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72–379PDF 2012

A REVIEW OF THE 

ADVANCED RESEARCH PROJECTS 

AGENCY—ENERGY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON INVESTIGATIONS AND 

OVERSIGHT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

TUESDAY, JANUARY 24, 2012 

Serial No. 112–57 

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. RALPH M. HALL, Texas, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

SANDY ADAMS, Florida 

BENJAMIN QUAYLE, Arizona 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

EDDIE BERNICE JOHNSON, Texas 

JERRY F. COSTELLO, Illinois 

LYNN C. WOOLSEY, California 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

DANIEL LIPINSKI, Illinois 

GABRIELLE GIFFORDS, Arizona 

DONNA F. EDWARDS, Maryland 

MARCIA L. FUDGE, Ohio 

BEN R. LUJA ́ N, New Mexicoo 

PAUL D. TONKO, New York 

JERRY MCNERNEY, California 

JOHN P. SARBANES, Maryland 

TERRI A. SEWELL, Alabama 

FREDERICA S. WILSON, Florida 

HANSEN CLARKE, Michigan 

VACANCY 

SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT

HON. PAUL C. BROUN, Georgia, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

SANDY ADAMS, Florida 

RANDY HULTGREN, Illinois 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

RALPH M. HALL, Texas 

DONNA F. EDWARDS, Maryland 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

JERRY MCNERNEY, California 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

Wednesday, April 13, 2011 

Page 

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

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

Opening Statements 

Statement by Representative Paul C. Broun, Chairman, Subcommittee on 

Investigations and Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives ...............................................................

Written Statement ............................................................................................

Statement by Representative Donna F. Edwards, Ranking Minority Member, 

Subcommittee on Investigations and Oversight, Committee on Science, 

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

Written Statement ............................................................................................

Witnesses: 

Dr. Arun Majumdar, Director, Advanced Research Projects Agency—Energy, 

U.S. Department of Energy 

Oral Statement .................................................................................................

Written Statement ............................................................................................

Hon. Gregory Friedman, Inspector General, U.S. Department of Energy 

Oral Statement .................................................................................................

Written Statement ............................................................................................

Frank Rusco, Director, Energy and Science Issues, U.S. Government Accountability Office 

Oral Statement .................................................................................................

Written Statement ............................................................................................

Discussion 

Appendix: Answers to Post-Hearing Questions 

Dr. Arun Majumdar, Director, Advanced Research Projects Agency—Energy, 

U.S. Department of Energy; ................................................................................

Hon. Gregory Friedman, Inspector General, U.S. Department of Energy ..........

Frank Rusco, Director, Energy and Science Issues, U.S. Government Accountability Office .........................................................................................................

(1) 

A REVIEW OF THE ADVANCED RESEARCH 

PROJECTS AGENCY—ENERGY 

TUESDAY, JANUARY 24, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT, 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 2:04 p.m., in Room 

2318 of the Rayburn House Office Building, Hon. Paul Broun 

[Chairman of the Subcommittee] presiding. 
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Chairman BROUN. The Subcommittee on Investigations & Oversight will come to order. I will try not to break this desk like my 

predecessor Chairman did. 

Good afternoon, everyone, to today’s hearing titled, ‘‘A Review of 

the Advanced Research Projects Agency—Energy,’’ ARPA–E. You 

will find in front of you packets containing our witness panel’s 

written testimony, biographies and their truth in testimony disclosures. I want to welcome everyone here, and I particularly want to 

welcome our witnesses here today. 

Now I will recognize myself for five minutes for an opening statement. 

The Advanced Research Projects Agency—Energy, or ARPA–E, 

was created in 2007 by the America COMPETES Act but not funded until 2009 with the passage of the American Recovery and Reinvestment Act. ARPA–E was directed to foster high-risk, high-reward energy technologies too risky for the private investment. In 

general, the statute calls for these technologies to be focused on reducing energy imports and emissions while improving energy efficiency. 

The Agency is directed to accomplish these goals by doing the following: identifying and promoting revolutionary advances in fundamental sciences; secondly, translating scientific discoveries and cutting edge inventions into technological innovations; and thirdly, accelerating transformational advances in areas that industry by 

itself is not likely to undertake because of the technical and financial uncertainty. 

These principles and goals are generally well-supported on both 

sides of the aisle here in Congress, and for good reason. If the Federal Government is going to fund energy research, it should not duplicate or crowd out private-sector investment. It should focus on 

revolutionary breakthroughs that will transform our energy infrastructure. 

Despite this support, this Committee did raise a number of concerns when ARPA–E was proposed. Specifically, the Committee 

was concerned with how the creation of a new agency would affect 

the world-class research supported by DOE’s Office of Science. Historically, DOE’s Office of Science has been the home of basic energy 

research, and their efforts have focused on high-risk, high-reward 

basic research for decades. The Committee was concerned that 

ARPA–E would compete with the Office of Science for scarce resources, thereby undermining basic research. 

Similarly, the Committee was also concerned that ARPA–E could 

unnecessarily duplicate DOE’s significant related work in other 

programs and areas scattered throughout the department. 

Finally, the Committee was concerned ARPA–E would focus on 

late-stage technology development and commercialization efforts 

that are better left for the private sector to undertake, thereby accepting both the risk and the potentially great reward. Such interventions could eventually crowd out private investment and get the 

government into the business of picking winners and losers among 

competing companies and technologies rather than letting the marketplace make these decisions. 

Today’s hearing allows the Committee to evaluate whether those 

concerns have been addressed. With respect to the impact ARPA– 
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E is having on the Office of Science, we saw a 53 percent increase 

in ARPA–E’s budget in the 2012 fiscal year, while the Office of 

Science received only a 0.6 percent increase. In the prior fiscal 

year, ARPA–E’s budget increased by 260 percent, while the Office 

of Science budget decreased six percent. Apparently our concern 

was well-founded. 

We also have some initial data regarding duplication with 

private- and public-sector funding, and based on work undertaken 

by GAO and Committee staff, the record appears mixed. Of the 44 

small- and medium-sized companies that received an ARPA–E 

award, GAO found that 18 had previously received private-sector 

investment for a similar technology. Committee staff were able to 

identify five additional companies that received private sector funding prior to their ARPA–E award. 

Similarly, a review of GAO work papers and publicly available 

information indicates numerous instances of overlap and duplication between ARPA–E and both public- and private-sector funding. 

For example, GAO found that 12 of the 18 companies it identified 

as having received private sector-funding prior to their ARPA–E 

award planned to use ARPA–E funding to either advance or accelerate prior funded work. One eventual ARPA–E awardee stated in 

its application that their ‘‘original projections planned on prototype 

demonstration and subsequent first-market adopter sales in late 

2012 or early 2013. The ARPA–E award coupled with another $1 

million in venture financing as part of our cost share allows us to 

accelerate our development schedule to 2011 instead.’’ Just brought 

it a year or possibly two sooner. 

These and numerous other examples that are detailed in a majority staff report that I have attached to my opening statement 

raise a fundamental question regarding the role and future of 

ARPA–E. Should it direct taxpayer money to simply speed up or 

accelerate companies and what they are already doing, or should 

it fund research in truly high-risk white spaces, so-called white 

spaces, that no one else is willing to undertake? I hope today’s 

hearing provides an opportunity to identify common ground on this 

question. 

Another thing that taxpayer money should not be used for is 

meetings with bankers to raise capital and a fee to appear on a 

local television shows. The DOE IG noted in its report that these 

two tasks were cited as an allowable cost by ARPA–E under its 

Technology Transfer and Outreach policy. ARPA–E originally argued that such spending should be allowed despite the DOE IG’s 

concerns, Just yesterday, however, ARPA–E provided an updated 

technology transfer policy that is now silent on the appropriateness 

of this type of spending. Personally, I think it is inappropriate. The 

Subcommittee is reviewing this policy, and I look forward to getting clarification from ARPA–E on this question. These concerns 

are not meant to imply that all of the work being conducted by 

ARPA–E is duplicative or unworthy of federal funding. Many of the 

projects it supports are clearly in line with its statutory direction, 

and if taxpayers are going to be involved in funding energy technologies at all, it should be in a manner similar to ARPA–E’s focus 

on high-risk, high-reward research that is not being pursued by the 

private sector. 
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Despite ARPA–E’s stated commitment to ‘‘carefully structure its 

projects to avoid any overlap with public and private sources of 

funding,’’ we have seen numerous instances that deviate from that 

pledge. Going forward, we will continue to monitor whether the 

agency is actually following the statutory direction and look forward to ARPA–E’s cooperation. 

[The prepared statement of Mr. Broun follows:] 
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Chairman BROUN. Now I recognize the Ranking Member from 

New York, my good friend, Mr. Tonko, for five minutes or whatever 

time beyond that that he needs. Mr. Tonko. 

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

this hearing today, and thank you to our witnesses for participating. 

The Advanced Research Projects Agency—Energy, or ARPA–E, 

was designed to be nimble, creative and aggressive in funding 

promising ideas that could transform the way we obtain and use 

energy. Nothing in the law said that ARPA–E could only fund companies that did not have private-sector funding or that it could not 

fund companies that had funding from other agencies. Our expectation was that ARPA–E could apply the successful DARPA model to 

the energy sector and enable promising ideas to move expediently 

toward proof of concept or demonstration. 

ARPA–E was to take on a scope of work that the private sector 

could not take on by itself and to accelerate the timeline of innovation in a way other agencies or venture capital could not do alone. 

Nothing in the GAO report that tackled this question suggests 

ARPA–E is doing anything but what the Congress and the president envisioned when ARPA–E was established in 2007. Time to 

market with an invention matters. Everyone knows who Alexander 

Graham Bell was and that he was awarded the first patent for a 

telephone. Very few people know who Elijah Gray was. He was second to file at the Patent Office for a very similar device. ARPA– 

E is supposed to make sure that the Alexander Graham Bells in 

our new and more competitive globalized world are American inventors and American companies. 

The response to this new organization has been enormous. DOE 

has received over 4,000 concept papers in the three years of its existence. Companies and academic institutions that I interact with 

are very excited about this new model for funding our energy research. ARPA–E is funding innovative companies in my district, 

like SuperPower in partnership with the University of Houston and 

others to research materials and superconductivity applications 

with the potential to provide essential improvements in our energy 

infrastructure. 

Given the importance of energy to every sector of our economy 

and our comeback and to all of our citizens, I believe we not only 

can afford this program, we cannot afford to lose it. 

Other national governments are investing, investing in the energy technologies of the future, clean energy technologies, especially renewable energy technologies. The Chinese government invested $34.6 billion in clean energy in 2009 while our United 

States Government invested $18.6, or rather, the United States invested $18.6 billion. Perhaps others are willing to accept second 

place in the race to develop new energy technologies. I simply am 

not. 

Finally, Mr. Chair, I have to comment on the Staff Report that 

the majority will enter into the record today. You and Chairman 

Hall have a well-documented opposition to ARPA–E. You asked 

GAO to examine how ARPA–E might be skirting the law requiring 

that DOE ensure they are not duplicating funding of the private 

sector. We will hear from the GAO about their findings today, but 
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their bottom line was that DOE has been working to ensure that 

they fund projects on a scale and time line that the private sector 

alone would not fund. 

Mr. Chair, it appears that when GAO’s report did not give the 

majority the findings you had hoped for, the majority staff wrote 

the report it wished to receive. The majority staff went through 

GAO’s work papers and cherry-picked some examples to portray 

the law as something that it is not. These are hallmarks of a partisan hit piece, not a thoughtful, thorough report. Just as one example, the staff report points to several examples of companies 

that received private-sector funding or funding from other federal 

programs. However, the report does not validate whether the funding is duplicative with ARPA–E funding or not. The report settles 

for assertion and hand waving where only facts should matter. I 

will not oppose a motion to put the majority’s report into the 

record, despite my misgivings about the process so long as it is understood that members on this side may decide to insert into the 

record our own evaluation of that work product and this program. 

I am pleased to note that we will receive testimony on two reports 

today, one from GAO, and one from the DOE Inspector General. I 

am going to put far more faith in their work products and findings, 

which are largely positive and productive than the partisan claims 

of the majority’s report. 

I thank the witnesses for appearing before us this afternoon, and 

I do look forward to your testimony. Thank you. I yield back. 

[The prepared statement of Mr. Tonko follows:] 
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Chairman BROUN. Thank you, Mr. Tonko. I want to read into the 

record the following. Review of GAO’s work papers was necessary 

to provide context and quantification to key findings and best inform the Committee’s oversight work going forward. ARPA–E is a 

fledgling agency that is still adjusting as it grows, and it just received a 50 percent budget increase over the prior year. 

I think the minority will agree with me, it is important that we 

identify and correct potential problems now while the agency is 

still getting its feet under it. 

To this end, the more extensive review adds great value to the 

community’s efforts to be good stewards of the taxpayers’ dollars. 

I appreciate your opening statement. If there are Members who 

wish to submit additional opening statements, your statements will 

be added to the record at this point. I ask unanimous consent that 

Mr. Bartlett and Mr. Rohrabacher be able to participate. Hearing 

no objections, so ordered. 

[The information may be found in Appendix 2.] 

Chairman BROUN. At this time, I would like to introduce our 

panel of witnesses. Doctor—help me. 

Mr. MAJUMDAR. Majumdar. 

Chairman BROUN. Majumdar. Close. I am trying, sir. I apologize. 

My family can’t spell, can’t pronounce, I am not sure which, with 

my spelling, B-r-o-u-n. But anyway, Dr. Majumdar is Director of 

Advanced Research Projects Agency—Energy for the U.S. Department of Energy. The Honorable Gregory Friedman, Inspector General of the U.S. Department of Energy, and Mr. Frank Rusco, the 

Director of the Energy and Science team at the U.S. Government 

Accountability Office. 

As our witnesses should know, spoken testimony is limited to 

five minutes each. I am not going to be real hard on that, as I mentioned to you all before, if you need a few extra moments, I will 

give you a little leeway. But if you could keep it to five minutes 

if possible, but I don’t want to short-change you, either. 

After those five minutes, of course, the Members of the Committee will have five minutes each to ask questions. Your written 

testimony will be included in the record of the hearing. 

It is the practice of the Subcommittee on Investigations and 

Oversight to receive testimony under oath. Do any of you have objections to taking an oath? Let the record reflect that all witnesses 

were willing to take an oath by shaking their heads side to side 

in a negative manner. 

If all of you would please stand and raise your right hand. Do 

you solemnly swear or affirm to tell the whole truth and nothing 

but the truth, so help you God? Let the record reflect that all witnesses participating have taken the oath and said, ‘‘I do.’’ 

Now, I recognize our first witness, Dr. Majumdar. 

STATEMENT OF DR. ARUN MAJUMDAR, DIRECTOR, 

ADVANCED RESEARCH PROJECTS AGENCY—ENERGY, 

U.S. DEPARTMENT OF ENERGY 

Dr. MAJUMDAR. Mr. Chairman, Ranking Member Tonko, Chairman Hall and the esteemed Members of this Subcommittee, I want 

to thank you for inviting me to testify on behalf of the Advanced 
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Research Projects Agency for Energy, or ARPA–E, about recent 

R&D activities, a recent report by the U.S. Government Accountability Office, GAO, and a report released in August 2011 by the 

U.S. Department of Energy’s Office of Inspector General, IG. 

I am here to report to you on ARPA–E’s activities and challenges. 

ARPA–E, which this Committee was integral in creating, is modeled after DARPA, which helped catalyze innovations such as the 

Internet, GPS, stealth technology, and many others. These innovations not only strengthened our national security but also economic 

prosperity by creating entirely new industries. ARPA–E’s goal is to 

catalyze similar quantum leaps in energy technologies, ones that 

are too risky for the private sector, and those that have the potential to create entirely new industries. 

Today, we import roughly 50 percent of the oil we use from other 

nations, many who don’t share our values, and we pay approximately $1 billion a day. This is a national security problem as well 

as an economic prosperity one. If we keep importing oil and pay 

like business as usual, we will put our children’s and grandchildren’s future at risk. A secure future is like a stool with three 

legs—national security, economic security, and environmental security—and at the foundation of all three securities are innovations 

in energy technologies. 

ARPA–E funds high-risk research projects focused on early-stage 

breakthrough energy technologies by a competitive process. Some 

examples, batteries that will make electric cars have a longer range 

and be cheaper than gasoline-based cars so that they can be sold 

without subsidies; entirely new ways of making biofuels using microbes that do not use sunlight but rather use electricity from nuclear, wind and other sources. 

With durations of two to three years, these inherently high-risk 

projects have the potential to be transformative and create a large 

economic growth 15 to 20 years from now. ARPA–E does not fund 

incremental improvements in existing technology but rather funds 

research that could create new technologies that do not exist today. 

But if it did, it would make today’s technologies obsolete. 

As you may know, ARPA–E issued its fourth round of Funding 

Opportunity Announcements on April 20, 2011, and subsequently 

announced 60 cutting-edge research projects aimed at dramatically 

improving how the U.S. produces and uses energy. With over $150 

million from our fiscal year 2011 budget, the new ARPA–E projects 

focus on research for innovative energy technologies, while increasing U.S. competitiveness in rare earth alternatives and breakthroughs in biofuels, thermal storage, grid controls, and power electronics. These projects are located across 25 states, with 50 percent 

of the projects led by universities, 23 percent by small businesses, 

12 percent by large businesses, and 13 percent by national labs, 

and two percent by non-profits. 

We are currently looking at new technologies and innovations in 

various areas. For example, we are holding a technical workshop 

in the area of natural gas and its undeveloped, innovative and potentially transformational uses in the transportation sector. We are 

also gearing up for our third annual ARPA–E Energy Innovation 

Summit on February 27th to 29th, which will feature many of the 

country’s energy thought leaders such as Bill Gates, Fred Smith, 
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Lee Scott, Ursula Burns and Susan Hockfield. I invite you to join 

us at the summit and witness for yourself our Nation’s energy innovation ecosystem. 

To be globally competitive, speed is of the essence. ARPA–E has 

developed a streamlined process so it can execute with a fierce 

sense of urgency and unprecedented speed and efficiency. Being 

vigilant stewards of taxpayer dollars is a critical component of 

ARPA–E’s DNA. All projects will be selected purely based on merit, 

based on a panel of experts. Once selected, ARPA–E Program Directors are personally invested in every project they manage to 

help them overcome technical barriers. But if a technology does not 

work and a project cannot reach its go/no-go milestones, ARPA–E 

discontinues the projects before the end of the day rather than 

waste taxpayer dollars. 

I would like to express my thanks to the DOE Inspector General 

and the GAO for their total reviews and final recommendation, all 

of which have been accepted and implemented by ARPA–E. ARPA– 

E is committed to continuously improving its operations so as to 

better fulfill its statutory mission of enhancing our Nation’s economic and energy security and maintaining the U.S.’s technological 

lead in the development and deployment of advanced energy technologies. 

I would also like to thank the IG and the GAO for safeguarding 

the sensitive proprietary information of ARPA–E applicants and 

awardees. Maintaining the confidentiality of this information was 

promised in the competitive selection process. It is critical to attracting the best ideas and talent in future funding competitions 

and maintains the competitiveness of a performance in domestic 

and foreign markets. 

Thank you again for your time, and I look forward to answering 

your questions. 

[Statement of Dr. Majumdar follows:] 
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Chairman BROUN. Thank you, Doctor. Our next witness is Mr. 

Friedman. Mr. Friedman, you are recognized for five minutes. 

STATEMENT OF HON. GREGORY FRIEDMAN, 

INSPECTOR GENERAL, U.S. DEPARTMENT OF ENERGY 

Mr. FRIEDMAN. Thank you, Mr. Chairman. Mr. Chairman and 

Members of the Subcommittee, I appreciate the opportunity to testify at your request on the work of the Office of Inspector General 

concerning the Department of Energy’s Advanced Research Projects 

Agency, commonly referred to as ARPA–E. Specifically, as requested by the Subcommittee, my testimony today will focus on our 

August 2011 audit report. 

ARPA–E, as has been noted previously, was created to enhance 

domestic economic and energy security by funding high-risk, highpayoff energy technology research and development. As of January 

17, 2012, according to department data, it had approved 153 

projects valued at about $448 million. Of this amount, approximately $220 million has been expended. 

The purpose of our audit was to evaluate ARPA–E’s program implementation and its stewardship of taxpayer-provided resources. 

Our review revealed that ARPA–E generally had effective systems 

in place to make research awards and to deploy Recovery Act resources. Of particular note, we found that ARPA–E, despite being 

a relatively new program, had developed and implemented research 

proposal selection criteria designed to make certain that awards 

were consistent with its mission objectives. 

We did, however, identify several opportunities to enhance safeguards over program execution activities and funding. At the time 

of our review, ARPA–E had not fully implemented policies and procedures to ensure that first, technology transfer and outreach activity expenditure goals were met and that such costs were effectively 

tracked and verified; second, that awardee activities were effectively monitored and that recipient requests for reimbursement 

were properly reviewed; and finally, ARPA–E had not established 

formal procedures for determining whether to continue or terminate projects that were not meeting program objectives. 

Based on the interim results of our audit, ARPA–E surveyed 

award recipients about their technology transfer and outreach activities and expenditures. Recipients reported that they have spent 

an estimated $15.3 million on such activities which allowed program officials to conclude that ARPA–E had exceeded the 2.5 percent spending requirement established in law. 

To address this matter on an ongoing basis, ARPA–E established 

a requirement that recipient expenditures reflect at least the minimum required amount and that such expenditures be tracked and 

reported. 

We also identified potentially unallowable costs that had been incurred by a small business recipient. At this small business, which 

was awarded approximately $5.8 million in ARPA–E funding, $1.2 

million of which had been incurred at the time of our audit, we 

identified almost $40,000 in questionable direct costs. Responding 

to our finding, the responsible contracting officer, as had been mentioned earlier, concluded that virtually all of the direct costs were 
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allowable because, in his judgment, they fell under the broad category of technology transfer activities. 

Further, this same recipient did not have support for its indirect 

cost rate. As such, we questioned the total indirect costs of 

$239,000 claimed by the recipient as of June 30, 2010. In response 

to our finding, program officials requested a review of the recipient’s indirect cost rate. 

APRA–E’s response to our report was favorable. ARPA–E took 

specific steps to address several of the issues we raised during the 

course of the audit. For example, policies governing monitoring and 

oversight, invoice review, and those related to terminating non-performing awards had been finalized. Further, ARPA–E officials told 

us that it had taken action to better define allowable technology 

transfer costs, and it implemented a process to measure progress 

in meeting spending goals in this area. 

We will continue to monitor ARPA–E’s activities as part of our 

normal risk assessment process. I would like to point out that the 

Office of Inspector General recently issued a Lessons Learned Report based on our body of work covering the department’s efforts 

under the Recovery Act, a major source of ARPA–E support. Our 

report, based on over 70 audits and inspections, along with a number of investigations, identifies several best practices, which if fully 

implemented, in our judgment, should help ARPA–E and the Department enhance overall program execution. 

Mr. Chairman, this concludes my statement. I would be pleased 

to answer any questions that you or the Members of the Subcommittee may have. 

[Statement of Mr. Friedman follows:] 
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Chairman BROUN. Thank you, Mr. Friedman. I next recognize 

our next witness, Mr. Rusco. You are recognized for five minutes, 

sir. 

STATEMENT OF MR. FRANK RUSCO, DIRECTOR, 

ENERGY AND SCIENCE ISSUES, 

U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. RUSCO. Thank you. Mr. Chairman, Ranking Member Tonko 

and Members of the Subcommittee. I am happy to speak today 

about GAO’s work on ARPA–E. At the request of this Committee, 

GAO undertook an evaluation of ARPA–E to examine, one, the 

Agency’s use of criteria and other considerations for making 

awards, including applicants’ identification of past private-sector 

funding; two, the extent to which ARPA–E projects could have been 

funded by the private sector; and three, the extent to which ARPA– 

E coordinates with other DOE offices to avoid duplication of efforts. 

At this hearing, the resulting GAO report is being released, and I 

will speak briefly about our key findings. In reviewing applications 

and selecting awardees, ARPA–E uses four key criteria. These include an assessment of the potential impact of the proposed technology; the project’s overall scientific merit; the applicant’s qualifications, experience and capabilities; and the quality of the applicant’s management plan. 

In addition, ARPA–E program directors take other things into 

consideration, including the transformative nature of projects and 

the likelihood that the project could be funded by the private sector. 

ARPA–E program directors also assist successful applicants in 

shaping projects and management plans to focus on transformational energy technologies and to increase the chances of success. With regard to the extent to which ARPA–E type projects 

could have been funded privately, it is impossible to know with certainty whether or not any individual project could be solely funded 

by private sources. However, based upon a wide range of evidence, 

we concluded that it is unlikely that most ARPA–E projects could 

have been solely financed by the private sector. 

We did find that 18 of 121, or 15 percent of applicants given 

awards in ARPA–E’s first three rounds of funding, had previously 

received some venture capital funding. It is important to note that 

some of the applicants also would have had other forms of funding 

that were not visible to us in the course of our audit. So any successful company engaged in this will have some source of private 

funding likely or other university funding. But we found 18 that 

had venture capital funding, and that was available for us to review. 

Of these projects funded by ARPA–E that had received previous 

venture capital funding, the projects differed from what had been 

previously funded by the venture capital. In most cases, the differences were technological. Either the ARPA–E projects were fundamentally different than projects that had received prior funding 

or were related but more challenging or transformational in nature. 

And for five of the projects, they were quite similar to what had 

been previously funded, but the ARPA–E funding allowed them to 
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speed up their research significantly over what was possible with 

private funding alone. 

Our overall conclusion was based on the result of interviews with 

ARPA–E program directors, six venture capitalists and ARPA–E 

applicants and awardees including the 18 that had previously received private funding. All of these sources provided evidence consistent with the conclusion that the specific projects funded by 

ARPA–E would not have been funded solely by the private sector. 

Finally, we found that ARPA–E program directors and other staff 

take steps to coordinate with other DOE program offices before 

making funding announcements to try to identify funding gaps. 

ARPA–E program directors also use officials from other DOE offices and from the Department of Defense to assist in reviewing 

ARPA–E applications. These efforts to communicate with and coordinate with other members of federal research and development 

programs may reduce the potential for overlap in funding. 

While we found it unlikely that most ARPA–E projects could 

have been solely funded by the private sector, we also found that 

ARPA–E could improve its approach to collecting and evaluating 

information about applicants’ past private funding. Specifically, 

while ARPA–E directors were generally aware of prior funding and 

applicants were required to provide such information, we found 

that most applicants did not initially adequately identify prior 

funding or explain why their projects could not be solely funded by 

the private sector. As a result, in order for program directors to 

evaluate private-sector funding, the directors had to ask for supplemental information from those applicants. 

To improve the efficiency of the application review process and 

the quality of information about private funding, we recommended 

that ARPA–E provide guidance to applicants, including a sample 

response. We also recommended that ARPA–E require applicants 

that had previously received private-sector funding to provide letters from investors or other documentation with their applications 

that explained why investors are not willing to fund applicants’ 

projects. 

Finally, we recommended that ARPA–E use venture capital funding databases to help identify applicants that had received privatesector funding and to verify information provided by applicants. 

ARPA–E concurred with our findings and recommendations. 

Thank you. This concludes my prepared statement. I will be 

happy to answer any questions you may have. 

[The prepared statement of Mr. Rusco follows:] 
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Chairman BROUN. Thank you, Mr. Rusco, and I want to thank 

the whole panel for your all’s testimony. 

Reminding Members that the Committee rules limit Member 

questioning to five minutes per round of questions, the Chair at 

this point will open the round of questions. The Chair recognizes 

himself for five minutes of questions. 

Dr. Majumdar, I want to see if you can help us by clarifying for 

the Subcommittee what appears to be a point of confusion regarding ARPA–E’s philosophy with respect to industry awardees. You 

have emphasized many times that ARPA–E limits its support to 

how risk technology, so-called white spaces, that are not being supported by industry or elsewhere in the government. GAO found 

that this was true with respect to most awards, most as they described it. However, GAO’s review as well as other public information indicates many instances where ARPA–E’s philosophy appears 

to instead support acceleration of activities already being undertaken by the private sector. 

Let me give you two quick examples. One venture capital-backed 

company, Phononic, testified before this Committee that it was 

using ARPA–E funds to accelerate what it was already doing. The 

Phononic CEO stated that his company’s ‘‘original projections 

planned on prototype demonstration and subsequent first market 

adoptive sales in late 2012 or early 2014, the ARPA–E award coupled with another $1 million in venture financing as part of our 

cost share allows us to accelerate our development schedule to 2011 

instead.’’ GAO paperwork states that another company ‘‘said that 

once the technical development of its first traunch of private financing were met, the second traunch was automatically funded 

and would have occurred irregardless of whether the company received ARPA–E funding or not.’’ 

Those don’t sound like high-risk projects in which the private 

sector is unwilling to invest. Please help reconcile award examples 

like this with ARPA–E’s stated philosophy to limit funding to technology areas too risky for private investment. 

Dr. MAJUMDAR. Congressman, thank you for your question. Let 

me just explain the philosophy of what do I mean by ARPA–E 

funds projects that are too risky for the private sector. And I have 

stated this before in many of my hearings, that ARPA–E will fund 

ideas that have never been funded before by the private sector, not 

to say that if there are companies that have been funding by the 

Venture Capital industry or by other private sector, that we will 

not fund. They may have funded for low-risk ideas for things that 

will generate revenue in three or four years, which is what the 

GAO report—— 

Chairman BROUN. Let me interrupt you just for the sake of time. 

I have about two minutes left. 

GAO has this example where they said all they did is accelerate 

their funding. Now, that is one example, granted. But it is one example that is out there. And they said that ARPA–E funding just 

accelerated the production of work that they would have done anyway. Is this an anomaly or is this something that is ongoing or is 

this something that is pervasive within ARPA–E or what? 

Dr. MAJUMDAR. We have never funded any idea that had been 

funded by the private sector. Since you raised the issue of, you 
50 

know, specifically of Phononic Devices, that happens to be my area 

of research myself. So I can get into gory details on that. But essentially, they are trying to come up with a material which conducts electricity very well but blocks heat. Now, as you know, you 

take material like copper, it will conduct electricity and heat, and 

if you take a material like in a diamond, it won’t conduct electricity, but will conduct heat. To find a material which conducts 

electricity but blocks heat is a non-trivial problem, and there is— 

you know, they are, in a sense, trying to get into a scientific breakthrough that they will translate into a device. But if they could do 

that, here is—let me just give you a number. 

Chairman BROUN. Again, I have 1/4 of a minute, 3/4 of a minute 

left. I misspoke. That was not GAO. That was the company’s CEO 

that made those statements, and he said the Charles grant just accelerated what they were going to do anyway with private funding 

all from private sourcing, not something new, something that 

would be just that they were going to do anyway. You all’s grant 

just helped them to do it in 2011 instead of 2012 or 2013 as they 

stated. 

The point is, and my time has run out, and I will just let this 

go and you and I can talk later, ARPA–E is supposed to fund 

projects that the private sector will not and cannot fund. This CEO 

said that all you did was just accelerate their development, and I 

think we need to be very cognizant that taxpayer dollars are very 

scarce. We are in a financial crisis as a Nation, and we need to 

make sure that projects that are funded through ARPA–E will not 

get private funding, cannot get private funding because they are 

too risky. That is one of the charges of ARPA–E. So we will talk 

about that later. My time is up. Now I yield to Mr. Tonko for five 

minutes. 

Mr. TONKO. Mr. Rusco, you are releasing your report today? 

Mr. RUSCO. Yes, that is correct. 

Mr. TONKO. And a report that you spent perhaps the better part 

of a year in developing. And that I believe was done at the request 

of Chairman Hall and Chairman Broun? 

Mr. RUSCO. Yes. 

Mr. TONKO. Can you briefly describe the review steps at GAO for 

the report to be developed, the interviews, the documents that you 

collect, and can you do that within the frame of a minute, please? 

Mr. RUSCO. Yes. Just briefly, to look at the private-sector funding, we looked at a venture capital funding database to try to identify prior capital that had gone to the companies that had the 

ARPA–E projects. And then we followed up with both the program 

directors and with the companies that had gotten the funding to 

try to determine what the nature of the funding was and how it 

differed from the projects. And then we also talked to venture capitalists, some of whom were the funders of the ARPA–E projects we 

looked at. 

Mr. TONKO. Well, thank you. And curiously, the staff to the majority did their own report, largely based on your working papers. 

When did they see your working papers? 

Mr. RUSCO. We have had a long back-and-forth with our client’s 

staff throughout this, and I think it has been productive. At the 

very beginning of the job, they gave us information they would be 
51 

working on. And then at the end of the report when we released 

the report to them but it had not been publically issued, then as 

per our protocols, they were able to come over and look at our 

work—— 

Mr. TONKO. At what point? 

Mr. RUSCO. That took place last week. 

Mr. TONKO. So last week? So they took about a week to develop 

their own report? That staff product reaches radically different conclusions, does it not, from those in your report? 

Mr. RUSCO. I think that the facts in the Committee report are 

in our work papers, the ones that—— 

Mr. TONKO. Right, but the conclusions—— 

Mr. RUSCO. And I haven’t had a chance to look at it very carefully so I can’t really speak too much to it. But I think that the 

difference is that our conclusion is based on a body of evidence that 

goes beyond those work papers and that—— 

Mr. TONKO. But are the conclusions—— 

Mr. RUSCO [continuing]. May be why we interpret things differently. 

Mr. TONKO. Would you analyze or characterize those conclusions 

as being drastically, radically different than yours? 

Mr. RUSCO. I wouldn’t characterize it as radically different. I 

think it is a matter of degree. It is sort of like what should the program be doing? We certainly found cases where—— 

Mr. TONKO. Well, does it live within, is it a conclusion that they 

live within the context of the statute? Are we misinterpreting statute here to draw a conclusion? 

Mr. RUSCO. Well, certainly we would have reported on that had 

we found that. That was not one of our objectives to interpret the 

statute, but we always have our general counsel working on reports. We did not find anything that to us looked like the agency 

was in violation of statute or we would have reported that. 

Mr. TONKO. Okay. And did the Republican staff ask you to check 

on their facts and conclusions? 

Mr. RUSCO. Yes. 

Mr. TONKO. And when did that come about? 

Mr. RUSCO. They sent us a memo on Thursday, last week, and 

we looked through the facts through our work papers and commented on those. 

Mr. TONKO. Well, the report, using your work papers again, finds 

cases where they allege or imply that a company was getting funding for work from the private sector, even as they took ARPA–E 

money. They point to ample cases from your work papers to suggest that ARPA–E is simply duplicating work already funded or 

soon to be funded by private capital or other agencies. I assume 

you know what is in your work papers. Did you find the kind of 

overlapping funding in duplication? 

Mr. RUSCO. I think our interpretation is different. We did find 

cases in which companies had received prior private funding, but 

the projects differed to a large extent or a significant extent from 

what was funded in the past, and in several instances, five instances, we found that the company said that the ARPA–E funding 

had enabled them to significantly speed up their research and it 

was a—— 
52 

Mr. TONKO. So as we heard already from Dr. Majumdar, there 

are cases of innovation, of technology transfer and of expediting, 

moving along, developing the market, transforming the market. So 

these 18 cases were getting funded for something other than previously being funded? 

Mr. RUSCO. Most of them were technologically distinct from what 

had been previously funded. 

Mr. TONKO. Okay. Thank you very much. 

Chairman BROUN. Thank you, Mr. Tonko. I want to ask you to 

put your hatchet down because the report was actually meant to 

supplement and not to refute the working papers, and in fact, staff 

have done some extra research on top of that and found other instances where—we just call into question—we just want the same 

thing that the minority staff and minority members want, this 

ARPA–E to be successful and utilize taxpayers’ dollars in the proper way. 

Mr. TONKO. Well, Mr. Chair, if you will—— 

Chairman BROUN. Certainly. 

Mr. TONKO. I think the statute is quite clear about transformational and about speeding up, expediting a process that can 

transform the market. And I think that it is very clear, the spirit 

and the letter of the law is very clear that this is to move along 

in a way that—time is innovation here. Time will determine who 

comes to the market first. If you can transform the market, I am 

assuming that is what we all wanted ARPA–E to do, and the statute is very clear. And to misrepresent it or misinterpret it, is just 

not helping, I think, the effort. 

Chairman BROUN. Mr. Tonko, there has never been an allegation 

that there has been a statutory breach. 

Now I recognize the Full Committee Chair, Mr. Hall, for five 

minutes. 

Chairman HALL. Thank you, Mr. Chairman. I have a feeling that 

maybe ARPA–E is saying that they couldn’t spend the money wisely because they had to spend it so quickly. I am not sure I am on 

solid ground there, but during debate on the America COMPETES 

Act which created ARPA–E, a lot of us were very concerned that 

the new agency might ultimately reshuffle the budget prioritization 

for existing DOE offices and de-emphasize the basic science research conducted within the Office of Science. 

So given the current budget constraints, where does ARPA–E fit 

into DOE’s priority list? Whoever wants to answer that could. 

Dr. MAJUMDAR. I will be happy to answer, as Secretary Chu has 

said many times in the past that ARPA–E is one of his top priorities. In terms of DOE priorities, Secretary Chu has said ARPA– 

E is one of his top priorities. 

Chairman HALL. Which offices will be reduced funding to provide 

additional ARPA–E funds if they are special and they set them up 

on such a high plane? 

Dr. MAJUMDAR. Well, I think that, you know—frankly, the budget is decided by Congress. And so—— 

Chairman HALL. Well, that doesn’t help us a hell of a lot. Go 

ahead. 

Dr. MAJUMDAR. So I mean, it is really the budget that is decided 

by Congress that we execute on. And so with regards to where the 
53 

funds go, I think Congress will decide, and we will just execute according to the law. 

Chairman HALL. Well, EPA seems to have a way around what 

Congress says to do. That is not the subject here, though. 

Mr. Friedman, the IG report states that in response to the questionable spending by ARPA–E recipients that you identified, an 

ARPA–E official said that the agency, and I am quoting here, ‘‘focused its attention on meeting the Recovery Act requirement of expeditiously awarding funds to projects by September 30, 2010, and 

as a consequence didn’t have sufficient time and resources to devote to establishing its operational controls in the area of policies 

and procedures.’’ That is the reason I said initially that basically 

ARPA–E is saying that they couldn’t spend the money wisely because they had to spend it so quickly. Is that a fair statement? 

Mr. FRIEDMAN. Well, Mr. Hall, I think you are going beyond 

where I would go. What we clearly have said in the report and 

what we found was that there were certain mid-point and endpoint policies and procedures that had not been formalized. Some 

of them were in draft, some of them were not. And we were told 

by people in the program office that their priority going in that because of the rush, because of the pressure they faced with some of 

the front-end decisions as to how to selection criteria and the rest, 

so that they were putting the other policies and procedures—sort 

of they were the second priority. 

Chairman HALL. Well, the lack of institutional financial controls 

seems to indicate the potential that misuse of funds could be much 

more widespread than that identified in the three awards that the 

IG reviewed. Do you agree to that? 

Mr. FRIEDMAN. Well, not to be too clever, Mr. Hall, I don’t know 

what I don’t know. We felt that the three that we selected gave us 

a fair representation. We looked at the control structure fairly thoroughly. Is it possible in the 100-plus awards that were made that 

we didn’t look at there were problems? Absolutely. 

Chairman HALL. Well, I guess it is not too much to ask, if your 

office will review this spending in more detail as part of your ongoing stimulus oversight. And if we have some questions later to follow up on this, that we are going to ask the Chairman to ask you 

to answer them within a reasonable amount of time. 

Mr. FRIEDMAN. I will do my best. 

Chairman HALL. I have some other questions I would like to ask 

about, Solyndra and many others. But I may get back to that. I 

may try to handle that by direct letter where you will have plenty 

of time to sit down and give us your answer to that or that you 

don’t have an answer to it. 

I thank you, and I yield back my time. 

Chairman BROUN. Thank you, Mr. Chairman. And I now recognize Mr. Miller for five minutes. 

Mr. MILLER. Thank you, Mr. Chairman. In the four years that 

I chaired this Subcommittee, in addition to knocking a hole in the 

Chairman’s podium with the gavel, we also did look at the performance of a lot of agencies within this Committee’s jurisdiction. And 

in a perfect world, agency leadership, the Inspector General would 

have welcomed the work of the GAO. It was an important oversight 

tool for Congress. The IG statute contemplates that. It intends for 
54 

it to be a management tool for the executive branch as well as an 

oversight tool for Congress. And GAO and the IGs can make constructive criticism, can actually be helpful in their suggestions. 

But it was rarely seen as that by the executives, by the top leadership of the agencies. They always saw it as unwelcomed criticism, 

not as helpful criticism. And frequently any cooperation was very 

grudging at best. 

Mr. Friedman, Mr. Rusco, what cooperation was there from 

ARPA–E in your work? Were they cooperative or did they hinder 

in any way your work? 

Mr. FRIEDMAN. Mr. Miller, was that directed to me? 

Mr. MILLER. To both of you, yes. 

Mr. FRIEDMAN. I must say that in his testimony, when Dr. 

Majumdar, praised the work of the IG and GAO, I got very nervous. But having said that, we had a very good relationship. It was 

a productive relationship. As we point out in our report, management took responsive action during the course of our audit when 

we brought issues to their attention. So I would say it was a productive relationship. 

Mr. RUSCO. I would echo that. 

Mr. MILLER. Same thing. And in looking at your report, the reports never come back and say they are doing everything perfectly. 

There are always suggestions for how things might be done differently. But my sense from your report, Mr. Friedman and Mr. 

Rusco, is that you regard—well, how did you regard ARPA–E’s 

management overall? I know the GAO has kind of a watch list of 

the most troubled agencies. ARPA–E is not on that. How do you 

regard the management of ARPA–E overall, having spent some 

time looking at the program? 

Mr. FRIEDMAN. Well, we would point out some shortcomings, and 

obviously ARPA–E has come back and told us they have made a 

lot of changes, improvements, corrections, instituted policies that 

we found lacking at the time. We have not confirmed what they 

have said. But fundamentally, as I said, Mr. Miller, the relationship was good, and I think it was a productive situation. I must 

say that I think so far we view it as a fairly positive situation in 

the Department of Energy family. 

Mr. RUSCO. The ARPA–E management has been very responsive 

to our requests for information. They have also been very responsive to our findings and recommendations. But again, we always 

evaluate what has happened after the passage of time. So I am 

hoping they will follow up on these. 

Mr. MILLER. Okay. Mr. Majumdar, sorry. Dr. Majumdar, there 

has been some criticism on this Committee on ARPA–E as crowding out research that the private sector would have done otherwise. 

But leaders in industry seem to disagree with that, including Bill 

Gates of Microsoft, Jeff Immelt of GE, Norm Augustine who was 

the former head, the former CEO of Lockheed-Martin and of course 

the chair of the Augustine Commission that issued the Rise Above 

the Gathering Storm report on competitiveness. And they concluded that ARPA–E was in fact funding high-tech, high-risk, longterm investments in clean energy. That would not have happened 

otherwise. And this is a quote from a letter they wrote. ‘‘By nearly 
55 

all accounts it appears that ARPA–E is being managed as a highly 

efficient, risk-taking, results-oriented organization.’’ 

Dr. Majumdar, could you compare for us ARPA–E to other government programs that are considering energy issues, and what 

value does ARPA–E bring to our commitment to invest in clean energy innovation research? 

Dr. MAJUMDAR. Well, thank you, Mr. Congressman. I think if you 

go to the Gathering Storm report that Dr. Augustine and his committee wrote, they felt there was a gap in our energy landscape in 

the R&D, in the research section of the landscape, where we were 

doing basic science where, you know, looking for how energy interactions matter, the origins of superconductivity and basically scientific discoveries. 

And then we were doing quite applied work, and there was a gap 

out there of translating basic science understanding into something 

useful that did not exist before and that was—and they created or 

they proposed that an agency like ARPA–E be created so that to 

translate the science into technologies that did not exist before, the 

first prototype of something that did not exist before, and thereby 

provide U.S. technological lead and economic and national security, 

which is what you have enacted under the law, and we are following exactly what was proposed in the law including the accelerating of transformation technology which is in the law. That is 

exactly what we are doing. 

Chairman BROUN. The gentleman’s time is expired. I now recognize Mr. Bartlett for five minutes. 

Mr. BARTLETT. Thank you, sir, but is there still a Subcommittee 

Member that hasn’t had a chance, time, on the Democrats’ side? 

Chairman BROUN. Mr. McNerney. 

Mr. BARTLETT. I would yield to him. I should come at the end 

of all your—— 

Chairman BROUN. Okay. Mr. McNerney, I apologize. 

Mr. MCNERNEY. Well, Mr. McNerney thanks the esteemed Member for his time. 

I have in front of me what I believe are the Republican objections 

to the ARPA–E program, first of all, that it funds projects that receive private funding; secondly that it picks winners and losers; 

and third, that it crowds out private investment. So the first objection, that it funds projects that receive private funding, I think has 

already been discredited. But just to drive the point home a little 

bit, I am going to read a section of the statute that I believe is a 

fitting section and that is Section C.2.2.C, ‘‘Accelerating transformational technological advances in areas that industry by itself 

is not likely to undertake because of technical and financial uncertainty.’’ So that, in my mind, doesn’t say that private funding is to 

be excluded from ARPA, and I think that drives that point home. 

The objection that ARPA–E crowds out private investment I 

think was dealt with pretty effectively by my colleague. And the 

third objection is it picks winners and losers. So Dr. Majumdar, I 

would like you to address that. 

Dr. MAJUMDAR. Well, thank you, Congressman, for the question. 

Here is what we do in ARPA–E. The process involves identifying 

a white space as was mentioned before. Let me give you an example. We are looking for those batteries for electric vehicles that will 
56 

make the electric cars have a longer range and be cheaper than 

gasoline cars so that these electric vehicles, so these plug-in hybrid 

electric vehicles will be cheaper so that you can sell without subsidies. Now, that battery does not exist anywhere in the world, and 

today’s lithium ion battery is not going satisfy that metric. So we 

said we will go to that white space where no one exists and no one 

in the world has this battery, and if we develop that battery, the 

U.S. will get the technological lead then. And that battery has to 

be double the energy density of today’s lithium ion battery and 1/ 

3 the cost. 

And so that was a technology agnostic metric that if anyone 

could meet. And what that created is really the competition. We 

are not picking winners. We are creating the competition between 

15 different types of approaches that we have funded in that portfolio. They are all competing to get to that metric because if they 

do, and some of them might, we will have the technological lead. 

And if you manufacture those batteries in the United States, we 

will have really the economic growth as well. And that is what we 

are trying to do. 

Mr. MCNERNEY. So that is typical of a portfolio is that you fund 

different organizations to come up with technologies competing 

with each other and then let the winner decide by the technology? 

Dr. MAJUMDAR. We create the competition. We don’t pick winners. 

Mr. MCNERNEY. Okay. Just to answer what the Chairman of the 

Full Committee asked, is there any connection whatsoever between 

ARPA–E and Solyndra? 

Dr. MAJUMDAR. Absolutely not. 

Mr. MCNERNEY. Can you confirm that, Mr. Friedman? 

Mr. FRIEDMAN. Well, I have no indication there is any connection 

whatsoever. There may be something that I am not aware of. But 

let me address the Solyndra matter now if I can. As has been publically stated both by the Department of Justice and by my office, 

there is a criminal investigation ongoing with regard to Solyndra. 

So it is impossible for me to answer. It could possibly disrupt an 

ongoing investigation. I know that would not be in the interest of 

anybody, and therefore, I really can’t talk beyond that. 

Mr. MCNERNEY. Thank you. Mr. Friedman, also, I would like to 

ask you what are the similarities and difference between ARPA– 

E and another program called the SBIR program? Are they both 

trying to accomplish the same thing? What is the difference in philosophy? Is that something you could answer? 

Mr. FRIEDMAN. You know, I really couldn’t give you the best answer. Certainly we have done work in the SBIR program, a fair 

amount of work. We have done work now in ARPA–E. The Department of Energy is a $13 billion a year science department on many 

different levels using many different programs. So you know, I 

can’t define specifically the differences between them right here 

and now. 

Mr. MCNERNEY. Dr. Majumdar, do you have any idea what the 

differences are between the two programs? 

Dr. MAJUMDAR. Well, I can give you a long answer but I have 

only 22 seconds. I was, at one point, a former recipient of an SBIR 

grant for a small company that started in the Bay Area, and basi-
57 

cally, lots of differences. SBIR do not have active program management. We hire some of the smartest people in the technical community to come to ARPA–E and actively manage and help make the 

decision if something is not working to terminate it to not waste 

taxpayer dollars. 

That does not happen in SBIR. In SBIR, there is Phase One, and 

there is a gap of six months before you get to Phase Two. In the 

start-up company there is no cash flow. It will go out of business. 

And so that doesn’t happen in ARPA–E. There are go/no-go milestones, annual milestones, and quarterly reports that people have 

to submit. 

So there are many, many differences. I could go on and on, but 

I will just limit my answer to that. 

Chairman BROUN. The gentleman’s time has expired. Sorry. I 

would like to add, back to—part of the statute it says areas that 

industry by itself is not likely to undertake. So you can’t overlook 

the not, either, Mr. McNerney and Mr. Tonko, and that is the 

whole thing. We are not here to be a hatchet job on ARPA–E or 

anybody else. 

Mr. MCNERNEY. Mr. Chairman, it is not likely to undertake by 

itself. 

Chairman BROUN. It says is not likely to undertake, period. It 

doesn’t say by itself. 

I now recognize Mr. Bartlett for five minutes. 

Mr. BARTLETT. Thank you very much. I believe the—I am told 

the staff has loaded a couple of slides for me that will I hope kind 

of put—okay. There they are. We can see them now—kind of put 

the need for ARPA–E in context. 

[Slide] 

Mr. BARTLETT. The upper figure here is from ’08 from the International Energy Association which is a creature of OECD. I think 

you would see it on the side screen so you don’t have to turn 

around. And what they are showing there is oil from our wells that 

we are now pumping. The dark blue at the bottom, you see that 

we have now reached a peak there. 

By the way, we were told that that was going to happen 56 years 

ago by M. King Hubbard, and 32 years ago in 1980, looking back 

at 1970 when he predicted the U.S. would peak, we knew with absolute certainty that he was right about the U.S., and therefore he 

would probably be right about the world. 

I want to note a couple things in that slide. Note that the total 

liquid fuels is about 84 million barrels a day for five years now. 

Note that they projected by 2030 that the world would be producing 106 barrels of oil per day. Now, just two years later in the 

slide at the bottom, reality is setting in. They go up to 35 now, not 

to just 30. And note there the precipitous decline in production in 

the wells from which we are now pumping oil. And the two curves 

on top, by the way, are the same thing. They are different colors, 

and they are flipped around. One is natural gas liquids, and the 

other is unconventional oil. They are the same things. They are 

just one on top of the other in different colors. 

The dark red wedge on top, which is enhanced oil recovery, in 

the lower slide is incorporated where it should be in the oil we are 
58 

now pumping because that just squeezes a little more out with live 

steam or CO2 or something like that down there. 

Notice the two huge wedges that they put in there to keep the 

world from having a reduced production of liquid fuels. They put 

huge wedges in there of oil that they hope will be produced from 

fields that we have found, but too tough to develop, like under 

7,000 feet of water and 30,000 feet of rock in the Gulf of Mexico. 

And then there is a pretty big wedge there that is of fields yet 

to be discovered. Now, I will tell you with some confidence, that 

those two wedges will not occur to that degree. They did not occur 

in our country. We are the most creative, innovative society in the 

world. We drill more oil wells than all the rest of the world put together. And today we produce half the oil that we did in 1970. 

Now, if you think that the world is more creative and innovative 

than the United States, then maybe you think those two wedges 

are going to happen. They are not going to happen. Your government paid for four studies that said that we were going to be here, 

two of them issued in ’05, two of them issued in ’07. Your government didn’t like what those studies said, so they just ignored them. 

The first was the big Hirsch report. In ’05, the second was the 

Corps of Engineers, in ’07 two reports. The Government Accountability Office, sir, your office did a report, and the National Petroleum Council. All four reports said essentially the same thing, the 

peaking of oil is either present or imminent with potentially devastating consequences. The world has never faced a problem like 

this to quote the Hirsch report, the SAIC report. And the social and 

economic consequences will be unprecedented is what they said. 

You know, the tragedy is that ARPA–E was not here 20 years 

ago because that is when we needed it. It is now too late because 

I think that there essentially no chance that the world is going to 

avoid some enormous geopolitical consequences as a result of the 

peaking of oil. It is not that we are running out of oil. Don’t let 

anybody tell you that. We are not running out of oil. There is a lot 

of oil left out there. Half of all the oil that we will ever pump, probably more than half that we will ever pump, is still left out there. 

What we have run out of is our ability to produce the oil as fast 

as we would like to use it. 

The next slide shows that. 

[Slide]. 

Mr. BARTLETT. There is the next slide. A bit of wishful thinking 

in this. The bar at the left shows increased production. There is not 

going to be any increased production. This is wishful thinking. But 

the bar on the right is not wishful thinking. That is going to be demand. Demand is going up. It is kind of the perfect storm, Mr. 

Chairman. At just the time we are trying to come out of a recession 

and just the time that they are developing oil with China and India 

leading, that is when oil is $100 a barrel, that is just the time that 

we need more oil and it is not going to be there. 

So there is a dire need for ARPA–E. If you could use more 

money, sir, I would gladly vote to provide it for you. You know, I 

tell audiences that the innocence and ignorance on matters of energy in the general population is astounding, and we have truly a 

representative government. Thank you. 

Chairman BROUN. I assume you yield back? 
59 

Mr. BARTLETT. Mr. Rohrabacher. 

Chairman BROUN. Mr. Rohrabacher, you are recognized for five 

minutes. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman, and I 

am not as pessimistic as my colleague, but I am certainly in agreement with him that we need—— 

Dr. BARTLETT. It is realistic, sir. 

Mr. ROHRABACHER [continuing]. And that we—realistic. Or 

maybe I am too optimistic, let us put it that way. But I do believe 

that no matter how you come down on it, we need to be focusing 

on developing energy resources and using our brains and our creativity in finding new ways of creating energy, rather than just 

more traditional ways. And that is what ARPA–E is supposed to 

be about. 

Let me ask about—you know, people mention Solyndra, and everybody, you know, sort of is shaking around and trying to duck. 

But let me just ask—and again, I am sorry. I always mispronounce 

your name as well. 

Dr. MAJUMDAR. Maybe because it has fallen down. 

Mr. ROHRABACHER. Okay, Majumdar. Has the White House, anyone in the White House, ever contacted you regarding a grant that 

someone had applied for an ARPA–E grant? 

Dr. MAJUMDAR. No, never. 

Mr. ROHRABACHER. This White House has never contacted you 

for any of these awards that you are giving? So you don’t have any 

pressure from them at all? 

Dr. MAJUMDAR. No. 

Mr. ROHRABACHER. Okay. That is good to hear. Obviously—well, 

I can’t say obviously was the case with Solyndra. We will find out. 

There is a case, for example, where Beacon Power received a $2.8 

grant from you, and they also received a $24 million grant from the 

Office of Electricity from DOE and a $43 million loan guarantee 

from the DOE, all within a seven-month period. Now, how is it that 

your organization that is supposed to be aimed at helping people 

who can’t get funding is now helping an organization duplicating 

the support from two different other entities or two other approaches they are doing for money? How is that? 

Dr. MAJUMDAR. Sure. I will be happy to clarify that, Congressman. What they did in the ARPA–E project is they went through 

a competitive process. They actually went through that process and 

won this grant, which is not a loan, it is a grant, and this is on 

energy storage as opposed to power storage. So the one that they 

got from the Office of Electricity is for power storage which is for 

frequency regulation. It is short-time power storage with fly 

wheels. 

Mr. ROHRABACHER. Now, I know—— 

Dr. MAJUMDAR. Our program was designed to look for storing 

gigawatts of power for an hour. When a wind gust comes in from 

the west or from anywhere else, you got to store about a gigawatt 

of electricity for an hour. That is energy. That is not power. And 

ARPA–E’s program was designed to look at the energy storage 

which is quite different from the power storage. And I can go 

into—— 
60 

Mr. ROHRABACHER. I will have to admit to you that not being an 

expert when a Ph.D. tells me that there is a difference between energy and power, and those of us who are less educated—— 

Dr. MAJUMDAR. Let me explain. 

Mr. ROHRABACHER. It seems rather similar to be—no, it is government money. And by the way, this company happened to go 

bankrupt after receiving this $70 million of money from the Government. 

Dr. MAJUMDAR. The difference between power and energy is like 

if you have a car, the power comes from your engine, and the energy storage comes from your gas tank, the size of a gas tank. They 

are different, and so that is what—so what we were funding them 

for is the energy storage part. 

Mr. ROHRABACHER. Well, there are a couple other in this GAO 

report. There are several other companies that have suggested 

their names were redacted. But it does look like—it says, ‘‘Potentially duplicative funding for essentially the same work. Are 

these—maybe I should ask our GAO guy. Are we talking about 

here—and here is another one—name redacted, submitted similar 

grant proposals to ARPA–E and other agencies, and both proposals 

were successfully awarded. 

Are these just because they are similar, people don’t know the 

difference between energy and power or what have we got here? 

Mr. RUSCO. I am sorry. I am not sure exactly what you are referring to. Is that in the committee report or is that in our—— 

Mr. ROHRABACHER. This is from a GAO work paper notes that 

one company named redacted. And here is a quote, ‘‘Submitted 

similar grant proposals to ARPA–E and other agencies, and both 

proposals were successfully awarded.’’ And so you found them to be 

apparently similar grant proposals. 

And then another company by your report, name redacted, explicitly stated that its application, that the proposal was ‘‘potentially duplicative funding for essentially the same work statement.’’ 

Do you know—I can’t tell you the company because you eliminated 

the name there. Oh, excuse me. We redacted the name. I thought 

this was coming from—— 

VOICE. It is a summary of their work. 

Mr. ROHRABACHER. It is a summary of their work, but I have 

been recommended — I guess or recommended when they gave me 

this paper not to read the names of the companies. Perhaps we 

should let them know what the name of the company is. 

Chairman BROUN. The gentleman’s time is expired. If one of you 

want to make a quick answer, I will be glad to accept that or you 

can present the question, if that is all right with you, Mr. Rohrabacher. If you have a quick answer, please say it. 

Mr. RUSCO. Maybe the best way to proceed would be for us to 

talk to your staff about those things off line since some of the information in our—much of the information in our work papers is business sensitive. 

Mr. ROHRABACHER. Well, there are two companies then that you 

did name and were eliminated from my copy here but—— 

Chairman BROUN. The gentleman’s time is expired. 

Mr. ROHRABACHER. Sorry about that. We are going to go to a second round of questions. The minority has acquiesced to my sugges-
61 

tions that we go to three minutes per member, and I ask unanimous consent that that be approved, so ordered. 

The Chair will recognize himself for three minutes. The IG report 

notes that in February of 2011, ARPA–E updated its technology 

transfer and outreach policy that included guidance to awareness 

on appropriate tech transfer expenditures. But this policy ‘‘allows 

recipients to incur costs that are typically unallowable under the 

FAR.’’ That is Federal Acquisition Regulations. 

At 3:00 p.m. yesterday, ARPA–E provided an updated TTO policy 

to the Committee. There were several notable differences between 

the February 2011 policy and the one provided yesterday. Dr. 

Majumdar, I would like to ask you a few questions about these differences, please, sir. The formal policy explicitly says that the expenditures on the following activities are acceptable uses of awardees’ funds: number one, meetings with investors to raise capital; 

number two, business plan, development and market research; 

three, expenditures relating to seeking additional funding from the 

private sector and government agencies; four, marketing and other 

expenditures relating to promoting an ARPA–E funded technology; 

and five, commercialization expenditures. The new policy we just 

received lists examples of both appropriate and inappropriate 

spending but is silent on all of these activities. 

So I would like to ask you to clarify, does ARPA–E allow awardees to spend taxpayer funding on each of these items? 

Dr. MAJUMDAR. Well, Congressman, just to give you some general terms, we have basically created this policy in consultation 

with the Federal Acquisition Regulation. Our contracting officer 

has decided, has determined, that these are allowable costs under 

the FAR rules, and if there is something that is unallowable and 

if the IG—we worked with the IG in the past, some things are unallowable, we go and recover the cost. And so we work together to 

do that. 

And so we are basically following the regulations, Federal Acquisition Regulation, with our contracting office making the determination. 

Chairman BROUN. Sir Inspector General, would you agree with 

that? 

Mr. FRIEDMAN. Well, I have not seen the new policy formulation 

that you apparently received. We haven’t had a chance to study it, 

so I really wouldn’t be in a position, Mr. Chairman, to comment on 

the new policy. 

What we found—I should point out that when it comes to costincurred audits that we do, we develop questionable costs and 

make recommendations to the contracting officer. The ultimate decision is that of the contracting officer. We provide advisory reports 

which we have done, and the contracting officer ultimately decides. 

That doesn’t mean we agree with the contracting officer in every 

instance, but I would have to see the new policy in this regard. 

Chairman BROUN. Very good. My time is just about expired. I 

will yield it back and yield to Mr. Tonko for three minutes. 

Mr. TONKO. Thank you, Mr. Chair. To me, you know, listening 

to the testimony here today, I come to the conclusion that the IG 

and the GAO, the two places we turn to for honest evaluations of 

how programs are doing, both came back from the reviews of 
62 

ARPA–E with largely positive reports. They have recommended 

modifications. It seems as though they have been complied with by 

ARPA–E folks. It would seem to me that simple fairness would dictate that the Committee acknowledge and congratulate Dr. 

Majumdar on his accomplishments. I am disappointed that partisanship has sunk to the level where we cannot even come together for such a simple thing as acknowledging when we find a 

program that seems to be on the right track, encouraging jobs and 

allowing acceleration and transformation to take hold. I look at the 

guidelines within the statute which indicates accelerating transformational technological advances in areas that industry by itself 

is not likely to undertake. 

So with that, Dr. Majumdar, I would ask with small companies 

and start-ups often looking for any support they can get to carry 

forth with their ideas, I know they look to venture capital and 

other agencies anywhere they can. How does ARPA–E differ in 

what it does as compared to other agencies or the private capital 

market? 

Dr. MAJUMDAR. Well, as I explained in the past, what we are 

looking for are white spaces, and let me just describe what that 

white space is because it has been referred to several places, are 

those areas where (a), within, first of all within the Department of 

Energy, no one else is funding. Secondly, are areas where there are 

potential for transformative solutions that meet the ARPA–E goals 

as written in the statute, the U.S. technological lead, reducing our 

imports, et cetera. Where there is an opportunity for science, new 

scientific discoveries can be translated into quantum leaps in technologies that will provide the U.S. with a technological lead and potential technological growth down the line. That is the area. And 

to identify that, we recruit some of the best people from the technical community to bring them in and then work with the technical 

community and within the DOE and other federal agencies, including the Department of Defense, to identify those white spaces. And 

that is how we create these areas, and the battery one that I gave 

earlier was an example of that. I gave the example of creating oil 

based on microbes that have never been used to make oil before. 

And these live on electrodes, and they grab electricity and make oil 

which has never been done ever by anyone in the world before. And 

that is a completely new pathway of creating oil. And if in the future it becomes successful and scales down in cost and volume, it 

will create the foundation of an entirely new industry that does not 

even exist today. That is the kind of research that we are funding 

right now. 

Mr. TONKO. That might be something that the country needs 

right now. We need that reinforcement if we are going to compete 

effectively in an innovation economy race around the world. Thank 

you. 

Chairman BROUN. Mr. Tonko, I agree with you. In fact, in my 

opening statement I congratulated or said that ARPA–E is supporting a lot of projects that are clearly aligned. This is a Committee of Investigation and Oversight. We are not trying to beat up 

on them. We just have a responsibility to our constituents and taxpayers in this country to make sure that we continue with this 

very much-needed research. In fact, Dr. Majumdar and I had some 
63 

private discussions about some of the things they are doing, and I 

am very excited about some of the projects that he has undertaken. 

I now recognize Mr. Hall for three minutes. 

Chairman HALL. Mr. Chairman, I maybe made a few people 

nervous when I mentioned Solyndra. I didn’t really mean any harm 

to anybody. I just know that it is a good example that we can learn 

from, and we are going to follow up. And I think it is reason for 

the nervous situation. 

In the wake of Solyndra, I would hope DOE is taking great care 

to insure such influential political actors are not receiving favored 

treatment from the Administration, but it is very difficult to follow 

the money in some of these cases and not be concerned. Dr. 

Majumdar, wouldn’t one of the best ways to avoid such potential 

cronyism and favored treatment be to avoid funding companies 

with such extensive private-sector backing in the first place? 

Dr. MAJUMDAR. Well, Chairman Hall, I can only speak for 

ARPA–E, and I think I would say that everything that we do in 

ARPA–E is based purely on merit. It is based on external panel reviews that we have, of two stages of reviews, and as I said, it is 

purely based on merit and that is how every single project has been 

decided and executed on. 

Chairman HALL. Well, let me ask you this. How often were officials from the White House were in touch with you? They weren’t 

in touch with you or your team or people under you regarding specific ARPA–E awards. Would you answer that for me? 

Dr. MAJUMDAR. They have never been in touch with me in terms 

of actual ARPA–E awards before the selection. 

Chairman HALL. You have said that before. Anyone with your 

team under you? 

Dr. MAJUMDAR. No one has been in touch—no one from the 

White House has been touch with anyone in ARPA–E with regards 

to selection. 

Chairman HALL. Okay. Did anyone connected to the White 

House or entities concerned with the presidential elections contact 

you or your staff regarding any ARPA–E applicants prior to the 

award to them? 

Dr. MAJUMDAR. No. 

Chairman HALL. All right. I thank you. 

Chairman BROUN. Thank you, Mr. Chairman. Now I recognize 

Mr. Miller for three minutes. 

Mr. MILLER. Thank you, Mr. Chairman. There have been a lot 

of questions about some research getting funding from more than 

one source within the Federal Government. It is almost an implication that that research is getting more than is needed and they are 

pocketing the rest, like Mel Brooks’ movie, ‘‘The Producers.’’ My impression is that all that money is actually being spent on the research in those cases, but how do you account for some research 

getting funding from more than one source and what steps are you 

taking to make sure there is not, in fact, duplicative funding of the 

same kind of research by different parts of the Federal Government? 

Dr. MAJUMDAR. Well, Mr. Congressman, let me just give you my 

own background. I have been a scientist and an engineer for the 

last 22 years in the research community. I have received funding 
64 

from many of the federal agencies out here. In fact, my group was, 

I would say, fairly successful where I had funding from the NIH, 

funding from NSF, from the Office of Naval Research, et cetera. So 

my group had funding from multiple sources. But we had to make 

clear, absolutely crystal clear, that they were for different projects. 

And so that is exactly what we are following right now, that if 

ARPA–E is providing funding for anything and if that particular 

group has received funding from somewhere else, our job is to 

make sure that the ARPA–E funding is distinct and it is unique 

for that particular project only. And that is what we have followed, 

and you know, the records would show that. 

Mr. MILLER. Do you have any procedures to make sure that there 

is not overlapping funding for the same kind of research, that it is 

in fact distinct funding? 

Dr. MAJUMDAR. Yes, we do, and I think I would like to acknowledge the help of the IG in helping us with that. I am sorry, the 

GAO in helping us with that and the IG. And they have made recommendations in making sure that we follow some of the procedures. And those have now been enacted and there are policies in 

ARPA–E to make sure that we do this in the right way, and we 

appreciate the help that we have received from them. 

Mr. MILLER. Either of you in the little time I have left have any 

comment on this? You don’t have to have a comment on this, you 

just can have a comment on this. 

Mr. FRIEDMAN. Well, Mr. Miller, the uneasiness that—Chairman 

Hall appears to be bipartisan. We are working on several cases 

that involve precisely the subjects that you are talking about, but 

they are at a very early stage, and it would be inappropriate for 

me to discuss them. 

Mr. MILLER. But not involving ARPA–E? 

Mr. FRIEDMAN. In one or more cases, ARPA–E’s funds are involved, but it does not reflect negatively upon the management of 

ARPA–E or the Department of Energy. 

Mr. MILLER. Okay. 

Mr. FRIEDMAN. In other words, people in the science community 

are not immune from seeking funding from multiple organizations 

for essentially the same work. That happens, research misconduct 

cases that we do work, we do have in our inventory. 

Mr. MILLER. Okay. My time has expired. 

Chairman BROUN. Thank you, Mr. Miller. Dr. Bartlett, we enjoyed your five-minute sermon. I recognize you for another threeminute sermon if you have it geared—— 

Mr. BARTLETT. Okay. Thank you very much. 

Chairman BROUN [continuing]. Up or questions, sir. 

Mr. BARTLETT. I would just like to note that in a former life, I 

worked for the IBM Corporation, Federal Systems Division, and at 

one time I was performing 14 different grants and contracts. So one 

entity can solicit money from a number of different sources because 

there are different projects that you work on. 

I would like to ask the members of the family if they know that 

there is a better prognosticator of energy futures than the IEA? Are 

you sufficiently familiar with the International Energy Association? 

Dr. MAJUMDAR. Yes, sir. 
65 

Mr. BARTLETT. Do you know if there is a better energy prognosticator in the world than this group? 

Dr. MAJUMDAR. I think they are considered one of the top, you 

know, agencies to look at energy futures, et cetera. 

Dr. BARTLETT. Of the slides that I showed were called the World 

Energy Outlook. The first one was in ’08 where they thought that 

by 2030 we would be producing 106 million barrels of oil a day. 

Just two years later, just last year in 2010, they now believe that 

by 2035, five years late, we would be producing only 96 million barrels of oil a day. And if you look at the crude oil projections, even 

with those two huge wedges which I do not think have a prayer 

of being realized, they are flat. The only increase in growth that 

they have is from natural gas liquids, and those won’t be in your 

gas tank probably because they are propane and butane and things 

like that, and then unconventional oil that is growing. That is like 

the tar sands of Alberta, Canada, and we will get a bit more from 

that. 

We really need to—energy is somewhat fungible but not totally. 

The energy future for electricity is very good. I don’t have any 

problem with their energy future there, more nuclear and wind and 

solar and microhydro and true geothermal, tapping into the molten 

core of the earth, we can get about all the electricity that we need. 

Our real crisis for the future is going to be liquid fuels, and there 

is—every 12 days we use a billion barrels of oil. That is about 

sixth-grade arithmetic. That is not tough, is it? 84 million barrels 

a day, 12 days, that is about a billion, right? So you see a new find 

of 10 billion barrels and that is a huge discovery of oil. That will 

last 120 days. Big deal. We face a huge challenge here, and you 

know, I am exhilarated by challenges, and this is a huge challenge. 

It is going to call the best from us to meet this challenge. It is not 

trivial. And why do you think your government ignored four different studies that essentially the same thing, four organizations I 

mentioned? They didn’t want to hear it so they didn’t pay any attention to it. You know, it is sad. Thank you, Mr. Chairman. 

Chairman BROUN. The Chairman’s time has expired. You don’t 

have anybody on your side. Mr. Rohrabacher, you are recognized 

for three minutes. 

Mr. ROHRABACHER. Thank you very much. Just to go back to the 

line of questioning they had before, especially about Beacon Power, 

which, as I mentioned at the end of the last time, it went bankrupt 

after receiving these $70 million from three different sources, from 

ARPA–E as well as from the DOE. Our records seem to show that 

all of this was done to develop a flywheel energy storage technology. Again, I am not educated enough to know the difference between the terms that we were talking about, energy and power, but 

doesn’t the fact that it was all going for flywheel technology seem 

to indicate that there was duplication? And by the way, just so my 

colleagues on the other side of the aisle, when we say we are 

against duplication, it doesn’t mean that we are suggesting that 

someone has pocketed the money. That is absurd. We are suggesting that maybe the money could have been used better somewhere else that wasn’t duplicating the money being spent on the 

research. But you may answer the question. 
66 

Dr. MAJUMDAR. Congressman, I am also very concerned—that I 

share a concern about duplication as well, which is why we coordinate very, very closely with the rest of the DOE and other federal 

agencies and also look at where the private sector is funding. In 

this particular case, they went through a competition, they won the 

award competitively. Right now they are meeting the go/no go milestones that we have put together. They are also meeting—— 

Mr. ROHRABACHER. They are now meeting it? 

Dr. MAJUMDAR. Yeah, and they are also meeting the obligations 

of the cost share. 

Mr. ROHRABACHER. But even after they filed for bankruptcy they 

are meeting these things? 

Dr. MAJUMDAR. Well, it is going through some restructuring, and 

we are in consultation with the Department of Justice, you know, 

when we work with them. 

Mr. ROHRABACHER. And what factor, how does that play into if 

someone is asked for a grant, do you check to see if they are not 

going to go bankrupt before you provide the grant? 

Dr. MAJUMDAR. Well, at that time, you know, when we actually 

gave the grant, we did check at that time. At that time they had 

not filed for bankruptcy, and you know, then they subsequently did 

because—— 

Mr. ROHRABACHER. Well, wouldn’t the money be coming back? If 

a company gets money from ARPA–E and then goes bankrupt, do 

we get any of the money back as part of the settlement for a company that is going out of business? 

Dr. MAJUMDAR. Well, they have not been liquidated, they are 

being restructured right now. 

Mr. ROHRABACHER. Okay. 

Dr. MAJUMDAR. So it is not that they are completely gone. They 

have been restructured, and that is part of the Department of Justice thing. We are not involved in that except to the point that we 

consult with them in making sure that we are not violating any 

laws. 

Mr. ROHRABACHER. Okay. 

Dr. MAJUMDAR. But at the same time, they are meeting the milestones and their cost-share obligations. 

Mr. ROHRABACHER. Okay. Well, let me just note for the record 

that we do have two companies that we do have their names here, 

but we didn’t want to put them forth in this hearing for fear of saying something bad about the company. But we do have two names 

that were included in the GAO report that said there was duplication. It appeared to be duplication, and if we could get the answer 

back in writing of why that was not duplicative and the GAO report was inaccurate. 

Chairman BROUN. The gentleman’s time is expired. I remind 

Members that we can all submit questions in writing, and I appreciate the witnesses to answer in a timely manner. I think you have 

two weeks to do so, and we appreciate it. We are going to—— 

Mr. ROHRABACHER. Mr. Chairman. 

Chairman BROUN. Mr. Rohrabacher. 

Mr. ROHRABACHER. Whereas our friends on the other side of the 

aisle have suggested that we have not congratulated them for the 

good things that they have done, could I please note for the record 
67 

that because we ask questions like this does not mean that we do 

not deeply appreciate the job that you are doing and that of course 

all of you have done for your country and for the benefit of all of 

mankind, and so we congratulate you for that, and thank you, and 

please don’t think the tone that we have here does not mean that 

we don’t appreciate the good things. 

Dr. MAJUMDAR. Thank you very much to all of you. 

Chairman BROUN. I want to associate myself with those remarks, 

and I am sure all our Democrat friends would also associate. I hope 

that you all will associate yourself with those remarks. 

I thank you all for your valuable testimony and Members for 

your questions. The Members of the Subcommittee may have additional questions as I have already mentioned, and we do ask you 

to respond to those in writing. The record will remain open for two 

weeks for additional comments from Members. The witnesses are 

excused, and the hearing is now adjourned. 

[Whereupon, at 3:40 p.m., the Subcommittee was adjourned.] 
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ADDITIONAL MATERIAL FOR THE RECORD
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MINORITY STAFF REPORT AS SUBMITTED BY RANKING MEMBER PAUL TONKO
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