The unique characteristics and relative abundance of wood have made it a natural material for a variety of uses, including homes and other structures, furniture, tools, vehicles, and decorative objects. Because wood varies in characteristics and volume by species, it may be heavy or light, stiff or flexible, and hard or soft. Federal agencies conduct research on the range of processes that occur between the time a tree is grown in the forest to the time it becomes a wood product and then is recycled. For purposes of our review, wood utilization research and product development refers to the activities that occur from harvesting the wood through the recycling of wood and paper products. (See fig. 1.) According to the North American Industry Classification System, the U.S. forest products industry is divided into two sectors: wood product manufacturing and pulp and paper manufacturing. The wood product manufacturing sector comprises small companies, while the pulp and paper manufacturing sector tends to have fewer, larger companies. The wood product manufacturing sector can be broken into three sub- sectors: (1) primary producers—sawmills and plywood mills; (2) secondary producers—millwork, cabinet, and furniture manufacturers; and (3) structural and reconstituted products producers—oriented strandboard (OSB), I-Joist, laminated veneer lumber, medium density fiberboard, and particleboard. The United States is the world’s leading producer of lumber and wood products used in residential construction and in commercial wood products. According to 2004 data (the most recent data available), the wood product sector employed 535,000 workers nationwide and produced shipments valued at $103 billion. The pulp and paper manufacturing sector includes two industry groups: (1) manufacturers of pulp and paper and (2) manufacturers of products made from purchased paper and other materials, such as paper bags or tissues. The vast majority of the raw material for making paper is the residue from other mills—primarily chips from sawmills. The United States is also a leader in the pulp and paper business, producing about 28 percent of the world’s pulp and 25 percent of the total world output of paper and paperboard. In 2004 (the most recent data available), the paper manufacturing sector employed 440,000 workers nationwide and produced shipments valued at $154 billion. According to a federal government report, the U.S. forest products industry faces increasing competition from its traditional competitors (Canada, the Scandinavian countries, and Japan), as well as from emerging competitors (Brazil, Chile, and Indonesia). Domestic purchases of paper and paperboard declined from 2000 to 2002, but have begun to rebound since then. Approximately 120,000 jobs were lost in the paper manufacturing sector from 1999 to 2004, representing a 21.5-percent loss. Sectors of the wood product manufacturing industry have also declined. According to a 2003 Forest Service report, during the last decade, the wood household furniture industry lost approximately one-third of its market share to imports. China now accounts for one-third of U.S. imports, up from none a decade ago. Federal research and product development in wood utilization helps provide the science and technology needed to conserve the nation’s forest resources, supply the demand for wood products, and support forest management and restoration activities. At least 12 federal agencies support wood utilization research and product development activities, but only 2 of these agencies—the Forest Service and CSREES—have programs targeted for these activities. For the Forest Service, the Forest and Rangeland Renewable Resources Act of 1978 is the primary legislation authorizing the Secretary of Agriculture to implement a comprehensive research program for forest and rangeland renewable resources, including wood utilization, and to disseminate the results. Other relevant legislation includes the following: The Biomass Research and Development Act of 2000, which requires the secretaries of Agriculture and of Energy to cooperate on policies and procedures that promote research and development leading to the production of fuels and biobased products; the act also established the Biomass Research and Development Initiative. The Energy Policy Act of 2005 established technical areas for focusing research under the Biomass Research and Development Initiative. The Healthy Forests Restoration Act of 2003 established a grant program to encourage the commercialization of woody biomass. The Forest Service’s research and development organization establishes research work units in the field by developing formal mission statements, which must be approved by the Deputy Chief for Research and other senior managers. A team from the Deputy Chief’s Office and station directors’ office formally reviews these mission statements and the unit’s work at least every 5 years, and the review often includes input from the public and private sectors. The Forest Service’s wood utilization research and product development is carried out by scientists and professional support staff in 27 research work units around the country that were operating at the time of our review. Most of the Forest Service’s wood utilization research and product development takes place at 16 research work units in the Forest Products Laboratory, which conducts research of national and international scope. The other 11 research work units are located in the Forest Service’s Northeastern, Southern, Pacific Northwest, Pacific Southwest, and Rocky Mountain Research Stations, and these units mostly focus on regional wood utilization issues. For example, research work unit 4104 of the Southern station focuses on managing Southern pine ecosystems, whereas research work unit 4701 of the Northeastern station focuses on efficiently using northern forest resources. These research work units produce 5-year research work plans that identify the mission, the problem to be solved through research, the proposed research approach, planned accomplishments, and staffing needs. CSREES provides support for wood utilization research and product development through several grant programs. CSREES awards committee- directed grants to 10 designated wood utilization research centers at 12 universities. The first three centers were established in fiscal year 1985 at Oregon State University, Mississippi State University, and Michigan State University. These three centers were established to support wood utilization and harvesting research on western conifers, southern pine, and eastern hardwoods, respectively. In fiscal year 1993, three centers with specific research focuses were added at the University of Maine, the University of Minnesota at Duluth, and North Carolina State University. In fiscal year 1999, the University of Tennessee and the Inland Northwest Forest Products Research Consortium were added. The consortium consists of the universities of Idaho and of Montana, and Washington State University. The most recent additions are the University of Alaska Southeast, in fiscal year 2000, and West Virginia University, in fiscal year 2004. Every year each center submits a grant proposal, reviewed by CSREES staff, containing information on proposed research activities, budgets, and progress to date. Funding supports scientists and graduate students and helps to pay for new equipment, supplies, and travel. In addition, CSREES provides grants to state-supported colleges and universities that can be used for, but are not specifically focused on, wood utilization research and product development through the following: The McIntyre–Stennis Act, a formula grant program, for forestry research, including two of eight potential funding areas focused on wood utilization and product development. The Hatch Act, a formula grant program, designed to fund a number of broad agricultural research areas. The National Research Initiative, a competitive grant program with several research areas, including biobased products and energy. Wood utilization research and product development grants have been awarded under this initiative, as well as under CSREES’ Small Business Innovation and Research grants and other small grants programs. Ten other agencies also support wood utilization research and product development. Table 1 provides information on these agencies’ principal authorizing legislation and a description of the programs that have supported wood utilization research and product development, and the mechanisms used for program delivery. The Federal Laboratory Consortium for Technology Transfer defines technology transfer as “the process by which existing knowledge, facilities or capabilities developed under federal research and development funding are utilized to fulfill public and private needs.” Since 1978, Congress has enacted a series of laws to promote technology transfer and to provide technology transfer mechanisms and incentives. Table 2 presents selected laws that support technology transfer for wood utilization research and product development. In addition to these laws, Executive Order 12591 (“Facilitating Access to Science and Technology”) directs federal agencies to encourage and facilitate collaboration among federal laboratories, state and local governments, universities, and the private sector—particularly small business—in order to assist in the transfer of technology to the marketplace. Technology transfer is also carried out through the nation’s extension system, established by the Smith-Lever Act in 1914, to assist in the development of practical applications of research knowledge in agriculture, including wood utilization. Under this system, thousands of county and regional extension specialists bring university expertise to the local level. Funding is provided by CSREES through annual formula grants to supplement state and county funds for extension services. The funds can be used for natural resources, including forestry or wood utilization, depending upon the priorities of the university. The Renewable Resources Extension Act of 1978 created the Renewable Resources Extension Program. Under this program, CSREES provides funds to 72 universities, which use these funds, along with state, local, and institutional funds, to deliver educational programs to forest and rangeland owners and managers. The program also provides guidance to states in developing their general extension programs for, among other things, timber utilization, harvesting, and marketing; wood utilization; and wood products marketing. These efforts have included wood utilization extension services, usually through extension specialists. Wood utilization research and product development conducted by 12 federal agencies span a broad spectrum of activities, and coordination of these activities is both formal and informal. These activities fall into five broad categories: (1) harvesting, (2) wood properties, (3) manufacturing and processing, (4) products and testing, and (5) economics and marketing. We grouped the wood utilization research and product development activities that the 12 agencies conduct into five broad categories: harvesting, wood properties, manufacturing and processing, products and testing, and economics and marketing. Table 3 shows the definitions we used for the five categories and provides examples of the types of the research and product development activities that fall into each of these categories. Table 4 shows the types of research and product development activities and examples of these activities by agency. All 12 agencies had activities in the manufacturing and processing category. The Forest Service and CSREES were the only two agencies that had wood utilization research and product development activities in all five categories. According to our analysis of the Forest Service’s 27 research work units’ plans covering fiscal years 1995 through 2005, over 80 percent of wood utilization research and product development occurred in three categories: wood properties, products and testing, and manufacturing and processing. In addition, CSREES wood utilization research centers’ annual research proposals for the same period showed that about 70 percent of their activities occurred in the following three categories: wood properties, manufacturing and processing, and economics and marketing. According to a CSREES official, the CSREES wood utilization research centers are allowed by law to use the funding to conduct technology transfer activities, which are reflected in the economics and marketing category. Appendixes II and III, respectively, provide detailed information on wood utilization research and product development activities for the Forest Service, for multiyear periods (beginning in the late 1980s) to the present; and CSREES, for fiscal years 1995 through 2005. We found instances of both informal and formal coordination of federal activities for wood utilization and product development. According to many scientists at the Forest Service, informal coordination occurs among the relatively small wood utilization research and product development community of scientists, and these scientists are often aware of related scientific research. Scientists share information at scientific and industry conferences and professional meetings and through publications, and in some cases work informally to share staff and equipment. Specific examples include the following: One Forest Service scientist associated with the Southern Research Station—with 30 years of experience in wood utilization research on Douglas Fir—shares resources and expertise with the Pacific Northwest Research Station on the plantation growth of this species. Forest Service scientists in the Southern Research Station have collaborated with colleagues in Australia, Denmark, Japan, and New Zealand on using wood from southern forests to develop wood composite products. These collaborative efforts were established primarily through professional relationships. A Forest Service scientist at the Pacific Northwest Research Station told us that scientists use annual professional meetings, such as those held by the Forest Products Society and the Society of Wood Science and Technology, as important mechanisms for coordinating their work and broadening the scope of their research area. The CSREES wood utilization research centers reported that they have more informal than formal coordination mechanisms with other wood utilization research centers and federal agencies. Like the Forest Service, these informal mechanisms include sharing information with their colleagues through professional meetings, publications, and newsletters. We also identified some formal mechanisms to coordinate wood utilization research and product development that are set up through legislative provisions, agency rulemaking, memorandums of understanding, cooperative arrangements, and other joint ventures. Specific examples include the following: The Biomass Research and Development Act of 2000 requires USDA and the Department of Energy to carry out a Biomass Research and Development Initiative under which competitively awarded grants, contracts, and financial assistance are provided to eligible entities to carry out research on fuels and products derived from biomass, including woody biomass. The agencies work together on developing grant solicitations, reviewing grant proposals, and selecting recipients. The act also created a Biomass Research and Development Board, co-chaired by the Department of Energy and USDA, to coordinate programs within the federal government for promoting the use of biobased fuels and products. The board’s mission is to maximize the benefits from federal grants and assistance by promoting collaboration and avoiding duplication of effort through strategic planning on biomass research. The board has approved the formation of a federal Woody Biomass Working Group to coordinate and focus federal efforts on woody biomass utilization. For 40 years, Forest Service wood utilization scientists have had standing annual meetings with representatives from both the paper and pulp and solid wood industries to present research results and obtain input and review from industry. When updating their research work unit plans every 5 years, these scientists also seek advice from outside sources, including industry representatives, academics, and environmental groups. Scientists also participate in research consortiums or cooperative arrangements with industry. For example, scientists in the Forest Service’s Southern Research Station participate in a consortium studying wood quality that has members from nine companies, including Weyerhaeuser and Georgia Pacific. CSREES wood utilization research centers also form cooperative arrangements. According to an Oregon scientist, these research cooperatives typically consist of 10 to 12 partners. The cooperatives set a research agenda and formally coordinate research through annual meetings and reports; each university, as well as government agencies, are asked to contribute funding annually. For example, scientists at the University of Minnesota wood utilization research center formed a productivity cooperative that includes state, county, university, and industry members (such as International Paper) to continue to strengthen applied forestry concepts and ensure the sustainability of Minnesota’s forest products industry. The Forest Service’s Northeastern Research Station formed the Furniture Steering Committee, which is composed of furniture manufacturers, consultants, equipment manufacturers, state economic development agencies, and universities to provide guidance on furniture research programs at the station and elsewhere. The steering committee recommended research on more efficient manufacturing and “just-in-time” training, which has been integrated into the research work unit’s plan. HUD’s Partnership for Advancing Technology in Housing is a voluntary partnership between leaders of the home building, product manufacturing, insurance, and financial industries; and representatives of six federal agencies concerned with housing. These six agencies work with HUD to develop technologies to improve the quality, durability, energy efficiency, and affordability of residential building materials; these materials could include wood. For example, with the partnership’s support, the Forest Service’s wood chemistry research work unit has been able to work cooperatively with laboratories in Japan, Sweden, and Finland on developing coatings to protect wood from the effects of weathering. Forest Service scientists at the Southern Research Station’s Utilization of Southern Forest Resources work unit have a memorandum of understanding with the Chinese government to host post-doctoral students from China; the station has hosted 25 students in the past 5 years. These students serve as additional staff resources to help the research work unit carry out its research activities. To construct a forest biomass life cycle assessment model, several partners established a joint venture: the Forest Service’s Pacific Southwest Research Station; the California Energy Commission’s Public Interest Energy Research Program; the University of California at Davis; several state and federal agencies; and energy, forestry, and environmental consultants. Partners will use the model to identify and analyze the social, economic, and environmental costs and benefits of using forest biomass to generate electrical power. This research project is planned in three phases over a 3- to 5-year period. Each participant shares in the cost of the venture. The 12 federal agencies we reviewed made available at least $54 million annually in financial support for wood utilization research and product development activities in fiscal years 2004 and 2005, measured either in budget authority or expenditures. Furthermore, the Forest Service employed almost 175 scientists and support staff in each of these two fiscal years. From fiscal years 1995 through 2005, the Forest Service received total budget authority of $268 million for wood utilization research and product development (or $289 million in 2004 inflation- adjusted dollars) while CSREES’ budget authority for the wood utilization research centers was about $51 million (or $55 million in 2004 inflation- adjusted dollars). For fiscal years 1995 through 2005, the Forest Service’s budget authority for wood utilization research and product development activities fluctuated moderately from year-to-year (in 2004 inflation- adjusted dollars). Over the same period, overall, CSREES’ budget authority for the wood utilization research centers increased (in 2004 inflation-adjusted dollars), in part because four new wood utilization research centers were added during fiscal years 1999, 2000, and 2004. The 12 federal agencies we identified as supporting wood utilization research and product development made available at least $54.4 million in financial support for this work, measured in either budget authority or expenditures, in fiscal year 2004, the year with the most complete data available. For fiscal year 2005, the agencies made available at least $54.3 million. Our data for fiscal year 2005 are complete except for data for the CSREES grants funded under the McIntyre-Stennis Act and the Hatch Act; the National Research Initiative; Small Business Innovation Research grants; and other small grants. See table 5. As table 5 shows, the Forest Service made available about half of the financial support for conducting wood utilization research and product development. In fiscal year 2004, the Forest Service made available about 52 percent of the $54.4 million, while four other agencies—CSREES, the Department of Energy, the National Science Foundation, and the Natural Resources Conservation Service—made available about 44 percent of the support; the remaining seven agencies together made available about 5 percent of the $54.4 million. Of the $54.4 million made available in fiscal year 2004, about $34 million ($28.3 million for the Forest Service and $5.7 million for the CSREES wood utilization research centers) was directly targeted to wood utilization research and product development. In addition, $1.9 million of other support targeted for wood utilization research and product development was made available by the Army, the Coast Guard, and the Office of Naval Research through committee-directed funding to specific universities to conduct research on wood composites. The remaining $18.5 million of the $54.4 million was made available in fiscal year 2004 from grant programs not targeted to wood utilization research and product development. That is, wood utilization research and product development was not the sole purpose of the grant or program. The Department of Energy made available the largest amount of this nontargeted support—$7.4 million. CSREES provided $3.0 million in fiscal year 2004 to support other wood utilization research and product development through grant programs authorized under the McIntyre- Stennis Act and the Hatch Act; the National Research Initiative; Small Business Innovation Research grants; and other small grants. The Natural Resources Conservation Service made available grant funding to promote greater innovation and development in all forms of biomass—including agricultural and woody biomass—with $5.3 million targeted to woody biomass research, under the Biomass Research Development Act of 2000. The other agencies made available the remaining $2.8 million. Of the 12 agencies, only the Forest Service directly employs full-time scientists and support staff to conduct wood utilization research and product development. Most of these employees work at the Forest Products Laboratory, as shown in table 6. The other 11 agencies we reviewed do not have full-time federal scientists dedicated to wood utilization research and product development, and were unable to provide information on scientists and support staff working on federal wood utilization research and product development activities. For fiscal years 1995 through 2005, the Forest Service received total budget authority for wood utilization research and product development of $268 million (which is equivalent to $289 million in 2004 inflation- adjusted dollars). As table 7 shows, during this 11-year period, the annual budget authority ranged between $24.2 million and $28.2 million (in 2004 inflation-adjusted dollars), with moderate fluctuations from year-to-year. Table 8 shows the total FTE scientists and support staff for the Forest Service’s wood utilization research work units, from fiscal years 1995 through 2005. As figure 2 shows, over the period, the levels of budget authority (adjusted for inflation) and FTE staff for wood utilization research and product development at the Forest Service fluctuated moderately. From fiscal year 1995 to fiscal year 1996, both budget authority (in 2004 inflation-adjusted dollars) and FTE staff at the Forest Service decreased by 14 percent and 4 percent, respectively. After 1996, budget authority for the most part increased through 2004 and then decreased in 2005. FTE staff continued to decrease through 1999, increased in 2000, and thereafter remained relatively stable. (See app. IV for information on changes in FTE Forest Service scientists and support staff for wood utilization research work units for each year from fiscal year 1995 through 2005.) During the 11-year period, the Forest Products Laboratory’s budget authority also fluctuated moderately. Between fiscal years 1995 and 2000, the budget authority declined by 17 percent (in 2004 inflation-adjusted dollars), from $20.8 million to $17.3 million; it increased again from fiscal years 2001 through 2004, but was still lower in 2005 than in 1995. (See table 9.) Table 10 shows the total FTE scientists and support staff for the Forest Products Laboratory’s wood utilization research work units, from fiscal years 1995 through 2005. The number of FTE Forest Products Laboratory scientists and support staff generally declined from fiscal years 1995 through 2000; then it fluctuated moderately. Figure 3 shows the changes in budget authority and FTE scientists and support staff at the Forest Products Laboratory. See appendix IV for funding and FTE staff, by research work unit, at the Forest Products Laboratory and at the research stations for fiscal years 1995 through 2005. While financial support for wood utilization research and product development at the Forest Service has fluctuated moderately during the past 11 years, Forest Service scientists and managers expressed concerns about resource constraints. They noted that increases in budget authority cover salary increases and other fixed costs, but that these increases may not be enough to cover increases in the costs of other operating expenses—such as purchasing or calibrating equipment, obtaining laboratory supplies, and traveling for research. The Forest Products Laboratory’s operating budget authority declined by about 67 percent between fiscal years 1995 and 1998 (in 2004 inflation-adjusted dollars), from about $1.95 million to $650,000; it also fluctuated within a narrow range from fiscal years 1999 to 2005, ending with $630,000. (See table 11.) Figure 4 shows changes in the dollars available for operating expenses (adjusted to 2004 dollars) in fiscal years 1995 through 2005 at the Forest Products Laboratory. Many of the scientists with whom we spoke cited instances in which fewer resources had diminished their ability to conduct research. For example, according to one scientist, he is spending less time in the laboratory because he is devoting more time to obtaining outside funding for his research work unit. Another scientist told us that his research work unit must now limit the number of wood samples from private sources that the unit has time to analyze, which it did not need to do in the past. According to Forest Service officials, due in part to funding constraints, as well as to better serve the scientific community, the Forest Products Laboratory has developed a strategic plan, and is in the process of reorganizing and consolidating its research work units and reducing the number of scientists and support staff. Table 12 shows that the total budget authority for fiscal years 1995 through 2005 for CSREES’ wood utilization research centers was about $51.2 million (which is equivalent to $54.8 million in 2004 inflation-adjusted dollars), and figure 5 illustrates that, overall, CSREES’ budget authority (adjusted for inflation) for the wood utilization research centers increased over the period. The increase in budget authority was due in part to the addition of four new wood utilization research centers, particularly when two new centers were added in fiscal year 1999; new centers were added again in fiscal years 2000 and 2004. While the increase in the number of wood utilization research centers would suggest an increased commitment to wood utilization research and product development, after adjusting for inflation, most of the centers, individually, experienced a downward trend in budget authority, as table 13 shows. (See app. IV for wood utilization research centers’ budget authority in nominal dollars over the period.) The 12 federal agencies generally rely on scientists and technology transfer specialists to transfer technologies to industry through a variety of methods, such as information dissemination, technical assistance, demonstration projects, and patents and licensing. While federal scientists are involved in some technology transfer, their primary responsibility is research; in contrast, specialists are responsible solely for technology transfer. In addition, the Forest Service has a unit dedicated to transferring the results of wood utilization research and product development: the Forest Service’s TMU. We identified a number of examples of activities that have occurred using each of the technology transfer methods, mostly from the Forest Service and CSREES wood utilization research centers. Scientists are expected to transfer the results of their work and primarily disseminate information through publications—particularly those in peer- reviewed journals—which help establish the validity of their research results. The Forest Service counts the number of articles published in these journals to assess scientists’ performance and reports this information as a performance measure for research in its annual report to Congress. Furthermore, according to Forest Service scientists, some industry officials may also read and use these journals. For example, a window and door manufacturer used the information from a journal article on the characteristics of wood from smaller trees for use in composites to develop a new and higher-value use for this wood. Instead of burning the wood as waste, the manufacturer now uses it in his products. Scientists also disseminate research results to industry through a variety of other methods, including publications that are not peer reviewed, Web sites, presentations of their work at professional meetings, and workshops. Specific examples include the following: Publications that are not peer reviewed include the Forest Service’s one- page information sheets, TechLines; technical reports; industry magazines; trade journals; and training manuals. For example, one training manual was developed after industry representatives asked a Forest Service scientist to create a publication on avoiding accidents caused by improperly constructed logging trails. Scientists also contribute to user manuals that are important to the building industry and homeowners, such as Finishes for Exterior Wood—20,000 copies sold in the past 10 years; and the Wood Mold Maintenance Manual—10,000 copies in circulation. Most of the Forest Service’s wood utilization research work units maintain Web sites that list articles or provide links to articles and contact information. For example, a research work unit in the Southern Research Station reported that 18,335 distinct users—approximately 1,528 per month—accessed its Web site in 2004, downloading 37,376 publications. Some of CSREES’ wood utilization centers also have Web sites, and some scientists have their own Web sites devoted to their wood utilization research and product development. The Forest Service’s State and Private Forestry’s Wood Education and Resource Center in West Virginia offers a grant program to transfer research results. In one instance, grant funds helped support the issuance of three newsletters informing pallet producers, shippers, and technical assistance personnel of the latest developments in implementing new international regulations. These regulations require that all pallets crossing international boundaries be treated to prevent the spread of invasive species. Additionally, three technical bulletins summarizing the results of the center’s applied research in this area were developed and distributed to an international audience. Workshops conducted by scientists for industry include the University of Minnesota’s industry-specific training on streamlined manufacturing procedures to over 75 companies, which has resulted in partnerships with 15 of them. University of Minnesota scientists reported that these partnerships have led to productivity improvements of 50 to 75 percent and cost reductions of 25 to 50 percent, with estimated financial impacts of over $750,000. Forest Service scientists have shared information through broadcasts. A radio host in Arkansas has a weekly show on forestry issues, and scientists from the Southern Research Station have discussed their research. The Forest Products Laboratory conducts “Entrepreneur Tours” in which small- to medium-size mill operators from western states tour the Forest Products Laboratory to learn about current research and how they can use it. Technology transfer specialists—at the Forest Service’s State and Private Forestry program and extension specialists and programs at universities— also play a key role in disseminating information to industry. As of February 2006, the Forest Service employed nine technology transfer specialists, who also provide other types of assistance to small businesses. Like scientists, specialists reach industry and other users through Web sites and publications—particularly those that are not peer reviewed, like trade journals, newsletters, and industry magazines. Specialists sometimes work directly with scientists to disseminate research to targeted users. For example, technology transfer specialists at Louisiana State University’s extension program publish the Dry Kiln Club newsletter, which provides updated research results from the university’s scientists on wood-drying and moisture-related wood decay to an audience of over 1,000. Extension specialists also disseminate information through targeted group education to industry and other users. This education includes short courses, continuing education courses, and workshops. Specialists often develop these courses using the results of research conducted at their university and other universities, the Forest Service, and other federal and state agencies. Specific examples include the following: Extension specialists at Virginia Tech University offered 27 short courses to industry in calendar year 2004. In one of these courses, they combined research from the College of Business with their own knowledge of wood science to teach methods for selling wood products. Extension specialists in Ohio taught a multiweek course to landowners on how to prune and manage their trees and market their products. The course was designed to help the landowners take advantage of a new pallet plant soon to be opening in their area. Extension specialists at Mississippi State’s wood utilization research center have provided logger education to over 3,000 logger firms during the past 10 years. Extension specialists at West Virginia University’s Appalachian Hardwood Center have conducted technology transfer and outreach efforts for the past 15 years. For example, in October 2004, the center hosted a log- sawing and grading workshop that focused on the efficient grading and recovery of lumber for low-grade logs. To enhance competitiveness in the region’s forest products industry, the University of Tennessee’s Forest Products Center has a wood products extension specialist who conducts workshops, issues newsletters, and takes other actions to transfer information from the CSREES wood utilization research center to industry. Technology transfer specialists also attend industry and professional conferences and meetings, where they present information and meet with industry representatives to build their networks. In addition, they disseminate information by creating directories that provide contact information for wood industries in their state. Both scientists and technology transfer specialists provide technical assistance through (1) telephone calls; (2) hands-on technical assistance; and (3) software development. Both scientists and technology transfer specialists respond to telephone calls requesting assistance from industry, consumers, and homeowners. For example, one scientist at Oregon State University estimated receiving over 200 calls per year; another scientist estimated receiving over 400. Forest Products Laboratory managers estimated that they receive 4,000 such calls per year. Scientists and technology transfer specialists also provide industry and others with hands-on technical assistance. Examples include the following: Forest Products Laboratory scientists provided technical assistance to help a small company improve its manufacturing efficiency by applying research on the fasteners and connectors used to assemble and disassemble portable flooring. This company produces flooring for the National Collegiate Athletic Association. Forest Products Laboratory scientists helped a large drumstick manufacturer solve a durability problem by developing a way to inject drumsticks with a polymer to strengthen them. Forest Products Laboratory scientists provide technical assistance by identifying wood samples for companies, as well as for private citizens. As part of this wood identification, they assist manufacturers in resolving problems they have in using different types of woods with different finishes. In 2004, they identified 600 specimens for industry, 350 specimens for government agencies, and 370 specimens of wood for the general public. For 12 years, the University of Minnesota has worked with a company to provide support in material selection, prototyping, performance testing, and market assessment and development. These efforts have helped the company introduce several new product lines in office furniture, store fixtures, and cabinet components; expand from 30 to 450 employees; and increase the company’s sales from $5 million to $50 million annually over the period. The Department of Energy offers energy assessments of facilities that manufacture wood products or produce pulp and paper, although the department requires a substantial cost investment from the company. According to the Department of Energy, these assessments have resulted in an annual savings of up to $9 million for some companies. Agencies also develop software and make it available, often for free, on Web sites. For example, a Forest Service computer program developed by researchers at the Forest Service’s Northeastern Research Station provides a realistic simulation model that allows industry to identify more efficient strategies to reduce waste in the manufacturing process. More than 700 computer program packages have been sent to industry, and follow-up telephone calls by Forest Service scientists indicate that the program is being used in planning and optimization activities by many of the recipients. Similarly, the Department of Energy’s Industrial Technologies Program provides free software tools to the forest products industry to improve energy efficiency in industry processes. Agencies also transfer research results through demonstration or pilot projects in mills, plants, and on-site at research locations. Specific examples include the following: The Forest Products Laboratory built a research demonstration house in 2001 on-site. The research in the demonstration house focuses on improving the use of traditional wood products, recycled and engineered wood composites, natural disaster resistance, energy efficiency, and indoor air quality. Features include a permanent wood foundation and engineered wood composites in the roof. In cooperation with the homebuilding and forest products industries, the Forest Products Laboratory constructed a house on the Washington, D.C., mall as part of the 2005 annual Smithsonian festival. The house showcases new technologies developed by the Forest Products Laboratory and cooperators, such as manufacturers of structural insulated panels. The house was visited by several thousand people over the course of the 10- day festival. Forest Products Laboratory scientists helped a company implement a demonstration project in its saw mill. The project showed that, with improvements to the company’s machinery for determining lumber quality, the company could increase efficiency by as much as 12 percent—thus adding an estimated $1.2 million annually in profit. Scientists at West Virginia University’s wood utilization research center have developed a new technology for using oak as a raw material in the manufacture of OSB. The Weyerhaeuser Company and other industry partners are testing the process and the produced strands in test runs to verify the results. If successful, the research work unit anticipates lower raw material costs and increased use of oak as an engineered wood product component. Success could lead to new or expanded OSB manufacturing facilities, and new jobs, in the Appalachian region. Forest Service scientists at the Southwest Wildland/Urban Interface and Forest Health Restoration research work unit, in Flagstaff, Arizona, have joined with Northern Arizona University on framing techniques using small-diameter logs. This partnership has led to a demonstration project with the Navajo Nation to develop hogans using small-diameter wood. Hogans are traditional housing structures tribes still use, and are typically built with more costly wood from larger trees. HUD, through its Partnership for Advancing Technology in Housing program, helped a builder in North Carolina to demonstrate the durability and cost of various building materials (including insulated composite wood panels) in four residential duplex units. The builder agreed to build each duplex out of a different building material, and HUD is evaluating the materials’ performance at this site. The Office of Naval Research has several demonstration projects in place using wood-plastic composite materials to replace wooden pier components, such as deck boards and fendering components. Such demonstrations help Navy engineers become familiar with new technologies and their benefits before the technologies are widely available. The Coast Guard, in a contract with the University of Maine for composite wood research, requires the university to demonstrate that the composite structures it developed could be used in a marine environment and be more durable than traditional structures. The university will build a dock for the Coast Guard to demonstrate the use of the composite material it has developed. Technology can also be transferred to industry through licensing and patenting. The Forest Service employs one full-time patent attorney, stationed at the Forest Products Laboratory, to assist scientists in patenting inventions they create as part of federally sponsored research projects; industry can then license these patents. The Forest Service Patent and Licensing Program handles all aspects of patents and licensing, including reviewing invention disclosures, filing and prosecuting patent applications, negotiating patent licenses and other technology transfer- related agreements. Between January 1, 1995, and December 3, 2005, a total of 58 patents were issued, and 12 applications related to wood utilization are currently pending, according to the Forest Service. Scientists at the CSREES wood utilization centers also obtain patents on processes and products they have developed. For example, scientists at the University of Minnesota’s wood utilization research center have obtained over 20 patents that they have then licensed to private industry. These patents include those for extracting chemicals from birch bark that can be used in medicine, in manufacturing absorbent panels, and in a foam-and-wood composite log used for siding. They also reported having a number of pending patent applications in the areas of housing systems and the extraction of natural chemicals from birch bark waste products. The Forest Service has a unit dedicated to transferring the results of wood utilization research and product development activities—the TMU, part of the State and Private Forestry Program, located at the Forest Products Laboratory. TMU’s mission is to improve wood utilization by transferring technologies developed primarily by the Forest Products Laboratory and other Forest Service research units. As of February 2006, TMU employed four technology transfer specialists with expertise in wood utilization and product development. These specialists collaborate with Forest Service scientists, primarily at the Forest Products Laboratory, to provide technical assistance to local governments, private landowners, rural communities, and forest industries to ensure the ready adoption of technologies based on forest materials. Like scientists and other technology transfer specialists, TMU’s specialists disseminate research results through publications, conferences, and workshops. Specific examples include the following: In fiscal years 2004 and 2005, TMU reported distributing 40,000 and 6,900 publications, respectively. For example, TMU’s newsletter, the Forest Products Conservation and Recycling Review, has a circulation of over 800. In fiscal year 2005, it published 19 issues of TechLines on topics ranging from the outdoor performance of wood-plastic composites; to wood flooring and roofing; to using waste wood for filtering water. TMU participated in 45 workshops, conferences, presentations, training sessions, and exhibits in fiscal year 2004 that were attended, in total, by over 5,000. In 2004, TMU cosponsored the SmallWood conference in Sacramento, California, that was attended by over 350, including harvesting contractors, rural development officials, community leaders, forest products business owners, environmental groups, and tribes. TMU provided an updated software tool that allows users to compare the unit costs of various heating fuels—the Fuel Value Calculator—allowing wood to be compared to conventional fossil fuels, such as natural gas or fuel oil. The calculator is available on TMU’s Web site. In addition, since TMU’s technology transfer specialists are located on-site with Forest Products Laboratory scientists, they have an opportunity to learn about the research from its early stages. Furthermore, when a technology is developed, the specialists can work with the scientists to conduct a market analysis to determine potential applications. For example, in 2004, TMU published Assessing the Market Potential of Roundwood Recreational Buildings, which provides information on the applicability of the Forest Products Laboratory’s research on roundwood. TMU also transfers technology to users by providing technical assistance directly to industry, communities, and individuals nationwide, as well conducting demonstration projects. Specifically, TMU specialists perform the following activities: Answer numerous phone inquiries and letters, and host visitors—over 2,000 in both fiscal years 2004 and 2005. Specialists provide answers to technical questions, point a user to key information sources, or provide a link and contact information to researchers working in a user’s area of interest. Travel to facilities to provide hands-on advice and answer questions. For example, TMU assisted a remote California logging community hard- hit by mill closures to create over 100 new jobs through a small forest products company and a nonprofit training center. Applying Forest Products Laboratory research, TMU specialists helped the company specialize in producing flooring from small-diameter trees by, among other things, providing solutions to product imperfections like warping and discoloration. Work with companies and communities in implementing research results or new technology through pilot and demonstration projects. For example, TMU staff are working with the Department of Energy’s National Renewable Energy Laboratory on a project testing small-scale biomass modular units, called “BioMax 15s,” that use wood chips to create electricity. The technology is still in the pre-commercial phase, so the department and the TMU are using a demonstration program at several sites around the country, including a high school in Walden, Colorado, and a furniture-making business at the Zuni Pueblo in New Mexico. In addition to its technology transfer responsibilities, in fiscal year 2005, the unit led the evaluation of proposals for USDA’s Woody Biomass Grant Program. This program made available over $4 million in grants designed to increase the utilization of woody biomass from or near National Forest System lands. The program is designed to improve forest restoration activities by using and creating markets for small-diameter material and low-valued trees that were removed during activities to reduce hazardous fuels. Grants could range in value from $50,000 to $250,000. We provided a draft of this report for review and comment to USDA’s CSREES, Forest Service, and Natural Resources and Conservation Service; Defense; Department of Energy; Department of Homeland Security; HUD; Interior; Department of Transportation; and the National Science Foundation. The Forest Service, DOT, Energy, and Interior provided technical comments, which we incorporated as appropriate. CSREES, Natural Resources and Conservation Service, Defense, Department of Homeland Security, HUD, and the National Science Foundation did not have comments on the draft report. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 7 days after the date of this letter. At that time, we will send copies of this report to interested congressional committees; the Secretaries of Agriculture, Defense, Energy, Homeland Security, Housing and Urban Development, Interior, and Transportation; the Director of the National Science Foundation; the Director of the Office of Management and Budget; and other interested parties. We will also make copies available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. If you have any questions about this report, please contact me at (202) 512- 3841 or nazzaror@gao.gov. Contact points for our Offices of Congressional Relations and of Public Affairs may be found on the last page of this report. GAO staff who made major contributors to this report are listed in appendix V. This report describes (1) the types of wood utilization research and product development activities supported by federal agencies and how these efforts are coordinated; (2) the level of support federal agencies made available for these activities in fiscal years 2004 and 2005, and changes in the level of support at the U.S. Department of Agriculture’s Forest Service and at the Cooperative State Research, Education, and Extension Service (CSREES)-funded wood utilization research centers from fiscal years 1995 through 2005; and (3) how the federal government transfers technologies and products from its wood utilization research and product development activities to industry. For this review, we defined wood utilization research and product development as those activities that occur from harvesting the wood through the recycling of wood and paper products. To better understand the focus of the federal research and development efforts in wood utilization, we worked with Forest Service and CSREES program officials to develop the following five broad categories: (1) harvesting—using scientific and engineering principles to ensure cost-effective, environmentally acceptable, and safe forest operations, including planning, road building, harvesting, handling and processing, and transportation; (2) wood properties—studying the basic and applied physical, chemical, and mechanical properties of wood and wood fiber to determine the suitability of this material for various uses, from pulp to structural beams to recycled composite products; (3) manufacturing and processing—new and better manufacturing ways to extract, reduce, and convert virgin wood raw materials to useful products and the development of technology to allow the re-use of materials and products to the maximum extent possible; (4) products and testing—developing test methods and gathering and evaluating data on the differing uses of wood and wood fiber products; and (5) economics and marketing. This final category includes evaluating and tracking domestic and international supply and demand trends, and trade policies, and markets, including market opportunities; and harvesting and production costs for alternative material and energy inputs and processing options. We performed our work at 12 federal agencies that support wood utilization research and product development activities. These include CSREES, the Forest Service, and the Natural Resources Conservation Service; the Department of Defense’s (Defense) Army, Army Corps of Engineers, and the Office of Naval Research; the Department of Energy; the Department of Homeland Security’s Coast Guard; the Department of Housing and Urban Development (HUD); the Department of the Interior’s (Interior) Bureau of Indian Affairs; the National Science Foundation; and the Department of Transportation. To answer the first objective—describing the types of wood utilization research and product development activities supported by federal agencies and how these efforts are coordinated—we collected information on research and product development activities at the 12 agencies for fiscal years 2004 and 2005 and worked with the Forest Service and CSREES to place these activities into one of the five categories we had developed. Because certain Forest Service research work units and CSREES-funded wood utilization research centers are specifically dedicated to wood utilization research and product development, we collected data on research activities for fiscal years 1995 through 2005 to understand how these activities changed over time. At the Forest Service, we used a data collection instrument to systematically gather data on the 27 research work units’ plans for wood utilization research and product development, covering fiscal years 1995 through 2005. Because these plans span multiple years, some dated back as far as 1988. In total, we examined the 71 plans for the 16 research work units at the Forest Products Laboratory and 11 research work units that were associated with other research stations within the Forest Service—4 in the Northeast, 4 in the South, 1 in the Pacific Northwest, 1 in the Pacific Southwest, and 1 in the Rocky Mountains. From these plans, we collected information on each research work unit’s mission, research problems, and selected research activities. (See app. II.) We also interviewed each research work unit’s project leader on the unit’s wood utilization research and product development activities. For CSREES, we examined the 10 wood utilization research centers at 12 universities that receive congressional committee-directed grants for wood utilization research and product development. Nine of these centers are at the universities of Alaska Southeast, Minnesota-Duluth, Maine, and Tennessee; Michigan State University, Mississippi State University, North Carolina State University, Oregon State University, and West Virginia University; and the tenth center is divided among three universities— Idaho State, Montana State, and Washington State—that participate in the Inland Northwest Forest Products Research Consortium. To identify these centers’ wood utilization research and product development activities, we obtained copies of the research proposals that the centers submit annually to CSREES. We used a data collection instrument to (1) systematically review the 88 proposals for fiscal years 1995 through 2005; (2) obtain information on the research objectives, approach, and description of wood utilization research and product development activities; and (3) summarize selected activities for reporting purposes. We also obtained information on the centers’ research activities from CSREES’ Current Research Information System (CRIS) to obtain concise, nontechnical descriptions of selected activities and to ensure that the CRIS summary reflected the information in the CSREES proposals. We interviewed knowledgeable agency officials regarding the reliability of data we used from CSREES’ CRIS database and compared selected CRIS data with grant files. We used the data from CSREES for descriptive purposes only, and determined that the data were sufficiently reliable for these purposes. For reporting purposes, we primarily relied on the CRIS summary information to describe the selected research activities presented in appendix III. To identify other CSREES wood utilization research and product development activities in fiscal years 2004 and 2005, CSREES officials queried the CRIS database using key search codes to identify the wood utilization research and product development activities being conducted under other CSREES-funded grant programs. At the time of our review, the CRIS database did not contain complete information for fiscal year 2005. We reviewed the grant projects—104—that fell within our definition of wood utilization research and product development. To collect information on wood utilization research and product development from the remaining 10 agencies, we interviewed agency officials and reviewed and summarized available information on the research activities for fiscal years 2004 and 2005. To obtain information on the coordination of wood utilization and product development activities among the 12 federal agencies, we interviewed agency officials to obtain their views on the use of informal and formal coordination mechanisms. For all agencies, we obtained this information through interviews with program officials and scientists. In the case of CSREES wood utilization research centers, we obtained this information through a data collection instrument sent to the program leader at each center. In addition, we obtained documents on selected formal coordinating mechanisms, such as interagency agreements. We also attended the “Agenda 2020” meeting sponsored by the Forest Service in 2005, which is held annually to exchange information between industry and Forest Service scientists performing wood utilization research and product development activities. The Forest Service uses these meetings to seek industry views on research results and future research needs. We also examined relevant laws, regulations, and agency polices related to coordination for wood utilization research and product development. To address the second objective—describe the level of support federal agencies made available for wood utilization research and product development activities in fiscal years 2004 and 2005, and changes in the level of support at the Forest Service and CSREES wood utilization research centers from fiscal years 1995 through 2005—we collected budget authority or expenditure information from the 12 agencies for fiscal years 2004 and 2005, and from the Forest Service and CSREES’ wood utilization centers for fiscal years 1995 through 2005. We reported dollars in either budget authority or expenditure data, depending on the availability of agency data. We analyzed these data in both nominal (actual) dollars and dollars adjusted for inflation (real). Most agencies and programs received congressional committee-directed budget authority for wood utilization research and product development or allocated a portion of their budget authority for these activities. Those budget authority amounts are reported when available. However, the only data available for the other CSREES grants and for the National Science Foundation were expenditure data. For information on CSREES’ budget authority for the wood utilization research centers for fiscal years 1995 to 2005 for the grants awarded to the wood utilization research centers, the CSREES official explained how the funds were allocated across the 10 wood utilization research centers over the 11-year period. These data were used to show the historical trends of investment dollars for wood utilization research and product development over the past 11 years. (See app. IV.) In addition to the budget authority for the CSREES wood utilization research centers, we obtained expenditure data for the wood utilization research and product development activities conducted under the authority of the McIntyre–Stennis Act, the Hatch Act, the National Research Initiative, the Small Business Innovation Research Grants, and other small grants, which can fund wood utilization research and product development. We obtained specific expenditure amounts for these activities for fiscal year 2004 from the CRIS database system. Fiscal year 2005 data were not available for these CSREES activities. For the Forest Service, we obtained information on budget authority from an internal agency review of research stations and research work units. We used this information to provide an overview of the changes in budget authority for wood utilization research and product development for fiscal years 1995 through 2005. See appendix IV for the budget authority for each research work unit over this period. In addition, we interviewed Forest Service budget officials in headquarters, the Forest Products Laboratory, and the State and Private Forestry Program on budget and other funding issues, such as the allocation of funds and setting of research funding priorities. We concluded that the data provided in the agency survey were sufficiently reliable for the purposes of our review. We also reviewed and summarized information from Forest Service documents on the number of scientists and research support staff at the Forest Service—the only agency that has full-time federal employees who directly conduct wood utilization research and product development activities. We reported the number of full-time equivalent (FTE) staff at each of the 27 research work units that conducted research on wood utilization and product development for fiscal years 1995 through 2005. (See app. IV.) To collect funding information from the remaining agencies, we asked budget and program officials for budget authority or expenditure information for fiscal years 2004 and 2005 for wood utilization research and product development. Specifically, the National Science Foundation provided us with expenditure information from its Project Reports Summary and Search and Awards databases because that is the only way it could identify the amounts devoted to wood utilization research and product development. We interviewed knowledgeable agency officials regarding the reliability of these data. We used the data for descriptive purposes only, and determined that the data were sufficiently reliable for these purposes. The funding for Defense’s Army, Corps of Engineers, and Office of Naval Research; and the Department of Homeland Security’s Coast Guard were congressional committee-directed funds or budget authority. However, for the Office of Naval Research and the Coast Guard, we reported expenditures because those amounts were applicable to our time period— fiscal years 2004 and 2005. To respond to objective three—how the federal government transfers technologies and products from its wood utilization research and product development activities to industry—we obtained and reviewed relevant legislation and policies and procedures on federal technology transfer activities. At the Forest Service, we interviewed and obtained examples of successful technology transfer from project leaders at the 27 research work units that are responsible for wood utilization research and product development; a patent attorney; technology transfer program managers at the Technology Marketing Unit located at the Forest Products Laboratory; and technology transfer specialists in the State and Private Forestry Program. At CSREES, we had discussions with program research officials and extension specialists. In addition, we sent a short data collection instrument to the 10 wood utilization research centers to obtain information on how they transfer the results of their research to industry, as well as to obtain examples of successful transfer efforts. We did not assess the success of these agencies’ reported efforts, nor did we try to quantify the results of these efforts. We also conducted site visits at a limited number of federal, university, and industrial facilities—the Forest Products Laboratory; Forest Service facilities in Virginia, West Virginia, and Oregon; the wood utilization research center at Oregon State University; the Western Wood Producers Association; the APA Engineered Wood Association; and a Weyerhaeuser Company research laboratory in Washington State. We also visited a sawmill, a manufacturer of wooden steps and stair posts, a manufacturer of engineered products, and a cabinet maker, and attended the 2005 Northeast Utilization and Marketing Council’s conference. We performed our work between February 2005 and May 2006, in accordance with generally accepted government auditing standards. This appendix presents examples of work conducted and planned for the Forest Service’s research work units at the Forest Products Laboratory (table 14), and in work units associated with five research stations: Northeastern, Pacific Northwest, Pacific Southwest, Rocky Mountain, and Southern (table 15). This appendix presents information on CSREES’ wood utilization research centers, including some of their objectives, specialty areas, and research activities over 11 years—fiscal years 1995 through 2005. This center specializes in assisting the Alaska Forest Products industry through research, extension, and education activities. The consortium uses a multidisciplinary, multi-institutional approach to solving forest operations and wood utilization problems unique to the Inland Northwest region. The consortium consists of the universities of Idaho and of Montana, and Washington State University. This center specializes in all aspects of utilization concerning species indigenous to the New England area. The center specializes in sustainable hardwood utilization, with a focus on wood preservation, wood composite materials, and genetic engineering of necessary wood properties for specific product development. This center specializes in timber harvesting, transportation, and economics; lumber manufacturing and processing; wood-based composite materials; protection and preservation of wood; wood chemistry; economic evaluation; and technology transfer. This center specializes in wood machining and tooling technology. This center specializes in science, technology, and business practices that will enhance the domestic and global competitiveness of the U.S. wood products industry, especially in the western United States; this will ensure more efficient use of available wood resources. A special emphasis is placed on training future scientists, researchers, and practitioners. This center specializes in southern Appalachian hardwood utilization and manufacturing of composite materials. This center specializes in improving the utilization of upland hardwoods in Appalachian forests. This appendix presents budget authority information for the Forest Service, information on FTE scientists and support staff for the Forest Service, and budget authority information for CSREES wood utilization research centers, from fiscal years 1995 through 2005. In addition to the contact named above, Andrea Wamstad Brown, Jacqueline Adams Cook, Richard Johnson, Rebecca Shea, Jay Cherlow, Carol Herrnstadt Shulman, Jeremy Ames, and Jaelith Hall-Rivera, made key contributions to this report.

Summary: More wood is consumed every year in the United States than all metals, plastics, and masonry cement combined. To maximize their use of wood, forest product companies rely on research into new methods for using wood. At least 12 federal agencies have provided support to wood utilization research and product development activities, including the U.S. Department of Agriculture's Forest Service and Cooperative State Research, Education, and Extension Service (CSREES)-funded wood utilization research centers, which historically have specifically targeted support to these activities. GAO was asked to identify (1) the types of wood utilization research and product development activities federal agencies support and how these activities are coordinated; (2) the level of support federal agencies made available for these activities in fiscal years 2004 and 2005, and changes in the level of support at the Forest Service and at the CSREES-funded wood utilization research centers for fiscal years 1995 through 2005; and (3) how the federal government transfers the technologies and products from its wood utilization research and product development activities to industry. GAO provided a draft of this report to the 12 federal agencies for review and comment. Some of the agencies provided technical comments, which were incorporated as appropriate. Federal wood utilization research and product development span a broad spectrum of activities. These activities fall into five categories: harvesting, wood properties, manufacturing and processing, products and testing, and economics and marketing. Of the 12 federal agencies that provided support to wood utilization research and product development, only the Forest Service and the CSREES-funded wood utilization centers had activities in all five categories; although all the agencies had activities in manufacturing and processing. Coordination of these activities is both informal and formal. Scientists informally coordinate their activities by conferring with each other and sharing information at conferences and professional meetings and through publications. In some cases, coordination occurs through more formal mechanisms, such as cooperative arrangements and other joint ventures. During fiscal years 2004 and 2005, the 12 federal agencies made available at least $54 million annually for wood utilization research and product development activities, measured either in budget authority or expenditures. (Dollars are reported in either budget authority or expenditure data, depending on the availability of agency data.) The Forest Service made available about half of these funds. In addition, the Forest Service--the only agency that directly employs scientists and support staff to conduct wood utilization research and product development--reported having almost 175 full-time equivalent scientists and support staff in each of these years. For fiscal years 1995 through 2005, the Forest Service's budget authority for wood utilization research and product development activities fluctuated moderately from year-to-year (in inflationadjusted dollars). In contrast, overall, CSREES' budget authority for the wood utilization research centers increased over the period (in inflation-adjusted dollars), in part because of the addition of four new wood utilization research centers between fiscal years 1999 and 2004. To transfer technologies and products to industry, federal agencies generally rely on scientists and technology transfer specialists, who use methods such as information sharing, technical assistance, and demonstration projects. For example, applying research from the Forest Products Laboratory, Forest Service technology transfer specialists assisted a small forest products company in producing flooring from small trees by, among other things, providing solutions to product imperfections like warping and discoloration.