Executive Office of the President

Office of Science and Technology Policy

Executive Office of the President

Office of Management and Budget 

M-05-18 

July 8, 2005 

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES 

FROM: JOHN H. MARBURGER, III 

DIRECTOR, OFFICE OF SCIENCE AND TECHNOLOGY POLICY 

 JOSHUA B. BOLTEN 

DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET 

SUBJECT: FY 2007 Administration Research and Development Budget Priorities 

This memo highlights the Administration’s research and development (R&D) priorities and 

emphasizes improving management and performance to maintain excellence and leadership in 

science and technology. The memo provides general guidance for setting priorities among R&D 

programs, interagency R&D efforts that should receive special focus in agency budget requests, 

and reiteration of the R&D Investment Criteria that agencies should use to improve investment 

decisions for and management of their R&D programs. These updated R&D budget priorities 

reflect an extensive, continuous process of consultation with the President's Council of Advisors 

on Science and Technology (PCAST) and collaboration within the interagency National Science 

and Technology Council (NSTC). 

General R&D Program Guidance 

The combination of finite resources and a multitude of new research opportunities requires 

careful attention to funding priorities and wise choices by agency managers. As we have 

reiterated previously in these annual memos, agencies must vigorously evaluate existing 

programs and, wherever possible, consider them for modification, redirection, reduction or 

termination, in keeping with national needs and priorities. They must justify new programs with 

rigorous analysis demonstrating their merit, quality, importance and consistency with national 

priorities. Agencies may propose new, high-priority activities, but these requests should identify 

potential offsets by elimination or reductions in less effective or lower priority programs or 

programs where Federal involvement is no longer needed or appropriate. 
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In general, the Administration favors Federal R&D investments that: 

• advance fundamental scientific discovery to improve future quality of life; 

• address societal and environmental impacts of science and technology, including ethical, 

national security and homeland security issues; 

• sustain specifically authorized agency missions and support the missions of other 

agencies through stewardship of user facilities; 

• enable potentially high-payoff activities that require a Federal presence to attain longterm national goals, including national security and energy independence; 

• support technological innovation to spur economic competitiveness and new job growth; 

• enhance the health of our Nation’s people; 

• strengthen science, mathematics and engineering education and accomplishments to 

enable superior performance in math and science; 

• ensure a scientifically literate population and a supply of qualified technical personnel 

commensurate with national need; 

• enhance our ability to understand and respond to global environmental issues; 

• maximize efficiency and effectiveness of the R&D enterprise through means such as 

competitive, peer-reviewed award and review processes and phase-out of programs that 

are only marginally productive or are not important to an agency’s mission; and 

• strengthen international partnerships that foster advancement of scientific frontiers and 

accelerate the progress of science across borders.

Agencies are expected to conduct programs in accordance with the highest standards of ethical 

and scientific integrity, and to have clear guidelines on issues such as conflict of interest, 

protection of privacy, and the treatment of human subjects. Agency participation in coordination 

of relevant standards through NSTC is expected, following the example of the U.S. Federal 

Policy for the Protection of Human Subjects, known as the Common Rule. 

Agencies should maximize the coordination and planning of their R&D programs through the 

NSTC. Two areas requiring special agency attention and focus through the NSTC are Federal 

scientific collections and R&D assessment. 

• Agencies should assess the priorities for and stewardship of Federal scientific collections, 

which play an important role in public health and safety, homeland security, trade and 

economic development, medical research, and environmental monitoring. Agencies 

should develop a coordinated strategic plan to identify, maintain and use Federal 

collections and to further collections research. 

• Determining the effectiveness of Federal science policy requires an understanding of the 

complex linkages between R&D investments and economic and other variables that lead 

to innovation, competitiveness, and societal benefits. An interagency process is needed 

to develop a new framework for understanding the impact of R&D investments, define 

appropriate data elements for monitoring and assessing this impact, contribute to the 

international effort to understand the impact of globalization of science and technology, 

and improve the basis for national science policy decisions.
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Interagency R&D Priorities 

While some priority R&D areas fall mainly within the purview of a single agency, such as fusion 

energy research at the Department of Energy, other areas require strong interagency 

coordination. The following interagency R&D priorities should receive special focus in agency 

budget requests. Agencies that receive funding for these activities should be prepared to 

participate in applicable interagency coordination groups to produce: 1) a clear and concise 

definition of program activities and priorities within the overall priority area; 2) an inventory of 

the programs in the baseline budget; 3) agency trade-offs that will provide the resources to help 

produce a coordinated, cross-agency program with greater impact than that of the individual 

activities; and 4) an interagency implementation plan. 

Homeland Security R&D 

Significant advances in securing the homeland and winning the war on terror have been made 

over the past few years through the focused application of our nation’s science and technology 

capability. Highlights of these accomplishments have been documented in the OSTP report 

Science and Technology: A Foundation for Homeland Security. But many challenges remain 

and much research and development is still required to further reduce vulnerabilities. Agencies 

should place increased emphasis on R&D efforts that support: quick and cost-effective 

decontamination capabilities following a biological, chemical, nuclear or radiological incident; 

predictive modeling to assess the rate of geographic spread of emerging and/or intentionally 

released infectious diseases; enhanced biometric systems; secure land and maritime borders 

through more reliable technologies for screening cargo and visitors; increased effectiveness of 

existing security systems through automation; improved understanding of the social and cultural 

dynamics of regional population groups; safety of the Nation’s food supply and agricultural 

systems; and social and behavioral research to anticipate, counter and diffuse threats to our 

homeland security and enhance response and recovery capabilities. As we continue the rapid 

development of near-term technologies, we need to enhance fundamental studies that may lead to 

transformational concepts for solving truly difficult challenges including the remote detection of 

nuclear material and/or devices and the remote detection and/or disabling of explosive devices 

ranging from suicide vests to vehicle-borne bombs. 

High-End Computing and Networking R&D 

While the importance of each of the Networking and Information Technology R&D (NITRD) 

program areas continues, investments in high-end computing and cyber infrastructure R&D 

should be given higher relative priority due to their potential for broad impact. Agency plans in 

high-end computing must be consistent with the 2004 Federal Plan for High-End Computing

and should aggressively focus on supercomputing capability, capacity and accessibility issues by 

emphasizing coordination, leveraging the efforts of all agencies and, where appropriate, use of 

coordinated multi-agency investments. Advanced networking research (including test-beds) on 

hardware and software for secure, reliable, distributed computing environments and tools that 

provide the communication, analysis and sharing of very large amounts of information will 

accelerate discovery and enable new technological advances. Agency requests should reflect 

these program priorities by reallocating funds from lower priority efforts. Agencies supporting 

R&D in these and all NITRD areas are expected to participate in interagency planning through 

the NSTC to guide future investments. Reflecting the importance of cyber security, agencies 
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should continue to work through the NSTC to generate a detailed gap analysis of R&D funding 

in this area. 

National Nanotechnology Initiative

Continued Federal investment in the agency programs that make up the National 

Nanotechnology Initiative (NNI) facilitates breakthroughs and maintains U.S. competitiveness in 

this field. The NNI should support both basic and applied R&D in nanotechnology and 

nanoscience, develop nanoscale instrumentation and metrology, and disseminate new technical 

capabilities to industry. Because research at the nanoscale offers natural bridges to 

interdisciplinary collaboration, especially at the intersection of the life and physical sciences, the 

Administration encourages novel approaches to accelerating interdisciplinary and interagency 

collaborations. Activities such as joint programs utilizing shared resources, as well as support 

for interdisciplinary activities at centers and user facilities, are encouraged. To ensure that 

nanotechnology research leads to the responsible development of beneficial applications, high 

priority should be given to research on societal implications, human health, and environmental 

issues related to nanotechnology and develop, where applicable, cross-agency approaches to the 

funding and execution of this research. 

Priorities in the Physical Sciences

Investments in the physical sciences likely to lead to or enable new discoveries about nature or 

strengthen national economic competitiveness continue to be important. Priority will be given to 

research, instrumentation and facilities that aim to close significant gaps in the fundamental 

physical understanding of phenomena that promise significant new technologies with broad 

societal impact. 

High-temperature and organic superconductors, molecular electronics, wide band-gap and 

photonic materials, thin magnetic films, and quantum condensates are examples of novel atomic 

and molecular-level systems that are only partially understood, and where coherent control holds 

great potential. 

Physical science research often demands instruments and facilities requiring a wide range of 

investments from bench-top devices such as scanning microscopes to the national-scale 

synchrotron and neutron user facilities. Of particular interest are investments that could enable 

the development of next-generation light sources and instruments capable of resolving electronic, 

chemical, and mechanical properties of structures with sub-nanometer resolution. In their budget 

submissions, agencies should demonstrate coordination with other agencies of their investments 

in instrumentation, upgrades and user programs at national scientific user facilities. 

Within discovery-oriented physical science investments, priority will be given to those projects 

and programs that are demonstrably well coordinated with related programs in other agencies 

and countries. Examples of well coordinated, inter-agency investments in the discovery-oriented 

sciences are described in the interagency working group report, A 21st Century Frontier for 

Discovery: The Physics of the Universe. 

Understanding Complex Biological Systems

New biotechnological tools are giving researchers unprecedented access to data on DNA 

sequences, and RNA and protein expression, thus opening new avenues for research into the 
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functional implications of gene expression. Agencies should target investments toward the 

development of a deeper understanding of complex biological systems through collaborations 

among physical, computational, behavioral, social and biological researchers and engineers. 

Scientific and technological breakthroughs in revealing biochemical processes are expected in 

diverse areas at scales ranging from the sub-molecular to the systems level. The rapidly 

developing methods and capabilities of the behavioral and social sciences can have significant 

impact on national security, health and education. Social science research is relevant to 

prevention and treatment of infectious disease (plant, animal and human), and to inherently 

complex areas such as obesity, environmental management, and the neural basis of behavior. 

Obesity research should be a priority area for interagency coordination. Data sharing across 

platforms and disciplines is important for all these complex issues, and should be given higher 

priority in agency programs. 

Energy and Environment

The Administration’s energy and environment research initiatives are critical for achieving 

sustained economic growth while ensuring national energy security and a healthy environment. 

 

Global earth observations support research in a wide range of sciences important for society. 

The U.S. Strategic Plan for an Integrated Earth Observations System (IEOS) provides guidance 

for agencies contributing to these efforts. Agencies should focus on near-term opportunities to 

pilot integrated observing systems, such as those that contribute to natural hazards assessment 

and disaster warnings. Agencies also should work through the NSTC U.S. Group on Earth 

Observations Subcommittee to ensure continued coordination and implementation of the U.S. 

Strategic Plan and continued strong U.S. leadership in the international community. 

Investments in global climate change science and technology continue to improve our 

understanding of climate variability and change, provide the basis for sound long-term climate 

policy decision-making, and enable the development of energy efficient technologies. Agencies 

should implement the 2003 “Strategic Plan for the U.S. Climate Change Science Program” and 

focus on the topics described in the 2003 “U.S. Climate Change Technology Program: Research 

and Current Activities.” 

Agencies are encouraged to implement activities outlined in the Administration's 2004 U.S. 

Ocean Action Plan, developed in response to the U.S. Commission on Ocean Policy. These 

activities included the development of an Ocean Research Priorities Plan and Implementation 

Strategy and the integration of U.S. ocean observing efforts into the Global Earth Observation 

System of Systems. 

The ability to measure, monitor and forecast U.S. and global supplies of fresh water is important 

because agencies are developing a coordinated, multi-year plan through the NSTC to improve 

research to understand the processes that control water availability and quality, and to collect and 

make available the data needed to ensure an adequate water supply for the future. Significant 

progress on this plan, including stakeholder input, is expected during the next two years. 

In support of the President’s Hydrogen Fuel Initiative, agency efforts should address the critical 

technology barriers of on-board hydrogen storage density, hydrogen production cost, and fuel 

cell cost, as well as distributed production and delivery systems. R&D should focus on novel 

materials for fuel cells and hydrogen storage (including nanostructured materials), durable and 
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inexpensive catalysts, and hydrogen production from renewable energy, nuclear energy, 

biological and electrochemical processes, and fossil fuels with carbon sequestration. 

Research and Development Investment Criteria 

The President’s Management Agenda directs agencies to use the R&D investment criteria to 

improve investment decisions for and management of their R&D programs. Under this 

initiative, three primary criteria apply to all R&D programs: 

 1. Relevance; 

 2. Quality; and 

 3. Performance. 

Industry-relevant applied R&D must meet additional criteria. The specific activities that 

programs should undertake to demonstrate fulfillment of the R&D investment criteria are 

described in a previous year’s memorandum, which is available at: 

http://www.whitehouse.gov/omb/memoranda/m03-15.pdf

Many of these specific activities have been incorporated into the Program Assessment Rating 

Tool (PART) that has been tailored for R&D programs. Agencies should use the criteria as 

broad guidelines that apply at all levels of Federally funded R&D efforts, and they should use the 

PART as the instrument to periodically evaluate fulfillment of the criteria at the program level. 

The R&D criteria have benefited from four years of working with agencies, other stakeholders, and 

experts in assessment, to build on the best of existing R&D planning and assessment practices. The 

R&D investment criteria continue to: 

• Provide tools for programs, agencies, and policy makers to select, plan, and manage R&D 

programs effectively, to increase the productivity of the Federal R&D portfolio and the return 

on taxpayer investment; 

• Help convey the Administration’s expectations for proper program management; 

• Set standards for information to be monitored and provided in program plans and budget 

justifications; and 

• Ultimately improve public understanding of the potential benefits and effectiveness of the 

federal investment in R&D.