sharing make it
difficult for them to participate in research. One participant suggested
that larger institutions take on a more regional perspective, to help
smaller institutions. Dr. Hamilton took the opportunity to publicize the
availability of the University of Minnesota grants management free
software, which is available through a license agreement.

Given the interest in how much systems cost, Dr. Hamilton shared the
experience of the University of Minnesota, which, in order to come out
from under the exceptional designation, had to develop enterprise-wide
systems at a cost of about \$12 million, with approximately \$1 million
per year paid to interact directly with *grants.gov*. However, to the
great frustration of university officials, the university is prohibited
from interacting with *grants.gov* staff, even though university
scientists and staff believe that they have desirable expertise to
offer. (For example, "Gopher" was invented at the University of
Minnesota before the advent of the Internet.) Dr. Cooley stated that the
*grants.gov* coordinating committee would welcome outside input, and
said that reluctance on the part of *grants.gov* staff to collaborate
may just be a misinterpretation of guidelines. One participant expressed
her hope that the process be made as apolitical as possible. It was
acknowledged that *grants.gov* has suffered from too many goals and lack
of prioritizing, but reported that it is more focused now, tackling a
limited number of priorities.

Participants also observed that the overriding theme of every agency
seems to be implementing *grants.gov,* but that many agencies have no
timetable for its implementation. Furthermore, many agencies lack
back-end systems to support its use, and do not consider implementation
a priority, because it seems so far away. It was suggested that
*grants.gov* should have deadlines for implementation.

Because NSF has very good front-end and back-office systems, they have
taken a leadership role with 11 partner agencies, to encourage a
Fastlane type of approach. It should be noted that not all the partner
agencies have research as their primary focus. NSF is tentatively
scheduled to accept applications from *grants.gov* this fiscal year.
With so many agencies trying to move the process ahead at working level,
the NSF is eager to hear about any difficulties that universities have
interfacing with *grants.gov*.

The issues raised as barriers to research resonated strongly with the
Chair of the University of Minnesota Senate Research Committee, where
similar concerns have been raised by the faculty, particularly regarding
the issue of full-cost reimbursement. The requirement to cost-share
essentially cannibalizes research money that was intended to sustain
growth. Other topics of particular concern include difficulties in
sharing research data with collaborators when the research is deemed to
be classified or sensitive. It needs to be made clearer what can and
cannot be done in such cases. NIH researchers will need to train a whole
new cadre in the management of classified research. In addition,
reporting and invoicing requirements are highly confusing.

It was recognized that FDP has been working on initiatives to address
many of the concerns raised and is seeking more efficient ways to move
ideas forward more quickly. Given that universities are a relatively
small player in the Federal funding world, with most grant money going
to local and state governments, Dr. Sheridan saw a major concern for
universities is that their concerns may not be heard, given their
relatively modest size. Dr. Olsen stated that, once the subcommittees
complete their hearings, they will be drafting priorities. The Director
of OSTP already has notified agencies that they will be expected to
incorporate the final recommendations and streamline policies. This will
be discussed by the Committee on Science next week; once finalized, it
will have the highest level of support for implementation.

## Wrap-Up

##### Thomas Cooley, Chief Financial Officer and Director, Office of Budget, Finance & Award Management, National Science Foundation

Dr. Thomas Cooley thanked participants for sharing their views. He
announced that the December 9-10 meeting will be broadcast via satellite
from the USDA, and he encouraged broad participation. The intention of
these regional forums is to develop a set of priorities and an
implementation strategy. Dr. Cooley highlighted some of the common
themes from today, including the following:

-   Federal agencies need to understand where policies originated and
    revisit them in light of changing times;

-   The audit community should be brought into the Subcommittee's
    deliberations;

-   An underlying theme has been to simplify, streamline, and provide
    uniformity to compliance requirements;

-   Do not change the Bayh-Dole Act;

-   There are opportunities to streamline and simplify awards to
    national labs and their collaborators.

-   Consider translating models for collaboration across campus, as
    described by Dr. Floyd, to other agencies and bureaus and
    departments. Perhaps sponsor best practices forums.

-   Have NIH and NSF resolve differences in conflict of interest
    interpretations, and in terms and conditions, building upon the work
    of the FDP.

There is clearly a great deal on the agenda, and insofar as universities
can serve more efficiently as catalysts for the research enterprise, we
can empower and accelerate scientific progress.