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88–141PDF 2014

PRIZES TO SPUR INNOVATION AND 

TECHNOLOGY BREAKTHROUGHS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

APRIL 9, 2014 

Serial No. 113–71 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. LAMAR S. SMITH, Texas, Chair 

DANA ROHRABACHER, California 

RALPH M. HALL, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

FRANK D. LUCAS, Oklahoma 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

RANDY HULTGREN, Illinois 

LARRY BUCSHON, Indiana 

STEVE STOCKMAN, Texas 

BILL POSEY, Florida 

CYNTHIA LUMMIS, Wyoming 

DAVID SCHWEIKERT, Arizona 

THOMAS MASSIE, Kentucky 

KEVIN CRAMER, North Dakota 

JIM BRIDENSTINE, Oklahoma 

RANDY WEBER, Texas 

CHRIS COLLINS, New York 

BILL JOHNSON, Ohio 

EDDIE BERNICE JOHNSON, Texas 

ZOE LOFGREN, California 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

FREDERICA S. WILSON, Florida 

SUZANNE BONAMICI, Oregon 

ERIC SWALWELL, California 

DAN MAFFEI, New York 

ALAN GRAYSON, Florida 

JOSEPH KENNEDY III, Massachusetts 

SCOTT PETERS, California 

DEREK KILMER, Washington 

AMI BERA, California 

ELIZABETH ESTY, Connecticut 

MARC VEASEY, Texas 

JULIA BROWNLEY, California 

ROBIN KELLY, Illinois 

VACANCY 

SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY

HON. LARRY BUCSHON, Indiana, Chair 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

RANDY HULTGREN, Illinois 

STEVE STOCKMAN, Texas 

CYNTHIA LUMMIS, Wyoming 

DAVID SCHWEIKERT, Arizona 

THOMAS MASSIE, Kentucky 

JIM BRIDENSTINE, Oklahoma 

CHRIS COLLINS, New York 

BILL JOHNSON, Ohio 

LAMAR S. SMITH, Texas 

DANIEL LIPINSKI, Illinois 

FEDERICA WILSON, Florida 

ZOE LOFGREN, California 

SCOTT PETERS, California 

AMI BERA, California 

DEREK KILMER, Washington 

ELIZABETH ESTY, Connecticut 

ROBIN KELLY, Illinois 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

April 9, 2014 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Larry Bucshon, Chairman, Subcommittee on 

Research and Technology, Committee on Science, Space, and Technology, 

U.S. House of Representatives ............................................................................ 5 

Written Statement ............................................................................................ 5 

Statement by Representative Daniel Lipinski, Ranking Minority Member, 

Subcommittee on Research and Technology, Committee on Science, Space, 

and Technology, U.S. House of Representatives ............................................... 6 

Written Statement ............................................................................................ 7 

Statement by Representative Lamar S. Smith, Chairman, Committee on 

Science, Space, and Technology, U.S. House of Representatives ..................... 8 

Written Statement ............................................................................................ 9 

Statement by Representative Eddie Bernice Johnson, Ranking Member, Committee on Science, Space, and Technology, U.S. House of Representatives .... 10 

Written Statement ............................................................................................ 11 

Witnesses: 

Mr. Christopher Frangione, Vice President of Prize Development, XPRIZE 

Oral Statement ................................................................................................. 12 

Written Statement ............................................................................................ 15 

Mr. Donnie Wilson, Founder and CEO, Elastec American Marine 

Oral Statement ................................................................................................. 22 

Written Statement ............................................................................................ 23 

Mr. Narinder Singh, Co-Founder and Chief Strategy Officer, Appirio and 

President, [topcoder] 

Oral Statement ................................................................................................. 28 

Written Statement ............................................................................................ 30 

Dr. Sharon Moe, President, American Society of Nephrology 

Oral Statement ................................................................................................. 37 

Written Statement ............................................................................................ 39 

Discussion ................................................................................................................. 44 

(1) 

PRIZES TO SPUR INNOVATION AND 

TECHNOLOGY BREAKTHROUGHS 

WEDNESDAY, APRIL 9, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:04 a.m., in Room 

2318 of the Rayburn House Office Building, Hon. Larry Bucshon 

[Chairman of the Subcommittee] presiding. 
2 
3 
4 
5 

Chairman BUCSHON. The Subcommittee on Research and Technology will come to order. 

Good morning, everyone. Welcome to today’s hearing entitled 

‘‘Prizes to Spur Innovation and Technology Breakthroughs.’’ In 

front of you are packets containing the written testimony, biographies, and truth-in-testimony disclosures for today’s witnesses. 

I now recognize myself for five minutes for an opening statement. 

Earlier this year, our Subcommittee held a hearing about the scientific activities at the Smithsonian Institution. Curators from the 

Smithsonian brought the original check that was given to Charles 

Lindbergh for winning the Orteig Prize in 1927 when he flew nonstop from New York to Paris in his airplane ‘‘The Spirit of St. 

Louis.’’ The Orteig prize—similar to prizes we will be discussing 

today—was a $25,000 prize financed by a New York hotel owner 

to the first aviator to make the nonstop flight from New York to 

Paris. The impact of Lindbergh’s flight was significant and helped 

spawn an interest in aviation and grow the emerging aviation industry. 

Today, scientific prize challenges still play an important role in 

spurring innovation and the federal government and private sector 

are crucial to sustaining these challenges. 

As a cardiothoracic surgeon, prize competitions in medical research are of particular interest to me. Rising healthcare costs are 

becoming a burden to American families. One example where cost 

containment is crucial affects the 450,000 Americans who suffer 

from end-stage renal disease, commonly known as kidney failure. 

One of our witnesses today, Dr. Sharon Moe who comes to us from 

the Indiana University School of Medicine, will discuss the effects 

a prize competition in kidney innovation to find cost-effective alternatives to transformative dialysis might have on the disease. 

Last month, I introduced H.R. 4186, the Frontiers in Innovation, 

Research, Science, and Technology—or FIRST—Act. The FIRST 

Act contains language that will provide the guidance necessary to 

help make this and other potential prizes come to fruition. We 

must ensure federal investment is also leveraging private sector investment in prize competitions. 

Our witnesses today will showcase some of the important efforts 

that are currently underway and we will be hearing from a major 

prize organization, a prize winner, a crowd-source prize expert, and 

a prize proposer. I got that all out. I hope that the work from these 

witnesses will inspire and produce the next Charles Lindbergh, 

transform fields, and develop important technological breakthroughs. 

I look forward to hearing from our distinguished witnesses and 

having a productive discussion. 

[The prepared statement of Mr. Bucshon follows:] 

PREPARED STATEMENT OF SUBCOMMITTEE ON CHAIRMAN LARRY BUCSHON

I am pleased to call to order this morning’s Subcommittee on Research and Technology hearing that will examine prizes funded by both the private sector and the 

federal government to spur innovation and technology breakthroughs. 

Earlier this year, our subcommittee held a hearing about the scientific activities 

at the Smithsonian Institution. Curators from the Smithsonian brought the original 

check that was given to Charles Lindbergh for winning the Orteig Prize in 1927 

when he flew non-stop from New York to Paris in his airplane ‘‘The Spirit of St. 
6 

Louis.’’ The Orteig prize -similar to the prizes we will be discussing today- was a 

$25,000 prize financed by a New York hotel owner to the first aviator to make the 

non-stop flight from New York City to Paris. The impact of Lindbergh’s flight was 

significant and helped spawn an interest in aviation and grow the emerging aviation 

industry. 

Today, scientific prize challenges still play an important role in spurring innovation and the federal government and private sector are crucial to sustaining these 

challenges. 

As a cardio thoracic surgeon, prize competitions in medical research are of particular interest to me. Rising healthcare costs are burdening to American families. 

One example where cost containment is crucial affects the 450,000 Americans who 

suffer from End-State Renal Disease (ESRD), commonly known as kidney failure. 

One our witnesses today, Dr. Sharon Moe who comes to us from the Indiana University School of Medicine, will discuss the effects a prize competition in kidney innovation to find cost effective alternatives to transformative dialysis might have on the 

disease. 

Last month, I introduced H.R. 4186, the Frontiers in Innovation, Research, 

Science and Technology, or FIRST, Act. The FIRST Act contains language that will 

provide the guidance necessary to help make this and other potential prizes come 

to fruition. We must ensure federal investment is also leveraging private sector investment in prize competitions. 

Our witnesses today will showcase some of the important efforts that are currently underway and we will be hearing from a major prize organizations, a prize 

winner, a crowd-source prize expert and a prize proposer. I hope that the work from 

these witnesses will inspire and produce the next Charles Lindbergh, transform 

fields, and develop important technological breakthroughs. 

I look forward to hearing from our distinguished witnesses and having a productive discussion. 

Chairman BUCSHON. At this point, I now recognize the Ranking 

Member, the gentleman from Illinois, Mr. Lipinski, for an opening 

statement. 

Mr. LIPINSKI. Thank you, Mr. Chairman. Thank you for holding 

this hearing and I thank our witnesses for being here this morning. 

Prize challenges inspire and help spur technological advancement by tapping into the strength of American ingenuity, and both 

the public and private sectors are increasingly making use of this 

tool to accelerate innovation. Recent prize competitions have challenged inventors to build fuel-efficient vehicles, develop technology 

to clean up oil spills, and to create algorithms for faster mobile applications. Prize competitions, including the one that the Chairman 

mentioned, spurred Charles Lindbergh to make the first nonstop 

transatlantic flight. It can also be credited with producing breakthroughs in aviation, navigation, food preservation, and many other 

advances in the modern world. 

For years, I have been a strong supporter of using prizes to 

incentivize advancement of emerging technologies, so I like to feel 

I was on the cutting-edge here in Congress on this issue. In 2007, 

I introduced the H–Prize Act along with a Republican colleague on 

this Committee, and that bill was incorporated into the Energy 

Independence and Security Act, which became law. And actually 

that originally was introduced in Congress before that in 2005. 

So that language that got incorporated into the bill authorized 

the Department of Energy to conduct prize challenges for the development of hydrogen as a transportation fuel. In 2010, I put language in the House NSF Reauthorization Bill giving prize competition authority to that agency. And the final version of COMPETES 

contained prize authority for all federal agencies. I am glad to 

know that in Fiscal Year 2012 several agencies conducted 27 prize 

competitions under this authority. I would also add that DOE is 
7 

taking another look at hydrogen energy, and I am hopeful that this 

will involve a new prize competition using these authorities to supplement the current work. 

With today’s budget climate, the federal government has to consider alternative financing tools for R&D funding outside of the established research grant paradigm in order to meet research goals. 

One benefit of prize challenges is that the prize is awarded only 

once the challenge has been met. This allows agencies to 

incentivize high-risk, high-reward research that generally constitutes a very small percentage of federally funded research. Prize 

competitions also attract participants who do not typically seek 

government grants or contracts. This brings in a diversity of ideas 

from people of different disciplines and educational backgrounds 

and levels. 

I would be interested in hearing from the witnesses about how 

their organizations encourage competitors to take advantage of this 

diversity and to learn from their peers. Also, I would be interested 

to hear how the witnesses reach out to students to encourage a culture of science learning through prize competitions. 

Fundamentally, the federal government supports scientific and 

technological breakthroughs with sustained investments in basic 

research. Prize competitions cannot replace our tried and true 

model for funding R&D but they can serve as another tool in the 

toolbox. I am looking forward to hearing from our witnesses what 

they have learned in designing and participating in competitions 

and how the federal government might further collaborate with 

these types of organizations so we can continue as leaders in innovation. 

I want to thank all of our witnesses for being here. I look forward 

to their testimony. 

Thank you, Mr. Chairman, and with that I yield back. 

[The prepared statement of Mr. Lipinski follows:] 

PREPARED STATEMENT OF SUBCOMMITTEE RANKING MINORITY MEMBER DAN LIPINSKI

Mr. Chairman, thank you for holding this hearing, and thank you to our witnesses for being here this morning. 

Prize challenges inspire and help spur technological advancement by tapping into 

the strength of American ingenuity, and both the public and private sectors are increasingly making use of this tool to accelerate innovation. Recent prize competitions have challenged inventors to build fuel efficient vehicles, develop technology 

to clean up oil spills, and to create algorithms for faster mobile applications. Prize 

competitions, including the famous 1927 Orteig Prize that spurred Charles Lindberg 

to make the first non-stop transatlantic flight, can be credited with producing breakthroughs in aviation, navigation, food preservation and many other advances in the 

modern world. 

For years, I have been a strong supporter of using prizes to incentivize advancement of emerging technologies. In 2007, I introduced the H-Prize Act along with a 

Republican colleague on this Committee and that bill was incorporated into the Energy Independence and Security Act which became law. My bill authorized the Department of Energy to conduct prize challenges for the development of hydrogen as 

a transportation fuel. In 2010 I put language in the House NSF reauthorization bill 

giving prize competition authority to that agency and the final version of the COMPETES Reauthorization contained prize authority for all federal agencies. I am glad 

to know that in fiscal year 2012 seven agencies conducted 27 prize competitions 

under this authority. I would also add that DOE is taking another look at hydrogen 

energy, and I am hopeful that this will involve a new prize competition using these 

authorities to supplement their current work. With today’s budget climate the Fed-
8 

eral Government has to consider alternative financing tools for R&D funding outside 

of the established research grant paradigm in order tomeet research goals. 

One benefit of prize challenges is that the prize is awarded only once a challenge 

has been met; this allows agencies to incentivize high-risk, high-reward research 

that generally constitutes only a very small percentage of federally funded research. 

Prize competitions also attract participantswho do not typically seek government 

grants or contracts. 

This brings in a diversity of ideas from people of different disciplines and educational backgrounds and levels. I would be interested in hearing from the witnesses 

about how their organizations encourage competitors to take advantage of this diversity and to learn from their peers. Also, I would be interested to hear how the 

witnesses reach out to students to encourage a culture of science learning through 

prize competitions. Fundamentally, the federal government supports scientific and 

technological breakthroughs with sustained investments in basic research. Prize 

competitions cannot replace our tried and true model for funding R&D, but they can 

serve as another tool in the toolbox. I am looking forward to hearing from our witnesses what they have learned in designing and participating incompetitions, and 

how the federal government might further collaborate with these types of organizations so that we can continue as leaders in innovation. 

I want to thank all of the witnesses for being here, and I look forward to their 

testimony. Thank you Mr. Chairman, I yield back. 

Chairman BUCSHON. Thank you, Mr. Lipinski. 

I now recognize the Chairman of the full Committee, the gentleman from Texas, Mr. Smith. 

Chairman SMITH. Thank you, Mr. Chairman. 

Scientific prizes have long played a role in advancing technology. 

They encourage creative thinking, spur innovation, and expand our 

economy. The Longitude Prize of 1714, offered by the British Government, resulted in the marine chronometer and drastically improved shipping safety. Napoleon Bonaparte’s 1800 Food Preservation Prize resulted in the development of canning food as we now 

know it. 

A top priority of the Science Committee is to encourage such innovation and technological advancements. To maintain our competitive advantage, we must continue to support fundamental research and development that encourages the creation and design of 

next generation technologies. But there are many other technological problems that could be solved by taking a different approach 

with the use of prizes. These include transforming kidney dialysis 

treatments, developing better surface oil cleanup technologies, and 

generating a potential cure for Alzheimer’s disease. Prizes also engage the brightest minds to solve a problem—scientists, entrepreneurs, inventors and yes, even teenagers. 

A great example of creative problem solving was illustrated recently when a 14-year-old student in Pennsylvania came up with 

a simple way to save the federal government hundreds of millions 

of dollars. He figured out that by changing the type of font used 

by government workers, the federal government could save more 

than $130 million each year. This great idea was the product of a 

science fair. 

Prizes also encourage individual incentive so the burden of risk, 

as well as the opportunity for success, is on the team or individual 

competitor. This will encourage more people to engage in high-risk, 

high-reward research. 

Federal science agencies have not fully utilized their prize competition authority to pursue breakthroughs in areas such as 

healthcare, advanced manufacturing, and agriculture. The FIRST 

Act improves federal science prize authority. It allows federal 
9 

science agencies to better partner with the private sector to maximize the value of every taxpayer dollar invested in research and 

development. 

In the words of one witness, Mr. Christopher Frangione, ‘‘Policymakers can continue this great progress in prize-based, public-private partnerships by supporting prize language such as that included in the FIRST Act.’’ 

Mr. Chairman, I do want to thank our witnesses for being here 

today. I want to thank them for their excellent written testimony, 

which I have seen, and apologize to them. I have to give a speech 

at 10:30 over in the Capitol so I am going to have to excuse myself. 

But let me just say in conclusion that I think there is much 

progress we can make in giving out these prizes. For instance, the 

National Science Foundation I think last year only awarded seven 

for $10,000 each. That is not really stepping up to the level that 

we would like to see them do, for example. 

And there are other ways that we can encourage individuals to 

participate and there are other ways that we can encourage government agencies to offer these prizes as well. They just do an immense amount of good. I remember in one instance—and I forget; 

maybe it had to do with the flying prize—where individuals actually spent 10 times more than the prize trying to get the prize just 

because it was sort of natural competitive instincts because of a desire to try to achieve a breakthrough and perhaps even be successful on the profit side as well. So prizes do a lot of good in a lot of 

ways. 

Thank you, Mr. Chairman, and I yield back. 

[The prepared statement of Mr. Smith follows:] 

PREPARED STATEMENT OF FULL COMMITTEEE CHAIRMAN LAMAR S. SMITH

Thank you, Chairman Bucshon, for holding today’s hearing. 

Scientific prizes have long played a role in advancing technology. They encourage 

creative thinking, spur innovation and expand our economy. 

The Longitude Prize of 1714, offered by the British government, resulted in the 

marine chronometer and drastically improved shipping safety. Napoleon Bonaparte’s 

1800 Food Preservation Prize resulted in the development of canning food as we 

now know it. 

A top priority of the Science Committee is to encourage such innovation and technological advancements. To maintain our competitive advantage, we must continue 

to support fundamental research and development that encourages the creation and 

design of next generation technologies. 

But there are many other technological problems that could be solved by taking 

a different approach with the use of prizes. These include transforming kidney dialysis treatments, developing better surface oil cleanup technologies, and generating 

a potential cure for Alzheimer’s disease. Prizes also engage the brightest minds to 

solve a problem-scientists, entrepreneurs, inventors and yes, even teenagers. 

A great example of creative problem solving was illustrated recently when a 14- 

year-old student in Pennsylvania came up with a simple way to save the federal 

government hundreds of millions of dollars. 

He figured out that by changing the type of font used by government workers the 

federal government could save more than $130 million each year. This great idea 

was the product of a science fair. 

Prizes also encourage individual incentive, so the burden of risk, as well as the 

opportunity for success, is on the team or individual competitor. This will encourage 

more people to engage in high-risk, high-reward research. 

Federal science agencies have not fully utilized their prize competition authority 

to pursue breakthroughs in areas such as health care, advanced manufacturing and 

agriculture. 
10 

The FIRST Act improves federal science prize authority. It allows federal science 

agencies to better partner with the private sector to maximize the value of every 

taxpayer dollar invested in research and development. 

In the words of one witness, Mr. Christopher Frangione, ‘‘Policymakers can continue this great progress in prize-based, public-private partnerships by supporting 

prize language such as that included in the FIRST Act.’’ 

I thank our witnesses for being here this morning and I look forward to their testimony. 

Chairman BUCSHON. Thank you, Mr. Chairman.I now recognize 

the Ranking Member of the full Committee, the gentlelady from 

Texas, Ms. Johnson. 

Ms. JOHNSON. Thank you very much and good morning. Thank 

you for holding this hearing to explore the use of prize competitions 

to spur innovation and technology breakthroughs. 

We are all very aware of the economic climate and budget constraints that the nation is facing. While tough choices have to be 

made, cuts to our federal R&D enterprise weakens the country’s 

ability to be a leader in innovation. Our competitors have the same 

tough budget choices to make, yet they are not just maintaining 

their R&D investments but doubling and tripling them. Though 

they are no substitute for the sustained investment and long-term 

national outlook that traditional federal R&D funds provide, prize 

competitions could play a more prominent role in how the government funds R&D than they have in the past. 

The broad federal prize authority granted to all federal agencies 

in the 2010 COMPETES reauthorization supports agencies’ increased use of prizes to incentivize more high-risk, high-reward research and reach out to a new audience of researchers and 

innovators across all areas of science and technology. NASA has established itself as a leader in public sector prize competition. In a 

survey of nearly 3,000 competitors for NASA prizes, 81 percent reported that they had never before responded to NASA or other government requests for proposals. 

And we ought to pull ahead of the competition. We must create 

opportunities for creative minds from all corners of our nation to 

make the next scientific or technological breakthrough. Prize competitions are yet another effective tool to tap into our Nation’s 

brain power. 

Two of our witnesses here today have spent years perfecting the 

design of prize competitions, and I am interested in learning how 

they develop specifications and parameters for challenges while 

still encouraging what may seem to be the pie-in-the-sky ideas. 

Henry Ford once said, ‘‘If I had asked people what they wanted, 

they would have said faster horses.’’ Finding the next Model T is 

critical to our Nation’s competitiveness, and I look forward to exploring how public-private collaborations and prize competitions 

might help. 

I thank our witnesses for being here, for their testimony, and 

thank you, Mr. Chairman. I yield back. 

[The prepared statement of Ms. Johnson follows:] 
11 

PREPARED STATEMENT OF FULL COMMITTEEE

RANKING MEMBER EDDIE BERNICE JOHNSON

Good morning, I would like to thank the Chairman for holding today’s hearing 

to explore the use of prize competitions to spur innovation and technology breakthroughs. 

We are all very aware of the economic climate and budget constraints that the 

nation is facing. While tough choices have to be made, cuts to our federal R&D enterprise weaken the country’s ability to be a leader in innovation. Our competitors 

have the same tough budget choices to make, yet they are not just maintaining their 

R&D investments, but doubling and tripling down. 

Though they are no substitute for the sustained investment and long-term national outlook that traditional federal R&D funding provides, prize competitions 

could play a more prominent role in how the government funds R&D than they have 

in the past. The broad federal prize authority granted to all federal agencies in the 

2010 COMPETES Reauthorization supports agencies’ increased use of prizes to 

incentivize more high-risk, high-reward research and reach out to a new audience 

of researchers and innovators across all areas of science and technology. 

NASA has established itself as a leader in public-sector prize competitions. In a 

survey of nearly 3,000 competitors for NASA prizes, 81% reported that they had 

never before responded to NASA or other government requests for proposals. If we 

are to pull ahead of the competition, we must create opportunities for creative 

minds from all corners of our nation to make the next scientific or technological 

breakthrough. Prize competitions are yet another effective tool to tapinto our nation’s brainpower. 

Two of our witnesses here today have spent years perfecting the design of prize 

competitions, and I am interested in learning how they develop specifications and 

parameters for challenges while still encouraging what may seem to be ‘‘pie-in-thesky’’ ideas. Henry Ford once said, ‘‘if I had asked people what they wanted, they 

would have said faster horses.’’ Finding the next Model T is critical for our nation’s 

competitiveness, and I look forward to exploring how publicprivatecollaborations in 

prize competitions might help. I thank our witnesses for their testimony. 

Thank you Mr. Chairman, I yield back. 

Chairman BUCSHON. Thank you, Ms. Johnson. 

If there are Members who wish to submit additional opening 

statements, your statements will be added to the record at this 

time. 

At this time I would like to introduce our witnesses. Our first 

witness today is Mr. Christopher Frangione, the Vice President of 

Prize Development at XPRIZE. In his role, Mr. Frangione works 

with all departments of XPRIZE, prize sponsors, and other prize 

stakeholders to develop prize strategy. Prior to joining XPRIZE, 

Mr. Frangione ran a market assessment practice at a boutique 

management consulting firm where he consulted to CEOs of major 

engineering companies on issues related to strategy. Mr. Frangione 

has leadership experience across the energy industry, including 

serving as Manager of Operations and Business Development at 

Green Mountain Energy Company. In that role, he managed a regional market and defined new business opportunities, policies, and 

strategies for the retail renewable energy company. Mr. Frangione 

received his bachelor of arts in environmental policy from Colby 

College and a master’s of business administration and a master’s 

of environmental management from Duke. 

Our second witness today is Mr. Donnie Wilson, Chairman and 

CEO of Elastec/American Marine, one of the largest manufacturers 

of pollution control products in the world, exporting equipment to 

over 100 countries. Mr. Wilson has over 20 years of experience in 

the design and production of oil spill products. Mr. Wilson has provided training and supervision to global clients for the collection 

and recovery of oil spills. Mr. Wilson served as the lead onsite burn 
12 

coordinator during the Deepwater Horizon oil spill in the Gulf of 

Mexico in 2010, supervising more than 400 offshore controlled 

burns. During the spill, there was a void in mechanical equipment 

to recover high volumes of oil, prompting the Wendy Schmidt Oil 

Cleanup X Challenge. Elastec/American Marine won with its patented groove disc skimmer winning the $1 million first-place prize 

out of 350 global entrants. Welcome. 

Our third witness today is Mr. Narinder Singh. As the President 

of the [topcoder] community and Chief Strategy Officer at Appirio, 

Mr. Singh is responsible for overseeing the company’s strategy, 

technology, and crowdsourcing initiatives. A co-founder of Appirio, 

Mr. Singh brings nearly 20 years of software and business experience and plays a role in keeping Appirio at the forefront of cloud, 

social, and mobile technology. Prior to joining Appirio—am I pronouncing that correctly—Mr. Singh worked in the office of the CEO 

as a part of a corporate strategy group. However, he began his career with Accenture at Center for Strategic Technology. Mr. Singh 

holds a bachelor of science from Northwestern University and an 

MBA from the Wharton School. He has won numerous awards for 

business and technology leadership, including the San Francisco 

Business Times 40 under 40 in 2013. 

And our final witness is Dr. Sharon Moe, President-elect of the 

American Society of Nephrology and a Stuart A. Kleit Professor of 

Medicine at the Indiana University School of Medicine. She is also 

a Division Director for Nephrology in the Department of Medicine 

at Indiana University School of Medicine and Section Chief for Nephrology at their Roudebush VA Medical Center. Dr. Moe is the 

principal investigator for several ongoing clinical and basic research studies in the field of vascular calcification and bone and 

mineral metabolism and kidney disease. Her research is funded by 

the Veterans Affairs Department, the National Institutes of 

Health, and pharmaceutical companies. She has authored over 140 

scientific manuscripts, teaching manuscripts, and textbook chapters. Dr. Moe received her medical degree from the University of 

Illinois College of Medicine in Chicago in 1989, as I did in 1984. 

She completed her internship and residency at the Department of 

Internal Medicine at Loyola University Medical Center in Maywood, Illinois. 

Thanks again for all our witnesses for being here this morning. 

It is a pleasure to have you. 

As our witnesses should know, spoken testimony is limited to 

five minutes each, after which the Members of the Committee will 

have five minutes each to ask questions. 

I now recognize Mr. Frangione for five minutes to present his 

testimony. 

TESTIMONY OF MR. CHRISTOPHER FRANGIONE, 

VICE PRESIDENT OF PRIZE DEVELOPMENT, XPRIZE 

Mr. FRANGIONE. Thank you. Thank you to the Committee, Ranking Members and Chairman, for the opportunity to testify today. 

And we welcome at XPRIZE the attention that the Committee is 

giving prizes as an economically efficient tool to incentivize innovation. 
13 

XPRIZE is a 501(c)(3) nonprofit organization founded in 1995 

and we are the global leader in prize competitions. Our mission is 

to bring about radical breakthroughs for the benefit of humanity 

and to inspire the formation of new industries and to revitalize broken industries or stuck industries. 

To date, we have awarded four prizes worth over $23 million, in- cluding our $10 million Ansari XPRIZE for suborbital spaceflight, 

and we have four active prizes worth over $44 million, including 

a handheld health diagnostic to diagnose 15 disease states and 

vital signs, the Qualcomm Tricorder XPRIZE. And in most of these 

competitions, we collaborated with the U.S. Government, whether 

it be in a financial mechanism or just in a partnership. 

As you have heard from everybody’s statements already, prizes 

are powerful tools for innovation. And, as Ranking Member Lipinski said, you know, the most important of which include leveraging 

your investment, democratizing innovation, and reducing risk. And 

if you look at leveraging your investment, you heard it up there 

earlier, but if you put out a $5 million grant, you are going to get 

$5 million worth of work. In a prize competition, the teams are 

spending their own money to compete, so if you put out a $5 million prize, you expect to get $20–50 million worth of work. In a 

time of fiscal constraint, this is a huge benefit. 

In terms of democratizing innovation, a prize does not care if 

somebody has had 20 years of experience or 20 days of experience 

as long as they can accomplish the goal you set out. And, most likely, you would have never given a grant or contract to these people 

that are competing for our competitions because 1) it would have 

been too risky for you; 2) you would have gone to your known solver community; 3) you would have never known they existed; and 

4) they didn’t know they were interested in competing. They didn’t 

know they had the expertise. 

And somebody brought up the question of high school students. 

We actually had a group of high school students in our Progressive 

Insurance Automotive XPRIZE and we have a group of high school 

students in that Qualcomm Tricorder XPRIZE, that handheld 

health diagnostic. 

And in terms of reducing risk, prizes are great in that they only 

pay the winner. So you put out a prize purse and these people are 

competing against each other to achieve that prize, so they are 

willing to take huge risks that really lead to disruptive innovations, 

risks that the people that you are going to give your normal grants 

or contracts to are not going to take because they don’t want to let 

you down and you don’t want them to take because you are on the 

hook for all the money. 

So we say at XPRIZE that the impact does not begin at the 

launch of the prize but at its award and that we want to make it 

extremely simple and rewarding for teams to compete. So we focus 

heavily on marketing and education. We focus heavily on recruiting 

teams and we focus heavily on supporting those teams so that they 

can all enter the marketplace at the end of the competition and be 

successful and change the world. 

In terms of private-public partnerships, we believe that they are 

the key to success in prize competitions. One example in one of our 

competitions in that Qualcomm Tricorder XPRIZE where we have 
14 

actually partnered with the FDA, and it is not a financial partnership. The FDA is assisting teams in preparing for future regulatory 

clearance for post-competition while the prize competition is actually helping the FDA maximize its own readiness for new regulatory submissions in the direct-to-consumer medical marketplace. 

And that is great. We also partnered with the Department of Energy in our Progressive Insurance Automotive XPRIZE. That was 

a financial partnership where they gave us $10 million to help support the competition. 

We believe that the private and public sectors must work together to utilize every tool available. As you heard up there, tools 

are not—prizes are not the solution; they are one tool in the innovation toolkit that complements the other tools we have. And understanding how and when prizes work will ensure that they are 

used most effectively and efficiently. 

The federal government, since 2010, not only under America 

COMPETES but more broadly, has launched 300 competitions 

through 55 agencies. And in 2012—or, excuse me, 2013, 25 agencies self-reported a total of 87 prizes, which is an 85 percent increase year-over-year. 

Congress can use policy as a driver for innovation by including 

language that you have in your current bill, supportive of prizes, 

and we believe that that language sends a strong signal to federal 

agencies and also the private sector that prizes are a good innovation tool. 

So we look forward to continuing the dialogue with the Committee and Congress as a whole about the power of prizes. Thank 

you. 

[The prepared statement of Mr. Frangione follows:] 
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Chairman BUCSHON. Thank you very much. 

I now recognize Mr. Wilson for five minutes for his—to present 

his testimony. 

TESTIMONY OF MR. DONNIE WILSON, 

FOUNDER AND CEO, 

ELASTEC AMERICAN MARINE 

Mr. WILSON. Thank you, Committee, for the opportunity to be 

here. 

As you can imagine, winning the $1 million XPRIZE makes us 

a leading fan of this competition. 

My company has been manufacturing oil spill equipment for 20 

years. We have been exporting globally to over 100 countries during that time. 

On April 20th, 2010, approximately 42 miles offshore of the 

Southwest Pass, the Deepwater Horizon drilling rig exploded, causing the worst oil spill in U.S. history. The Deepwater Horizon incident prompted the XPRIZE Foundation and Wendy Schmidt was 

invited to be involved in the oil spill recovery XPRIZE challenge. 

It was going to be a daunting task what they requested from industry to produce a skimmer that is capable of 2,500 gallons per 

minute recovery at 70 percent efficiency, three times the industry 

standard. So as we would all agree, XPRIZE always asks for audacious challenges. When we saw the challenge, we were not sure 

that we wanted to enter because it was much larger than any 

skimmer we had built. At that time it was 400 gallons a minute 

is our—was our current design. 

What was interesting for us in this challenge was not only the $1 million opportunity but to be able to prove that we could build 

the best skimmer in the world from the cornfields and oilfields of 

southern Illinois, 1,000 miles from the nearest coast. So I would 

agree that people that are not typically involved in such contests 

can be when you do it through competition. 

Three hundred and forty-nine teams from around the world took 

part in the challenge. Ten finalists from five nations were involved. 

This was done at the Ohmsett facility in New Jersey, which is 

funded by the government and a fantastic place. Anyone ever gets 

a chance to go, they should. It is cutting-edge and the only place 

in the world that this could be done. 

The Wendy Schmidt oil spill challenge brought together teams 

throughout the industry and were looking for new, fresh ideas. 

It is hard to describe the benefits of such a prize because of the 

competition and what it can do to encourage people to think outside the box. There were contestants from all over the world, some 

doing things from their garage in Alaska to very focused competitors from different countries. To date, we have—we are starting to 

commercialize this product and we have sold nearly $3 million 

worth of product in three different continents and we will be introducing versions of this X SKIMMER design in the coming months. 

This competition gave Elastec/American Marine the faith and financial incentive to develop a new technology to keep our world 

clean, and I am pleased to comment about that today. Thank you. 

[The prepared statement of Mr. Wilson follows:] 
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Chairman BUCSHON. Thank you very much. 

I now recognize Mr. Singh for five minutes to present his testimony. 

TESTIMONY OF MR. NARINDER SINGH, 

CO-FOUNDER AND CHIEF STRATEGY OFFICER, 

APPIRIO AND PRESIDENT, [TOPCODER] 

Mr. SINGH. Chairman, Ranking Members of the Subcommittee, 

Members of the Subcommittee, I thank you for the invitation to 

speak before you. 

My testimony here today will seek to expand even your view of 

prizes and show how we can act bigger by thinking smaller. 

In 2006, myself and three others formed Appirio. Today, we have 

over 900 people with headquarters in San Francisco and Indianapolis. We have received numerous awards on ‘‘Best Places to Work,’’ 

innovation awards. We were named the World Economic Forum 

Technology Pioneer in 2012. 

[topcoder] enables that. It is a community of over 620,000 designers, developers, and data scientists, and it is based on prizes. We 

use this community to crowdsource hundreds of projects for commercial companies across the world, including private sector organizations like Comcast and Ferguson. What we do is we break 

down large projects into smaller pieces and we use prizes against 

each of those and hold many competitions. As a result, we run 5 

to 10,000 competitive challenges each year. Our average prize 

amount for these challenges ranges from a few hundred to a few 

thousand dollars. 

For example, recently with [topcoder], Appirio helped the research organization of a large pharmaceutical company improve the 

performance of software that runs Genome Wide Association Studies, or GWAS. GWAS is an approach to rapidly scanning markers 

across complete set of DNA. We reduced the time it took for them 

to run this from 10 hours to less than 30 seconds. What is remarkable is that the core of this advancement was driven by a series 

of about a dozen contests with about only $50,000 in prizes. The 

firm plans to share this with the scientific community and it will 

completely change the way research is done with GWAS. 

In government, we have partnered with NASA and Harvard 

Business School to create the NASA Tournament Lab at HBS. This 

lab focuses on creating insights on the optimal design of contest 

and also how the federal government can be more effective in using 

them. So essentially not only do we have to achieve results but we 

have got a bunch of researchers from Harvard peering over our 

shoulders while we do it. 

So we have used this concept repeatedly of stringing together a 

series of smaller challenges to create some outstanding outcomes. 

So, for example, we used a set of challenges to reduce the time it 

took for NASA to optimize medical safety supplies on space excursions from 3 hours to 30 seconds. We have created a mobile application for International Space Station that will help astronauts 

manage their nutrition and health, and it was developed through 

a series of 18 challenges for less than $60,000 in prize money, and 

it is in final testing for spaceflight now. 
29 

We also just launched the NASA Asteroid Grand Challenge on 

[topcoder] with Harvard and Planetary Resources to improve the 

detection algorithms of detecting asteroids. It consists of a series of 

10 related challenges and we hope for a similar leap forward in accuracy of algorithms, and the total prize will be under $100,000. 

We have also worked with other government agencies through 

NASA’s Center of Excellence for Collaborative Innovation. One of 

the projects was for the Center of Medicare and Medicaid Services 

seeking to modernize the CMS infrastructure for the State of Minnesota so that healthcare providers could register more easily. This 

project spanned 11 months, had more than 140 challenges on 

[topcoder], and the total cost including labor was about $1.5 million. Research from Harvard Business School and the NASA Tournament Lab shows that done through traditional approaches, it 

would have been $7.5 million or nearly five times as much. 

I believe in large prizes and their capability to create entire markets by—proven by my colleagues from XPRIZE. But breaking 

problems down allows for giant leaps forward to occur inside of existing markets. And by breaking problems down, we can increase 

the power of prizes to be applied to a much wider set of activities. 

To do so, we do need more scalable rules for government. For example, it appears in the current language of FIRST that it would 

require private-sector judges to disclose their financials. For challenges to a few hundred to a few thousand dollars, this is an onerous burden, especially given that, for example, all of our reviews 

are publicly available and often evaluated by a computer program. 

More than anything I have said here today, the one thing I feel 

confident about is that the rate of change of advancement of technology will not slow down. 3–D printing, robotics, biotech, artificial 

intelligence, and even wearables, many other domains are just getting started. More than ever, we will need the ability to quickly 

and efficiently tap into the right skills instantaneously. 

So the nature of our economic system is built upon a free market 

and for a good reason. In most cases it is the most efficient way. 

Crowdsourcing taps into the power of the market, but also democratizes participation beyond a few select firms that can compete in 

large institutions and allows anybody to jump in and to try their 

hands. Crowdsourcing itself is an innovation, but in this context, 

even more importantly it allows you to keep pace with innovation. 

I want to thank the Committee for the opportunity to share my 

perspectives and would be happy to take any questions. 

[The prepared statement of Mr. Singh follows:] 
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Chairman BUCSHON. Thank you very much. 

I now recognize Dr. Moe for her testimony. 

TESTIMONY OF DR. SHARON MOE, PRESIDENT, 

AMERICAN SOCIETY OF NEPHROLOGY 

Dr. MOE. Chairman Bucshon, Congressman Lipinski, and Members of the Committee, my name is Dr. Sharon Moe and I am 

President of the American Society of Nephrologist, better known as 

ASN. I am a kidney doctor in Indianapolis, Indiana, and Professor 

of Medicine, Director of the Division of Nephrology at the Indiana 

University School of Medicine. I thank the Committee for calling 

this hearing to discuss the role of prize competitions in promoting 

innovation. We would like to put forth the innovation in dialysis as 

a worthy topic for a prize. 

With nearly 15,000 physicians, scientists, nurses, and other 

healthcare professionals, ASN leads the fight against kidney disease. Kidney disease is the 8th leading cause of death the United 

States. It is a silent killer that destroys lives and places a staggering burden on our society. Of the more than 20 million Americans with kidney disease, nearly 450,000 have progressed to complete kidney failure and rely on Medicare End-Stage Renal Disease 

Program for lifesaving dialysis. The ESRD program costs $35 billion annually and covers all Americans, regardless of age or disability. Despite this spending, kidney care has not advanced in the 

25 years that I have been practicing nephrology. ASN believes that 

a prize competition is an optimal way to promote innovation, reduce costs, and improve patient outcomes and quality of life. 

Dialysis keeps patients alive but it doesn’t come close to replacing normal kidney function. It does not return patients to full 

health or allow them to pursue full-time employment. Innovation 

has been stymied by a lack of competition among payers and a payment system that doesn’t support novel therapies. If Congress uses 

a prize competition to signal that it wants alternatives to currently 

available dialysis care, I believe the private sector will produce lifechanging, cost-saving alternatives to dialysis. 

I have a 48-year-old patient who epitomizes the need for innovation, 48. He survived cancer but damage from the radiation treatment caused kidney failure. He is on dialysis, still awaiting a kidney transplant despite three years on the list. He tried dialyzing 

at night so he could continue to work but was too sick to function. 

He had to quit work and go on disability. He recently told me, Doc, 

I just can’t take it anymore. I hate the needles. I hate feeling bad 

all the time. I can’t work. It seems like a transplant will never happen. I would like to stop dialysis. Will you be my doctor while I die? 

A 48-year-old went from working full-time to contemplating death 

over dialysis in just one year. That is because the few options available to him have not significantly advanced in the last 25 years. 

This reality is in stark contrast to dramatic therapeutic advances 

for other chronic diseases. We have developed insulin pumps that 

deliver accurate insulin doses, implantable defibrillators that shock 

the heart back to function, and robotic surgery to minimize hospital 

stays and pain after gallbladder and prostate surgery, just to name 

a few. 
38 

In contrast, dialysis machines have become smaller, computerized, and more portable so that some patients can dialyze at home. 

However, patients still endure getting stuck with two needles three 

times a week at minimum and their blood being filtered through 

for an average of 12 hours a week. 

We need breakthroughs, not incremental changes to old technology. A prize competition that helps harness the power of the private sector can spur the scientific and technological breakthroughs 

to deliver improved technology for kidney replacement therapy. The 

FIRST Act would help pave the way for such an incentive by providing the guidance that federal agencies need to make prize competitions a reality. We need to transform dialysis or prevent the 

need for it altogether. 

Prize competitions are a powerful lever, as you have heard, that 

would draw a diverse group of inventors, scientists, and investors 

to innovate and develop better alternatives. Such innovation would 

improve the lives of thousands of Americans on dialysis covered by 

the Medicare ESRD program and offer hope to the 20 million 

Americans facing the possibility of dialysis in the future. 

I appreciate the opportunity to testify and would welcome any 

questions. Thank you. 

[The prepared statement of Dr. Moe follows:] 
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Chairman BUCSHON. Thank you very much. 

At this time I would like to recognize the newest Member of the 

Subcommittee and the full Committee of Science, Space, and Technology, Mr. Johnson from Ohio. Welcome to the Committee and to 

the Subcommittee. 

Mr. JOHNSON. Well, Mr. Chairman, it is good to join. Science and 

technology is a passion of mine as a patent holder myself and an 

innovator, which is a long way from the mule farm that I grew up 

on, by the way, so I am excited about being here and I look forward 

to working with all of our colleagues to move things along. 

Chairman BUCSHON. Thank you. 

I would like to thank the witnesses for your testimony. It is fascinating testimony from all of you. 

Reminding Members that the Committee rules limit questioning 

to five minutes, and the Chair at this point will open the round of 

questions. I recognize myself for five minutes. 

Dr. Moe, more specifically, how does the legislative language in 

the FIRST Act advance and help scientific prize competitions do 

you think? 

Dr. MOE. I think there is a lot of interest in prize competitions, 

but as we have talked to committees and organizations, there is 

some confusion as to what their role is and how they can actually 

go about competing or being part of a prize competition. And so I 

think that will actually enable more associations such as our ASN 

to go together with Congressional offices, with Committees, with 

other Committees on the Hill to actually improve the ability to conduct a prize. 

I think a prize, particularly in our field, is important. A lot of 

these have not been in the healthcare field and I think that is really an important problem, particularly when we look at dialysis patients and the cost that is to society and the fact that we are not 

really bringing these people—we are not really advancing the technology that we can do in other areas of medicine and we have done 

in other areas of medicine. 

Chairman BUCSHON. Mr. Frangione, do you want to make some 

comments about that? 

Mr. FRANGIONE. Sure. I think the America COMPETES did a 

great job giving broad authority to agencies to do prizes, but every 

agency is interpreting it a little bit differently. 

Dr. MOE. Yes. 

Mr. FRANGIONE. And any clarification that can encourage agencies to use it in a more systematic way or a more universal way 

would be extremely helpful. 

And there are a couple of things that we think are important in 

a prize. If you throw a prize, just like if you throw a party, nobody 

is going to come unless you invite them, right? And so we actually 

actively go out and recruit teams. We go to conferences and we talk 

and we market and that really helps draw teams in. And I think 

that is an important thing for the agencies to understand. 

The other really important thing is supporting the teams during 

the competition. We don’t give them money to compete but we give 

them the support. We connect them with potential funders. We 

teach them how to do business plans because, as everybody knows, 

the best innovators aren’t necessarily the best business people and 
45 

we want every single team out there to be successful after the prize 

competition is over in that market. 

So the key is really ensuring that you support the competition 

as it is occurring, the teams, the marketing, the media, the education. Otherwise, you are going to have one or two people show 

up to compete and you are not going to get the results that a prize 

can bring you. 

Chairman BUCSHON. So what principles do you use to select the 

prize targets and find appropriate sponsors? And can you go over 

what some of the best practices to develop these public-private 

prize—— 

Mr. FRANGIONE. Sure. 

Chairman BUCSHON. —partnerships might be? 

Mr. FRANGIONE. Sure. So we—when we design a prize, we 

crowdsource our prizes, not from the general public but we end up 

interviewing anywhere from 50 to 150 experts. We spend six to 

nine months just designing a prize because once you launch it, you 

don’t really have the opportunity to change the rules, right, because the teams are spending their own money at that point in 

time. So we believe in really making sure you reach out to all potential stakeholder groups, including the potential competing teams 

to make sure you get those targets right. 

Somebody said earlier, you know, how do you put a big moonshot 

out there, a big, audacious goal and get the teams to compete, 

right? So you do that by understanding where the market is going 

in ten years and trying to make it go there in three years and you 

do it by supporting them. 

So I think the best practices that we see in designing is really 

understanding the true market failures. As a doctor, you know, you 

don’t—you want to cure the disease, not the symptoms, so you have 

to dig down. What are those market failures? Have a prize aligned 

with those market failures, make sure you are not presupposing a 

solution, and opening it up to the world. 

Chairman BUCSHON. Thank you. 

Mr. Wilson, what characteristics or key criteria for your winning 

your competition and what recommendations would you have to 

make competitors in the future—help them win competitions? I 

mean what were the—kind of the things that you all did to make 

yourselves successful in winning your competition? 

Mr. WILSON. Well, I would like to go back to an earlier comment 

that when we looked at the competition we wanted to know is it 

put together well. Our industry is rather niche so we might see 

something that would be very strange, you know, recovery rates or 

speeds or something that would sort of derail our opportunity. So 

putting the effort into establishing a good contest, knowing the details, getting experts involved would be very important to us so 

that we know we are putting our best foot forward in a contest. 

The other interesting part is when you do something this audacious, the general public is probably not going to believe you. If I 

just did this myself and could find somebody to actually publicize 

it, they would say, well, you guys are nuts. How did you do that? 

So when you have a contest, there is so much emphasis on the goal 

and the end result that everybody assumes that if you got there, 
46 

you certainly got there based on good performance. Those are characteristics that were important to us. 

Chairman BUCSHON. So people that—competing for prizes should 

look into the quality of the prize and whether the organization offering it has the ability to hold a good competition. That is the bottom line it sounds like. 

At this point I yield to Mr. Lipinski for five minutes. 

Mr. LIPINSKI. Thank you, Mr. Chairman. 

The first thing I want to ask, does anyone have any experience 

themselves or can anyone talk about what they have heard, what 

they have learned about any of the prize competitions that any 

agencies—federal agencies are doing? I was just wondering are 

there—is there anything that is not being done right now or you 

think should be done differently with the way these prize competitions have been done up to this point? Does anyone have any comments on that? 

Mr. FRANGIONE. So I can’t speak specifically about specific agencies or specific prizes. I think there is a couple key things that will 

make them be better, part of which was already talked about, marketing and media and recruiting teams. 

Mr. LIPINSKI. Um-hum. 

Mr. FRANGIONE. I think the other important thing is to not legislate a specific prize, right? You want to legislate the ability to do 

prizes and give them the tools—give the agencies the tools to do 

them in a consistent manner. But we want to make sure that we 

don’t legislate a specific prize because, as I said, designing it—and 

as Donnie also said, designing it is really important. So if it is legislated that it has to meet these goals, those goals may be totally 

wrong. 

And the other thing that is important for the agency is when 

they put out an RFP or an RFI to design a prize, they also have 

to recognize that they can’t put the goals in the RFP and say you 

have to meet these goals if you design this prize because you want 

to be able to throw out those goals that you want to find the right 

prize to design. 

So I think it is more—I think a lot of agencies are doing a really 

good job, NASA’s Centennial Challenges, DOE has done a great 

job. I think it is more just knowing what other tools fit within the 

prize tool that could help them be more successful. So nobody is 

doing a bad job; they are just not taking full advantage of the 

prizes. 

Mr. SINGH. Congressman, I would say there is a Yogi Berra 

quote that I like. It is ‘‘In theory there is no difference between theory and practice. In practice, there is.’’ And it kind of applies to 

how things tend to work. For example, we have been very effective 

with running challenges with certain agencies. However, a lot of 

times the overall preparation, some of the things that Chris was 

describing, require us to then sometimes get in a situation where 

we have to contract with the government in a normal way, right? 

And for us as a commercial organization, we don’t focus on government as a sector. We look at the challenge as a way of saying 

this is a more efficient mechanism of engaging with government. 

But if we then get pulled into the rest of the cost-plus world of how 

things work, our tendency is to say, you know what, let’s go look 
47 

for commercial customers or let’s find some third party to try to 

deal with government for us. And so we end up in a situation 

where unless we have got really great support from an agency that 

is willing to navigate all sorts of rules for us, that we will choose 

not to enter and engage in that area because of the friction of the 

engagement. 

Mr. LIPINSKI. Mr. Singh, you had talked about the—how you sort 

of—you separate bigger—you separate it into smaller pieces what 

you are trying to, you know, then pull together to come up with a 

solution to a problem. Is there—does the federal government—have 

you seen agencies doing that or could it be done better? 

Mr. SINGH. Yes. So the challenge I described with NASA that we 

just launched around detecting asteroids, like who doesn’t want to 

find asteroids? So that challenge is actually already broken down 

into 10 parts. And so the first three or four parts of that is to define the problem statement. We do kind of a test data set with the 

community so we make sure the problem is set up right. We break 

it down into certain components, and then the main event, so to 

speak, is like the sixth or seventh challenge along the way and 

then there is a refinement. 

So we have done that pattern with NASA and the NASA Tournament Lab at HBS quite successfully. And they have actually gotten to where they understand how to break those down as well or 

better than we do now. And so it is a matter of—I think it gives 

us more surface area. It is not a way of discovering a new industry 

but it is certainly a way of exponential leaps forward in existing 

problem areas. 

Mr. LIPINSKI. And are there areas that you think—Dr. Moe said 

that—you say you think this could be used better in healthcare. 

Are there areas that have not—other areas you think the federal 

government has not—federal agencies have not gotten into that 

they could use these prize competitions in? And are there areas 

that the federal government probably cannot serve a good role— 

that these prize competitions will not serve a good role in trying 

to solve? 

Mr. SINGH. That is to me. So I think a couple things. Right now, 

the federal government is using prizes .0000001 percent, so there 

is a certainly opportunity for expansion without a doubt. 

I think the key piece that I was saying is that I believe and what 

XPRIZE is doing with creating these large incentive pools. I think 

the micro challenges give you an opportunity to increase the surface area of the kinds of problems government can work on, so all 

of a sudden it is not just the exponential pieces but it is building 

applications, it is building things in order of magnitude cheaper or 

faster. And so it give you an opportunity to apply it in more places 

and I think that is a great complement. 

There are certainly areas where this will never work, particularly where the data is too sensitive or there is information where 

it is so difficult to break the problem down that you can’t do it. So 

there are limitations, but I think we are not even close to approaching those yet, so there is a lot of opportunity to expand and 

try this in other places. 

Mr. LIPINSKI. All right. Thank you very much. I yield back. 
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Chairman BUCSHON. Thank you. I now recognize Mr. Massie, 

five minutes. 

Mr. MASSIE. Thank you, Mr. Chairman. 

I have got questions—I am sure this is well thought out, but I 

have questions about how intellectual property interweaves with 

some of these XPRIZEs or prizes in general. So could you just give 

us a quick statement on that, Mr. Frangione, and then I have some 

questions specifically. 

Mr. FRANGIONE. Sure. So in an XPRIZE competition, because we 

believe the teams are competing for the market at the end of the 

day, they are not competing for that check, we don’t hold any of 

their IP, nor do our sponsors. And that is extremely important to 

us. First of all, we are 501(c)(3) nonprofit; we can’t do it. But also 

we would see fewer and fewer teams compete if that is the case. 

And that is an important thing for the government to understand 

because often the government likes to hold the IP. And so you 

should look at more innovative ways of licensing IP versus holding 

it or saying, you know what, this is a challenge that is important 

enough. You keep your IP. Because again, if you keep their IP, they 

are competing for a $10 million check and then you are not going 

to have as many competitors. They would rather compete for the 

multibillion-dollar market that is there at the end of the day. 

Mr. MASSIE. So that might explain why we are getting 4 or 10 

times as much—— 

Mr. FRANGIONE. Oh, absolutely. 

Mr. MASSIE. —investment because—— 

Mr. FRANGIONE. Absolutely. 

Mr. MASSIE. —all of the participants claim the right to their IP? 

Mr. FRANGIONE. Sure. Right. So we are building the market that 

then they get to go enter into. They are helping us build it, but together we are building it. 

Mr. MASSIE. So the prize just kind of puts them over the edge 

and sort of—it is not the straw that breaks the camel’s back but 

it is the last little incentive that causes them to go after it? 

Mr. FRANGIONE. Absolutely. 

Mr. MASSIE. So—but if there is a $10 million prize out there— 

and this is back to IP—so, for instance, a patent is not a right to 

do something; it is a right to exclude somebody from doing something. 

Mr. FRANGIONE. Um-hum. Um-hum. 

Mr. MASSIE. So to what extent can participants use in-house IP— 

which I assume that they could; I mean that would make sense— 

but if they are coming up with the XPRIZE, are they allowed to 

use other intellectual property from other portfolios? And do they 

have to license it as a condition of winning the prize—— 

Mr. FRANGIONE. So—— 

Mr. MASSIE. —or to win the prize? 

Mr. FRANGIONE. So every team competing is its own company so 

they have to follow whatever rules any company has to follow to 

license technology or to build a new technology or to get a patent 

or license the patent, right? So that all sort of takes care of itself. 

We—you know, we make sure that our competitors follow all normal business rules, follow—you know, we can take competitors 

from around the world but we can’t take any competitors that the 
49 

United States has sanctions against, right? So it is the same idea, 

right? They have to follow all their applicable business laws where 

they are located and where we are located. 

Mr. MASSIE. But if they are going to use somebody else’s goose 

that lays golden eggs, they have to license it? 

Mr. FRANGIONE. Absolutely. Absolutely. And we see, interestingly 

enough, prizes are about competition but we see a lot of collaboration. In our Google Lunar, our $30 million XPRIZE to land a lunar 

on the Moon, the teams are all merging, right, because they will 

say, oh, you have this technology and I don’t have that so let’s 

merge and compete as one team. And you see people jumping from 

other teams. So it is a really great model to not only get competition but—— 

Mr. MASSIE. It sounds like a great model, but as we start to understand it in Congress—— 

Mr. FRANGIONE. Yeah. 

Mr. MASSIE. —and propose it as a—you know, the prize incentive 

as a way to direct research and to spend taxpayer dollars—— 

Mr. FRANGIONE. Right. 

Mr. MASSIE. —ultimately, I am worried that the public won’t appreciate that, that we are paying for somebody—giving them a 

prize and then the taxpayer doesn’t necessarily hold rights to the 

intellectual property and the intellectual property is not public domain, although—— 

Mr. FRANGIONE. Right. 

Mr. MASSIE. —I wouldn’t argue—— 

Mr. FRANGIONE. Yes. 

Mr. MASSIE. —that making it public domain is actually a good 

way to have it promoted. I think it is quite the opposite. But—— 

Mr. FRANGIONE. So you can—like I said, you can hold the IP, you 

can do most-favored nation pricing, you can do licensing. There are 

lots of ways you can get around that. We actually have a competition we are probably going to launch this year that the solutions 

are open source because we believe it is as important to the world. 

And the teams know going in that their solutions are going to be 

open source at the end. Great. So I think you shouldn’t let that get 

in the way of encouraging agencies to use it because there is such 

a broad spectrum of what they can do with that IP and that licensing and you just have to find that sweet spot to maximize the number of competitors while also maximizing the benefit to the U.S. 

taxpayer. 

Mr. MASSIE. Right. Because if there is no intellectual property 

protection, they are going to have a hard time getting the dollars 

to back the idea. 

Mr. FRANGIONE. Exactly. 

Mr. MASSIE. Final question for anybody that wants to answer, 

are there any problems that our federal government faces where 

you say, gee, they need to do a prize there and they could—we 

could solve that? Yes, Dr. Moe. 

Dr. MOE. Clearly, kidney disease is a major burden and—— 

Mr. MASSIE. Okay. 

Dr. MOE. —the key is is that dialysis—I mean you could break 

it down. You could do so many different prizes. You can do an 

implantable kidney. You could even just take the current dialysis 
50 

procedure where you have needles going into an access that often 

fails, you have water system problems, you have hydrodynamics, 

you have filters, so you have membranes that need experiments, 

you could add cells to those membranes. And here, yet, we have 

done nothing in 25 years. We are still putting needles in, taking 

blood out, running it through a filter. I mean we have to do something like that and it is a perfect, perfect item. We are there from 

technology, we are there from the science level, we understand the 

kidney. Anything can be better than what we are doing now. 

Mr. MASSIE. I will put that on my list. My time is expired but 

I would love to hear the other answers to that question. 

Chairman BUCSHON. Yeah. That is true. I have taken care of 

many, many end-stage renal patients and they—no one knew in 

the 1970s when they first developed dialysis that it would—it was 

only supposed to be for a few people, right? Nobody knew that the 

technology would advance and suddenly that is why people are all 

on the Medicare program because it was so expensive but nobody 

knew it would explode into what it is today—at such a big cost to 

the government and to the patients. 

With that, I recognize Ms. Kelly, five minutes. 

Ms. KELLY. Thank you, Mr. Chair, and welcome. 

Mr. Frangione and Mr. Singh, engagement in STEM education is 

critical for the future competitiveness of our Nation. Many experts 

have testified before this committee and said that success in the 

STEM fields must start at an early age and be seen as something 

achievable for all students. How have or might your organizations 

use prize competitions as a tool to promote STEM education and 

to engage diverse groups of students in STEM? 

Mr. SINGH. Thank you, Congressman, for the question. 

So obviously for us it is the supply chain of our future, right, not 

just as a country, as a company overall. And so a few things that 

we do to promote growth overall that we are looking to extend into 

the areas that we run challenges for free on a weekly basis that 

draw 2 or 3,000 competitors. They take about 90 minutes. There 

are some code challenges. And they compete for readings and they 

compete for learning. Like people are trying to get better. So these 

are not for paid prizes but we invest in creating these so they are 

like applied challenges. 

So one of the things that we have done is we have run those in 

special ways for high school or college competitions as well. Later 

this year we will be making it self-service so any high school or college computer science teacher can go and say, hey, let me run my 

own virtual competition against our databank of 2,000 problems 

that have been accumulated over the past dozen years. So that is 

some of the things that we will go through and do. That really addresses though the, I would say, post-‘‘I have learned to code,’’ for 

example, stage. We are not—that we are not any further out. But 

it is really effective. 

I was at a high school technology conference called TechOlympics 

in Cincinnati. It is one of the largest high school competitions in 

the country, and we ran a mini [topcoder] tournament for the kids 

there. And it was exciting to see the winners and the like, and one 

of the things that really struck me with the computer science 

teacher is he was like, you know, we have to teach for a certain 
51 

band and this is an area that has so much spectrum of beginner 

to advanced that no curriculum in my school can cover all my students. So this is such a great opportunity for me to really be able 

to shuffle those people who got a spark or interest in it to be able 

to give them a way of learning and finding an outlet for their creativity regardless of how old they are or where they sit. 

So those are some of the things that we are looking at. I think 

there is a lot more that we could do. One of the particular pieces 

for us is girls in STEM. Last year, we did a poster design contest 

for how to encourage girls in STEM at a young age. I think that 

is an area that we would like to invest and do more in in the future. 

Ms. KELLY. Thank you. 

Mr. FRANGIONE. And so at XPRIZE we are trying to create the 

next Apollo moment, right? And hopefully that in amongst itself is 

going to excite kids into STEM education. But we recognize that is 

not, right, so we have these giant competitions out there to get us 

to the next Apollo moment but we spend a lot of time and effort 

getting kids involved either through smaller competitions like 

FIRST Robotics or other competitions that we support. We do a lot 

of documentaries. We just created a dome show for planetariums 

focused on the Moon and our Google Lunar XPRIZE. 

So our goal is to get kids really excited at a very young age, getting them in smaller competitions that they can then, you know, 

compete on, and we—but what we are realizing is—and it is great. 

We used to have these smaller competitions, and we still do, but 

we now have high school teams competing for our $10 million competitions. So it is almost like, okay, I guess we are going to go to 

13-month-olds, right, with our stuff because the eighth graders are 

going to start competing for our competitions next. So we focus a 

lot on the STEM education and we really want to get people excited 

and kids excited about science because they are our future and we 

need them to be excited. 

Ms. KELLY. Thank you so much. I don’t know if Mr. Wilson or 

Dr. Moe have a comment. 

Dr. MOE. Yeah. I think one of the things to keep in mind, too, 

is that we have shortages of various types of physicians in the 

country, and particularly nephrology is facing a true workforce 

challenge, lack of interest in our field. And kids today are very 

technological, far more than I certainly was going through medical 

school. I wanted the physiology. Kids today want to apply that 

physiology to technology, and I think that is where prize competitions to get those integrated is really important. 

We offer a course for first-year medical student at Mount Desert 

Island to go through physiology and I would love to add a little bit 

of technology to that where we can—here, here is what the kidney 

does. What if you could create a chip that actually puts these 

pieces together? And people are doing that. People are actually 

working on the kidney on a chip. 

Ms. KELLY. I don’t know if you have any comments. 

Thank you. I yield back. 

Chairman BUCSHON. Thank you. 

I recognize Mr. Johnson from Ohio, five minutes. 
52 

Mr. JOHNSON. Thank you, Mr. Chairman. And by the way, I have 

got young grandchildren. I have got a 13-month-old that is already 

using an iPad, so there might be some value in that. I don’t know. 

For all of you, though, in light of ongoing budget pressure and 

our current state of fiscal austerity, how can prize competitions 

conducted by the private and public sectors serve as an efficient 

and effective tool for spurring innovative solutions to advance hightech industries? Now, I know this is kind of a 30,000 foot view, but 

for my first entry at the Committee, I want to understand—I want 

to get your perspective on that. I think it is important but I want 

to hear why you think it is important. 

Mr. FRANGIONE. Sure. So the key to prize competitions, as you 

heard briefly, is that they push all the risk onto the teams so you 

can use a small amount of money—a small amount of government 

money—and you have to support them, right. There are operating 

costs. You can use a small amount of money to push the risk onto 

the teams so that these folks are developing technologies and solutions to achieve your goal. 

And in doing so, those teams are spending significantly more 

than that prize purse. The example I gave in my testimony is you 

could give out a $5 million grant and get $5 million worth of work 

or you can put out a $5 million prize and we see in our prize competition anywhere from 4 to 10 times leverage. So you are going to 

get $20–50 million worth of work. When you are talking about fiscal constraint, that is amazing. 

If you look back over history, the Lindbergh prize was a $25,000 

prize and all the teams spent $400,000. And our Ansari XPRIZE, 

the $10 million prize, there are 27 teams from—or 26 teams from 

seven nations, spent over $100 million. And the winning team actually spent $26 million to win $10 million. We don’t see that a lot 

but we do see that big number a lot. So they are great tools specifically for that reason. 

Mr. JOHNSON. Okay. Any of the rest of you? Dr. Moe. 

Dr. MOE. Sorry. For healthcare in particular and for dialysis, because of the way the reimbursement system is set up, there is— 

it is not a disincentive but there isn’t an incentive to actually do 

innovation. And I think by having a prize, that kind of goes outside 

of the main reimbursement system, outside of the main way that 

we do business actually is a way to jumpstart that. In particular, 

I mean a dialysis patient—dialysis itself is very, very expensive but 

these patients are sick, they are hospitalized, they are on over 30 

pills a day, they are on Medicare Part D. They also require surgeries and so their cost is beyond just the procedure. And so even 

if we can fix one of those problems with a prize, we can actually 

impact long-term cost to the government with a minor investment 

compared to the $35 billion we spent annually. 

Mr. JOHNSON. Sure. Mr. Singh, you have a comment? 

Mr. SINGH. I was going to say I think it works because markets 

work. And what we have shown the last dozen years because of 

technology is it went from where you had done something to do 

something to where you need access. And so, for example, if you 

are fans of hotels or car services, Uber and Airbnb are companies 

that have hundreds of thousands of units of capacity that they 
53 

don’t own, but because of technology, they allow you to get to. And 

what this created is the opportunity for leverage. 

And so today what one person, what 10 people can do is tremendously transformed because of what technology has done. And with 

prizes, you allow that supply and demand of talent to find each 

other and you get the opportunity for the market to work in an 

even broader way. And so I think that applies to every industry. 

Mr. JOHNSON. What about on an efficiency spectrum? You know, 

we talk about the need for empowering American workers and 

American businesses to compete on a level playing field. Competition demands that companies are effective, that they are efficient 

in their operations. How do you think these science prizes like this 

sponsored by the federal government, does that encourage marketplace efficiency? 

Mr. SINGH. I mean from my perspective, absolutely, right? I 

mean I think there is obviously the two edges to that equation, 

right? It requires investment in kind of core skills. We talked about 

STEM. We have to have the raw materials that enable us to be the 

most efficient in those areas, but absolutely, it is actually ruthlessly efficient, right? It works and rewards the best outcome, and 

that is something that in general can save a lot of money but also 

requires that we arm ourselves with the right tools to be able to 

participate in that kind of marketplace. 

Mr. JOHNSON. Again, all of you, do you think we have too many 

of these federally funded science prize programs, too few? I think 

I know what your answer is but—— 

Dr. MOE. Few. 

Mr. JOHNSON. Okay. Mr. Chairman, I yield back three seconds. 

Chairman BUCSHON. Thank you for that extra time. 

I now recognize Mr. Kilmer for five minutes. 

Mr. KILMER. Thank you, Mr. Chairman. 

First of all, thank you all for being here. I think this is—has a 

huge upside, a tremendous opportunity to drive innovation and to 

appeal to talented people to come up with good solutions. 

I will throw in just in response to Mr. Massie’s question. I know 

we have been speaking with the XPRIZE folks and others about 

looking at using that—this model and working with NOAA to provide a prize competition around addressing the ocean acidification, 

which in my neck of the woods is a very big deal that affects our 

shellfish industry and others, sort of similar to the one Wendy 

Schmidt XPRIZE ocean health prize competition. 

A lot of the questions that I had have been asked. I guess I am 

curious just from a public policy standpoint if you can provide some 

direction to us. You know, it seems like the role for Congress kind 

of could fit a few areas. 1) you know, in terms of funding, kind of 

be encouraging, authorizing, appropriating for the purposes of 

prizes; 2) trying to establish some method of coordination as agencies are sort of contemplating doing prizes, have some sort of coordinating mechanism to make sure that it is done right and that 

they are not sort of reinventing the wheel when each agency contemplates this; and then 3) there is, you know, obviously sort of directing it. You know, go do a prize on this or that or, you know, 

ocean acidification or something else. 
54 

Am I missing anything big? And then as you look at those sorts 

of levers, any advice if I airdropped you into Congress as to how 

best to approach those ways of engaging? 

Mr. FRANGIONE. Sure. So I will take that and then I will pass 

it off. 

And funding is great. We always like more funding to the agencies to do prizes and helping to clarify what they can do and what 

they can’t do and how they can do it. So, for example, I mentioned 

earlier we really believe you need to support the teams and you 

need to market and educate the public and the world and the 

teams. And so giving them that ability to use every element of a 

prize to make that prize most effective is extremely helpful. 

We also are in favor of directing to certain areas. We are not in 

favor of legislating specific metrics of prizes. That is when you get 

into big trouble because you end up possibly picking metrics that 

aren’t the best metrics. 

As Donnie said earlier, you know, he really looked at the metrics 

of the competition to see if it was worthwhile. And there is an art 

and science to prize design and you need to allow the agencies and 

the public and private sector partners to design that in the appropriate manner. 

So I think you have got them all. I would just caution on how 

you direct the types of prizes. 

Mr. KILMER. Thank you. 

Mr. FRANGIONE. Um-hum. 

Mr. SINGH. So I don’t—I am not a public policy expert but I will 

act like the government is a really big company, which I do know 

how to deal with, okay. And so what we tell really big companies 

is we say, look, you need to create some centers of excellence that 

allow for skills to be there but you don’t want to throttle all work 

through that because—— 

Mr. KILMER. Yeah. 

Mr. SINGH. —even big companies are too big for things to go 

through one central location. So centers of excellence that allow 

you to cluster experience and knowledge sharing are important but 

you certainly don’t want to throttle things through that. 

The other piece that we sometimes give advice to large companies is create incentives for people who do things well, right? So if 

agency—and this—in your context, if agency X does something well 

that receives an exponential return, well, guess what? You get to 

do more of that. And so what that does is it creates the incentive 

and behavior where somebody says, oh, it spreads around. We did 

something; it receives this return. That led to this positive outcome. And now I want to go to the center of excellence and learn. 

So if that process is emulatable in the government context, that is 

a something that has worked for large organizations looking to absorb new innovations. 

Dr. MOE. I think one of the things that can be done is to identify 

really problem areas. Obviously dialysis is one of those. But I think 

within those agencies, as part of the ASN, go and talk to individuals within CMS, for example, there is recognition that there is not 

enough innovation. There is recognition that the current payment 

structure is for the purpose of containing cost but doesn’t do anything to reduce cost and improve innovation. 
55 

So within those agencies, there is recognition of the need for 

something new and different, and by, you know, doing a prize within your various offices of who can come up with the best idea for 

a prize competition or best needed area would be a way to spur 

people to think about it. I think that is the important thing is to 

somehow encourage offices to think about a prize. 

Mr. KILMER. Thank you. And to give 10 more seconds, I yield 

back. Thank you. I did better than three. 

Chairman BUCSHON. There you go. 

I recognize Mr. Hultgren for five minutes. 

Mr. HULTGREN. Thank you, Mr. Chairman. Thank you all for 

being here. This really is a crucial hearing for this Subcommittee 

as we continue to ensure federal government is playing a smart 

role in advancing innovation and breakthrough discoveries that I 

believe will dramatically change our world and make it a better 

world to live in. 

Prizes are an important mechanism where private sector partners such as yours certainly can have a dramatic effect. I also believe the federal government should be learning best practices from 

you as the administrators have approached prizes in a very different manner, having more numerous but smaller prizes that 

often serve mainly PR purposes. It is also important they understand how prizes work together with our greater federal R&D enterprise, and they both play crucial roles in a symbiotic relationship. 

Mr. Frangione, is that it? Sorry. Frangione. Is your written testimony—in your written testimony you touched on the multiplier effect these prizes have on R&D. Teams, I think you stated, spend 

4 to 10 times the value of the prize in aggregate. Why do you think 

XPRIZE has been successful in getting people to spend more than 

a prize purse to win the prize? Is it simply the prestige of winning 

the prize? Also, how do you build prize branding so that there is 

prestige in winning your prize and thereby attract a diverse group 

of participants? 

Mr. FRANGIONE. So there are a lot of reasons teams compete for 

our prizes. One is the prize purse obviously. Two is the 

legitimization of an industry. Nobody believed that private companies could put a plane in space. Only government could do that. 

And our prize legitimized that. And as Donnie said earlier, one of 

the other things is you can first go out there and you can market 

your result and say I have done this but nobody believes it because 

your company is marketing it. When you go through a prize competition, the prize has all these different stages whether it is independent third-party verified data that they can now use to make 

the products better and to go out and sell their product. 

Another real reason teams compete is for the competition resources. When we used Ohmsett where the oil spill cleanup 

XCHALLENGE was held, that cost us $1 million to rent the facility 

and $1 million in donated oil. We had 10 finalist teams so it is 

$200,000 per team and it was on a U.S. Navy base so you wouldn’t 

have been able to use it anyway. So they got to test at an independent third-party verified testing center because of the competition. So the key is and the reason we are successful is that we provide lots of reasons for the team to compete that is not about that 
56 

check. Once it is about that check, you are not going to get a lot 

of teams competing. So you have to make it rewarding and simple 

for them to compete. You have to make sure that they are all heroes so that they all compete for that end market at the end of the 

day. Once you limit it to a $10 million check, nobody is going to 

compete. Well, you will have a few but not a lot. 

Mr. HULTGREN. Do you think it is more difficult for the government to build similar branding when we have so many different 

and smaller prizes? 

Mr. FRANGIONE. I do not. I think the government can do a great 

job in this and many have. NASA’s Centennial Challenges are 

doing great. USAID is investigating prizes and doing a fantastic 

job. I think the key is that you have to pull all these other levers 

in the prize—the marketing, the media, the competition resources—and make them rewarding for teams to compete. 

I think people would be excited to compete for a government 

prize, right? I mean XPRIZE is a great brand but I actually think 

it would be cooler to compete for a NASA prize. People at home will 

kill me for saying that but, you know, it is—NASA holds so much 

more stature than we do, right? So I think the government’s brands 

that they have—USAID, NASA, DOE—are big enough amongst 

themselves and I do encourage them to do much larger prizes than 

they are currently doing. 

Mr. HULTGREN. I don’t know if you want to put the Congress 

brand on—I don’t know how that would go over. 

Let me touch on again the multiplier effect these prizes have. I 

wonder if you could give the Committee any examples of companies 

that competed for prizes, did not win, but still started successful 

businesses from their work. In your testimony you spoke about 

‘‘disruptive innovation’’ and ‘‘democratizing innovation.’’ How does 

your process give previously overlooked teams both the experience 

and exposure they need to then enact a workable business model 

and attract private capital? 

Mr. FRANGIONE. Sure. So for us we have lots of examples of—and 

I can’t give you specifics just because I don’t know them off the top 

of my head, but we have lots of examples of teams going out and 

competing. We just have so many teams it is hard to keep track. 

For example, on our oil spill technology prize, we had a team that 

was a tattoo artist and they came in seventh place. They didn’t win 

any money but they still did better than industry standard at the 

time on one of the metrics and they are out there competing in the 

marketplace. Unfortunately, I don’t know how successful they are. 

Maybe Donnie knows how successful they are now. But still, they 

would have never competed. They didn’t even have an interest in 

the industry until the prize existed. 

So the key is that you don’t know who the solver community is 

until you launch the prize, and that is why they are so much better 

than a traditional grant or contract in certain places. Basic research where there is no end market, prizes don’t work. You need 

that end market. But in certain places where there is a big end 

market, prizes work really well. 

Mr. HULTGREN. Well, thank you all very much. I guess I have 

only three seconds that I can yield back like my colleague from 

Ohio. So I yield back, Chairman. 
57 

Chairman BUCSHON. Thank you very much. 

At this point I would like to thank all the witnesses. This is a 

very fascinating hearing. I thank you for your valuable testimony 

and the Members for questions. The record will remain open for 

two weeks for additional comments and written questions from 

Members. 

The witnesses are excused and the hearing is adjourned. Thank 

you very much. 

[Whereupon, at 11:19 a.m., the Subcommittee was adjourned.] 

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