DOE Lab Have Fewer Industry Partnerships & Rely More on Private Funding
According to a recent report by the US General Accounting Office, Department of Energy Laboratories have revised their approach to technology development partnerships with business. Since 1980, the congress has enacted several laws designed to improve the United States' competitive position in the world economy by facilitating the transfer of technology from federal laboratories to U.S. businesses. Specifically, 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) that are consistent with the laboratories' mission. By fiscal year 1995, DOE's three nuclear weapons laboratories-Lawrence Livermore National Laboratory, Los Alamos National Laboratory, and Sandia National Laboratories- were among the leading federal laboratories participating in CRADAs with businesses, universities, and other private partners. In addition, DOE's Kansas City, Pantex and Oak Ridge Y-12 nuclear weapons production facilities began entering in CRADAs in the mid-1990s. Within DOE, these laboratories and production facilities are managed by the National Nuclear Security Administration (NNSA). Both the private partner(s) and the DOE laboratory or production facility generally have provided scientists and facilities for CRADA projects, and private partners have also provided funding to cover a portion of the research costs. According to DOE, the laboratories and production facilities have also transferred technology by, for example, providing technical assistance to small businesses and entering into "work-for-other" agreements, in which the private entity pays the laboratory's full costs for performing a research project.
To further encourage DOE's nuclear weapons laboratories and production facilities to enter into partnerships with private entities, the Congress established the Technology Transfer Initiative in fiscal year 1991 to provide funding specifically designated for supporting CRADAs and other types of partnerships. Technology Transfer Initiative funding increased from about $1 million initially to $205 million in fiscal year 1995. However, the Congress began to phase out these dedicated funds in fiscal year 1996 and rely instead on program managers at the laboratories and production facilities to use regular research funding for partnerships that would significantly benefit their programs. While the use of 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 technology development partnerships.
In recent years, NNSA's laboratories and production facilities have substantially revised their approaches to technology development partnerships: They have reduced their use of CRADAs and the provision of technical assistance to small businesses while entering into more agreements fully funded by private partners. The number of CRADAs at NNSA facilities, which peaked at 639 in fiscal year 1995, subsequently declined by more than 60 percent as dedicated funding for technology partnerships was gradually eliminated. NNSA laboratory managers told us that because the dedicated funding generally has not been replaced with NNSA research program funds, their laboratories have either prematurely terminated many CRADAs or required the private partners to fully fund the work. NNSA facilities also are negotiating fewer new CRADAs-they entered into only 21 CRADAs during the first 6 months of fiscal year 2001; in comparison, they entered into 240 new CRADAs in fiscal year 1995. Similarly, technical assistance for small businesses, funded by the Technology Partnership Program, has declined by more than 70 percent between fiscal years 1995 and 2000. In contrast, NNSA facilities have increased work-for-other and technology licensing activities, which are funded by private businesses. Overall, NNSA's and private partners' support of technology partnerships has dropped from $390 million in fiscal year 1995 to $175 million in fiscal year 2000 and to $81 million in the first 6 months of fiscal year 2001.
NNSA officials and laboratory managers identified various advantages and disadvantages of collaborative research under a CRADA. In particular, CRADAs can leverage NNSA's research funds with additional private funding, scientists and equipment that extend NNSA's research capabilities. CRADAs also have enabled NNSA's laboratories to maintain core competencies in research and manufacturing and recruit and retain key scientists challenged by interesting research projects. However, CRADAs require NNSA's laboratories to share control over the scope of the research, project time frames, and intellectual property rights; and they may divert research funds to projects with only secondary benefits to NNSA's core mission. NNSA laboratory managers identified two alternatives-establishing an advocate within NNSA to facilitate funding for CRADAs and setting aside a small portion of research funding specifically to provide initial support for mission related CRADAs-that would increase NNSA's current management and financial support for CRADAs and potentially increase the number of agreements.
The full report is available on the Internet at www.gao.gov
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