U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

79–010

" ! SENATE 106th Congress

2d Session

REPORT

2000

106–382

Calendar No. 758

TECHNOLOGY ADMINISTRATION

AUTHORIZATION ACT

REPORT

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND

TRANSPORTATION

on

S. 1407

AUGUST 25, 2000.—Ordered to be printed

Filed under authority of the order of the Senate of July 26, 2000

(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

JOHN MCCAIN, Arizona, Chairman

TED STEVENS, Alaska

CONRAD BURNS, Montana

SLADE GORTON, Washington

TRENT LOTT, Mississippi

KAY BAILEY HUTCHISON, Texas

OLYMPIA SNOWE, Maine

JOHN ASHCROFT, Missouri

BILL FRIST, Tennessee

SPENCER ABRAHAM, Michigan

SAM BROWNBACK, Kansas

ERNEST F. HOLLINGS, South Carolina

DANIEL K. INOUYE, Hawaii

JOHN D. ROCKEFELLER IV, West Virginia

JOHN F. KERRY, Massachusetts

JOHN B. BREAUX, Louisiana

RICHARD H. BRYAN, Nevada

BYRON L. DORGAN, North Dakota

RON WYDEN, Oregon

MAX CLELAND, Georgia

MARK BUSE, Staff Director

ANN H. CHOINIERE, General Counsel

KEVIN D. KAYES, Democratic Staff Director

MOSES BOYD, Democratic Chief Counsel

GREGG ELIAS, Democratic General Counsel

79–010

Calendar No. 758

106TH CONGRESS REPORT

2d Session " ! SENATE 106–382

TECHNOLOGY ADMINISTRATION AUTHORIZATION ACT

AUGUST 25, 2000.—Ordered to be printed

Filed under authority of the order of the Senate of July 26, 2000

Mr. MCCAIN, from the Committee on Commerce, Science, and

Transportation, submitted the following

REPORT

together with

ADDITIONAL VIEWS

[To accompany S. 1407]

The Committee on Commerce, Science, and Transportation, to

which was referred the bill (S. 1407) ‘‘A Bill to authorize appropriations for the Technology Administration of the Department of Commerce for fiscal years 2001, 2002, and 2003, and for other purposes’’, having considered the same, reports favorably thereon with

an amendment in the nature of a substitute and recommends that

the bill as amended do pass.

PURPOSE OF THE BILL

The purpose of the bill, as reported, is to authorize appropriations to the Technology Administration (TA) of the Department of

Commerce (DOC) for fiscal year (FY) 2001, FY 2002, and FY 2003

as follows:

[In millions of dollars]

Area of consideration FY 2001 FY 2002 FY 2003

Office of Under Secretary for Technology ........................................................................... 8.716 8.977 9.246

Teacher Science and Technology Enhancement Institute .................................................. 0.750 0.773 0.796

Experimental Program to Stimulate Competitive Technologies Program .......................... 3.000 3.000 3.000

Scientific and Technical Research and Services ............................................................... 337.508 356.071 375.655

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[In millions of dollars]

Area of consideration FY 2001 FY 2002 FY 2003

Industrial Technology Services ........................................................................................... 271.015 275.421 264.960

Construction and Maintenance ........................................................................................... 35.879 36.955 38.064

Total ....................................................................................................................... 656.868 681.197 691.721

BACKGROUND AND NEEDS

Under the leadership of the Under Secretary of Commerce for

Technology, TA provides advice on technology policy, supports technology development programs, and disseminates technology information. The Under Secretary oversees the three major components

of the TA: (1) the Office of Technology Policy (OTP), (2) the National Institute of Standards and Technology (NIST), and (3) the

National Technical Information Service (NTIS). The mission of

OTP is to evaluate, develop, and promote policies and programs

that facilitate private sector innovation and U.S. industrial competitiveness. NIST (formerly the Bureau of Standards) is, by far,

the largest of the three TA activities. NIST conducts in-house research and development as well as standards activities in support

of U.S. industry. In addition, through its Industrial Technology

Services (ITS) account, NIST funds two external technology grant

and assistance programs: the Advanced Technology Program (ATP),

which provides grants to companies to undertake initial high risk

high-tech research to develop promising technologies with economic

potential (but does not support product development), and the

Manufacturing Extension Partnership (MEP), which provides manufacturing assistance to small- and medium-sized businesses

through regional centers. NIST also manages the Malcolm

Baldridge National Quality Award, which is given to U.S. companies that excel in quality achievement and total quality management. NTIS is a self-financed agency that collects and sells to the

public technical information generated by the U.S. government and

foreign sources.

In recent years, of all the TA activities, the greatest controversy

has involved NIST’s two grant programs—ATP and MEP. Proponents of ATP argue that the program strengthens the U.S. economy by providing U.S. companies with a critical helping hand by

funding peer-reviewed, high risk, yet promising, commercially-relevant research ventures that private capital sources would be unlikely to finance because of the risk and unlikelihood of a quick return on investment. However, opponents of ATP view the program

as ‘‘corporate welfare’’ and believe that the goal of increased U.S.

competitiveness is better achieved through a combination of deregulation, tax reform, tort reform, and more vigorous enforcement

of trade agreements. MEP has been viewed by critics of NIST in

a more favorable light. Through its centers in each state and over

300 smaller local activities, MEP provides assistance to the Nation’s approximately 381,000 small- and medium-sized firms seeking to modernize their plants. Proponents assert that this is precisely the kind of assistance that these firms need because it is difficult for owners and managers of small companies to find highquality, unbiased information, advice, and assistance. In addition,

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many of these firms lag behind their foreign competitors in technology and operations, leading larger firms to look increasingly for

offshore suppliers. However, some believe that the MEP concept of

using extension agents to visit industries to identify and to address

their needs is not a cost-effective model and is particularly inefficient in rural states where the agents must travel great distances.

Opponents also argue that the MEP makes insufficient use of advanced computer networking to deliver needed technical assistance

to U.S. companies.

LEGISLATIVE HISTORY

On February 7, 2000, the Administration submitted its FY 2001

budget request for TA to the Congress. On April 21, 1999, the Subcommittee on Science, Technology, and Space held an oversight

hearing on TA’s programs at which time testimony was heard from

Gary Bachula, Acting Under Secretary of Commerce for Technology

and Raymond Kammer, Director, NIST.

On July 21, 1999, Senator Frist, Chairman of the Subcommittee,

introduced S. 1407, a bill to authorize appropriations for TA for FY

2000, FY 2001, and FY 2002.

On April 13, 2000, the Committee met in executive session and,

on a voice vote, ordered the bill, as amended, to be reported.

SUMMARY OF MAJOR PROVISIONS

As reported, S. 1407 would authorize funding for TA for FY 2001,

FY 2002, and FY 2003 and make several changes to the programs

of TA. Major provisions of S. 1407, as reported, include:

1. Authorization of Appropriations. A total of $656.9 million

would be authorized for the TA for fiscal year (FY) 2001, $681.2

million for FY 2002, and $691.7 million for FY 2003. The authorized funding level for TA is allocated among its activities as indicated in the chart under Purpose of the Bill.

2. National Institute of Standards and Technology Act Amendments. Substantial changes would be made to the manner in which

ATP is administered. Specifically, the participation of large companies would be restricted to joint ventures or partnerships only, and

all competitions would be required to be general and open to all applicants.

3. Experimental Program to Stimulate Competitive Technologies.

The Experimental Program to Stimulate Competitive Technologies

would be transferred from OTP to NIST with an annual authorization level of $3 million.

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing

Rules of the Senate and section 403 of the Congressional Budget

Act of 1974, the Committee provides the following cost estimate,

prepared by the Congressional Budget Office:

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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, May 1, 2000.

Hon. JOHN MCCAIN,

Chairman, Committee on Commerce, Science, and Transportation,

U.S. Senate, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1407, the Technology Administration Authorization Act for Fiscal Years 2001, 2002, and

2003.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contacts are Mark Hadley (for federal costs) and Shelley Finalyson (for the state and local impact).

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

S. 1407—Technology Administration Authorization Act for Fiscal

Years 2001, 2002, and 2003

Summary: S. 1407 would authorize appropriations for fiscal

years 2001 through 2003 for various technology programs administered by the Department of Commerce. Funds would be authorized

for the National Institute of Standards and Technology (NIST), for

the office of the Under Secretary for Technology, and for the Experimental Program to Stimulate Competitive Technologies (EPSCOT).

The bill would authorize several new initiatives at NIST, including

a science and technology training program for teachers, and an

interagency board concerned with global positioning systems. Other

provisions of the bill would modify existing programs, and would

authorize NIST to transfer title to tangible personal property to recipients of funding from the Advanced Technology Program (ATP)

under certain conditions. The bill also would require NIST and office of the Under Secretary to submit reports to the Congress on

the status of the manufacturing sector in the digital age and the

activities of the national laboratories.

Assuming appropriation of the authorized amounts, CBO estimates that implementing S. 1407 would cost about $2 billion over

the 2001–2005 period. Provisions regarding the transfer of title to

personal property could affect direct spending; therefore, pay-asyou-go procedures would apply to the bill. CBO estimates, however,

that the impact on direct spending would not be significant in any

one year.

S. 1407 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA)

and could benefit state and local governments.

Estimated cost to the Federal Government: The estimated budgetary impact of S. 1407 is shown in the following table. The costs

of this legislation fall within budget function 370 (commerce and

housing credit). For the purposes of this estimate, CBO assumes

that all authorized amounts will be appropriated near the beginning of each fiscal year and that outlays will follow the historical

spending patterns for the affected programs.

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By fiscal year, in millions of dollars

2000 2001 2002 2003 2004 2005

SPENDING SUBJECT TO APPROPRIATION 1

Spending Under Current Law:

Budget Authority 2 ........................................................................... 642 0 0 0 0 0

Estimated Outlays ........................................................................... 648 420 210 76 33 11

Proposed Changes:

Authorization Level .......................................................................... 0 657 677 692 0 0

Estimated Outlays ........................................................................... 0 316 524 633 328 145

Spending Under S. 1407:

Authorization Level 2 ........................................................................ 642 657 677 692 0 0

Estimated Outlays ........................................................................... 648 736 734 709 361 156

1 This bill could affect direct spending if NIST chose to transfer title to some of the personal property acquired under ATP that otherwise would have been sold as surplus property under current law. Based on information provided by NIST, however, CBO estimates that the potential loss in sale receipts would not be significant in any one year. 2 The 2000 level is the amount appropriated for that year for specified technology programs with the Department of Commerce.

Pay-as-you-go considerations: The Balanced Budget and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending and receipts. Provisions in S.

1407 authorizing NIST to convey title to personal property could

reduce offsetting receipts (a form of direct spending), but CBO estimates that any loss of receipts would not be significant in any single year.

Estimated impact on state, local, and tribal governments: S. 1407

contains no intergovernmental mandates as defined in UMRA, but

several sections of the bill would affect grant programs that benefit

state and local governments. The bill would authorize appropriations totaling about $352 million for the 2001–2003 period for the

Manufacturing Extension Partnership (MEP), a program jointly financed by the federal government and state or local agencies. The

MEP is a program designed to enhance productivity and technological performance in the United States and is made up of the

State Technology Extension Program (STEP) and the Manufacturing Extension Centers Program (MECP). STEP provides technical assistance and planning grants to states to develop or revitalize their technology program. MECP involves cooperative agreements between the federal government and nonprofit institutions

that are often funded by state or local development agencies or universities.

S. 1407 also would authorize appropriations for the Experimental

Program to Stimulate Competitive Technology. This is a program

to strengthen the technological competitiveness of states that have

historically received less federal research and development funds

than other states. These grants require at least a 25-percent match

and are available to consortia including state and local governments. The bill would transfer the program from the Under Secretary of Commerce to NIST and authorize appropriations of $3

million annually for fiscal years 2001 through 2003. Any costs to

state or local governments to participate in these technology programs would be voluntary.

Estimated impact on the private sector: This bill would impose

no new private-sector mandates as defined in UMRA.

Estimated prepared by: Federal Costs: Mark Hadley. Impact on

State, Local, and Tribal Governments: Shelley Finlayson. Impact

on the Private Sector: Jean Wooster.

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

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REGULATORY IMPACT STATEMENT

In accordance with paragraph 11(b) of rule XXVI of the Standing

Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported:

NUMBER OF PERSONS COVERED

S. 1407, as reported, would reauthorize appropriations for DOC’s

TA for fiscal years 2001, 2002, and 2003. The TA conducts measurements and standards activities in support of U.S. industry and

manages technology grant and assistance programs to increase

U.S. competitiveness. The Committee believes that the bill will not

subject any individuals or businesses affected by the bill to any additional regulation.

ECONOMIC IMPACT

Providing for continual funding would allow NIST to continue its

support of U.S. industries by conducting its standards and measurements setting functions. NIST’s grants and assistance programs

would continue to assist U.S. businesses to be more competitive in

international markets and would continue to benefit the general

public through contributing to the economic growth of the country

from investments in new science and technology ventures that otherwise would not have been undertaken.

PRIVACY

This legislation would not have an adverse impact on the privacy

of individuals.

PAPERWORK

This legislation would not increase the paperwork requirement

for private individuals or businesses. The legislation would require

three reports to be submitted to the Senate Committee on Commerce, Science, and Transportation and the House Committee on

Science: (1) the Director of NIST would be required to submit a report on the manufacturing sector; (2) the Assistant Secretary for

Technology Policy would be required to submit a report on the national laboratories; and (3) the Director of NIST would be required

to submit a report on technical standards.

SECTION-BY-SECTION ANALYSIS

Section 1. Short title

This section would permit the reported bill to be cited as the

‘‘Technology Administration Authorization Act for Fiscal Years

2001, 2002, and 2003.’’

Section 2. Definitions

This section would provide the definitions of several key terms

used throughout the report bill.

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Section 3. Authorization of appropriations for scientific and technical research and development

Subsection (a) would authorize $338 million for Scientific and

Technical Research Services for FY 2001, $356 million for FY 2002,

and $376 million for FY 2002.

The Committee continues to recognize NIST’s important and legitimate role in promoting U.S. industrial competitiveness by working with industry to develop and apply measurements, standards,

and technology. The basic research and standards work at NIST is

an important function.

The Committee continues to recognize the role of quality as an

integral part of today’s business management practices. The Committee commends NIST for its work in establishing the Malcolm

Baldridge Quality Award criteria, which is used by thousands of organizations as a general performance and business excellence

model.

As standards develop that allow interoperability, manufacturers

and retailers can more closely integrate their supply chains. A

March 1999 NIST study estimates that lack of interoperability

costs the automotive supply chain $1 billion per year. The majority

of these costs are attributable to the time and resources spent correcting and reformatting data files that are not usable by those receiving the files. While a general international Standard for the

Exchange of Product Model Data (STEP) exists to facilitate the exchange of these data files, much more work needs to be done to

apply that standard to specific industries. This section of the reported bill includes $4 million for FY 2001 for NIST to continue cooperation with the automotive and aerospace industries into the

pilot stage and with other key manufacturing sectors on implementing STEP.

The funds authorized in this section of the reported bill also

would include NIST’s Minority Serving Initiative. This important

new initiative would allow NIST to foster partnerships with these

institutions which educate a disproportionately large number of the

nation’s minority scientists and engineers. It would also expand the

post-doctoral fellowship program, bringing more of these scientists

and engineers to work at NIST.

In Subsection (b), NIST would be authorized $36 million for FY

2001, $37 million for FY 2002, and $38 million for FY 2003 for the

Construction and Maintenance account in order to fund needed

new construction and renovations at NIST.

In Subsection (c), NIST would be provided $750,000 for FY 2001,

$773,000 for FY 2002, and $796,000 for FY 2003 for the Teacher

Science and Technology Enhancement Institute program. The Committee is disappointed that the President’s request did not include

funding for this program, which was established by the Technology

Administration Act of 1998. The Committee believes that this program will greatly assist teachers in better understanding the relationship between technology and commerce. The need for human

capital has been identified as a major barrier to continual growth

by the technology community, more so than technology and finance.

To ensure that American industry continues to be the dominant

player in the global economy, NIST must do its part to ensure a

readily available source of human capital exists.

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Section 4. Authorization for the Office of the Under Secretary for

Technology

Subsection (a) would authorize $8,716,000 for FY 2001,

$8,977,000 for FY 2002, and $9,246,000 for FY 2003 for the activities of the Under Secretary for Technology and OTP. Subsection (b) would authorize $590,000 for FY 2001, $608,000

for FY 2002, and $626,000 for FY 2003 of the funds in Subsection

(a) for the Office of Space Commercialization.

The Committee has steadfastly supported the Federal investment

in research and development. The products of that investment, scientific and technical documents, are archived and disseminated by

NTIS. The Committee has not endorsed the closure of NTIS, as

proposed by the Secretary of Commerce. The proposal submitted to

the Committee by the Secretary is incomplete and does not address

several issues that were raised during a hearing held by the Committee on October 21, 1999. The Committee intends to review the

status of the agency further before making a final decision.

Section 5. Authorization of appropriation for industrial technology

services

This section would authorize $271.02 million for ITS for FY 2001,

$275.42 million for FY 2002, and $264.96 for FY 2003. The ITS account funds NIST’s ATP and MEP. There would be authorized to

be appropriated for ATP $146.88 million for FY 2001, $151.28 million for FY 2002, and $155.82 million for FY 2003. There would be

authorized to be appropriated for the MEP program $124.14 million for FY 2001, $119.14 million for FY 2002, and $109.14 million

for FY 2003.

The MEP FY 2001 funding level is $10 million above the requested level and would allow accelerated implementation of the ecommerce initiative for support of small manufacturing firms. This

$10 million would increase support for the small manufacturers by

more than 100 percent above the requested level for a total of $19

million for FY 2001. The reported bill provides a total of $15 million for FY 2002 and $5 million for FY 2003 for this e-commerce

initiative. The Committee believes that accelerated funding over

the next two years is very important and necessary to ensure that

the small manufacturers remain competitive. The FY 2001 funding level of $147 million for ATP is a 3 percent

increase above the FY 2000 appropriated level. The funding level

for FY 2001 and FY 2002 also represents a 3 percent increase over

the previous year. The Committee continues to be concerned about

ATP’s failure to use $26 million in funds for new awards in FY

1999 and the program’s decision to de-obligate $28 million previously dedicated to projects in FY 1999.

The Committee recognizes that a major element of the Nation’s

transition to electronic commerce is the need to improve manufacturing productivity by ensuring that electronic data can be exchanged accurately and efficiently. Over the past two years, representatives from several government agencies (Departments of

Energy, Defense, and Commerce and the National Science Foundation) and many companies in the manufacturing sector worked to

develop roadmaps that address generic future manufacturing infrastructure requirements. The resulting documents, the Integrated

Manufacturing Technology Roadmaps, laid out common visions in

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the areas of information systems for manufacturing enterprises,

modeling and simulation, manufacturing processes and equipment,

and technologies for enterprise integration. Integrated Manufacturing Technology Initiative is the name given to the implementation of these roadmaps. The Committee supports the budget request of $1 million to support the federal government role in this

public-private partnership and the establishment of a convening organization that will use the Integrated Manufacturing Technology

Roadmaps as its guide.

Section 6. National Institute of Standards and Technology Act

amendments

Section 6 of the reported bill would make several amendments to

the NIST Act.

Subsection (a) would amend the NIST Act, making changes to

the process by which ATP operates. Specifically under subsection

(a), paragraph (1) would require the reviewers, as part of the current technical merit review process, to make a determination that

the research projects in question would not go forward in a timely

manner without Federal assistance. In addition, each program applicant would be required to certify that an unsuccessful attempt

has been made to secure private market funding for the research

project involved. In providing the certification, each applicant

would be required to include a written narrative description of the

efforts made to secure the funding. Paragraph (1) also would restrict a large business’ participation to joint ventures only, and the

joint ventures would have to include one or more small businesses.

In paragraph (2), the term ‘‘large business’’ would be defined as a business with gross annual revenues greater than $2.5 billion. A

small business would be defined in accordance with section 3(a)(1)

of the Small Business Act. A medium business would be a business

that is neither a small business nor a large business.

Paragraph (3) would make a technical correction to the Act to redesignate subsection (j) of the existing code as subsection (m).

Paragraph (4) would authorize the Director to grant an extension

beyond the five year deadline for completing a project provided that

the extension would result in no additional costs to the Federal

government and is in the Federal government’s interest. Paragraph

(4) also would allow the Secretary to vest title to tangible personal

property in ATP grant recipients as long as (a) the property is purchased as part of the ATP grant, and (b) the Secretary determines

that the vesting furthers the objectives of NIST. The vesting made

under this subsection would be made only if subject to the limitations prescribed by the Secretary, and only if vesting causes no additional cost to the Federal government.

Subsection (b) would amend the NIST Act provisions which govern ATP to allow non-industry joint venture participants such as

universities and non-profits participating as ATP awardees and

subawardees the option of retaining title to the intellectual property generated under ATP programs where the non-government

parties to the ATP project agree it will serve the interests of the

participants in the project. This change will provide a greater opportunity for industry to work together with universities and other

nonprofit organizations. The amendment language removes any restriction requiring patent title to be held by nonprofit companies

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and permits the participants to agree among themselves as to

where patent title will vest. The amendment also provides a preemption of the requirements of chapter 18 of title 35 of the U.S.

Code as required by that chapter. It furthers stipulates that these

provisions are not retroactive. Subsection (b) of the reported bill

would eliminate all focus program competitions. Specifically, this

subsection would require all awards to be based on general open

competitions.

Section 7. Reports

Subsection (a) would require the Director, within six months

after enactment, to submit a report to the Senate Committee on

Commerce, Science, and Transportation and the House of Representatives Committee on Science on the manufacturing sector addressing such issues as an expanded definition of and the role of

manufacturing in the digital age; necessary revisions to existing

federal programs to reflect requirements imposed by the knowledge-based economy; and needs of small businesses for technical

assistance.

Subsection (b) would require the Assistant Secretary for Technology Policy, within nine months after enactment, to submit a report to the Senate Committee on Commerce, Science, and Transportation and the House of Representatives Committee on Science

on whether the laboratories have clearly defined and focused missions; barriers to maintaining competitive centers of excellence;

laboratory collaborations; strengthening laboratories; and any recommendations to increase the efficiency and effectiveness of the national laboratories.

Subsection (c) would require the Director, in consultation with

the U.S. Trade Representative Office and other appropriate agencies, to submit a report to the Senate Committee on Commerce,

Science, and Transportation and the House of Representatives

Committee on Science, within six months of enactment, on the role

and impact of international technical standards on global commerce and international trade; the role of national standards in

international commerce and trade policies; the timeliness of domestic and international process and its impact on development of new

markets and new technologies; market, industry, and technology

inputs to the standards process; access in representation to the domestic and international standards process; and any recommendation for changes to the domestic standards process.

Section 8. Authorization of interagency support for global positioning system

This section would authorize interagency funds and other forms

of support for the activities of the Interagency Global Positioning

System Executive Board (IGEB) including the Executive Secretariat, which is housed within the Department of Commerce. This

section does not authorize any additional funds to any agency but

does exempt the IGEB from the general legislative ban on multiagency funding of executive boards.

Due to the dual military and civilian nature of the Global Positioning System (GPS), the Committee supports the involvement of

civilian agencies in the management of the GPS. Furthermore, because of the jointly held responsibilities of the IGEB, which is coVerDate 11-MAY-2000 06:49 Aug 30, 2000 Jkt 079010 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\SR382.XXX pfrm03 PsN: SR382
11

chaired by the Departments of Defense and Transportation and includes the Departments of Commerce, State, Agriculture, Justice,

and Interior as well as the Joint Chiefs of Staff and the National

Aeronautics and Space Administration, the Committee supports allowing multi-agency contributions to fund the activities of the

IGEB, including the operations of the Executive Secretariat.

Section 9. Transfer of EPSCoT to NIST

Subsection (a) would transfer the Experimental Program to Stimulate Competitive Technology (EPSCoT) from OTP to NIST. The

Committee is disappointed that the Administration did not include

funding for the program as part of the FY 2001 budget request.

Subsection (b) would authorize $3 million for FY 2001, $3 million

for FY 2002, and $3 million for FY 2003 for EPSCoT.

Consistent with the Technology Administration Act of 1998, the

Committee encourages the Director to ensure that states are working toward established achievement criteria for participating in the

program. It is hoped that as more states meet this criteria, their

need to participate in the program may be eliminated.

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing

Rules of the Senate, changes in existing law made by the bill, as

reported, are shown as follows (existing law proposed to be omitted

is enclosed in black brackets, new material is printed in italic, existing law in which no change is proposed is shown in roman):

NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

ACT

SEC. 28. ADVANCED TECHNOLOGY PROGRAM. [15 U.S.C. 278n]

(a) There is established in the Institute an Advanced Technology

Program (hereafter in this Act referred to as the ‘‘Program’’) for the

purpose of assisting United States businesses in creating and applying the generic technology and research results necessary to—

(1) commercialize significant new scientific discoveries and

technologies rapidly; and

(2) refine manufacturing technologies.

The Secretary, acting through the Director, shall assure that the

Program focuses on improving the competitive position of the

United States and its businesses, gives preference to discoveries

and to technologies that have great economic potential, and avoids

providing undue advantage to specific companies. In operating the

Program, the Secretary and Director shall, as appropriate, be guided by the findings and recommendations of the Biennial National

Critical Technology Reports prepared pursuant to section 603 of

the National Science and Technology Policy, Organization, and Priorities Act of 1976 (42 U.S.C. 6683).

(b) Under the Program established in subsection (a), and consistent with the mission and policies of the Institute, the Secretary,

acting through the Director, and subject to subsections (c) and (d),

may—

(1) aid industry-led United States joint research and development ventures (hereafter in this section referred to as ‘‘joint

ventures’’ (which may also include universities and indeVerDate 11-MAY-2000 06:49 Aug 30, 2000 Jkt 079010 PO 00000 Frm 00013 Fmt 6659 Sfmt 6602 E:\HR\OC\SR382.XXX pfrm03 PsN: SR382
12

pendent research organizations), including those involving collaborative technology demonstration projects which develop

and test prototype equipment and processes, through—

(A) provision of organizational and technical advice; and

(B) participation in such joint ventures by means of

grants, cooperative agreements, or contracts, if the Secretary, acting through the Director, determines participation to be appropriate, which may include (i) partial startup funding, (ii) provision of a minority share of the cost of

such joint ventures for up to 5 years, and (iii) making

available equipment, facilities, and personnel, provided

that emphasis is placed on areas where the Institute has

scientific or technological expertise, on solving generic

problems of specific industries, and on making those industries more competitive in world markets;

(2) provide grants to and enter into contracts and cooperative

agreements with United States businesses (especially small

businesses), provided that emphasis is placed on applying the

Institute’s research, research techniques, and expertise to

those organizations’ research programs;

(3) involve the Federal laboratories in the Program, where

appropriate, using among other authorities the cooperative research and development agreements provided for under section

12 of the Stevenson-Wydler Technology Innovation Act of 1980;

and

(4) carry out, in a manner consistent with the provisions of

this section, such other cooperative research activities with

joint ventures as may be authorized by law or assigned to the

Program by the Secretary.

(c) The Secretary, acting through the Director, is authorized to

take all actions necessary and appropriate to establish and operate

the Program, including—

(1) publishing in the Federal Register draft criteria and, no

later than six months after the date of the enactment of this

section, following a public comment period, final criteria, for

the selection of recipients of assistance under subsection (b)(1)

and (2);

(2) monitoring how technologies developed in its research

program are used, and reporting annually to the Congress on

the extent of any overseas transfer of these technologies;

(3) establishing procedures regarding financial reporting and

auditing to ensure that contracts and awards are used for the

purposes specified in this section, are in accordance with sound

accounting practices, and are not funding existing or planned

research programs that would be conducted in the same time

period in the absence of financial assistance under the Program;

(4) assuring that the advice of the Committee established

under section 10 is considered routinely in carrying out the responsibilities of the Institute; and

(5) providing for appropriate dissemination of Program research results.

(d) When entering into contracts or making awards under subsection (b), the following shall apply:

13

(1)(A) No contract or award may be made until the research

project in question has been subject to a merit review, and has,

in the opinion of the reviewers appointed by the Director and

the Secretary, acting through the Director, been shown to have

scientific and technical merit and be of a nature and scope that

would not be pursued in a timely manner without Federal assistance.

(B) Each applicant for a contract or award under the Program shall certify that the applicant has made an effort to secure private market funding for the research project involved.

That certification shall include a written narrative description

of the efforts made by the applicant to secure that funding.

(2) In the case of joint ventures, the Program shall not make

an award unless the award will facilitate the formation of a

joint venture or the initiation of a new research and development project by an existing joint venture.

(3) No Federal contract or cooperative agreement under subsection (b)(2) shall exceed $2,000,000 over 3 years, or be for

more than 3 years unless a full and complete explanation of

such proposed award, including reasons for exceeding these

limits, is submitted in writing by the Secretary to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of

the House of Representatives. The proposed contract or cooperative agreement may be executed only after 30 calendar days

on which both Houses of Congress are in session have elapsed

since such submission. Federal funds made available under

subsection (b)(2) shall be used only for direct costs and not for

indirect costs, profits, or management fees of the contractor.

(4) In determining whether to make an award to a particular

joint venture, the Program shall consider whether the members of the joint venture have made provisions for the appropriate participation of small United States businesses in such

joint venture.

(5) Section 552 of title 5, United States Code, shall not apply

to the following information obtained by the Federal Government on a confidential basis in connection with the activities

of any business or any joint venture receiving funding under

the Program—

(A) information on the business operation of any member

of the business or joint venture; and

(B) trade secrets possessed by any business or any member of the joint venture.

(6) Intellectual property owned and developed by any business or joint venture receiving funding or by any member of

such a joint venture may not be disclosed by any officer or employee of the Federal Government except in accordance with a

written agreement between the owner or developer and the

Program.

(7) If a business or joint venture fails before the completion

of the period for which a contract or award has been made,

after all allowable costs have been paid and appropriate audits

conducted, the unspent balance of the Federal funds shall be

returned by the recipient to the Program.

14

(8) Upon dissolution of any joint venture or at the time otherwise agreed upon, the Federal Government shall be entitled

to a share of the residual assets of the joint venture proportional to the Federal share of the costs of the joint venture as

determined by independent audit.

(9) A company shall be eligible to receive financial assistance

under this section only if—

(A) the Secretary finds that the company’s participation

in the Program would be in the economic interest of the

United States, as evidenced by investments in the United

States in research, development, and manufacturing (including, for example, the manufacture of major components or subassemblies in the United States); significant

contributions to employment in the United States; and

agreement with respect to any technology arising from assistance provided under this section to promote the manufacture within the United States of products resulting from

that technology (taking into account the goals of promoting

the competitiveness of United States industry), and to procure parts and materials from competitive suppliers; and

(B) either—

(i) the company is a United States-owned company;

or

(ii) the Secretary finds that the company is incorporated in the United States and has a parent company which is incorporated in a country which affords

to United States-owned companies opportunities, comparable to those afforded to any other company, to

participate in any joint venture similar to those authorized under this Act affords to United States-owned

companies local investment opportunities comparable

to those afforded to any other company; and affords

adequate and effective protection for the intellectual

property rights of United States-owned companies.

(10) Grants, contracts, and cooperative assignments under

this section shall be designed to support projects which are

high risk and which have the potential for eventual substantial

widespread commercial application. In order to receive a grant,

contract, or cooperative agreement under this section, a research and development entity shall demonstrate to the Secretary the requisite ability in research and technology development and management in the project area in which the grant,

contract, or cooperative agreement is being sought.

(11)(A) Title to any intellectual property arising from assistance provided under this section shall vest in a company or

companies incorporated in the United øStates.¿ States or any

other university or nonprofit awardee or subawardee (as those

terms are defined by the Secretary) receiving financial assistance under this section, as agreed by the parties, notwithstanding the requirements of chapter 18 of title 35, United

States Code. The United States may reserve a nonexclusive,

nontransferable, irrevocable paid-up license, to have practiced

for or on behalf of the United States, in connection with any

such intellectual property, but shall not, in the exercise of such

license, publicly disclose proprietary information related to the

15

license. Title to any such intellectual property shall not be

transferred or passed, except to a company incorporated in the

United States, until the expiration of the first patent obtained

in connection with such intellectual property.

(B) For purposes of this paragraph, the term ‘‘intellectual

property’’ means an invention patentable under title 35, United

States Code, or any patent on such an invention.

(C) Nothing in this paragraph shall be construed to prohibit

the licensing to any company of intellectual property rights

arising from assistance provided under this section.

(12) A large business may participate in a research project

that is the subject of a contract or award under paragraph (3)

only as a member of a joint venture that includes 1 or more

small businesses as members.

(e) The Secretary may, within 30 days after notice to Congress,

suspend a company or joint venture from continued assistance

under this section if the Secretary determines that the company,

the country of incorporation of the company or a parent company,

or the joint venture has failed to satisfy any of the criteria set forth

in subsection (d)(9), and that it is in the national interest of the

United States to do so.

(f) When reviewing private sector requests for awards under the

Program, and when monitoring the progress of assisted research

projects, the Secretary and the Director shall, as appropriate, coordinate with the Secretary of Defense and other senior Federal officials to ensure cooperation and coordination in Federal technology

programs and to avoid unnecessary duplication of effort. The Secretary and the Director are authorized to work with the Director

of the Office of Science and Technology Policy, the Secretary of Defense, and other appropriate Federal officials to form interagency

working groups or special project offices to coordinate Federal technology activities.

(g) In order to analyze the need for the value of joint ventures

and other research projects in specific technical fields, to evaluate

any proposal made by a joint venture or company requesting the

Secretary’s assistance, or to monitor the progress of any joint venture or any company research project which receives Federal funds

under the Program, the Secretary, the Under Secretary of Commerce for Technology, and the Director may, notwithstanding any

other provision of law, meet with such industry sources as they

consider useful and appropriate.

(h) Up to 10 percent of the funds appropriated for carrying out

this section may be used for standards development and technical

activities by the Institute in support of the purposes of this section.

(i) In addition to such sums as may be authorized and appropriated to the Secretary and Director to operate the Program, the

Secretary and Director also may accept funds from other Federal

departments and agencies for the purpose of providing Federal

funds to support awards under the Program. Any Program award

which is supported with funds which originally came from other

Federal departments and agencies shall be selected and carried out

according to the provisions of this section.

(j) Notwithstanding subsection (b)(1)(B) and subsection (d)(3), the

Director may grant an extension beyond the applicable deadline

specified in subsection (b)(1)(B) or (d)(3) for a joint venture or single

16

applicant recipient of assistance to expend Federal funds to complete the project assisted with that assistance, if that extension—

(1) is granted with no additional cost to the Federal Government; and

(2) is in the interest of the Federal Government.

(k)(1) The Secretary, acting through the Director, may vest title to

tangible personal property in any recipient of financial assistance

under this section if—

(A) the property is purchased with funds provided under this

section; and

(B) the Secretary, acting through the Director, determines

that the vesting of such property furthers the objectives of the

Institute.

(2) Vesting under this subsection shall—

(A) be subject to such limitations as are prescribed by the Secretary, acting through the Director; and

(B) be made without further obligation to the United States

Government.

In carrying out this section, the Secretary, acting through the Director, shall ensure that the requirements of Circular No. A–110 issued

by the Office of Management and Budget are met with respect to the

valuation of cost-share items used by participants in the Program.

(l) AWARDS BASED ON COMPETITION.—All amounts appropriated

for grants under subsection (b) for fiscal years beginning after the

date of enactment of the Technology Administration Authorization

Act for Fiscal Years 2000, 2001, and 2002 shall be used for grants

awarded on the basis of general open competition.

ø(j)¿ (m) As used in this section—

(1) the term ‘‘joint venture’’ means any group of activities, including attempting to make, making, or performing a contract,

by two or more persons for the purpose of—

(A) theoretical analysis, experimentation, or systematic

study of phenomena or observable facts;

(B) the development or testing of basic engineering techniques;

(C) the extension of investigative finding or theory of a

scientific or technical nature into practical application for

experimental and demonstration purposes, including the

experimental production and testing of models, prototypes,

equipment, materials, and processes;

(D) the collection, exchange, and analysis of research information;

(E) the production of any product, process, or service; or

(F) any combination of the purposes specified in subparagraphs (A), (B), (C), (D), and (E), and may include the

establishment and operation of facilities for the conducting

of research, the conducting of such venture on a protected

and proprietary basis, and the prosecuting of applications

for patents and the granting of licenses for the results of

such venture; øand¿

(2) the term ‘‘large business’’ means a business that—

(A) is not a small business; and

(B) has gross annual revenues in an amount greater than

$2,500,000,000;

(3) the term ‘‘medium business’’ means a business that—

17

(A) is not a small business; and

(B) has gross annual revenues in an amount less than or

equal to $2,500,000,000;

(4) the term ‘‘small business’’ means a small business concern,

as described in section 3(a)(1) of the Small Business Act (15

U.S.C. 632(a)(1)); and

ø(2)¿ (5) the term ‘‘United States-owned company’’ means a

company that has majority ownership or control by individuals

who are citizens of the United States.

STEVENSON-WYDLER TECHNOLOGY INNOVATION ACT OF

1980

SEC. 5. COMMERCE AND TECHNOLOGICAL INNOVATION. [15 U.S.C.

3704]

(a) ESTABLISHMENT.—There is established in the Department of

Commerce a Technology Administration, which shall operate in accordance with the provisions, findings, and purposes of this Act.

The Technology Administration shall include—

(1) the National Institute of Standards and Technology;

(2) the National Technical Information Service; and

(3) a policy analysis office, which shall be known as the Office of Technology Policy.

(b) UNDER SECRETARY AND ASSISTANT SECRETARY.—The President shall appoint, by and with the advice and consent of the Senate, to the extent provided for in appropriations Acts—

(1) an Under Secretary of Commerce for Technology, who

shall be compensated at the rate provided for level III of the

Executive Schedule in section 5314 of title 5, United States

Code; and

(2) an Assistant Secretary of Commerce for Technology Policy, who shall serve as policy analyst for the Under Secretary.

(c) DUTIES.—The Secretary, through the Under Secretary, as appropriate, shall—

(1) manage the Technology Administration and supervise its

agencies, programs, and activities;

(2) conduct technology policy analyses to improve United

States industrial productivity, technology, and innovation, and

cooperate with United States industry in the improvement of

its productivity, technology, and ability to compete successfully

in world markets;

(3) carry out any functions formerly assigned to the Office of

Productivity, Technology, and Innovation;

(4) assist in the implementation of the Metric Conversion Act

of 1975;

(5) determine the relationships of technological developments

and international technology transfers to the output, employment, productivity, and world trade performance of United

States and foreign industrial sectors;

(6) determine the influence of economic, labor and other conditions, industrial structure and management, and government

policies on technological developments in particular industrial

sectors worldwide;

(7) identify technological needs, problems, and opportunities

within and across industrial sectors that, if addressed, could

18

make a significant contribution to the economy of the United

States;

(8) assess whether the capital, technical and other resources

being allocated to domestic industrial sectors which are likely

to generate new technologies are adequate to meet private and

social demands for goods and services and to promote productivity and economic growth;

(9) propose and support studies and policy experiments, in

cooperation with other Federal agencies, to determine the effectiveness of measures with the potential of advancing United

States technological innovation;

(10) provide that cooperative efforts to stimulate industrial

innovation be undertaken between the Under Secretary and

other officials in the Department of Commerce responsible for

such areas as trade and economic assistance;

(11) encourage and assist the creation of centers and other

joint initiatives by State of [or] local governments, regional organizations, private businesses, institutions of higher education, nonprofit organizations, or Federal laboratories to encourage technology transfer, to stimulate innovation, and to

promote an appropriate climate for investment in technologyrelated industries;

(12) propose and encourage cooperative research involving

appropriate Federal entities, State or local governments, regional organizations, colleges or universities, nonprofit organizations, or private industry to promote the common use of resources, to improve training programs and curricula, to stimulate interest in high technology careers, and to encourage the

effective dissemination of technology skills within the wider

community;

(13) serve as a focal point for discussions among United

States companies on topics of interest to industry and labor, including discussions regarding manufacturing and discussions

regarding emerging technologies;

(14) consider government measures with the potential of advancing United States technological innovation and exploiting

innovations of foreign origin; and

(15) publish the results of studies and policy experiments.

(d) JAPANESE TECHNICAL LITERATURE.—

(1) In addition to the duties specified in subsection (c), the

Secretary and the Under Secretary shall establish, and

through the National Technical Information Service and with

the cooperation of such other offices within the Department of

Commerce as the Secretary considers appropriate, maintain a

program (including an office in Japan) which shall, on a continuing basis—

(A) monitor Japanese technical activities and developments;

(B) consult with businesses, professional societies, and libraries in the United States regarding their needs for information on Japanese developments in technology and engineering;

(C) acquire and translate selected Japanese technical reports and documents that may be of value to agencies and

19

departments of the Federal Government, and to businesses

and researchers in the United States; and

(D) coordinate with other agencies and departments of

the Federal Government to identify significant gaps and

avoid duplication in efforts by the Federal Government to

acquire, translate, index, and disseminate Japanese technical information. Activities undertaken pursuant to subparagraph (C) of this paragraph shall only be performed

on a cost-reimbursable basis. Translations referred to in

such subparagraph shall be performed only to the extent

that they are not otherwise available from sources within

the private sector in the United States.

(2) Beginning in 1986, the Secretary shall prepare annual reports regarding important Japanese scientific discoveries and

technical innovations in such areas as computers, semiconductors, biotechnology, and robotics and manufacturing. In preparing such reports, the Secretary shall consult with professional societies and businesses in the United States. The Secretary may, to the extent provided in advance by appropriation

Acts, contract with private organizations to acquire and translate Japanese scientific and technical information relevant to

the preparation of such reports.

(3) The Secretary also shall encourage professional societies

and private businesses in the United States to increase their

efforts to acquire, screen, translate, and disseminate Japanese

technical literature.

(4) In addition, the Secretary shall compile, publish, and disseminate an annual directory which lists—

(A) all programs and services in the United States that

collect, abstract, translate, and distribute Japanese scientific and technical information; and

(B) all translations of Japanese technical documents performed by agencies and departments of the Federal Government in the preceding 12 months that are available to

the public.

(5) The Secretary shall transmit to the Congress, within 1

year after the date of enactment of the Japanese Technical Literature Act of 1986, a report on the activities of the Federal

Government to collect, abstract, translate, and distribute declassified Japanese scientific and technical information.

(e) [Omitted.]

(f) EXPERIMENTAL PROGRAM TO STIMULATE COMPETITIVE TECHNOLOGY.—

(1) IN GENERAL.—The Secretary, øacting through the Under

Secretary,¿ acting through the National Institute of Standards

and Technology, shall establish for fiscal year 1999 a program

to be known as the Experimental Program to Stimulate Competitive Technology (referred to in this subsection as the ‘‘program’’). The purpose of the program shall be to strengthen the

technological competitiveness of those States that have historically received less Federal research and development funds

than those received by a majority of the States.

(2) ARRANGEMENTS.—In carrying out the program, the Secretary, øacting through the Under Secretary,¿ acting through

the National Institute of Standards and Technology, shall—

20

(A) enter into such arrangements as may be necessary

to provide for the coordination of the program through the

State committees established under the Experimental Program to Stimulate Competitive Research of the National

Science Foundation; and

(B) cooperate with—

(i) any State science and technology council established under the program under subparagraph (A);

and

(ii) representatives of small business firms and other

appropriate technology-based businesses.

(3) GRANTS AND COOPERATIVE AGREEMENTS.—In carrying out

the program, the Secretary, øacting through the Under Secretary,¿ acting through the National Institute of Standards and

Technology, may make grants or enter into cooperative agreements to provide for—

(A) technology research and development;

(B) technology transfer from university research;

(C) technology deployment and diffusion; and

(D) the strengthening of technological capabilities

through consortia comprised of—

(i) technology-based small business firms;

(ii) industries and emerging companies;

(iii) universities; and

(iv) State and local development agencies and entities.

(4) REQUIREMENTS FOR MAKING AWARDS.— (A) IN GENERAL.—In making awards under this subsection, the Secretary, øacting through the Under Secretary,¿ acting through the National Institute of Standards

and Technology, shall ensure that the awards are awarded

on a competitive basis that includes a review of the merits

of the activities that are the subject of the award.

(B) MATCHING REQUIREMENT.—The non-Federal share of

the activities (other than planning activities) carried out

under an award under this subsection shall be not less

than 25 percent of the cost of those activities.

(5) CRITERIA FOR STATES.—The Secretary, øacting through

the Under Secretary,¿ acting through the National Institute of

Standards and Technology, shall establish criteria for achievement by each State that participates in the program. Upon the

achievement of all such criteria, a State shall cease to be eligible to participate in the program.

(6) COORDINATION.—To the extent practicable, in carrying

out this subsection, the Secretary, øacting through the Under

Secretary,¿ acting through the National Institute of Standards

and Technology, shall coordinate the program with other programs of the Department of Commerce.

(7) REPORT.—

(A) IN GENERAL.—Not later than 90 days after the date

of the enactment of the Technology Administration Act of

1998, the Under Secretary shall prepare and submit a report that meets the requirements of this paragraph to the

Secretary. Upon receipt of the report, the Secretary shall

transmit a copy of the report to the Committee on ComVerDate 11-MAY-2000 06:49 Aug 30, 2000 Jkt 079010 PO 00000 Frm 00022 Fmt 6659 Sfmt 6602 E:\HR\OC\SR382.XXX pfrm03 PsN: SR382
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merce, Science, and Transportation of the Senate and the

Committee on Science of the House of Representatives.

(B) REQUIREMENTS FOR REPORT.—The report prepared

under this paragraph shall contain with respect to the

program—

(i) a description of the structure and procedures of

the program;

(ii) a management plan for the program;

(iii) a description of the merit-based review process

to be used in the program;

(iv) milestones for the evaluation of activities to be

assisted under the program in fiscal year 1999;

(v) an assessment of the eligibility of each State that

participates in the Experimental Program to Stimulate

Competitive Research of the National Science Foundation to participate in the program under this subsection; and

(vi) the evaluation criteria with respect to which the

overall management and effectiveness of the program

will be evaluated.

(22)

ADDITIONAL VIEWS OF SENATOR HOLLINGS

ADVANCED TECHNOLOGY PROGRAM

The Advanced Technology Program (ATP) is an important investment in American economic competitiveness. It supports American

industry’s own efforts to develop new cutting-edge, next-generation

technologies—technologies that will create the new industries and

jobs of the 21st century. However, the ATP does not fund the development of commercial products. Instead, it provides matching

funds to both individual companies and joint ventures for ‘‘preproduct’’ research on these high-risk, potentially high-payoff technologies. These technologies include promising new ideas in manufacturing, advanced electronics, and new materials.

Why do we need the ATP? The answer is simple: to keep America

competitive and to create jobs. Long-term technology has become

the key to future U.S. prosperity at precisely the time that global

competition, downsizing, and shareholder pressures are forcing

American companies to focus scarce research dollars on short-term

projects. The Commerce Department estimates that these market

pressures compel companies to spend up to 90 percent of their research funding on projects that will pay off in one to five years. As

a result, U.S. companies, small and large, have serious trouble

funding long-term, next-generation technologies that can facilitate

the building of new industries but will not pay for ten to fifteen

years. Moreover, the U.S. Government, historically, has supported

long-term research in only a few key sectors—an approach very different from our foreign competitors.

The ATP’s sole aim is to develop new basic technologies that

would not be pursued soon or at all because of technical risks and

other obstacles that discourage private-sector investment. The ATP

does not support product development and is modeled on similar

Federal research programs that have long helped a few sectors

such as agriculture, the aircraft industry, and energy technology.

The program particularly helps small technology companies. To

date, the ATP has made 468 cost-sharing awards, involving 1,067

companies and research partners in 43 states.

Although ATP competitions have been in existence for only ten

years, already a real difference can be seen from the early awards

that have been completed. A March 1999 study found that future

returns from just three of the completed ATP projects—improving

automobile manufacturing processes, reducing the cost of blood and

immune cell production, and using a new material for prosthesis

devices—would pay for all projects funded to date by the ATP.

Measurement and evaluation have been part of the ATP since its

beginning. The benefits of the program are well-documented

through individual case studies; the Secretary’s 1997 review; the

February 1998 Development, Commercialization, and Diffusion

23

Study; and the March 1999 review of the Performance of Completed Projects. What these analyses show time and time again is

that the ATP is stimulating collaboration, accelerating the development of high-risk technologies—and paying off for the nation. In FY 2000, total program funding for the ATP is $201.3 million which will support $50.7 million in new awards. The reported bill,

on the other hand, authorizes $146.9 million in FY 2001 for the

ATP. A total program at this level would drastically constrict funding for new ATP awards to approximately $16.4 million in FY

2001.

New awards are the lifeblood of the program. This year’s competition brought in 417 proposals from industry, totaling nearly

$900 million in requested ATP funding with an industry cost-share

of over $681 million. Only $50.7 million was available for new

awards. These proposals include 545 participants (not including

subcontractors) from industry, academia and other research organizations. In addition, the ATP staff reviewed 271 pre-proposals prior

to the competition deadline. Numbers this large clearly demonstrate significant interest on the part of industry.

Fluctuations in funding would send a message to industry that

the future of the ATP is once again uncertain. This will halt

progress made in encouraging industry to identify forward-looking,

risk-sharing R&D of new enabling technologies. On-again, off-again

first-year funding availability for ATP plays into the hands of those

who argue that the Federal government is an unreliable partner

over the long term.

As industry continues to focus more of its R&D on near term

product development, there will be fewer sources of support for the

type of fundamental and enabling technology R&D that ATP costshares. Industry is approaching the ATP to co-fund truly revolutionary research, ranging from tissue engineering to advanced

learning technologies. These are new technical areas that are becoming increasingly important to the U.S. economy and the quality

of life of American citizens.

MANUFACTURING EXTENSION PARTNERSHIP

The Manufacturing Extension Partnership (MEP) supports a network of locally-run centers which provide technical advice and consulting to small manufacturing companies in all fifty states and

Puerto Rico. Many of these firms lag behind foreign competitors in

technology and operations, leading larger American firms to look

increasingly for offshore suppliers. One of the chief challenges facing small- and medium-sized manufacturers is adapting and using

electronic commerce technologies to do business with larger firms.

The reported bill authorizes $124.2 million in FY 2001, $119.2

million in 2002, and $109.2 million in FY 2003 for MEP. The evidence is clear, however, that these proposed funding levels are unrealistic in the out years. The increased funding in FY 2001 would

allow the program to fund more field agents at the Centers and

reach more small- and medium-sized manufacturers. In addition,

MEP could focus on the challenge of electronic commerce by developing more technical capacity and new services to help small- and

medium-sized manufacturers use new technology to compete and

win new business. The reported bill assumes that one year of inVerDate 11-MAY-2000 06:49 Aug 30, 2000 Jkt 079010 PO 00000 Frm 00025 Fmt 6604 Sfmt 6604 E:\HR\OC\SR382.XXX pfrm03 PsN: SR382
24

tense focus on electronic commerce will be sufficient to keep small

manufacturers competitive. I disagree. MEP will need to continue

this effort—with at least level funding—in order to reach more

companies and to help them use emerging technologies.

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