Technology Transfer: Several Factors Have Led to a Decline in Partnerships at DOE's Laboratories
Published: 2002-04-19T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: Since 1980 Congress has passed laws to facilitate the transfer of technology from federal laboratories to U.S. businesses. In particular, the National Competitiveness Technology Transfer Act of 1989 authorized federal laboratories operated by contractors, including the Department of Energy's (DOE) national laboratories, to enter into cooperative research and development agreements (CRADA). Under a CRADA, the partner and DOE laboratory agree to jointly conduct research and typically share the research costs. By fiscal year 1992, DOE's national laboratories were among the leading federal laboratories participating in CRADAs. Recently however, the 12 laboratories that DOE surveyed have substantially reduced their CRADA partnerships and their technical assistance to small businesses. Instead, the laboratories have increasingly transferred technology through agreements that did not involve collaborative research and were funded by a business or other nonfederal entity. Managers at most of the laboratories say the lack of dedicated funding for technology for transfer to technology partnerships, including funding targeted to small businesses, is the most important barrier to their technology transfer activities. Managers at most laboratories said that DOE's lack of a high-level, effective advocate for technology transfer and DOE's lack of commitment to technology partnerships were important barriers. Several managers also said that requirements, such as DOE's advance payment clause, were often financially burdensome for small businesses.

section_title: Letter
paragraphs: Since 1980, the Congress has enacted several laws designed to make federally funded technology available to the public by facilitating the transfer of technology from federal laboratories to U.S. businesses. In particular, the National Competitiveness Technology Transfer Act of 1989 authorized federal laboratories operated by contractors—including the Department of Energy’s (DOE) national laboratories—to enter into cooperative research and development agreements (CRADAs) that are consistent with the laboratories’ missions. Under a CRADA, the partner and DOE laboratory agree to jointly conduct research and typically share the research costs. By fiscal year 1992, DOE’s national laboratories were among the leading federal laboratories participating in CRADAs with businesses, universities, and other partners. In addition to CRADAs, DOE’s laboratories have participated in technology partnerships by providing technical assistance to small businesses. DOE’s laboratories have also transferred technology to businesses and other nonfederal entities without using partnerships by (1) “work-for-others” agreements, in which laboratory scientists perform specified research and the business pays full costs; (2) licensing their technology to businesses; and (3) making specialized user facilities available.
To further encourage DOE’s laboratories to enter into CRADAs and provide technical assistance, the Congress began providing funding specifically designated for technology partnerships in fiscal year 1991. However, in fiscal year 1996, the Congress began to phase out these dedicated funds, relying instead on program managers at the laboratories to use their regular research funds for CRADAs that would significantly benefit their programs. While the use of regular research funds instead of dedicated funds ensures that a CRADA project will have primary benefits to DOE’s research mission, it has raised concerns that DOE’s laboratories will be less likely to support CRADAs.
In July 2001, we reported a substantial drop in the number of CRADAs and technical assistance agreements that DOE’s National Nuclear Security Administration (NNSA) laboratories and production facilities have entered into in recent years. Concerned that a similar decline might have occurred among all of DOE’s laboratories, you requested that we expand our analysis to include the 12 DOE laboratories that have historically been most active in transferring technology to U.S. businesses. Specifically, you asked that we (1) examine these laboratories’ participation in and funding for technology transfer activities with nonfederal entities during the past 10 years and (2) obtain laboratory managers’ views on any barriers that may limit technology transfer activities between DOE’s laboratories and potential nonfederal partners.
To address the first objective, we surveyed the following 12 laboratories, which have accounted for almost all of DOE’s technology transfer activities and funding, according to DOE:   Lawrence Livermore National Laboratory, Los Alamos National Laboratory, and Sandia National Laboratories within NNSA;   Ames Laboratory, Argonne National Laboratory, Brookhaven National Laboratory, Lawrence Berkeley National Laboratory, Oak Ridge National Laboratory, and Pacific Northwest National Laboratory within DOE’s Office of Science;   National Renewable Energy Laboratory within DOE’s Energy Efficiency and Renewable Energy Program; Idaho National Engineering and Environmental Laboratory within DOE’s Environmental Management Program; and   National Energy Technology Laboratory within DOE’s Fossil Energy Program.
DOE’s other laboratories have been less active in technology transfer primarily because they (1) conduct basic research in the fields of high energy and nuclear physics and nuclear fusion, which have little near-term potential for commercial applications; (2) conduct classified research with little, if any, commercial application; or (3) are small.
subsections: section_title: Background
paragraphs: DOE laboratories have primarily used the following types of agreements to transfer technology to U.S. businesses and other organizations:   CRADAs: A DOE laboratory and its nonfederal partner(s) agree that their scientists will collaborate on a research project of mutual interest and consistent with the laboratory’s mission. Both parties may contribute personnel, services, and property to the CRADA project, and the partner(s) can provide funding for the laboratory’s research. However, the DOE laboratory cannot provide funding to the partner(s). Intellectual property rights to technology developed under the CRADA are negotiated in advance. In general, the inventing partner retains ownership rights, while the other partner receives appropriate licensing rights.
Technical assistance for small businesses: Both NNSA’s and the Office of Science’s laboratories used dedicated funds (provided by the Technology Partnership Program and the Laboratory Technology Research Program, respectively) to provide technical assistance to small businesses.
Work-for-others agreements: A DOE laboratory agrees to conduct a defined scope of work or list of tasks that is consistent with DOE missions and which does not place the laboratory in direct competition with the private sector. The nonfederal entity pays for the entire cost of the project. While intellectual property rights are negotiable, the nonfederal entity typically retains title rights to any inventions.
Technology licensing agreements: A DOE laboratory grants a business an exclusive or nonexclusive license to use its intellectual property in return for a licensing fee and/or royalties.
User facility agreements: A DOE laboratory permits outside organizations to use its unique research equipment and/or facilities to conduct research. For nonproprietary research, almost all of the users are supported by federal grants, typically through the National Science Foundation or DOE. For proprietary research, the private organization pays the full cost for using research equipment or facilities and retains title rights to any intellectual property.
Table 1 shows the dedicated funding that the Congress has made available for technology partnerships through the Technology Partnership Program for NNSA’s laboratories and weapons production facilities and the Laboratory Technology Research Program for DOE’s Office of Science laboratories. The Technology Partnership Program, which provided funding for DOE’s nuclear weapons laboratories and production facilities, peaked at $214 million in fiscal year 1996 and was subsequently phased out by fiscal year 2001. The Laboratory Technology Research Program, which provided funding for DOE’s Office of Science laboratories, also declined from a peak of $47 million in fiscal year 1995 to $3 million in fiscal year 2002. DOE requested $3 million for the Laboratory Technology Research Program for fiscal year 2003 and has announced that it will terminate this program once previously approved projects have been funded.
In the early 1990s, DOE created the Office of Research and Development Management within the Office of the Under Secretary to promote and oversee technology transfer at DOE’s laboratories and production facilities. In March 1996, at the direction of the Congress, DOE disestablished this office and eliminated all of its staff positions. Subsequently, in 1999, DOE established a Technology Transfer Working Group, composed of representatives from 25 DOE organizations, to oversee and coordinate technology transfer policies. The working group has no permanent staff positions.
section_title: DOE Laboratories Have Substantially Reduced Technology Transfer Activities Not Fully Funded by Nonfederal Partners
paragraphs: The 12 DOE laboratories surveyed have substantially reduced their participation in CRADAs and technical assistance to small businesses in recent years, primarily because DOE research program funding has not replaced dedicated funding for technology partnerships. On the other hand, the number of work-for-others agreements, technology licenses, and user facility agreements has increased during the past 10 years. (See tables 5 and 6 in app. I for data on each laboratory’s technology transfer activities and nonfederal entities’ financial support.) Finally, two laboratories have identified non-DOE sources to support their efforts to provide local small businesses with technology assistance.
subsections: section_title: CRADAs Increasingly Depend on Partner’s Financial Support
paragraphs: Table 2 shows that active CRADAs at DOE laboratories—which peaked at 1,111 in fiscal year 1996—dropped by more than 40 percent to 606 in fiscal year 2001. In particular, CRADAs that continued from the prior year dropped from 861 in fiscal year 1996 to 440 in fiscal year 2001. Much of this decline occurred in fiscal year 2000, when 360 CRADA projects ended. (See table 7 in app. I for each laboratory’s newly executed and continuing CRADAs.)
The initial growth and subsequent decline in CRADAs over the past 10 years mirrors the change in DOE’s dedicated funding for technology partnerships through NNSA’s Technology Partnership Program and the Office of Science’s Laboratory Technology Research Program. Since peaking in fiscal year 1996, the drop in CRADAs has been greatest at the laboratories for which dedicated funding constituted a substantial share of partnership funding. For example, from 1996 through fiscal year 2001, the number of new CRADAs dropped from 12 to 7 and total active CRADAs dropped from 55 to 30 at the Office of Science’s Lawrence Berkeley National Laboratory. The Laboratory Technology Research Program was the DOE source of funding for 68 percent of these CRADAs. The termination of Technology Partnership Program funding resulted in more than a 60-percent drop in active CRADAs at NNSA laboratories.
According to technology transfer managers at the DOE laboratories we visited, their laboratories are likely to have fewer CRADAs in the future because of DOE funding constraints. For example, the number of CRADAs at Oak Ridge National Laboratory dropped from 256 in fiscal year 2000 to 79 in fiscal year 2001 primarily because of funding constraints. In addition, as a result of unanticipated cuts in fiscal year 2002 funding for the Laboratory Technology Research Program—from $10 million in fiscal year 2001 to $3 million in fiscal year 2002—the Office of Science funded only 5 of the 12 multi-year CRADA proposals previously approved for funding by its peer review process. The partners for the other seven approved CRADAs were informed that funding for their projects would not be available in fiscal year 2002. The Office of Science has announced that these 12 CRADAs will be the last ones funded by the Laboratory Technology Research Program, which will be terminated.
The three laboratories that have historically relied on DOE program funds to support CRADAs have participated in at most 50 CRADAs per year each. For example, total CRADAs at the National Renewable Energy Laboratory have grown from 14 in fiscal year 1996 to 21 in fiscal year 2001, primarily because the Energy Efficiency and Renewable Energy Program, whose mission includes working with industry, has provided funding support for most of these CRADAs. CRADAs at the Idaho National Engineering and Environmental Laboratory peaked at 50 in fiscal year 1996 and subsequently fell to 32 in fiscal year 2001.
Figure 1 shows that CRADA funding from all sources peaked at over $500 million in fiscal year 1995. Since then, DOE funding has declined while partners have provided a greater proportion of CRADA support through funding and in-kind contributions. These trends reflect the decline in the total number of active CRADAs and the fact that DOE’s research programs generally have not provided the funding support for CRADAs that NNSA’s Technology Partnership Program and the Office of Science’s Laboratory Technology Research Program had previously provided. Funding from some DOE programs has increased, however. For example, the Energy Efficiency and Renewable Energy Program, which provided $16.6 million for CRADAs in fiscal year 1996, provided $40.1 million of the $81 million in total DOE funds for CRADAs in fiscal year 2001. (See tables 8 and 9 in app. I for the financial support of CRADAs by DOE research programs and partners.)
With the decline in DOE funding support for CRADAs, the bulk of support for CRADAs has come from the laboratories’ partners. Before fiscal year 1997, CRADA partners primarily provided in-kind contributions that covered the costs incurred by their scientists. Since then, CRADA partners have provided more funding to cover part, or all, of the DOE laboratory’s costs for CRADAs. In fiscal year 2001, CRADA partners provided 76 percent of the total financial support for CRADAs through funding and in-kind contributions—specifically, partners paid all of the costs for 23 percent of active CRADAs and jointly funded the DOE laboratory’s costs for 15 percent of active CRADAs. (See table 10 in app. I for the type of financial support that partners provided.)
While these funds enabled the DOE laboratories to leverage their resources, technology transfer managers at several laboratories noted that many ongoing CRADAs were terminated early and potentially beneficial CRADA projects were stopped during negotiations because a business learned that it would have to pay a substantial part, or all, of the laboratory’s research costs in addition to its own costs. In recent years, about 33 percent of the CRADAs were with small businesses, 50 percent were with large or intermediate businesses, and 13 percent were with universities or consortia. (See table 11 in app. I.)
section_title: Nonfederal Entities Have Increasingly Used Other Technology Transfer Agreements
paragraphs: Table 3 shows that the DOE laboratories’ other technology transfer activities funded by businesses and other nonfederal entities have grown substantially in the past 10 years—work-for-others agreements are more than four times greater and technology licenses and user facility agreements are eight times greater. Businesses and other nonfederal entities have provided more funding for work-for-others agreements than for all other types of technology transfer activities combined. Funding from nonfederal entities for work-for-others agreements increased from $31 million in fiscal year 1992 to over $188 million in fiscal year 1999. In fiscal year 2001, there were 1,527 work-for-others agreements funded at $147 million.
Although the nonfederal entity is required to pay all of the project costs, many businesses use a work-for-others agreement, rather than a CRADA. The work-for-others program allows them to obtain title, in most cases, to any intellectual property developed under the agreement while the title and licensing rights to any intellectual property developed under a CRADA are subject to negotiations. (See table 12 in app. I for work-for-others agreements by laboratory.) In contrast, the research under a work-for- others agreement typically is less beneficial for the DOE laboratory than research under a CRADA because (1) it is not required to provide direct benefit to the program missions, although it must be consistent with them; (2) the laboratory’s scientists typically do not collaborate on research with the nonfederal entity’s scientists; and (3) the laboratory does not normally have rights to any resulting intellectual property.
During the past 10 years, the laboratories’ technology licensing activities significantly increased, from 189 licenses with $4.7 million in license income in fiscal year 1992 to 1,720 licenses with $19.3 million in license income in fiscal year 2001. The growth in technology licensing can be traced to the 1984 amendments to the Patent and Trademark Amendments of 1980, commonly known as the Bayh-Dole Act, which allowed DOE’s laboratories operated by universities or nonprofit organizations to retain title to inventions that their scientists made. Subsequently, the National Competitiveness Technology Transfer Act of 1989 added technology transfer as a mission of the DOE laboratories. (See table 13 in app. I for technology licenses by laboratory.)
User facility agreements, which provide access to unique DOE research equipment and facilities, increased from 252 in fiscal year 1992 to more than 2,000 in fiscal year 2001. In particular, Brookhaven National Laboratory had 741 agreements in fiscal year 2001 that provided nonfederal entities with access to its specialized facilities such as the National Synchrotron Light Source. Similarly, Oak Ridge National Laboratory had 604 agreements with nonfederal entities in fiscal year 2001.
section_title: Two DOE Laboratories Have Used Non-DOE Sources to Fund Their Technical Assistance Programs for Small Businesses
paragraphs: The 12 DOE laboratories have reduced their technical assistance to small businesses from a high of 746 agreements in fiscal year 1995 to 246 agreements in fiscal year 2001. This decline reflected the phasing out of dedicated funding for technology partnerships, which the NNSA and Office of Science laboratories could use to support technical assistance. More recently, two laboratories have used other, non-DOE sources of funding to provide technical assistance to local small businesses. Sandia National Laboratories have an agreement with the state of New Mexico that entitles Sandia to up to $1.8 million per year in tax relief for assistance provided to small businesses in the state. Similarly, Pacific Northwest National Laboratory has received funding from an economic development agency in Washington to provide technical assistance. These laboratories accounted for more than two-thirds of the DOE laboratories’ technical assistance agreements in fiscal year 2001.
section_title: Managers at DOE Laboratories Cited Barriers to Technology Transfer Activities
paragraphs: According to DOE laboratory managers, the most important barrier to effective technology transfer was the lack of dedicated DOE funding for technology partnerships, including funding targeted at small businesses.(See table 4.) According to laboratory managers, other important barriers are closely associated with the lack of dedicated funding for technology partnerships and raise serious concerns about the future of CRADAs at their laboratories. While the laboratory managers also identified certain administrative issues that have delayed, or even stopped, potential partnerships, several of them told us that the long delays in obtaining DOE approval of CRADAs, common in the mid-1990s, have mostly been addressed.
subsections: section_title: Lack of Dedicated DOE Funding for CRADAs
paragraphs: Managers at 8 of the 12 DOE laboratories we surveyed cited the lack of dedicated DOE funding for CRADAs as an important barrier that has constrained technology partnerships at their laboratories. Each of these laboratories had received dedicated funding under either the Technology Partnership Program or the Laboratory Technology Research Program. According to several laboratory and DOE officials, DOE’s research managers generally have questioned whether technology partnerships would provide direct benefits to NNSA’s missions of stockpile stewardship and nuclear nonproliferation and the Office of Science’s mission of basic science. As a result, research managers have been reluctant to substitute limited research funds for the dedicated technology transfer funding that was phased out in recent years. Because DOE funding was not available, several laboratories had to advise many of their CRADA partners that they would either have to pay the project’s full costs, including those incurred by the DOE laboratory’s scientists, or the laboratory would terminate the CRADA. Sandia National Laboratories managers told us that they had terminated 18 CRADAs early in fiscal year 2000 because of such funding constraints.
Three laboratories stated that the lack of dedicated DOE funding was a “show stopper” for CRADAs. For example, managers at Lawrence Berkeley National Laboratory told us that because many of the laboratory’s research program budgets have been squeezed in recent years, research managers have little flexibility to support CRADAs or other types of technology partnerships. Alternatively, CRADA partners— particularly small businesses—are unwilling or unable to fund all of the research costs. The Lawrence Berkeley managers believe that dedicated funding is important for maintaining a critical mass of CRADAs—without the likelihood of funding support, scientists will not invest the effort to develop strong funding proposals for potentially useful collaborations. Moreover, according to managers at several laboratories, previous DOE funding support for CRADAs likely led to an increase in work-for-others agreements and CRADAs funded by nonfederal partners in recent years. These managers believe that dedicated funds have provided the laboratories with an opportunity to “get their foot in the door” with companies. Once the partners are familiar with the capabilities of the national laboratories, they are more likely to want to continue working with the laboratories, according to the managers.
Several managers cited the importance of dedicated funding for commercializing many of their laboratories’ technological innovations because there often is a gap in the funding needed to translate the innovation into possible commercial applications, a gap that some managers referred to as the “valley of death.” The Lawrence Berkeley managers told us that CRADAs have enabled technology licensees to collaborate with the laboratory’s scientists to develop commercial applications. According to Lawrence Berkeley and Argonne managers, based on the number and quality of proposals that their scientists had previously submitted for Laboratory Technology Research funding, each of these laboratories could effectively use $10 million per year in dedicated funding for CRADAs.
Managers at 4 of the 12 laboratories stated that the lack of dedicated DOE funding was not an important barrier for CRADAs. In particular, three of these four laboratories had not received dedicated funding. Furthermore, two of these three laboratories—the National Renewable Energy Laboratory and the National Energy Technology Laboratory—primarily conduct research for the Energy Efficiency and Renewable Energy Program and the Fossil Energy Program, respectively, which may have been more willing than some of the other DOE programs to use regular research funds to support CRADAs because their missions include working with industry.
section_title: Lack of Dedicated DOE Funding for Small Business Partnerships
paragraphs: Managers at 8 of the 12 DOE laboratories cited the lack of dedicated funding for technology partnerships as an important barrier that has constrained small business participation at their laboratories. In particular, managers at two laboratories told us that the lack of dedicated funding was a “show stopper” for small businesses because a small business generally did not have the funds available to pay all, or part, of the DOE laboratory’s costs—in addition to its own costs—for a CRADA research project. Managers at several of the laboratories also cited the importance of dedicated DOE funding as a basis for providing technical assistance to small businesses. Managers cited various examples of a laboratory scientist correcting a manufacturing problem or improving a product after spending a few days with a small business.
section_title: Uncertainty about Continued Funding
paragraphs: Managers at 8 of the 12 laboratories told us that uncertainty about DOE’s continued financial support for CRADAs was an important barrier. In particular, managers at several Office of Science laboratories told us that Laboratory Technology Research Program funding cutbacks in recent years had created ill will among CRADA partners whose funding support was cut and uncertainty among laboratory scientists and their partners about whether to pursue CRADA proposals for projects that were unlikely to get funded. Some scientists at laboratories we visited discussed their frustration at having funding disappear after they had nurtured working relationships with industry scientists to develop potential technology transfer projects and—much more time-consuming, in their perspective— persuading the partner’s key financial and management staff of the project’s merit. These experiences create “legends” about the difficulties of working with DOE laboratories, according to the deputy director of the Lawrence Berkeley National Laboratory.
section_title: Lack of Commitment for Technology Partnerships
paragraphs: Managers at 10 of the 12 DOE laboratories cited the lack of a high-level, effective advocate for technology partnerships in DOE headquarters as an important barrier that has constrained their technology transfer activities. Similarly, managers at 9 of the 12 laboratories told us that the lack of DOE institutional commitment to technology partnerships as a way to accomplish program missions was an important barrier. Managers stated that technology partnerships, which cut across DOE programs, need an advocate in DOE headquarters who is not tied to a specific research area and has sufficient visibility within DOE to effectively foster technology partnerships. More specifically, managers at several Office of Science laboratories cited the need for an advocate because they believe that funding technology partnerships is a low priority within the Office of Science. They noted that when the Congress reduced the fiscal year 2002 funding for the Office of Advanced Scientific Computing Research, funding for the Laboratory Technology Research Program was disproportionately cut—from the president’s budget request of $6.9 million to $3 million—compared with other research programs in this office. In March 2002, the Office of Science announced that it will terminate the Laboratory Technology Research Program once its previously approved CRADAs have been funded.
Both laboratory managers and DOE headquarters officials stated that DOE’s lack of commitment to technology partnerships is caused, in part, by the cross-cutting nature of the research carried out through CRADAs and other technology transfer activities. They noted that technology partnerships often provide important results and fulfill DOE’s broader responsibility to disseminate knowledge, but the partnerships may not always be directly tied to the specific goals of a single DOE research program. As a result, these partnerships are likely to be a lower priority for research managers responsible for meeting specific goals. Because DOE’s research budgets have declined in recent years, it is even less likely that these managers will be willing to fund research activities that, while potentially valuable, extend beyond their immediate programs, according to the laboratory managers.
Finally, DOE officials noted that DOE’s Technology Transfer Working Group is not an internal advocacy group for technology transfer, but a virtual organization with no full-time permanent staff. The working group was established after DOE eliminated its full-time technology transfer organization in 1996 at the Congress’ direction. The working group, which convenes monthly by teleconference, oversees technology transfer policy and practices, identifies issues, and coordinates the DOE headquarters response to these issues. Other than through its organizational representatives, the working group has no direct interface with Secretarial-level officials concerning matters related to resources for technology transfer and is not in a position, by itself, to serve as an advocate among top-level DOE officials for such resources.
section_title: Requirement That Partners Pay for the Laboratory’s Research Costs in Advance
paragraphs: Managers at 9 of the 12 laboratories told us that DOE’s requirement that the partner pay in advance for research conducted at the laboratory was an important barrier to technology partnerships at their laboratory. Generally, DOE requires an advance payment for about 90 days of work, if (1) a project is expected to cost more than $25,000 and last more than 90 days or (2) the nonfederal partner will contribute more than $25,000 for its portion of the research that DOE laboratory scientists will conduct. (For shorter or less costly projects, the partner is required to pay its entire share in advance.) Some laboratory managers told us that the advance payment requirement has presented problems in negotiating, for example, work-for-others agreements or jointly funded CRADAs with small or large businesses or with universities. While the requirement rarely stops an agreement from being signed, it has delayed negotiations, particularly when a small business cannot readily provide an upfront payment. The advance payment requirement typically is more burdensome for small businesses than large businesses because small businesses are less likely to have the funds available to prepay work, according to laboratory managers. DOE’s policy permits exceptions to this requirement; for example, the contractor operating the laboratory may negotiate with DOE a smaller advance payment for a small business that is unable to meet the standard requirement.
Some laboratory managers told us that the advance payment requirement had created serious problems for small businesses that sought the laboratory’s assistance as a subcontractor for a project under either the Small Business Innovation Research (SBIR) program or the Small Business Technology Transfer (STTR) program. While DOE requires an advance payment for conducting research, the SBIR and STTR programs typically provide payments for completed work, leaving the small business with the problem of providing funding to bridge this gap. Managers at one laboratory questioned the need for the advance payment requirement for an SBIR or STTR project when the payment is coming from another federal program. In some cases, the federal agency funding the SBIR or STTR project has agreed to provide some funding upfront to help cover the DOE laboratory’s work. Alternatively, managers at two of the DOE laboratories told us that they have assisted partners with a bridge loan by using an account set aside for such purposes by the contractor that operates the laboratory for DOE.
section_title: Requirements to Protect U.S. Economic Interests
paragraphs: Managers at 7 of 12 DOE laboratories cited the U.S. competitiveness requirements in the DOE model CRADA as an important barrier to technology partnerships at their laboratory. DOE requires that partners either manufacture substantially in the United States or provide a plan for ensuring that the partnership will result in a net economic benefit to the U.S. economy. Specifically, DOE’s model CRADA states that because a purpose of the CRADA is to provide substantial benefit to the U.S. economy, partners are required to (1) substantially manufacture in the United States any products embodying the intellectual property developed under the CRADA; (2) incorporate any processes, services, and improvements developed under the CRADA into the partner’s U.S. manufacturing facilities either prior to or simultaneously with implementation outside the United States; and (3) not reduce the use of such processes, services, and improvements in the United States because of their introduction elsewhere. DOE officials noted that DOE’s requirements are more stringent than those in the Federal Technology Transfer Act of 1986, which requires that laboratory directors “give preference to business units located in the United States which agree that products embodying inventions made under the cooperative research and development agreement or produced through the use of such inventions will be manufactured substantially in the United States.”
Some laboratory managers said that DOE’s requirements have created particular difficulties for large U.S.-based multinational companies, including IBM and Procter & Gamble, that would like to collaborate with a DOE laboratory. Managers noted that multinational companies often are unwilling to sign an agreement containing DOE’s competitiveness clause because of its possible implications in subsequent years on the company’s strategic manufacturing decisions. Alternatively, the managers noted that companies could submit a detailed explanation to DOE of how the CRADA research will provide “alternative benefits” to the U.S. economy. They pointed out, however, that documenting alternative benefits can be a long and cumbersome process.
In addition, managers at 4 of the 12 laboratories cited as an important barrier the long delays—up to 6 months—associated with consulting the Office of the U.S. Trade Representative for CRADAs involving a company controlled by a foreign company or government. The Federal Technology Transfer Act of 1986 and Executive Order 12591 require that laboratory directors consider whether the foreign company’s government permits comparable access to U.S. companies. The executive order also requires that laboratory directors consider whether the foreign company’s government has policies to protect U.S. intellectual property. Moreover, the executive order directs laboratory directors to consult with the Office of the U.S. Trade Representative in addressing these issues.
section_title: Other Issues
paragraphs: Managers at some of the 12 DOE laboratories cited other barriers to technology transfer, but we did not find a general consensus that these problems needed to be addressed. For example, managers at four laboratories cited administrative burdens and time delays in negotiating and signing a technology partnership agreement.
Managers at Los Alamos National Laboratory told us that it takes about 3 months, on average, from the time funding for a CRADA is approved until the agreement is signed.
Managers at Oak Ridge National Laboratory cited the administrative burden associated with obtaining DOE headquarters approval for technology partnerships as small as a $5,000 technical assistance project and suggested that DOE establish a threshold below which local approval would suffice.
Managers at several laboratories, however, told us that DOE has made major improvements in reviewing CRADAs since the mid-1990s, when we reported that, on average, it took four DOE contractor-operated laboratories about 7.5 months to implement a one-collaborator, one- laboratory CRADA.
section_title: Agency Comments
paragraphs: We provided DOE with a draft of this report for its review and comment. We met with DOE officials, including the director of the Office of Science and Technology Policy, who said that DOE found the report to be a reasonable representation of the technology partnering activities at the 12 DOE laboratories surveyed. In commending GAO for gathering pertinent data and analyzing trends and barriers, DOE stated that the report provides a sound basis for assessing the current situation and charting future directions.
DOE stated that, for purposes of portraying a broad perspective, it was helpful to include the work-for-others program among the five types of agreements most commonly used to transfer technology to U.S. businesses and other organizations. DOE also noted that a considerable amount of technology transfer takes place in the normal course of executing technical work associated with mission-related contracts and financial assistance, and that this work was not included in the report as technology transfer. While we agree with DOE that the laboratories’ technology transfer activities are not limited to the five types of agreements discussed, we note that the laboratories’ role in other forms of technology transfer was outside the scope of our review. DOE officials also provided comments to improve the report’s technical accuracy, which we incorporated as appropriate.
section_title: Scope and Methodology
paragraphs: To obtain trend data on technology development partnerships, we asked managers at each of the 12 DOE laboratories to provide participation and funding data for fiscal years 1992 through 2001. To help ensure consistency across locations, we worked with these managers to establish uniform definitions and resolve any discrepancies. In addition, we (1) interviewed officials at DOE headquarters and (2) visited Argonne National Laboratory, Lawrence Berkeley National Laboratory, and Oak Ridge National Laboratory to obtain the views of administrators and scientists about their laboratories’ participation in and funding of technology partnerships.
To identify any barriers that may limit DOE laboratories’ efforts to transfer technology to potential nonfederal partners, we interviewed officials at DOE headquarters and obtained the views of laboratory administrators at each of the 12 DOE laboratories. We conducted our review from October 2001 through March 2002 in accordance with generally accepted government auditing standards. We did not independently verify the data provided by DOE’s laboratories.
As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days after the date of this letter. At that time, we will send copies to appropriate congressional committees, the secretary of energy, the director of the Office of Management and Budget, and other interested parties. We will also make copies available to others on request.
If you or your staff have any questions about this report, please contact me at (202) 512-3841. Key contributors to this report were Richard Cheston, Kerry Hawranek, and Susan Swearingen.
section_title: Appendix I: Technology Transfer Activities of 12 DOE Laboratories
paragraphs: Appendix I: Technology Transfer Activities of 12 DOE Laboratories Funding was made available beginning in fiscal year 1994 through DOE’s Defense Programs’ Small Business Initiative.
Data were not readily available.
Oak Ridge was unable to provide the number of technical assistance for small businesses agreements by fiscal year, but estimated that the laboratory entered into 100 of these agreements over the 10-year period.
Data were not readily available.
Amounts shown are Ames’ portion of the total royalties received by Iowa State University Research Foundation per a formula in the laboratory’s management and operating contract.
Data were not readily available.
Data were not readily available.
Data were not readily available.
Data were not readily available.