# Presentation: 214458

## Research Business Models Subcommittee

**PRELIMINARY**
-  Summary of Public Comment
- Geoff Grant

- November 11, 2003

## Basic Summary

- Total Comments (see list)
- Associations*
- Federal Agencies/FFRDCs
- Individuals
- Industry/Small Business
- Universities

- 46
- 12
- 2
- 10
- 3
- 19

- * AAU, NASULGC, COGR, AAMC, AIRI, FDP, 3 animal welfare associations, etc.

## Major Themes – General18 comments

- Caution about Overuse of the “Business Model” Perspective
- This is a research partnership with knowledge, trained students, and investigators as products
- Its about  “Investment”, not “Procurement”
- The Vannevar Bush model has evolved into a social contract bringing together research institutions and agencies, and it is important to maintain the vibrancy and ability of research institutions to be research performers
- A business model would suggest that agencies coordinate portfolios of interconnected activities.
- Do not overstress outcome evaluation when risk, negative findings, and “failures” are part of the process

## Major Themes- Principles of the Partnership18 comments (as part of General comments*)

- Reaffirm and articulate the principles of the partnership
- Establish an OMB Circular A 1,- “The Principles of Research Partnership.”
- Align research policies, practices, and standards with these principles
- Stability, transparency, and a reasonable level of predictability are necessary for success
- Develop agency and institutional best practices, norms, and standard interpretations
- Recent, incremental changes have moved the partnership away from the “investment” model closer to a “procurement” model which threatens to impede scientific creativity and productivity and to diminish long-term financial stability of research institutions

- * 150 comments from 46 respondents

## Major Themes- Principles of the Partnership (cont.)

- Policy changes that could affect research enterprise output must be carefully considered to avoid unintended, adverse consequences
- The system must be flexible, competitive, responsive, and supportive of the individual investigator, with funding decisions based on merit
- The financial investment must be diverse in terms of the fields supported and the modes of support
- The process must be open to new ideas and investigators from all research institutions- regardless of size
- Seek agreement among funding agencies, the audit community, and the university research community on acceptable principles and business standards
- Actions are often taken unilaterally by agencies without regard for the sustainability of scientific institutions or the partnership

## Major Themes- Accountability20 comments

- A high priority is to strive to return to a costing and regulatory system that is equitable, effective, and appropriately reflects diversity of research providers, even more pressing than to articulate new business modelsThe principle of full cost reimbursement is vital to the partnership
- The two central considerations are costs, including how they are charged and compensated, and administrative regulations, including how they are imposed and complied with
- Establish an on-going process and dialogue
- Use PRD-4 as a key source of issues and principles
- Doubling the NIH budget has heightened obligations for accountability
- A good business model cannot tolerate a hybrid of conflicting goals
- Accountability should be defined in terms of scientific outcomes, not just financial/administrative compliance, and evaluated through publications and progress reports

## Major Themes- Accountability (cont.)

- NSTC should examine NIH GPRA goals as appropriate, don’t require other new performance measures
- Reduce or eliminate multiple and overlapping agency audit requirements- a number of agencies are insisting on performing their own audits
- Eliminate or Streamline Subrecipient Monitoring
- It is at odds with increasing collaboration which has grown markedly over the last five years
- Maintain Single Audit Act A-133
- Eliminate CAS requirements or only incorporate the principles
- Only 25 of Top 100 have had DS-2s reviewed & approved in 7 years
- It is an unfunded mandate
- Consider the viability of “business-business” models for working together
- For example, if common standards can be adopted, consider  “accrediting” institutional oversight systems that deploy these standards and practices
- Limit data collection to information that is timely to decision making, e.g. modular grants and just in time processes

## Major Themes- Inconsistency of Policies and Practices Among Federal Agencies21 comments

- Basic principles are sound, but recent changes are burdensome and agency practice varies considerably
- Review agency implementation and eliminate or minimize the variety in implementation of A-110 and the FAR
- Implement FDP terms in A-110 routinely and consistently among agencies, not as special terms
- Base accountability on a Business Partnership, emphasizing scientific outcomes, not overlapping financial and administrative audits.
- Continued increases in substantial compliance costs cannot be borne by recipients without impairing the research enterprise

## Major Themes- Inconsistency of Policies and Practices Among Federal Agencies (cont.)

- The principle of full cost reimbursement is vital for the partnership to be successful
- The admin. cap, salary cap, caps on stipends and tuition costs, and elimination of the Biomedical Research Support Grant are inconsistent with basic objectives and shifts legitimate research costs to awardees; and
- The admin. cap is an inconsistent treatment between academic institutions and independent research institutes
- The cap on reimbursement of administrative costs and related cost-shifting are central issues that must be addressed in any discussion of Federal-academic business models
- Imposition of salary cap limits recruitment and retention of physician investigators
- Cost sharing requirements in small institutions are problematic, even hiring decisions are affected by decisions around total support and cost sharing requirements.

## Major Themes- Inconsistency of Policies and Practices Among Federal Agencies (cont.)

- CAS and DS-2 requirements cost an estimated $20M in start-up costs for the top 100 universities, yet only 25 of those have been audited and approved. The lack of response creates uncertainties among institutions and agencies.
- OIRA reported it in 2002 as an unfunded mandate.
- Coordinate RBM process with other similar processes such as NAS COSEPUP, OMB Performance Management Advisory Council, PL106-107, FDP, especially the Initiative to Reduce Regulatory Burden, etc.
- NIH and NSF have implemented conflict of interest policies that while good are not entirely consistent.  There is a strong preference for a government-wide policy.  The same is true for misconduct in science policy.
- Making awards as sensitive, but unclassified is problematic
- Payment of academic year salary is inconsistent within some agencies and among agencies

## Major Themes- Inconsistency of Policies and Practices Among Federal Agencies (cont.)

- NSF clarification on cost sharing was welcome and should be applied as standard policy across agencies
- Award notices are issued in a variety of electronic and hard copy without standard format, reference to terms.  It would be helpful to have a standard template to incorporate information into institutional databases
- There are still multiple letter of credit systems, and DoD programs should be under LOC
- Reporting of expense balances differs among agencies
- Reporting procedures in hard copy and on-line vary among agencies
- Terms and conditions in subcontracting and flow down of terms often assume that the sub is a university, and these issues are hard to negotiate when the sub is a Federal laboratory.

## Major Themes- Regulatory Requirements17 comments

- HIPPA threatens to impede clinical research and intrudes on the role of IRBs, and impose new civil and criminal liability on hospitals, etc. for use or disclosure of medical information for research purposes.
- Rationalize EPA hazardous (RCRA) waste requirements and implement best practices and performance-based model developed in conjunction with HHMI
- Reduce redundancy and overlapping requirements in animal welfare regulations
- Enhance and promote the alternative to animal use requirements

## Major Themes- Multidisciplinary Research13 comments

- Coordinate the examination of multidisciplinary/collaborative research issues with NAS COSEPUP
- Eliminate existing barriers (political and practical) for projects that transcend disciplines and specific agency missions
- Research administrative practices can be deployed based on types of science and support, e.g single projects, investigator portfolios, multiple, collaborating investigators, and multidisciplinary, multi-agency projects
- Multidisciplinary research often requires greater administrative support
- Teams need special support for young faculty to ensure they can develop independence in their discipline, i.e individual research and publications
- There should be more balance in the research portfolio to encourage collaboration between Federal laboratories and industry (see GAO report)

## Major Themes- Multidisciplinary Research (cont.)

- Examine sufficiency of funding for “mid-size” multi-investigator funding
- Improve peer review oversight, extend its use more broadly, and coordinate inter-agency communication on project funding
- Eliminate artificial distinctions between research, education, and public service
- The Materials Science programs and Centers for Excellence and Engineering Research Centers have demonstrated value in the support of integrated research
- There need to be more models for how universities and Federal laboratories can collaborate in interdisciplinary research
- Individual awards should be increased in average size and duration

## Major Themes- Research Infrastructure10 comments

- Academic institutions have assumed the predominant burden for construction of new facilities
- Multidisciplinary research requires more and predictable levels of specialized facility and instrumentation support independent of individual project grants, especially for sophisticated instrumentation, primates, recombinant rodents, and other animals
- Develop new policies and business arrangements to foster development, use, and continuous improvement of shared facilities and equipment.  Service centers should b able to accumulate costs for replacement equipment or changes in technology.
- Implement a Federal facility loan guarantee program as recommended in NIH report
- Increase support for specialized, shared instrumentation, especially MRIs, PET, and mass spectrometers

## Major Themes- Research Infrastructure (cont.)

- Foster more cross-disciplinary support for special facilities and Federal labs, e.g as in NIH use of synchrotron facilities
- Strengthen coordination of investment in merit-reviewed, cross disciplinary research infrastructure
- Fully fund IRBs and IAACUCs for that portion of Federally funded research
- See report entitled, “NIH Working Group on Construction of Research Facilities: A Report to the Advisory Committee of the Director, NIH.”
- A 2003 COGR study reports $1B underecovery due to the administrative cap, which is consistent with a RAND report for OSTP that estimated underecovery to be between $700M and $1.5B
- There needs to be fair and equitable policy for utility cost recovery

## Major Themes- Research Infrastructure (cont.)

- Substantial losses due to the administrative cap threaten financial stability and ability for the institution to fund essential facilities and instrumentation
- Within the context of full cost reimbursement:
- Provide relief from the admin.cap
- Increase reimbursement for utility cost adjustments for all institutions
- Remove agency policies which provide less than full reimbursement
- Promote fair rate negotiation
- Modify A-21 to allow direct charging of administrative services directly linked to the performance of research

## Major Themes- Information Technology9 comments*

- Establish one eGov. solution, not multiple agency solutions
- Establish national, uniform, inter-operative clinical information systems to support clinical trials
- Research institutions can develop common specs while commercial vendors develop systems
- Agencies have moved slowly to develop common interfaces

## Major Themes- Technology Transfer Optimization7 comments*	

- Reaffirm Bayh-Dole tech transfer principles and minimize agency specific limitations of rights
- Do not change the existing technology transfer framework under Bayh-Dole, which works well
- Address concerns about agency departures from principles and potential restrictions on royalties
- Address concerns about use of “transactions other than grants & contracts” for basic and applied research
- Promote exchange of tools among investigators while protecting proprietary rights

## Major Themes- Inconsistency of Policies and Practices Among Universities11 comments*

- Some institutions do not waive or reduce collection of F&A on awards when not paid by sponsors although there may be good reasons for the difference in treatment
- Institutions vary in their acceptance of terms and conditions, e.g. restrictions on publications

## Major Themes- State and Institutional Requirements4 comments*

- Comments not identified as yet

## Major Themes- Research Support

- No comments identified as yet