Executive Office of the President 

Ofiice of Management and Budget 

Executive Office of the President 

OtEce of Science and Technology Policy 

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES 

FROM: 

SUBJECT: 

JOSHUA B. BOLTE 

DIRECTOR, AND BUDGET 

Updated Administration Research and Development Budget Priorities 

This memorandum updates guidance on research and development (R&D) priorities and 

standards for program evaluation based on the R&D Investment Criteria. The Administration 

will continue to emphasize improved management and performance, in order to maintain 

excellence and leadership in science and technology. 

The Administration sees certain areas of R&D as particularly important. Many fall mainly 

within the purview of a single agency, such as the new vision for space exploration (NASA) and 

research to improve human health (NIH), while some involve interagency R&D efforts, which is 

the focus of the second section of this memorandum. The 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) that will help shape the budget issued next February. 

General R&D Program Guidance 

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

careful attention to fhding 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. 
In general the Administration favors Federal R&D investments that: 

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

sustain specifically authorized agency missions and support the missions of other 

agencies through stewardship of user facilities; 

enhance the health of our Nation's people; 

strengthen science, mathematics and engineering education and accomplishments to 

enable continuation of superiority in math and science; 

support technological innovation to enhance economic competitiveness and new job 

growth; 

address the workforce needs of the Nation to ensure a scientifically literate population 

and a robust supply of qualified experts; 

advance hndamental discovery to improve future quality of life; 

enhance our understanding of the global environment; 

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. 

Interagency R&D Priorities 

This section lists interagency R&D efforts that should receive special focus in agency budget 

requests. Agencies that receive hding for the following 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 greater than that of the individual activities; and 4) 

an interagency implementation plan. 

Homeland Securitv R&D 

Winning the war on terror and securing the homeland continue to be the highest of national 

priorities. Agencies should pursue an R&D investment strategy that closes remaining 

vulnerabilities and minimizes the emergence of new ones, with emphasis on applied technologies 

to address our Nation's ability to prevent, detect, treat, remediate, and attribute acts of terrorism. 

Agencies should continue to invest in technologies to enable decontamination following 

biological, chemical, and radiological incidents; standoff detection and protection against highexplosives; design and development of inherently secure infrastructures; establishment of 

standards for homeland security technology; and advanced techniques for threat and 

vulnerability analysis. Fundamental R&D should be considered to address and counter new or 

novel threats. Research areas of increased priority include: enhancing prevention, detection, 

treatment, and remediation of nuclear, chemical and biological (particularly genetically 

modified) threats; planning for and initiating recapitalization efforts to ensure continuing stateof-the-art capability to test and evaluate next-generation medical countermeasures; enabling the 

development of a biosurveillance network integrating human, animal, plant and environmental 

surveillance and laboratory networks across federal, state and local systems; addressing shortfalls 

in the development of new drugs and vaccines against foreign animal disease threats; and 

pursuing social and behavioral studies to anticipate, counter, and diffuse threats to our homeland 

security. 
Networking and Information Technology R&D 

The Networking and Information Technology R&D (NITRD) program is a high Administration 

priority. While the importance of each of the NITRD program areas continues, high-end 

computing (supercomputing) and cyberinfrastructure R&D should be given higher relative 

priority due to the potential of each in fbrthering progress across a broad range of scientific and 

technological application areas. The recent report of the High-End Computing Revitalization 

Task Force (HECRTF) describes a coordinated R&D plan for core high-end computing 

technology, as well as multi-agency approaches for addressing high-end computing capability, 

capacity, and accessibility issues. Agency plans in high-end computing should be consistent 

with the HECRTFplan, emphasize coordination, leverage the efforts of all agencies and, where 

appropriate, provide explicit benefit to multiple agencies through coordinated multi-agency 

investments. Cyberinfi-astructure R&D encompasses research on hardware and software tools 

that is aimed at strengthening the connections between new and existing computers (including 

supercomputers), databases, scientific instruments, researchers and facilities. By providing 

secure, reliable, distributed computing environments and tools that allow the science and 

engineering communities to produce, collect, store, communicate, analyze and quickly share 

huge amounts of information, improvements in cyberinfi-astmcture will accelerate discovery. 

Agency requests should reflect these two program priorities by reallocating bds fiom lower 

priority efforts. 

National Nanotechnolony Initiative 

Nanotechnology offers great promise across many scientific fields and most sectors of the 

economy and is another top Administration priority. Continued federal investment in the agency 

programs that make up the National Nanotechnology Initiative (NNI) is key to facilitating fhre 

breakthroughs and to maintaining U.S. competitiveness. The NNI should support both 

fimdarnental 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. In order to ensure that nanotechnology research leads 

to the responsible development of beneficial applications, agencies also should support research 

on the various societal implications of the nascent technology. In particular, agencies should 

place a high priority on research on human health and environmental issues related to 

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

execution of this research. 

Priorities of the Phvsical Sciencq 

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 that aims to close significant gaps in the fundamental physical understanding of 

phenomena that promise significant new technologies with broad societal impact. Hightemperature 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 with such gaps where coherent control holds great potential. 
In addition, the development or enhancement of instruments and facilities can extend our 

scientific reach in ways that often have broad impact. The range of such investments is large, 

from bench-top devices such as the scanning tunneling microscope to the national-scale 

synchrotron and neutron user facilities. Priority will be given to those instrument- or facilityrelated investments with the greatest promise for the broadest scientific impact. Of particular 

interest are investments leading to the development of next-generation light sources. In their 

budget submissions, agencies should seek to coordinate their investments in instrumentation, 

upgrades, and user programs at national scientific user facilities. 

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

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

other countries. Examples of well coordinated, inter-agency investments in the discoveryoriented sciences are described in the interagency working group report, A 21" Century Frontier 

for Discovery: The Physics of the Universe. 

Biologv of Comdex Svstems 

The application of DNA sequence and other data allows the development of new 

biotechnological tools, such as microarrays to decipher the functional implications of gene 

expression, which are helping to unravel longstanding questions in biology. 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. These collaborations will yield new ways of collecting and analyzing 

data allowing for the exploration of the living world across all levels of biological organization, 

both spatially and temporally. Scientific and technological breakthroughs are expected in 

diverse areas ranging from elucidating processes operating at the sub-molecular level, to 

preventing and treating infectious disease (plant, animal and human), to addressing inherently 

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

Federal agencies should continue.to invest in obtaining additional sequence data and in the 

development of genomics tools and resources. A firm, broad foundation of biological 

knowledge in normal and disease states is a necessary underpinning for the scientific advances 

that will improve the health of the Nation. The NSTC coordination process (such as efforts by 

the Subcommittee on Biotechnology and Interagency Working Groups on Plant Genomes and on 

Domestic Animal Genomics) will assist in identifymg R&D opportunities and needs to most 

effectively utilize Federal resources consistent with individual agency mission and stewardship 

responsibilities. 

Climate. Water, and Hydrogen R&D 

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

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

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 further 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." 
The highly successful intergovernmental Earth Observation Summit in July 2003 resulted in the 

commitment to develop a coordinated 10-year plan for global Earth observations. Agencies 

should continue to support the NSTC-coordinated development and implementation of a 10-year 

U.S. plan for a comprehensive and sustained global Earth observation system, identifLing key 

areas for implementing solutions that will minimize data gaps and maximize the utility of the 

data. 

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

another high-priority concern. Agencies, through the NSTC, should develop a coordinated, 

multi-year plan 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 Nation's future. 

Finally, agencies should continue research efforts in support of the President's Hydrogen Fuel 

Initiative; this includes research outside of the subset of activities currently counted as part of the 

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 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 details of the R&D investment 

criteria are located in last year's version of this memorandum, which is available at: 

htt~://www.whitehouse. gov/omb/memorandalm03- 1 5 .odf 

The R&D criteria have benefited from three 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 complement use of 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 compliance with the criteria at the program level. 

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 

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

federal investment in R&D.