64682 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

the airplane is in flight is prohibited. Such

positioning may lead to loss of airplane

control or may result in an overspeed

condition and consequent loss of engine

power.’’

(b) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, New York

Aircraft Certification Office (ACO), FAA,

Engine and Propeller Directorate. Operators

shall submit their requests through an

appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, New York ACO.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the New York ACO.

(c) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

(d) This amendment becomes effective on

January 13, 1998.

Issued in Renton, Washington, on

December 2, 1997.

Darrell M. Pederson,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 97–32112 Filed 12–8–97; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF COMMERCE

National Institute of Standards and

Technology

15 CFR Part 295

[Docket No. 970822200–7272–02]

RIN 0693–AB44

Advanced Technology Program

AGENCY: National Institute of Standards

and Technology, Technology

Administration, Commerce.

ACTION: Final rule.

SUMMARY: The National Institute of

Standards and Technology (NIST) is

issuing a final rule which amends the

implementing regulations for the

Advanced Technology Program (ATP).

Major changes include an increase in

the cost-sharing requirement for large

companies applying as single proposers

in future competitions; modification of

the ATP evaluation criteria for project

selection to place greater emphasis on

joint ventures and consortia with a

broad range of participants; and a new

rule for the valuation of transfers

between separately-owned joint venture

members which applies to transfers of

goods, including computer software,

and services provided by the transferor

related to the maintenance of those

goods, when those goods or services are

transferred from one joint venture

member to other separately-owned joint

venture members.

EFFECTIVE DATE: This rule is effective

December 9, 1997.

FOR FURTHER INFORMATION CONTACT:

To receive additional program

information, contact Barbara Lambis at

(301) 975–4447.

SUPPLEMENTARY INFORMATION: The

National Institute of Standards and

Technology is issuing a final rule which

amends regulations found at part 295 of

title 15 of the Code of Federal

Regulations, which implements the

Advanced Technology Program (ATP).

In a statement to Congress in March of

1997, Secretary of Commerce William

M. Daley announced a Departmental

study of several issues raised by

Members of Congress and others

concerning the policies and procedures

of the ATP. The study was designed to

make recommendations for possible

changes to improve the effectiveness of

the program. Following issuance of a 30-

day notice of opportunity for public

comment on ways to improve the

operation of the ATP, recommendations

for possible changes were made to

improve the effectiveness of the

program.

In order to implement the

recommendations and the decisions of

Secretary Daley, the National Institute of

Standards and Technology is today

issuing changes to the operating

procedures of the Advanced Technology

Program found at part 295 of title 15 of

the Code of Federal Regulations. These

changes strengthen the fundamental

mission of the ATP: for Government to

work in partnership with industry to

foster the development and broad

dissemination of challenging, high-risk

technologies that offer the potential for

significant, broad-based economic

benefits for the nation. Such a unique

government-industry research

partnership fosters the acceleration not

only of dramatic gains in existing

industries, but also acceleration of the

development of emerging or enabling

technologies leading to revolutionary

new products, industrial processes and

services for the world’s markets and

work to spawn industries of the 21st

century. Furthermore, the changes also

ensure that the fundamental strengths of

the ATP remain unchanged, especially

the requirement that the ATP continue

to be a wholly merit-driven program

based on peer review.

Description of the Changes

Changes to part 295 include revisions

on the following topics (please see the

analysis of comments below for

additional details):

• Revised section 295.32(b) increases

the cost-sharing requirement for large

companies applying as single proposers

in future competitions. ‘‘Large

businesses,’’ as the term is defined in

the revised Sec. 295.2(k), are required to

cost-share at a minimum of 60 percent.

• The term ‘‘large business’’ is

defined as including any business,

including any parent company plus

related subsidiaries, having annual

revenues in excess of the amount

published by ATP in the relevant

annual notice of availability of funds. In

establishing this amount, ATP may

consider the dollar value of the total

revenues of the 500th company in

Fortune Magazine’s Fortune 500 listing.

• The ATP evaluation criteria for

project selection are modified to: (1)

place greater emphasis on joint ventures

and consortia with a broad range of

participants; and (2) better define the

multi-step selection process based on all

of the criteria in Sec. 295.6.

• A new rule is established in Sec.

295.25 regarding the valuation of

transfers between separately-owned

joint venture members. The rule applies

to transfers of goods, including

computer software, and services

provided by the transferor related to the

maintenance of those goods, when those

goods or services are transferred from

one joint venture member to other

separately-owned venture members.

• Also, a number of administrative

and clerical changes are proposed to be

implemented to part 295 for consistency

and clarity.

Summary of Comments

On September 17, 1997, NIST

published a notice of proposed

rulemaking in the Federal Register (62

FR 48802). In response to this notice

three letters were received; one from a

not-for-profit research organization, one

from a U.S.-owned for-profit company,

and one from an individual. An analysis

of the comments follows.

Section 295.2 Definitions—(1

Comment)

One commenter stated that the

definition of ‘‘matching funds’’ under

Section 295.2(1) eliminates reference to

in-kind contribution of personnel and

requested clarification on whether NIST

considers personnel costs to be a cash

contribution that would not be subject

to the 30 percent limitation on in-kind.

NIST Response: Under the ATP

program, personnel contributions are
Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations 64683

considered as ‘‘cash’’ contributions

when made by funding recipients and,

therefore, would not be subject to the 30

percent limitation.

Section 295.3 Eligibility of United

States and Foreign-Owned Businesses—

(1 Comment)

One commenter stated that Section

295.3, ‘‘Eligibility of United States and

foreign-owned business’’, is unfair to

U.S. citizens and makes the goal

outlined in Section 295.1 ‘‘Purpose’’,

nearly impossible to achieve. The

commenter believes that we should use

the best technology in the world to

achieve the ATP goals of ‘‘high pay-off.’’

The commenter suggests that the

ownership rule be changed to that of

individual representatives who must be

U.S. citizens regardless of employer,

and believes this would be fair to all

U.S. citizens, who have a right to be

employed in the U.S. by any legal

entity. The commenter concludes that

change would make it possible for

participating coalitions to consider the

best technology in the world to help the

U.S. develop the best economic growth

in a competitive, global economy.

NIST Response: The statutory

authority for the ATP, Section 28 of the

NIST Act (15 U.S.C. 278n), stipulates

ATP eligibility requirements. Only

Congress has the authority to amend

this statute. We therefore cannot make

any changes based on these comments.

Section 295.6 Criteria for Selection—(1

Comment)

One commenter requested

clarification of what it meant by ‘‘costsharing’’ in section 295.6(d)(1), Level of

commitment of proposer, which refers

to contributions of personnel,

equipment, facilities, and cost-sharing.

NIST Response: The ‘‘level of

commitment’’ criterion reflects the

extent to which a proposer has

demonstrated a commitment to the

project with, for example, cash,

personnel, scientific equipment, and

research facilities. Cost-sharing as used

in this selection criteria includes cash

and in-kind contributions and the level

of the total contribution, i.e., low,

average, or high.

Section 295.12 Special Reporting and

Auditing Requirements—(2 Comments)

One commenter suggested that the

ATP award stipulate the reporting

requirements needed and stated that the

audit requirements are a duplication of

government surveillance and are not in

the spirit of contractor self governance

programs. Companies which have

resident cognizant Federal auditors

should be allowed to utilize such

auditors to conduct the audits rather

that having to incur additional expenses

to hire an outside Certified Public

Account (CPA). The commenter

recommends that the audit requirement

apply on an as-needed basis for firms

who do not have systems to support

government contracting.

NIST Response: Each ATP award

includes guidance on the financial,

business, and technical reporting

requirements. The audit requirement is

not meant to be duplicative of existing

government audit surveys. Resident

cognizant Federal auditors may conduct

the required audits in lieu of a private

CPA firm.

A second commenter noted that

295.12 is noted as being revised and

then removed.

NIST Response: This is a

typographical error. Section 295.12 is

being revised; however, section 295.14

is being removed.

Section 295.25 Special Rule for the

Valuation of Transfers Between

Separately-Owned Joint Venture

Members—(1 Comment)

One commenter stated that section

295.25 will serve as a disincentive for

small companies to become joint

venture partners and they will likely

only provide products and services as

subcontractors. The commenter further

stated that the proposed special rule is

not mandated under the ATP statute

and further appears to be at odds with

the ATP objective and with all other

government pricing principles. The

commenter supports the use of GSA

schedule price as a method of valuing

products and services and asserts that

the use of other pricing methods for the

ATP program could jeopardize

preexisting agreements. He also

disagrees that transferred services

should be included in the 30 percent

restriction on in-kind contributions.

NIST Response: The ATP is a costshared, high-risk research and

development program and, therefore, it

is expected that participants share in

risk taking. The issues related to an

equitable valuation of transfers among

joint venture participants appear to be

unique to this program, therefore,

guidelines from other Federal programs

would not necessarily apply. In the

ATP, reimbursement of the

government’s share of the costs is based

on actual costs incurred during the

period of cost sharing rather than on

recovering sunk costs (previously

incurred R&D costs). The Department of

Commerce deems this approach to be a

reasonable compromise between a very

strict interpretation of the intent of the

ATP legislation and the more traditional

policy of using GSA Schedule pricing as

the basis for valuation. The strict

interpretation would, for example,

result in a transfer of previouslydeveloped software from one joint

venture participant to another being

valued for matching funds purposes

essentially at zero. We recognize that

such an interpretation would cause

hardship for many ATP proposers,

hence the compromise. ATP recognizes

that some small companies may not

have the resources to contribute a

significant portion of the cost-sharing,

however, joint ventures often have a

mix of other medium and/or large

businesses that, in the aggregate, can

provide the required cost-sharing.

Section 295.32 Limitations on

Assistance—(1 Comment)

Section 295.32(b), which raises the

cost sharing of a single company to 60

percent, and Section 295.6, regarding

the evaluation criteria, will make it

more difficult for single companies to

participate. The commenter further

states that no rationale is given for the

changes.

NIST Response: ATP agrees that the

change could make it more difficult for

some large businesses to participate in

ATP as single company proposers.

There has been much heated debate in

the Congress and elsewhere concerning

cost sharing in ATP and the role of large

firms applying as single company

proposers. Many people have expressed

the viewpoint that large businesses

should be expected to support more

than 50 percent of the total project cost.

(Under the previous rule, large

companies with very low indirect costs

could recover more than 50 percent of

total project costs.) DOC believes that

the change will result in a broader

consensus that the ATP’s policies for

large businesses are fair and

appropriate.

Additional Information

Effective Date of the Final Rule

This final rule relating to grants,

benefits, and contracts is exempt from

the delayed effective date requirement,

and accordingly, under section 553(a)(2)

of the Administrative Procedure Act (5

U.S.C. 553), is therefore being made

effective immediately without a 30 day

delay in effective date.

Executive Order 12866

This rule has been determined not to

be significant under section 3(f) of

Executive Order 12866.

Executive Order 12612

This rule does not contain policies

with Federalism implications sufficient
64684 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

to warrant preparation of a Federalism

assessment under Executive Order

12612.

Regulatory Flexibility Act

The Assistant General Counsel for

Legislation and Regulation of the

Department of Commerce certified to

the Chief Counsel for Advocacy, Small

Business Administration, that this rule

will not have a significant economic

effect on a substantial number of small

entities. (5 U.S.C. 605(b)). This is

because there are only a small number

of awardees and thus only a small

number of awards will be given to small

businesses. Specifically, based on past

experience and currently foreseen

budges, the ATP would expect to

receive only a few hundred proposals

annually from small businesses, and

from these, to make under 100 awards.

The program is entirely voluntary for

the participants that seek funding.

Paperwork Reduction Act

Notwithstanding any other provisions

of the law, no person is required to

respond to, nor shall any person be

subject to a penalty for failure to comply

with a collection-of-information, subject

to the requirements of the Paperwork

Reduction Act, 44 U.S.C. 3501 et seq.,

unless that collection of information

displays a currently valid Office of

Management and Budget (OMB) control

number.

This rule contains collection of

information requirements subject to

review and approval by the Office of

Management and Budget under the

Paperwork Reduction Act (PRA). The

collection of information requirements

have been approved under OMB Control

Number 0693–0009. The public

reporting burden per respondent is

estimated to range between 20 and 30

hours per submission of the proposal

and 3 hours annually for recipients of

financial assistance to provide

monitoring reports. This estimate

includes the time for reviewing

instructions, searching existing data

sources, gathering and maintaining the

data needed, and completing and

reviewing the collections of

information. Comments on the burden

estimates, or any other aspect of the

information requirements, should be

addressed to Barbara Lambis, Room

A333, Administration Building National

Institute of Standards and Technology,

Gaithersburg, MD 20899.

National Environmental Policy Act

This rule will not significantly affect

the quality of the human environment.

Therefore, an environmental assessment

or Environmental Impact Statement is

not required to be prepared under the

National Environmental Policy Act of

1969.

Executive Order 12372

Executive Order 12372

‘‘Intergovernmental Review of Federal

Programs’’ does not apply to this

program.

List of Subjects in 15 CFR Part 295

Inventions and patents, Laboratories,

Research, Science and technology,

Scientists.

Dated: December 3, 1997.

Elaine Bunten-Mines,

Director, Program Office.

For reasons set forth in the preamble,

Title 15, part 295 of the Code of Federal

Regulations is amended as follows:

PART 295—ADVANCED TECHNOLOGY

PROGRAM

1. The authority citation for Part 295

continues to read as follows:

Authority: 15 U.S.C. 278n.

2. Section 295.1 is revised to read as

follows:

§ 295.1 Purpose.

(a) The purpose of the Advanced

Technology Program (ATP) is to assisted

United States businesses to carry out

research and development on high risk,

high pay-off, emerging and enabling

technologies. These technologies are:

(1) High risk, because the technical

challenges make success uncertain;

(2) High pay-off, because when

applied they offer significant benefits to

the U.S. economy; and

(3) Emerging and enabling, because

they offer wide breadth of potential

application and form an important

technical basis for future commercial

applications.

(b) The rules in this part prescribe

policies and procedures for the award of

cooperative agreements under the

Advanced Technology Program in order

to ensure the fair treatment of all

proposals. While the Advanced

Technology Program is authorized to

enter into grants, cooperative

agreements, and contracts to carry out

its mission, the rules in this part address

only the award of cooperative

agreements. The Program employs

cooperative agreements rather than

grants because such agreements allow

ATP to exercise appropriate

management oversight of projects and

also to link ATP-funded projects to

ongoing R&D at the National Institute of

Standards and Technology wherever

such linkage would increase the

likelihood of success of the project.

(c) In carrying out the rules in this

part, the Program endeavors to put more

emphasis on joint ventures and

consortia with a broad range of

participants, including large companies,

and less emphasis on support of

individual large companies.

3. Section 295.2(c) is revised to read

as follows:

§ 295.2 Definitions.

* * * * *

(c) The term direct costs means costs

that can be identified readily with

activities carried out in support of a

particular final objective. A cost may

not be allocated to an award as a direct

cost if any other cost incurred for the

same purpose in like circumstances has

been assigned to an award as an indirect

cost. Because of the diverse

characteristics and accounting practices

of different organizations, it is not

possible to specify the types of costs

which may be classified as direct costs

in all situations. However, typical direct

costs could include salaries of personnel

working on the ATP project and

associated reasonable fringe benefits

such as medical insurance. Direct costs

might also include supplies and

materials, special equipment required

specifically for the ATP project, and

travel associated with the ATP project.

ATP shall determine the allowability of

direct costs in accordance with

applicable Federal cost principles.

* * * * *

4. Section 295.2 is further amended

by revising the reference ‘‘§ 295.2(r)’’ in

paragraph (d) to read ‘‘§ 295.2(q)’’ and

by removing paragraph (e),

redesignating paragraphs (f) through (k)

as paragraphs (e) and through (j),

removing paragraph (n), redesignating

paragraphs (o) through (r) as paragraphs

(n) through (q), and adding new

paragraph (k) to read as follows:

§ 295.2 Definitions.

* * * * *

(k) The term large business for a

particular ATP competition means any

business, including any parent company

plus related subsidiaries, having annual

revenues in excess of the amount

published by ATP in the relevant

annual notice of availability of funds

required by § 295.7(a). In establishing

this amount, ATP may consider the

dollar value of the total revenues of the

500th company in Fortune Magazine’s

Fortune 500 listing.

* * * * *

5. The newly designated § 295.2(g) is

revised to read as follows:

§ 295.2 Definitions.

* * * * *
Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations 64685

(g) The term indirect costs means

those costs incurred for common or joint

objectives that cannot be readily

identified with activities carried out in

support of a particular final objective. A

cost may not be allocated to an award

as an indirect cost if any other cost

incurred for the same purpose in like

circumstances has been assigned to an

award as a direct cost. Because of

diverse characteristics and accounting

practices it is not possible to specify the

types of costs which may be classified

as indirect costs in all situations.

However, typical examples of indirect

costs include general administration

expenses, such as the salaries and

expenses of executive officers,

personnel administration, maintenance,

library expenses, and accounting. ATP

shall determine the allowability of

indirect costs in accordance with

applicable Federal cost principles.

* * * * *

6. The newly designated § 295.2(h) is

revised to read as follows:

§ 295.2 Definitions.

* * * * *

(h) The term industry-led joint

research and development venture

means a joint research and development

venture that consists of two or more

separately-owned, for-profit businesses

that perform research and development

in the project; control the venture’s

membership, research directions, and

funding priorities; and share total

project costs with the Federal

government. The venture may include

additional companies, independent

research organizations, universities,

and/or governmental laboratories (other

than NIST) which may or may not

contribute funds (other than Federal

funds) to the project and perform

research and development. An

independent research organization may

perform administrative tasks on behalf

of an industry-led joint research and

development venture, such as handling

receipts and disbursements of funds and

making antitrust filings.

* * * * *

7. Redesignated § 295.2(j)(1)(vi) is

revised to read as follows:

§ 295.2 Definitions.

* * * * *

(j) * * *

(1) * * *

(vi) Any combination of the purposes

specified in paragraphs (j)(1) (i), (ii),

(iii), (iv) and (v) of this section, and may

include the establishment and operation

of facilities for the conducting of

research, the conducting of such venture

on a protected and proprietary basis,

and the prosecuting of applications for

patents and the granting of licenses for

the results of such venture, but does not

include any activity specified in

paragraph (j)(2) of this section.

* * * * *

8. Section 295.2(l) is revised to read

as follows:

§ 295.2 Definitions.

* * * * *

(l) The term matching funds or cost

sharing means that portion of project

costs not borne by the Federal

government. Sources of revenue to

satisfy the required cost share include

cash and in-kind contributions. Cash

contributions can be from recipient,

state, county, city, or other non-federal

sources. In-kind contributions can be

made by recipients or non-federal third

parties (except subcontractors working

on an ATP project) and include but are

not limited to equipment, research tools,

software, and supplies. Except as

specified at § 295.25, the value of inkind contributions shall be determined

in accordance with OMB Circular A–

110, Subpart C, Section 23. The value of

in-kind contributions will be prorated

according to the share of total use

dedicated to the ATP program. ATP

restricts the total value of in-kind

contributions that can be used to satisfy

the cost share by requiring that such

contributions not exceed 30 percent of

the non-federal share of the total project

costs. ATP shall determine the

allowability of matching share costs in

accordance with applicable federal cost

principles.

* * * * *

9. Section 295.3(c) is added as

follows:

§ 295.3 Eligibility of United States and

foreign-owned businesses.

* * * * *

(c) Companies owned by legal

residents (green card holders) may

apply to the Program, but before an

award can be given, the owner(s) must

either become a citizen or ownership

must be transferred to a U.S. citizen(s).

10. Section 295.4 is revised to read as

follows:

§ 295.4 The selection process.

(a) The selection process for awards is

a multi-step process based on the

criteria listed in § 295.6. A source

evaluation board (SEB) is established to

ensure that all proposals receive careful

consideration. In the first step, called

‘‘preliminary screening,’’ proposals are

eliminated that do not meet the

requirements of this part or the Program

announcement. Typical but not

exclusive of the reasons for eliminating

a proposal at this stage is that the

proposal: is deemed to have serious

deficiencies in either the technical or

business plan; involves product

development rather than high risk R&D;

is not industry-led; is significantly

overpriced or underpriced given the

scope of the work; does not meet the

requirements set out in the notice of

availability of funds issued pursuant to

§ 295.7; or, in the case of joint ventures,

requests more than a minority share of

funding. NIST will also examine

proposals that have been submitted to a

previous competition to determine

whether substantive revisions have been

made to the earlier proposal, and, if not,

may reject the proposal or forward it to

a later stage in the review process based

upon the earlier review.

(b) In the second step, referred to as

the ‘‘technical and business review,’’

proposals are evaluated under the

criteria found in § 295.6. Proposals

judged to have the highest merit based

on the selection criteria receive further

consideration and are referred to as

‘‘semifinalists.’’

(c) In the third step, referred to as

‘‘selection of finalists,’’ the Program

prepares a final scoring and ranking of

semifinalist proposals. During this step,

the semifinalist proposers may be asked

to make oral presentations on their

proposals at NIST, and in some cases

site visits may be required. Subject to

the provisions of § 295.6, a list of ranked

finalists is submitted to the Selecting

Official.

(d) In the final step, referred to as

‘‘selection of awardees,’’ the Selecting

Official selects funding recipients from

among the finalists, based upon: (1) The

rank order of the proposals on the basis

of all selection criteria (§ 295.6);

(2) Assuring an appropriate

distribution of funds among

technologies and their applications; and

(3) The availability of funds. The

Selecting Official is responsible for

ensuring that only proposals that meet

the Program selection criteria receive

awards. The Program reserves the right

to withhold awards in any case where

a search of Federal records discloses

information that raises a reasonable

doubt as to the responsibility of the

proposer. The decision of the Selecting

Official is final.

(e) If a joint venture is ranked as a

finalist, but the Program determines that

the joint venture contains weaknesses in

its structure or cohesiveness that may

substantially lessen the probability of

the proposed program being completed

successfully, the Program may inform

the proposer of the deficiencies and

enter into negotiations with the

proposer in an effort to remedy the

deficiencies. If appropriate, funding up
64686 Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations

to 10 percent of the amount originally

requested by the proposer may be

awarded by the Program to the proposer

to assist in overcoming the

organizational deficiencies. If the

Program determines within six months

of this award that the organizational

deficiencies have been corrected, the

Program may award the remaining

funds requested by the proposer to that

proposer.

(f) NIST reserves the right to negotiate

with proposers selected to receive

awards the cost and scope of the

proposed work, e.g., to add or delete a

task(s) to improve the probability of

success or to make the proposal more

consistent with ATP’s mission.

11. Section 295.6 is revised to read as

follows:

§ 295.6 Criteria for selection.

The evaluation criteria to be used in

selecting any proposal for funding

under this Program, and their respective

weights, are listed in this section. No

proposal will be funded unless the

Program determines that it has high

scientific and technical merit, no matter

how meritorious the proposal might be

with respect to the other selection

criteria. Similarly, no proposal will be

funded that does not require Federal

support or that is product development

rather than high risk R&D. Each of the

subfactors within a selection criterion

shall be weighted equally.

(a) Scientific and technical merit (30

percent).

(1) Quality, innovativeness, and costeffectiveness of the proposed technical

program, that is, uniqueness with

respect to current industry practice.

Proposers shall compare and contrast

their approaches with those taken by

other domestic and foreign companies

working in the same field.

(2) Appropriateness of the technical

risk and feasibility of the project, that is,

is there a sufficient knowledge base to

justify the level of technical risk

involved, and is the risk commensurate

with the potential payoff. Projects

should press the state of the art while

still having credibility with regard to

technical approach.

(3) Coherency of the technical plan

and clarity of vision of the technical

objectives, and the degree to which the

technical plan meets the project and, in

the case of focused program

competitions, program goals.

(4) Integrated, forward-looking, team

approach to the project. This factor

includes the extent to which the R&D

team will take into account aspects such

as research and raw material suppliers

and considerations of manufacturability

and requirements of customers,

regulatory concerns, safety issues, and

environmental impacts. It also includes

the extent to which all of the necessary

technical disciplines will be brought

into the R&D and how R&D,

manufacturing, and marketing will work

together in an integrated fashion.

(5) Potential broad impact on U.S.

technology and knowledge base.

(b) Potential net broad-based

economic benefits (20 percent).

Potential to improve U.S. economic

growth, taking into account the

timeliness of the proposal; that is, the

potential project results will not occur

too late or too early to be competitively

useful, and the degree to which ATP

support is essential for the achievement

of the broad-based benefits from the

proposed R&D and appropriateness of

proposed R&D for ATP support. This

criterion takes into consideration the

likelihood of the results being achieved

in the same general time frame by the

proposer or by other U.S. researchers

without ATP support, and whether

other Federal agencies or other sponsors

are already funding very similar kinds

of work. Projects will not be selected if

the Program judges that Federal support

is not needed. In assessing the potential

for broad-based economic benefits,

emphasis is placed on a strong potential

for spillover benefits extending well

beyond those accruing to the

awardee(s). Benefits are compared

against the costs of the proposal to

determine cost-effectiveness of the

proposal.

(c) Adequacy of plans for eventual

commercialization (20 percent).

(1) Evidence that if the project is

successful, the proposers will pursue

further development of the technology

toward commercial application, either

through their own organization(s) or

through others.

(2) Degree to which proposal

identifies potential applications of the

technology and provides evidence that

the proposer has credible plans to

assure prompt and widespread use of

the technology if the R&D is successful

and to ensure adequate protection of the

intellectual property by the

participant(s) and, as appropriate, by

other U.S. businesses.

(d) Level of commitment and

organization structure (20 percent).

(1) Level of commitment of proposer

as demonstrated by contribution of

personnel, equipment, facilities, and

cost-sharing. Extent to which the

proposer assigns the company’s best

people to the project. Priority given to

this work in relation to other company

activities.

(2) For joint ventures, the extent to

which the joint venture has been

structured (vertical integration,

horizontal integration, or both) so as to

include sufficient participants

possessing all of the skills required to

complete successfully the proposed

work.

(3) For joint ventures, the extent to

which participation by small businesses

is encouraged and is a key component

of the proposal.

(4) Appropriateness of subcontractor/

supplier/collaborator participation and

relationships (where applicable). For

large company single proposers, the

extent to which subcontractor teaming

arrangements are featured and are a key

component of the proposal.

(5) Clarify and appropriateness of

management plan. Extent to which the

proposers have clarified who is

responsible for each task, and the chain

of command. Extent to which those

responsible for the work have adequate

authority and access to higher level

management.

(e) Experience and qualifications (10

percent).

(1) Adequacy of proposer’s facilities,

equipment, and other technical,

financial, and administrative resources

to accomplish the proposed program

objectives. This factor includes

consideration of resources possessed by

subcontractors to the proposer or other

collaborators.

(2) Quality and appropriateness of the

technical staff to carry out the proposed

work program and to identify and

overcome barriers to meeting project

objectives.

(3) Past performance of the company

or joint venture members in carrying out

similar kinds of efforts successfully,

including technology application.

Consideration of this factor in the case

of a start-up company or new joint

venture, will take into account the past

performance of the key people in

carrying out similar kinds of efforts.

12. Section 295.12 is revised to read

as follows:

§ 295.12 Special reporting and auditing

requirements.

Each award by the Program shall

contain procedures regarding technical,

business, and financial reporting and

auditing requirements to ensure that

awards are being used in accordance

with the Program’s objectives and

applicable Federal cost principles. The

purpose of the technical reporting is to

monitor ‘‘best effort’’ progress toward

overall project goals. The purpose of the

business reporting system is to monitor

project performance against the

Program’s mission as required by the

Government Performance and Results

Act (GPRA) mandate for program
Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / Rules and Regulations 64687

evaluation. The audit standards to be

applied to ATP awards are the

‘‘Government Auditing Standards’’

(GAS) issued by the Comptroller

General of the United States (also

known as yellow book standards) and

the ATP program-specified audit

guidelines. The ATP program-specific

audit guidelines include guidance on

the number of audits required under an

award. In the interest of efficiency, the

recipients are encouraged to retain their

own independent CPA firm to perform

these audits. The Department of

Commerce’s Office of Inspector General

(OIG) reserves the right to conduct

audits as deemed necessary and

appropriate.

13. Section 295.14 is removed.

14. Section 295.22 is revised to read

as follows:

§ 295.22 Limitations on assistance.

(a) An award will be made under this

subpart only if the award will facilitate

the formation of a joint venture or the

initiation of a new research and

development project by an existing joint

venture.

(b) The total value of any in-kind

contributions used to satisfy the cost

sharing requirement may not exceed 30

percent of the non-federal share of the

total project costs.

15. Section 295.25 is added to subpart

B as follows:

§ 295.25 Special rule for the valuation of

transfers between separately-owned joint

venture members.

(a) Applicability. This section applies

to transfers of goods, including

computer software, and services

provided by the transferor related to the

maintenance of those goods, when those

goods or services are transferred from

one joint venture member to other

separately-owned joint venture

members.

(b) Rule. The greater amount of the

actual cost of the transferred goods and

services as determined in accordance

with applicable Federal cost principles,

or 75 percent of the best customer price

of the transferred goods and services,

shall be deemed to be allowable costs;

provided, however, that in no event

shall the aggregate of these allowable

costs exceed 30 percent of the nonFederal share of the total cost of the

joint research and development

program.

(c) Definition. The term ‘‘best

customer price’’ shall mean the GSA

schedule price, or if such price is

unavailable, the lowest price at which a

sale was made during the last twelve

months prior to the transfer of the

particular good or service.

16. Sections 295.31 and 295.32 are

revised to read as follows:

§ 295.31 Qualification of proposers.

Awards under this subpart will be

available to all businesses, subject to the

limitations set out in §§ 295.3 and

295.32.

§ 295.32 Limitations on assistance.

(a) The Program will not directly

provide funding under this subpart to

any governmental entity, academic

institution or independent research

organization.

(b) For proposals submitted to ATP

after December 31, 1997, awards to large

businesses made under this subpart

shall not exceed 40 percent of the total

project costs of those awards in any year

of the award.

(c) Awards under this subpart may

not exceed $2,000,000, or be for more

than three years, unless the Secretary

provides a written explanation to the

authorizing committees of both Houses

of Congress and then, only after thirty

days during which both Houses of

Congress are in session. No funding for

indirect costs, profits, or management

fees shall be available for awards made

under this subpart.

(d) The total value of any in-kind

contributions used to satisfy a cost

sharing requirement may not exceed 30

percent of the non-federal share of the

total project costs.

17. In part 295 remove the word

‘‘applicants’’ or ‘‘applicant’’ and add in

its place the word ‘‘proposers’’ or

‘‘proposer’’ in the following places:

§ 295.7(a), (b) and (c); § 295.21 section

heading; subpart C heading; and

§ 295.31 section heading.

[FR Doc. 97–32215 Filed 12–8–97; 8:45 am]

BILLING CODE 3510–13–M

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 274

[Release Nos. 33–7478; IC–22920; File No.

S7–19–97]

RIN 3235–AG73

Update of Registration Form to Reflect

Fee Rate Change for Registration of

Certain Investment Company

Securities

AGENCY: Securities and Exchange

Commission.

ACTION: Amendments to form.

SUMMARY: The Securities and Exchange

Commission (‘‘Commission’’) is

updating the fee rate information in the

instructions to the form under the

Investment Company Act of 1940 that

prescribes the method by which certain

investment companies calculate and pay

registration fees on securities they issue

(the form was last published at 62 FR

47941 (Sept. 12, 1997)). On November

28, 1997, legislation was enacted that

sets a new fee rate of $295 per

$1,000,000 offered or sold (prorated for

amounts less than $1,000,000).

Registration fees under this new rate are

calculated by multiplying the aggregate

offering or sales amount by .000295.

This amendment updates the reference

to the current fee rate in the instructions

to the form.

EFFECTIVE DATE: December 9, 1997.

FOR FURTHER INFORMATION CONTACT:

Robin S. Gross, Staff Attorney, Office of

Regulatory Policy at (202) 942–0690, or

Carolyn A. Miller, Senior Financial

Analyst, Office of Financial Analysis at

(202) 942–0513, Division of Investment

Management, Securities and Exchange

Commission, 450 5th Street, N.W., Mail

Stop 10–2, Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: The

Commission today is amending

Instruction C.9 to Form 24F–2 [17 CFR

274.24] under the Investment Company

Act of 1940 [15 U.S.C. 80a] (the

‘‘Investment Company Act’’).

Form 24F–2 is the Form on which

certain investment companies file an

annual notice of securities sold

pursuant to rule 24f–2 under the

Investment Company Act [17 CFR

270.24f–2]. The Instruction to Item

5(vii) explains that the multiplier for

calculation of the registration fee is

determined by the Commission in

accordance with section 6(b) of the

Securities Act of 1933 [15 U.S.C. 77f(b)].

The Instruction informs filers of the

multiplier that was in effect as of the

date of the most recent printing of the

Form, but indicates that this rate is

subject to change from time to time,

without notice, by act of Congress

through appropriations for the

Commission or other laws.

On November 28, 1997, legislation

was enacted that sets the fee rate at $295

per $1,000,000 offered or sold (prorated

for amounts less than $1,000,000). Fees

will be calculated by multiplying the

aggregate offering or sales amount by

.000295.

The Commission is amending the

Instruction to Item 5(vii) of Form

24F–2 to reflect the change in the fee

rate.

Statutory Authority

The Commission is amending Form

24F–2 pursuant to the authority set forth

in sections 24 and 38(a) of the