[Senate Report 107-30]
[From the U.S. Government Publishing Office]
Calendar No. 65
107th Congress Report
SENATE
1st Session 107-30
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NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001
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June 5, 2001.--Ordered to be printed
_______
Mr. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 517]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 517) to authorize funding the Department
of Energy to enhance its mission areas through technology
transfer and partnerships for fiscal years 2002 through 2006,
and for other purposes, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
Purpose of the Measure
The purpose of S. 517 is to improve scientific and
technical collaborations between the Department of Energy's
national laboratories and institutions of higher education,
technology-related business concerns, nonprofit institutions,
and state, tribal and local government agencies.
Background and Need
The national security and economic growth of the United
States rests, in large measure, on our leadership in science
and technology. The Department of Energy (DOE), working through
its system of national laboratories, is not only responsible
for the development and stewardship of the Nation's nuclear
arsenal but is also the third largest government sponsor of
basic scientific research in the United States. The research
and development (R&D) conducted by DOE through the national
laboratories is critically important to the national security,
economic growth, and quality of life of the United States.
Since the end of the Cold War, however, the private sector
has eclipsed the Federal Government in R&D. Between 1987, when
Federal funding for R&D peaked, and 1999, Federal funding for
R&D dropped by around 20 percent in real terms, while private
sector funding for R&D doubled. As a result, private industry
now funds about 70 percent of our national R&D.
For DOE and its national laboratories to continue to
fulfill their national security, energy, science, and
environmental missions, DOE and the national laboratories must
take advantage of the scientific and technological expertise
that exists in colleges and universities, private nonprofit
institutions, non-Federal government agencies, and technology-
related business concerns in the private sector.
The Stevenson-Wydler Technology Innovation Act of 1980 (15
U.S.C. 3701 et seq.) attempted to encourage collaboration
between Federal laboratories and the private sector through,
among other things, cooperative research and development
agreements, known as ``CRADAs.'' CRADAs allow the Federal
Government, through its laboratories, to share personnel,
services, facilities, equipment, intellectual property, and
other resources with non-Federal parties in the conduct of R&D
that supports the laboratories' missions. Although CRADAs have
been successful, funding for them within DOE's defense programs
has been cut dramatically in recent years and the number of new
CRADAs has been cut in half between 1995 and 1998.
Additional legislation is needed to ensure adequate funding
for national security CRADAs and to improve the CRADA process
generally, to make it faster, more flexible, and more
attractive to non-Federal participants. In addition,
legislation is needed to promote closer scientific and
technological cooperation between the national laboratories and
non-Federal institutions, and to stimulate the development of
``technology clusters'' of technology-related businesses and
academic institutions around the national laboratories, similar
to the technology clusters found in the Silicon Valley.
Legislative History
S. 517 is similar to S. 1756 in the 106th Congress.
106th Congress
S. 1756. S. 1756 was introduced by Senator Bingaman for
himself and Senator Murray on October 20, 1999. Senators
Domenici and Gorton were later added as cosponsors. The
Committee on Energy and Natural Resources held a field hearing
on S. 1756 in Albuquerque, New Mexico on February 14, 2000. On
September 20, 2000, the Committee on Energy and Natural
Resources adopted an amendment in the nature of a substitute to
S. 1756, and ordered the bill favorably reported, as amended.
S. 2549. On July 11, 2000, the Senate adopted legislation
similar to S. 1756, as reported by the Committee on Energy and
Natural Resources, as Amendment No. 3770 to S. 2549, the
National Defense Authorization Act for Fiscal Year 2001.
Amendment No. 3770 added subtitle E (sections 3161-3169) to
title XXXI of S. 2549. The amendment was sponsored by Senators
Bingaman, Domenici, Murray, Gorton, Thompson, Frist, and
Murkowski, and was agreed to by voice vote.
H.R. 4205. On July 13, 2000, the Senate passed H.R. 4205,
the House counterpart to S. 2549, after striking all after the
enacting clause and inserting the text of S. 2549, including
subtitle E.
Public Law 106-398. On October 30, 2000, H.R. 4205,
including subtitle E, was enacted as the Floyd D. Spence
National Defense Authorization Act for Fiscal Year 2001 (Public
Law 106-398). Section 3161 of Public Law 106-398 directed the
Administrator for Nuclear Security to establish a Technology
Infrastructure Pilot Program at the national security
laboratories and nuclear weapons production facilities. Section
3161 of Public Law 106-398 is similar to section 3 of S. 517,
which directs the Secretary of Energy to establish a broader
Technology Infrastructure Pilot Program that includes non-
national security laboratories and non-nuclear-weapons
facilities. Section 3196 of Public Law 106-398 amended section
12 of the Stevenson-Wydler Technology Innovation Act of 1980
(15 U.S.C. 3710a) to permit the National Nuclear Security
Administration to waive any license retained by the Government
on inventions resulting from research at an NNSA laboratory to
facilitate commercialization of the invention. Section 3196 of
Public Law 106-398 is similar to section 9 of S. 517, which
further amends the Stevenson-Wylder Act to permit the
Department of Energy to waive licenses for inventions at all
DOE national laboratories.
Public Law 106-404. On November 1, 2000, Congress enacted
the Technology Transfer Commercialization Act of 2000 (Public
Law 106-404). Section 11 of the Public Law 106-404 (42 U.S.C.
7261c.) provides for the appointment of a technology
partnership ombudsman at each DOE national laboratory. Section
11 of Public Law 106-404 is similar to section 5 of S. 517.
107th Congress
S. 517. S. 517 was introduced by Senator Bingaman for
himself and Senators Domenici and Murray on March 12, 2001.
Senator Crapo was added as a cosponsor on March 20, 2001. At a
business meeting on May 16, 2001, the Committee on Energy and
Natural Resources ordered S. 517 favorably reported without
amendment.
Committee Recommendation
The Committee on Energy and Natural Resources, in open
business session on May 16, 2001, by a unanimous vote of a
quorum present, recommends that the Senate pass S. 517.
Committee Amendments
During the consideration of S. 517, the Committee did not
adopt any amendments.
Section-by-Section Analysis
Section 1 designates the short title.
Section 2 defines terms used in the Act.
Section 3(a) directs the Secretary of Energy to establish a
Technology Infrastructure Program.
Subsection (b) provides that the purpose of the program is
to stimulate the development of technology clusters around the
national laboratories to support their missions; to improve the
ability of the national laboratories to benefit from commercial
research, technology, products, processes, and services; and to
encourage the exchange of scientific and technological
expertise between the national laboratories and non-federal
institutions.
Subsection (c) authorizes the Secretary to divide up to
$10,000,000 per year for three years equally among up to ten
national laboratories or facilities.
Subsections (d), (e), and (f) provide applicable
requirements and selection criteria for the program.
Subsection (g) requires the Secretary to report to Congress
within three years of the program's start on whether the
program should be continued beyond the pilot stage and to
recommend any legislation that may be needed to implement a
follow-on program.
Section 4 requires the Secretary to direct the Director of
each national laboratory to establish a small business advocacy
office to increase small businesses' participation in
procurement, collaborative research, and technology licensing
and transfer.
Section 5 requires the Secretary to direct the Director of
each national laboratory to appoint an ombudsman to resolve
complaints or disputes over technology partnerships, patents,
and licensing.
Section 6 requires the Secretary to direct the Laboratory
Operations Board to study and report on: (1) employee mobility
among the national laboratories; and (2) the need for changes
in indemnification requirements, royalty and fee schedules,
patent licensing procedures and rights, and certain other
matters related to businesses' participation in laboratory
partnerships and technology licensing. The second group of
study topics is particularly aimed at finding new ways to
promote start-ups and stronger networks of technical
collaboration near the laboratories.
Section 7 gives DOE ``other transactions'' for cost-shared
research. Standard government contracts, grants, or cooperative
agreements can be ill suited to working with a consortia of
research organizations where the Government is only one
investment partner among many. ``Other transactions'' authority
cuts through that problem by giving the Secretary greater
flexibility to enter into beneficial arrangements without
regard to the restrictive requirements of standard funding
instruments. Similar authority has been successfully used for
many years by the Defense Advanced Research Projects Agency
(DARPA) to manage many of its innovative relationships with
industry, particular research consortia. The authority given to
the Secretary of Energy in section 7 is directly modeled on the
authority given to DARPA and the Defense Department in section
2371 of title 10, United States Code.
Section 8 confirms that all activities under the Act must
be carried out in accordance with the existing DOE structure,
including the Nuclear National Security Administration (NNSA).
Section 9 amends the Stevenson-Wydler Technology Innovation
Act of 1980 (15 U.S.C. 3710) to streamline the approval process
for CRADAs at government-owned, contractor-operated (GOCO)
facilities. Subsection (a) amends section 12(a) of the
Stevenson-Wydler Act to permit Federal agencies to substitute
an annual strategic plan for individual joint work statements.
Subsection (b) adds a new paragraph to section 12(b) of the
Stevenson-Wydler Act to permit designated officials at the
Department of Energy to waive licenses retained by the
Government under enumerated provisions of the Stevenson-Wydler
Act if the official finds that the retention of the license
would substantially inhibit the commercialization of an
invention that would otherwise serve an important Federal
mission. Subsection (c) amends section 12(c)(5) of the
Stevenson-Wydler Act to reduce the time allowed to approve
CRADAs at government-owned, contractor-operated laboratories to
30 days.
Section 10(a) establishes CRADA funding goals for the
National Nuclear Security Administration (NNSA). Subsection (b)
establishes a goal of obligating 0.5 percent of the funds
available to the NNSA during fiscal year 2001 and 2002 for
CRADAs or similar cooperative, cost-shared research
partnerships with non-Federal organizations. The Committee
estimates this will amount to about $30 million in each fiscal
year. Subsection (c) requires the Administrator to submit a
report to the congressional defense committees recommending an
appropriate funding objective for subsequent years. Subsection
(d) requires that CRADAs entered into under section 10 be
consistent with and support the missions of the NNSA.
Subsection (e) requires that, beginning in March 2002, and no
later than the end of March of each year thereafter, the
Administrator report to Congress on whether the goals of
section 10 have been met in the previous fiscal year. If the
goals have not been met, the provision requires the
Administrator to describe what actions he or she will take to
achieve such goals and recommend any legislative changes needed
to achieve them.
Cost and Budgetary Considerations
The following estimate of costs of this measure has been
provided by the Congressional Budget Office.
Summary
S. 517 would authorize several new programs at the
Department of Energy (DOE) that would foster technology
partnerships between DOE and nonfederal entities. The bill
would authorize the appropriation of $10 million a year for
three years for a Technology Infrastructure Pilot Program at
certain DOE laboratories and facilities. It would direct the
department to expand support for small businesses at those
facilities and to appoint an ombudsman to facilitate the
resolution of complaints or disputes. DOE also would be
authorized to waive provisions in licenses that are retained by
the government under cooperative research and development
agreements (CRADAs) over the next five years and to develop
alternative contractual arrangements for research and
development projects. Finally, the bill would direct DOE to
allocate a fixed percentage of the amounts appropriated for the
National Nuclear Security Administration (NNSA) for CRADAs, and
to prepare various reports.
Assuming appropriation of the necessary amounts, CBO
estimates that implementing this bill would cost about $50
million over the 2002-2006 period. The provisions regarding
CRADAs could affect the collection and spending of royalties
and other payments governed by licensing agreements, but CBO
estimates that the net effect on direct spending would
negligible. Because the bill could affect direct spending, pay-
as-you-go procedures would apply.
S. 517 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated Cost to the Federal Government
The estimated budgetary impact of S. 517 is shown in the
following table. The costs of this legislation fall within
budget functions 050 (national defense), 250 (general science,
space and technology, and 270 (energy).
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By fiscal year, in millions of dollars--
-----------------------------------------------
2001 2002 2003 2004 2005 2006
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SPENDING SUBJECT TO APPROPRIATION
Spending under current law for technology partnerships:
Authorization level \1\..................................... 5 5 0 0 0 0
Estimated outlays........................................... 0 1 2 2 0 0
Proposed changes:
Estimated authorization level............................... 0 15 15 15 5 5
Estimated outlays........................................... 0 3 11 15 13 8
Spending Under S. 517:
Estimated authorization level............................... 5 20 15 15 5 5
Estimated outlays........................................... 0 4 13 17 13 8
----------------------------------------------------------------------------------------------------------------
\1\ Public Law 106-398 authorized $5 million in 2001 and 2002 for a
technology partnership program, but no funds have yet been
appropriated.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the authorized and
estimated amounts will be appropriated for each year, beginning
in 2002. We assume outlays will follow historical spending
patterns for similar programs.
Spending Subject to Appropriation
CBO estimates that implementing this bill would cost a
total of $50 million over the next five years, assuming
appropriation of the necessary amounts. Most of this funding
would support the pilot program, which would promote
opportunities for commercial research and technology
development with 10 national laboratories or facilities. The
$10 million authorized for each of the next three fiscal years
would be in addition to the $5 million already authorized for
such pilot programs at the national security labs for 2002.
Under the bill, the pilot program would require that at least
50 percent of the funding to be provided from nonfederal
sources; we expect that spending would start slowly.
In addition, based on information from DOE, CBO estimates
that the bill's requirement that DOE expand support for small
businesses would cost about $5 million annually, assuming
appropriation of the necessary funds.
Direct spending
The provisions in S. 517 regarding CRADAs could affect
direct spending because the federal government collects and
spends royalties and other payments under these licensing
agreements. Under current law, the government may grant
nonfederal entities patent licenses or assignments for
inventions resulting from CRADAs and other collaborative
arrangements. Federal agencies are authorized to spend any
royalties or payments resulting from such licenses or
assignments without further appropriation.
The provisions allowing DOE to waive license provisions
could reduce royalties from existing as well as future CRADAs,
but CBO estimates that the net effect would not be significant
because agencies are able to spend any such collections without
further appropriation. The provisions that would allocate a
portion of the NNSA's funding for CRADAs could increase
licensing activity and royalties at some point in the future,
but the net effect would be negligible because any proceeds
would be spent by DOE.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. CBO
estimates that the provisions in S. 517 regarding CRADAs and
licensing arrangements could affect direct spending, but we
estimate that the net effect would not be significant.
Estimated impact on state, local, and tribal governments:
S. 517 contains no intergovernmental mandates as defined in
UMRA and would impose no costs on state, local, or tribal
governments. Any costs or benefits accruing to
intergovernmental entities, including public universities, from
participation in the Technology Infrastructure Pilot Program
would be voluntary.
Estimated impact on the private sector: This bill contains
no new private-sector mandates as defined in UMRA.
Estimate prepared by: Federal Costs: Kathleen Gramp. Impact
on State, Local, and Tribal Governments: Victoria Heid Hall.
Impact on the Private Sector: Lauren Marks.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact Evaluation
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 517. The bill is not a regulatory measure in
the sense of imposing Government-established standards or
significant economic responsibilities on private individuals
and businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any additional paperwork would result from the
enactment of S. 517, as ordered reported.
Executive Communications
On October 4, 2000, the Committee on Energy and Natural
Resources requested legislative reports from the Department of
Energy and the Office of Management and Budget setting forth
executive views on S. 1756 (106th Congress). These reports had
not been received at the time the report on S. 1756 was filed,
nor had these reports been received at the time the report on
S. 517 was filed. When these reports become available, the
Chairman will request that they be printed in the Congressional
Record for the advice of the Senate.
The testimony provided by the Director of the Los Alamos
National Laboratory and the Director of the Sandia National
Laboratories at the February 14, 2000 Committee hearing on S.
1756 (106th Congress) follows:
Prepared Statement of Dr. John C. Browne, Director, Los Alamos National
Laboratory
Introduction
I am pleased to have the opportunity to address this
Committee today. I want to thank our Senators and the Committee
for the strong support they have shown over many years for our
Laboratory's mission and for industry-Laboratory partnerships
and economic development. I am committed to seeing that Los
Alamos National Laboratory fulfills our national security
mission while also carrying out our responsibility to achieve
the goals of the government's technology transfer program.
I would also like to state my support for the ``National
Laboratories Partnership Improvement Act of 1999.'' This bill
will make it easier for Los Alamos to collaborate with industry
and universities, especially those in the northern New Mexico
region.
Los Alamos and the other DOE laboratories facilitate the
exchange of new technology and advanced technical capabilities
between the public and the private sectors. Such exchange helps
us achieve our programmatic mission while providing our
researchers with stimulating challenges. I am convinced that
significant benefits derived from our technical collaborations
with academia and industry.
I concur with the stated purpose of the government's
involvement in technology transfer which is to make federally
developed technology available to industry in a way that will
provide short- and long-term benefits to the U.S. economy and
the industrial competitiveness of our nation. These benefits
include new and higher quality jobs, an enhanced skill base,
commercialization of new technologies, and a more robust
domestic economy.
However, let me state strongly that a clear benefit for Los
Alamos and the DOE is the opportunity for our researcher to
solve national problems in collaboration without industrial
partners. Collaborations with private industry help us to
assimilate ``best industrial practices'' to maintain and
develop our skills.
While I believe that our efforts in technology transfer and
industrial partnerships have been successful, the funding for
these effort has dropped significantly in the last several
years. The FY01 President's budget eliminates this funding
entirely. If this occurs, then our programmatically funded
industrial partnerships will have to focus directly on DOE
program deliverables.
If there is no longer identified funding for the DOE
technology partnership program, it would be more efficient to
conduct our mission-focused partnerships through normal
contracting and funds-in arrangements. These activities would
be more timely and cost-effective by eliminating the additional
DOE management processes that grew up when the government was
funding a more general technology transfer program with
hundreds of millions of dollars per year.
Stockpile Stewardship and the Technology Partnership Program
A major purpose of partnering with industry is to help us
achieve our mission objectives more efficiently and
effectively. The Nuclear Weapon Complex cannot afford to do
everything itself. In many specialized areas, U.S. industry has
developed experience, expertise, equipment, and technology that
eclipses what exists in the Nuclear Weapons Complex.
Cooperative Research and Development Agreements (CRADAs) with
industry are essential to achieving our stockpile stewardship
mission while refurbishing and modernizing the complex. They
also provide contacts for future, innovative partnerships with
industry.
Adoption of the moratorium in nuclear testing hastened the
need for more powerful computing capabilities. As an element of
stockpile stewardship the Accelerated Strategic Computing
Initiative (ASCII) is successfully pushing the frontiers of
speed and capacity with advanced hardware development at the
nuclear weapons laboratories. However, a successful Stockpile
Stewardship Program requires more than hardware. Sophisticated
computational modeling and simulation programs are being
created at Los Alamos and the other weapons laboratories to
solve complex physics and materials problems. Nevertheless, a
key question remains: How can we validate the results of this
modeling and simulation effort? Validation of the models is
essential. It requires actual data to compare with the results
of calculations. While historical data are available for
comparison, the fact remains that no new nuclear testing data
have been generated since 1992.
The ASCII program is a good example of a government program
whose goals are synergistic with industrial goals. ASCII is
advancing the technological frontier for private industry while
establishing needed partnerships with industry to attain its
programmatic goals. We have collaborated with many U.S.
companies. large and small, in which our modeling and
simulation expertise has resulted in unclassified codes that
have been used for commercial activities. In return, our
partner companies provide data that assist the laboratories to
validate our codes. Without access to the data from our
industrial collaborators, millions in additional tax collars
would be required to generate the additional data needed to
validate our computer models.
Los Alamos National Laboratory's continuing role in Science
Based Stockpile Stewardship (SBSS) relies on our ability to
predict material performance over decades of material lifetime.
Our partnerships with industry are designed to increase our
understanding of the aging stockpile. Working with industry has
provided us with confidence to predict changes in materials
characteristics and performance and has enhanced our ability to
manufacture and inspect replacement parts with increased
precision, at lower cost.
The Technology Partnership Program (TPP) has been an
effective tool in building awareness of and advocacy for the
value of partnerships between industry and the weapons program.
The Los Alamos TPP effort has successfully catalyzed and
incubated more than 200 partnerships between industry and the
weapons program in the following technical thrust areas:
Advanced Manufacturing; Materials and Chemistry and Materials
Processing; Advanced Inspection and Surveillance; Advanced
Diagnostics for Dynamic Experiments; Advance Computation,
Modeling, and Simulation; and Knowledge Management.
We also have successfully directed AMTEX and ACTI
partnerships to provide direct support to weapons programs, and
have helped several small, high-tech businesses grow and become
more competitive in Northern New Mexico through R&D
partnerships under our Small Business Initiative.
Los Alamos is presently collaborating with two industrial
partners on polymer aging work with direct applications to
weapons. These partners are world leaders in the field of
research and production of urethanes, an essential element in
the SBSS initiative. These collaborations encompass research in
materials synthesis, advanced characterization, and predictive
modeling.
One of these collaborations is studying accelerated aging
methods and models to better understand the behavior of
polymers when subjected to environmental degradation. Part of
this research incorporates stable isotope labels into polymers,
a unique laboratory capability that is advancing our materials
knowledge base. The results of this research improve our
understanding of lifetime predictions for the stockpile.
Los Alamos is greatly concerned about DOE's intent to
eliminate the funding for the TPP program in FY2001. Loss of
this funding will make it more difficult to continue the
momentum gained recently in building high-quality, mission-
driven partnerships with industry for the weaponsprogram. The
funding is also of value in creating the laboratory industry structures
that are key to economic development in the future. We request your
continued support for partnering with industry.
Comments Regarding the Provisions of S. 1756
1. Regional technology infrastructure: Economic clusters
Los Alamos regional economic development activities
In 1997, the University of California and the Department of
Energy incorporated a new Appendix into the Prime Contract for
Los Alamos. Appendix M required the establishment of a new
Technology Commercialization Office (TCO) as a part of the
Laboratory's technology transfer organization. With the support
of the DOE and the University of California (UC), $1 million
annually is allocated to the Technology Commercialization
Office in support of its regional business development efforts.
In addition to the $1 million funding for the Laboratory,
TPP's Small Business Initiative Regional Impact Program has
provided an additional $2 million annually to fund
collaborations with regional small business. The program has
supported more than 45 regional small business CRADAs, the
Technical Assistance Program, and SBIR Training Workshops. The
future of the SBI program is in severe jeopardy based on the
demise of TPP funding for industrial partnerships. This has
already resulted in the termination of some regional CRADA
activity and threatens the development of future partnerships.
Since 1997, Los Alamos has diligently worked to nurture and
grow new businesses in the Northern New Mexico region. The
Laboratory has invested more than $7 million to provide direct
assistance to more than 80 Northern New Mexico clients. Among
these clients, the Laboratory assisted seven Laboratory
employees to participate in the new Entrepreneurial Leave-of-
Absence program to pursue business start-ups in the region.
Some major results of this program include: 34 new Northern New
Mexico technology firms; 124 new jobs among those 34 firms; and
external capital invested in these firms exceeds $21M.
Los Alamos is also a partner with a growing private sector
technology community in Northern New Mexico helping to create a
framework for future cluster groupings. Formal working
relationships have been established with numerous Northern New
Mexico organizations including Northern New Mexico Small
Business Development Centers, regional technology incubators
and business parks, and various investor organizations.
For example, in the area of information technology and
software the Laboratory is a co-founder and active participant
in the NM Information Technology and Software Association
(NMITSA). Similar cluster initiatives in the biosciences,
materials, and optoelectronics areas are also under
development.
We also are supportive of workforce training initiatives
that support the information technology cluster. In January
2000, Los Alamos co-sponsored ``E-Commerce 2000 Summit'' with
Taos La Plaza Telecommunity, the Town of Taos, the National
Center for American Indian Enterprise Development and the
Electronic Commerce Resource Center. This purpose of the summit
was to educate the local business community on accessing the
many opportunities available through the Internet.
Through Appendix M of the UC contract and the Small
Business Initiative Program, the Laboratory has provided
approximately $3 million in funding annually to support these
activities. The demise of TPP eliminates our ability to sustain
regional CRADAs, the Technical Assistance Program, and SBIR
training. Although we will continue our efforts to promote
regional business development, as required by Appendix M,
passage of Senate Bill 1796 will help us to continue to
collaborate with regional businesses through CRADAs.
Los Alamos Research Park project
The DOE maintains a strong commitment to regional economic
development to Northern New Mexico. With the lease of 44 acres
of land to the Los Alamos Commerce and Development Corporation,
the Los Alamos Research Park will emerge as a preeminent
location for cooperative projects to thrive amidst Los Alamos
researchers and their external partners. Motorola, one of the
Laboratory's strategic partners, has signed a lease as the
anchor tenant in the park.
The park will facilitate strategic collaborations with
industry help diversify the Northern New Mexico economy, and
increase job opportunities. The park is expected to create a
more business-friendly infrastructure enabling technology
clusters in information technology, biotechnology, and
optoelectronics to develop. Park tenants will help to generate
new tax revenues for Los Alamos County over the next ten to
fifteen years.
Using the model established for the Research Park, DOE is
investigating other opportunities to lease unique Laboratory
facilities to private industry. For example, DOE and National
Institutes of Health (NIH) need carbon-13 and oxygen-18
isotopes that can be generated for advanced biomedical
applications at one of the Laboratory's vacant facilities. The
sublease of the facility to a private company will help the
government obtain materials needed for further research and
provide materials required for industrial applications.
Industry analyses for projects of this nature indicate the
potential need for up to 100 employees to be hired primarily
from the Northern New Mexico region.
2. Improved small business procurement opportunities at Los Alamos
To promote small business in the region, Los Alamos has
increased small business procurement opportunities. Several
initiatives will assist small businesses in working with the
Laboratory: The Small Business Office (SBO) has been elevated
to report to the Director of Business Operations Division; The
Small Business Office will be given procurement authority; A
new Director of Small Business will be appointed to serve as a
facilitator and advocate for small businesses interested in
contracting opportunities with LANL; A Small Business and
Contracting Ombuds function will provide a resource for small
businesses with complaints and questions about procurement,
technology transfer and other topics; and The Laboratory will
convene a series of workshops to assist small businesses in
working with the Laboratory.
Los Alamos is conducting mandatory training for purchasing
agents to raise consciousness regarding the importance of
subcontracting with small, minority, and woman-owned
businesses. We are creating a web page to identify upcoming
subcontracts and maximize small business planning efforts. A
news bulletin will provide the same information to businesses
without on-line access. This is consistent with Los Alamos'
commitment to being a good neighbor in the region and promoting
regional economic development.
With these changes, we will make the Laboratory more
accessible, more consistent, and more transparent to regional
small-businesses. The result will be a stronger regional
economy and a more productive partnership between the
Laboratory and the small business community.
3. Amendments to the Stevenson-Wydler Act
The ``National Laboratories Partnership Improvement Act of
1999'', introduced as Senate Bill 1756, will facilitate the
stated objective to help the national laboratories work better,
faster and with greater flexibility with industry. The bill
will also enable Los Alamos to work more closely with regional
companies, universities and other organizations in Northern New
Mexico to support the Laboratory's mission and to stimulate
local economic development.
The Stevenson-Wydler Technology Innovation Act of 1980 as
amended, permitted the federal laboratories to transfer their
technologies and provide a means for external users to access
laboratory developments. In 1986, The Federal Technology
Transfer Act (Public Law 99-502), mandated technology transfer
as a responsibility of all federal laboratory scientists. It
empowered directors of the Government Owned, Government
Operated laboratories (GOGO) with the authority to enter into
CRADAs and to sign them on behalf of their respective agency.
In 1989, Congress passed the National Competitiveness
Technology Transfer Act. This legislation granted Government
Owned, Contractor Operated (GOCO) laboratories such as Los
Alamos, the opportunity to enter into CRADAs and other
agreements with universities and private industry, in
essentially the same ways as was provided GOCOs under the
Federal Technology Transfer Act of 1986. In 1991, the Defense
Authorization Act established technology transfer as a mission
for the nuclear weapons laboratories.
The primary impediments in implementing technology transfer
statutes at the laboratories have not resulted from
legislation, but from the multitude procedural requirements
partly from DOE's interpretation of federal requirements. These
procedural requirements have unnecessarily burdened the labs
with costly and time-consuming efforts. The ability to engage
industry and academia in a timely fashion has been severely
diminished.
The proposed legislation should help streamline the process
while reemphasizing the goals of Stevenson-Wydler and the
National Competitive Technology Transfer Act making
collaborative technology transfer arrangements between federal
laboratories and the private sector easier and more attractive.
We are encouraged to see the streamlined approach this bill
offers for Joint Work Statements and CRADAs. However, under the
present bill, DOE has the discretion to approve CRADAs and JSWs
on a case-by-case basis or to permit submission of an annual
strategic plan in lieu of review. We would prefer to see the
elimination of the DOE review of both Joint Work Statements and
final CRADAs. The time that would be saved by eliminating case-
by-case review and approval would benefit the laboratory and
our CRADA partners, translating into dollar savings in almost
all instances.
The maturation of the CRADA process with approximately 450
CRADAs executed at Los Alamos over the past decade suggests
that it is reasonable to allow us to negotiate and adopt CRADAs
and joint work statements without case-by-case review
(analogous to our procurement subcontracting process). The DOE
has established performance-based metrics for our technology
transfer efforts that are part of our annual science and
technology evaluation. These DOE audits and reviews could
address concerns regarding the quality of Joint Work Statements
and CRADAs prepared by the Laboratories. Our most recent audit
was rated outstanding.
Recommendation: S. 1756 should be amended to allow the
Department's contractors to adopt Joint Work Statements and
CRADAs without the requirement of case-by-case DOE approval.
Annual audits and reports would be more than sufficient to
ensure that high quality Joint Work Statements and CRADAs are
adopted.
4. Other transactions
Los Alamos supports the bill's provisions to allow DOE to
utilize the method of ``other transactions'' as an
exceptionally flexible contracting authority that allows a
``clean sheet of paper'' negotiation with non-federal
organizations.
Other Areas for Improving DOE Policies and Procedures for Economic
Development
With the inclusion of Appendix M in the UC Prime Contract,
the DOE has demonstrated strong support for entrepreneurial
activities that enhance and diversify the economic base of
Northern New Mexico and facilitate the start-up and growth of
new technology based businesses in the region. The DOE can
further exhibit its support for these emerging New Mexico
businesses by modifying the Fairness of Opportunity policies to
allow preferential consideration for regional firms interested
in licensing Laboratory technologies.
The Laboratory is required to satisfy existing Fairness of
Opportunity requirements prior to granting an exclusive license
agreement. When the Laboratory issues an advertisement for
potential licensees, small regional businesses as well as large
national firms typically respond to the call for proposals.
Without a long-term track records or the vast resources large
established firms have to commit to commercialization
initiatives, small regional businesses are often placed at a
disadvantage. The addition of ``proximity to the Laboratory''
as an additional selection criterion when advertising
technology licensing opportunities would help regional firms
start up, grow, and remain in the area, further complementing
the cluster development objectives of S. 1756.
Concluding Remarks
We all recognize the vast scientific and technological
capabilities available in federal laboratories such as Los
Alamos and Sandia. The opportunity to meet our DOE mission, to
benefit the federal taxpayers through the development of new
partnerships, and to assist in the development of economic
clusters in our region, are all part of the Los Alamos
strategic plan for the coming decade. These activities allow
DOE research to reach mission goals while strengthening or
overall economy.
It is critical that the federal government supports a
sustained effort in technology partnerships if these efforts
are to continue to have a positive impact. We cannot engage our
best people in these endeavors if the funding fluctuates as
dramatically as it has over the past eight years. Our present
economic boom in the U.S. has lowered the interest of many
national leaders in technology transfer but the nation must be
prepared to continue its investment in the economic engine
provided by high technology developments such as those that
occur at the national laboratories. Senate Bill 1756 will help
the DOE, its laboratories and industry meet this challenge.
------
Prepared Statement of Dr. C. Paul Robinson, Director, Sandia National
Laboratories
Introduction
Mr. Chairman, members of the committee, and distinguished
guests, thank you for the opportunity to testify today. I am
Paul Robinson, Director of Sandia National Laboratories. Sandia
is managed and operated for the U.S. Department of Energy (DOE)
by Sandia Corporation, a subsidiary of the Lockheed Martin
Corporation.
I am pleased to testify in support of S. 1756, the
``National Laboratories Partnership Improvement Act.'' The bill
acknowledges that research collaborations with industry and
universities are crucial to the ability of the DOE laboratories
to accomplish their missions. This point is stated in the
``Findings'' section of the bill:
``To be able to help the Department to achieve its missions
in the most cost-effective manner, the National Laboratories
must take advantage, to the greatest practicable, of the
scientific and technological expertise that exists in the
private sector, as well as at leading universities, through
joint research and development projects, personnel exchanges,
and other arrangements.''
The truth of this statement is not widely appreciated. The
DOE laboratories are often regarded as prolific sources of
advanced technology. And while that is often true, it must be
acknowledged that we are also voracious users of technology
developed in the larger community of science and engineering.
We are, in a sense, hunter-gathers of technology that can
support our DOE missions. The laboratories cannot be an island;
they must interact extensively with industry and universities
to keep their research foundations up-to-date with the fast-
moving pace of progress in technology.
A wide range of opinion exists concerning the appropriate
role of technical collaboration between federal research and
development (R&D) institutions and the private sector and
academia. Some have claimed that cost-shared research with
national laboratories amounts to corporate welfare. Although
there are undoubtedly some examples of corporate welfare in
federal programs, the DOE Defense Programs partnership effort
is not one of them. In recent years it has become quite clear
that the DOE laboratories are major beneficiaries of such
collaborative research. Partnerships are an important strategic
response of the science and technology enterprise as R&D
budgets in both industry and government have come under stress.
It has been amply demonstrated that collaborative R&D programs
involving the DOE laboratories can be of great value to
industry and small businesses. But there should be no
misunderstanding that such partnerships are also of great
benefit to the DOE laboratories in performance of their
strategic mission responsibilities.
In my statement today, I will give examples of how
industrial partnerships have contributed to DOE missions at
Sandia National Laboratories. I will discuss the origins and
intent for the partnership policies DOE adopted and the
implementation of partnership programs at Sandia National
Laboratories. I will then describe the negative impact of the
steady decline in partnership funding since fiscal year 1996
and conclude with some observations on revitalizing the DOE
partnerships program. Specific comments on the draft language
of S. 1756 are offered in an appendix to my statement.
How Industrial Partnerships Contribute to the DOE Lab Missions
Our laboratory's core competencies have been strengthened
and its capabilities enhanced through interaction with
industrial and academic researchers and engineers. This
interaction permits us to cultivate relationships with key
suppliers and contributors, explore technical frontiers with
those who have a common interest, and maintain critical
mission-related competencies at world-class levels during a
period of reduced federal investment. Partnerships have
directly benefited DOE missions as we have learned of new
approaches and technologies and applied them to support our
internal programs.
As you know, the mission responsibilities of Sandia
National Laboratories and Los Alamos National Laboratory are
centered on stewardship of the nation's nuclear weapons
stockpile. This is a long-term obligation that requires
sustained expertise in many technical disciplines. We must
exercise, maintain, and continuously improve the technical
competencies required for this work. Nuclear weapons
stewardship requires advanced technology, some of which is
specific to nuclear weapons, but much of which is common to the
standard science and engineering disciplines. If we don't keep
up with the advancing frontiers in electronics, materials
science, computer science, nanotechnology, and so forth, we
cannot perform our mission in the long term. Cooperative work
with industry often helps support technologies that are
strategic for the nuclear weapons program.
For example, microelectronics technology is critical to the
DOE defense mission, and it is especially important for
Sandia's responsibilities in component design. To meet our
mission obligations, Sandia has developed a broad-based
competency in microelectronics, from the fundamental science of
semiconducting materials to device design and fabrication. In
the past two decades, there has been explosive growth and
innovation across the microelectronics industry, with advance
after advance being stacked up to increase the performance of
computers and other high-performance electronic systems. We can
only hope to stay abreast of developments through partnerships
with the leaders in this field. In the 1990s we collaborated
extensively with the Sematech Consortium, as well as with
several major semiconductor companies and research
universities. Those arrangements have proved to be crucially
important to the weapons program at Sandia.
As a result of our cooperative research and development
work with Sematech, we were able to revitalize our
microelectronics fabrication facility through a major donation
of equipment and research instrumentation from IBM valued at
over $20 million. The facility became a dual-benefit project
with industry and hosted partnership projects with U.S.
microelectronics manufacturers and universities. Without the
major support provided by IBM and other industrial partners
through collaborative research programs, Sandia would not have
a modern semiconductor fabrication facility today. And this
facility is absolutely critical to our mission. We are the only
government laboratory with both research and production
capability supporting radiation-hardened microelectronic
components for defense and space applications.
In another example, about a year ago Intel Corporation
granted a royalty-free license of its Pentium processor design
to Sandia so that we can develop a radiation-hardened version.
The Pentium offers a ten-fold increase in processing power over
currently available radiation-hardened microprocessors for
applications such as earth satellites, space probes, missile
defense, and other military and intelligence systems. Our
agreement with Intel will save U.S. taxpayers millions of
dollars in research and development--costs that would have been
required to emulate this capability with a new design. In
addition, the savings in time and money by being able to adapt
proven commercial software to operate the Pentium, rather than
write new software, will be enormous. Several government
agencies will participate with DOE in the radiation-hardened
redesign of the pentium chip, including NASA, the Air Force,
and the National Reconnaissance Office. Intel's patriotic
action built on a partnering relationship that Sandia fostered
over many years and involved numerous cooperative research and
development projects.
It is simply wrong to label these partnerships ``corporate
welfare''; the government clearly got more value out of these
interactions than it put in. Ironically, I have heard exchanges
such as these referred to as ``government welfare,'' which is
perhaps not far off the mark!
The Adoption of Partnership Policy for DOE Defense Programs
In the late 1980s, DOE began to look favorably on the
concept of R&D partnerships to attract private industrial
participation with the labs in areas of mutual interest to
industry and to Defense Programs. DOE had become concerned with
a developing shortage of reliable component suppliers to the
nuclear weapons program which began to manifest itself in the
mid-1980s. This trend became more pronounced after the collapse
of the Soviet Union and the subsequent decrease in spending on
weapons production and the closing of many of the dedicated
plants for nuclear weapon components.
Defense Programs' approach differed from the ``technology
transfer'' model envisioned earlier for government-owned and
government-operated (GOGO) federal laboratories in the
Stephenson/Wydler Act. Stephenson/Wydler was intended as a
vehicle for transferring government-developed technologies to
the private sector for commercialization. Defense Programs, on
the other hand, envisioned collaborative work on technologies
of mutual interest to both the DOE and industry. There was an
expectation of benefit to DOE programs as well.
Prior to 1989, only GOGO laboratories were allowed to enter
into cooperative research and development agreements (CRADAs)
with industrial partners (as permitted by the Federal
Technology Transfer Act of 1986). Basically, the only way
government-owned, contractor-operated (GOGO) labs like Sandia
and Los Alamos could partner with industry was through
procurements. Fortunately, the CRADA mechanism was extended to
GOCO laboratories by the National Competitiveness Technology
Transfer Act of 1989.
In the FY 1991-92 time frame, Defense Programs implemented
a program of R&D partnerships by creating a formal technology
transfer program financed by a specific defense appropriation
and conducted by an independent program initiative within
Defense Programs that did not ``tax'' existing programs. This
new program, the Technology Transfer Initiative (TTI)--later
changed to the Technology Partnerships Program (TPP)--provided
seed money for catalyzing new relationships with industrial
entities that had never before collaborated with DOE
laboratories.
Sandia's implementation of partnerships
Sandia's implementation of partnerships includes
Cooperative Research and Development Agreements (CRADAs) with
both large and small companies, large-scale strategic alliances
with industry groups, expanded offerings of DOE laboratory user
facilities, and direct technical assistance to small and
medium-sized enterprises.
Cooperative research and development agreements
In the first few years after the National Competitiveness
Technology Transfer Act of 1989, cooperative research and
development agreements (CRADAs) became the preferred
arrangement for undertaking collaborative research. Work under
a CRADA is cost-shared with the partner, and intellectual
property resulting from the collaborative work can be
protected. Implementation of CRADAs was rather difficult at
first, however. Companies were unhappy with bureaucratic delays
and some of the contractual terms imposed by DOE's original
regulations. Fortunately, problems with the CRADA rules and
processes were worked out to the general satisfaction of the
labs, their partners, and DOE within the first two years.
Sandia signed CRADAs with many local firms, most of them
small businesses. Many of those CRADAs led to new products and
permitted the licensing of technology developed at Sandia for
commercial applications. Sandia has also executed many CRADAs
with some of the nation's largest companies. With Intel
Corporation, for example, we have performed 12 CRADAs since
1991 with a total value approaching $30 million.
By fiscal year 1995, Sandia had developed the largest
portfolio of industry partnerships of any federally sponsored
institution. Our partnering strategy evolved beyond simple
CRADAs with individual companies. We found, for example, that
consortia involving industry, universities, and other labs were
effective vehicles for sharing research during the
precompetitive stages of a technology's development,
effectively ``raising the level of all ships'' and probably
increasing U.S. technological competitiveness. We established
or participated in several consortia in areas such as specialty
metals, investment casting, computational structural analysis,
and microelectronics and optoelectronics. In the last decade,
Sandia signed several multiple-partner CRADAs with consortia of
companies and universities. Many of these newer CRADAs comprise
a substantial segment of a specific industry or involve working
with umbrella organizations that represent an entire industry.
At the same time, it was also becoming clear that CRADAs
with individual companies in the private sector often went far
beyond technology transfer by creating strategic benefits for
both parties. An outstanding example of mutual benefits in
Sandia's CRADA work with the Goodyear Tire and Rubber Company.
Engineers at Sandia and Goodyear collaborated to improve a
computational engineering tool for solving structural mechanics
problems common to tire design and to the design of reliable
neutron generators for nuclear weapons. Sandia's investment in
this work was marginal, but in the process we acquired valuable
improvements in our capability from Goodyear's expertise.
The benefit to Goodyear--and to the nation--was
substantial. Consider that Goodyear is the only manufacturer of
tires that is U.S.-based and majority-owned by U.S. investors.
The company has faced aggressive technical and price
competition from foreign manufacturers who are subsidized by
their governments. With its healthy volume of international
sales, Goodyear measurably improves the U.S. trade deficit,
creates U.S. jobs, and generates profits that are taxable here
or are reinvested in a U.S.-based enterprise.
DOE user facilities
Another important vehicle for collaborative research is the
Department of Energy's user facility program. DOE's
laboratories have distinguished themselves in the development
and operation of major scientific and engineering facilities
that would be difficult to reproduce in a different setting.
Today, most of these facilities are operated as user
facilities, and their unique capabilities are available to
researchers from industry, academia, and other government
agencies. Sandia has 40 such facilities representing most of
the laboratory's core technical capabilities for DOE missions.
One of the great advantages of the user facility concept is
that it provides a physical environment conducive to
collaboration. Researchers from industry, universities, and the
national laboratories frequently work side-by-side in these
settings on problems of mutual interest.
An example of a Sandia user facility with important
collaborative programs is our Electronics Quality/Reliability
Center, which supports research and development in reliability
physics, reliability engineering, and failure analysis for
electronic devices. Sandia has trained a great many electronics
specialists from U.S. companies in the processes, techniques,
and diagnostics for producing extremely high-reliability
electronic systems--a hallmark of our defense work. In turn, we
continuously learn of the new components and technologies of
the commercial electronic industry, to move us ahead with the
ever-changing state of the art. Together, we have merged these
capabilities for the advantage of our respective programs.
Sandia's Intelligent Systems and Robotics Center provides
an environment for research and development on applications of
intelligent systems and robotics to manufacturing,
environmental cleanup, weapons production and dismantlement,
and medicine. The Liquid Metal Processing and Thermal Spray
Laboratories user facility features a wide range of prototype
and industrial-scale furnaces, melting and investment casting
facilities, thermal spray labs, and computational resources.
These are just a few examples of Sandia's diverse user
facilities.
Sandia's user facilities will become increasingly important
for generating cooperative work with industrial partners and
for building alliances involving industry, university, and
government entities.
Technical assistance to small enterprises
Sandia has made a special effort to provide technical
assistance directly to small business enterprises. Sandia,
Lawrence Livermore, and Los Alamos national laboratories and
the Y-12 production facility at Oak Ridge are partners in the
Department of Energy's Small-Business Initiative. Technical
assistance to small companies increases the return on the
federal investment in DOE's technical assets to the tax-paying
public at minimal incremental cost.
Sandia works directly with individual businesses to solve
problems that are beyond the technical means of the business to
resolve. Often these have been problems that--unless the
troubles could be quickly diagnosed and solved--would have led
to the failure of the small business. We also work with small-
business associations to reach a greater number of participants
by addressing common problems and opportunities and matching
laboratory capabilities with the generic needs of groups of
small businesses.
The Small-Business Initiative (SBI) at Sandia has four
program elements: Technical Assistance: Use of Sandia expertise
or equipment to solve a specific, short-term technical problem.
The SBI supports individual facility costs up to $5,000 for
each transaction; Partnership Agreements: Joint, cost-shared or
funds-in, dual-benefit development of technology, with SBI
support limited to $50,000; Facility Utilization: Identifies
user facilities of value to small business. Helps support the
costs associated with a small business' use of a user facility;
and Intermediary Relationships: Linkage of Sandia to the local,
regional, and national small-business communities.
Intermediaries pre-qualify small business requests for Sandia.
We believe Sandia's Small-Business Initiative has had a big
impact, both regionally and nationally. Sandia National
Laboratories has executed 1,500 technical assistance agreements
with small businesses in 45 states since its inception in 1994.
Our program has assisted 450 small businesses in New Mexico,
helping to sustain the local industrial base and the jobs and
economic benefits that it provides.
Locally, Sandia has helped many small businesses with
technical problems. Here are a few examples:
Quatro Corporation: This electronics manufacturer turned to
Sandia for help in developing a process for recovering solid
waste from printed wiring boards during manufacture. Sandia
helped the company build a prototype process for extracting and
reclaiming waste material. Quatro is evaluating the
patentability of the process and whether to build an
environmentally safe manufacturing plant based on it. If such a
facility is built, it could create approximately 50 jobs.
Radiant Technologies, Inc.: Engineers from Sandia helped
Radiant Technologies develop a manufacturable prototype read/
write optical disk, for commercial computer memories based on
ferroelectric thin films. Under the Small-Business Initiative's
technical assistance program Radiant obtained a license for
this technology.
SCB Technologies, Inc.: SCB secured an exclusive license
from Sandia several years ago to commercialize the
semiconductor bridge igniter, which provides precise ignition
of explosives. The company developed a version that is
insensitive to radio frequency signals, which can cause
conventional detonators to fire prematurely. Under a small-
business technical assistance agreement, an SCB engineer,
together with Sandia explosives experts, verified the
performance of the new circuit in a radio frequency
environment.
Waveront Research, Inc. (WRI): WRI requested technical
assistance in demonstrating connectivity of an optical device
to a digital computer interface. Sandia provided use of a
special microlaser array, unavailable commercially and
necessary for early prototyping. WRI credits the assistance
with keeping the fledgling business afloat. In addition, the
company expects successful commercialization and the creation
of at least four new jobs.
Southwest Tire Processors: An example of a small-business
assistance project in rural New Mexico, Southwest Tire
Processors of Socorro recycles rubber tires into chunks,
powders, and sprays for use as insulation, water and sound
barriers, and playground/patio materials. Assistance provided
by Sandia in adhesive development enabled the company and its
partners to develop a new product line of full-circle waste
tire recycling. In addition, a new small business, Material
Recovery of North America (MRNA), was created to commercialize
the equipment, process, and end products.
These are just a few examples of the many successful small-
business technical assistance projects between Sandia and local
companies. Unfortunately, DOE has now substantially reduced its
budgetary support for the Small-Business Initiative. In fact,
our small-business assistance program will be in jeopardy in FY
2001 when DOE terminates the Technical Partnerships Program.
Expanded state support would be very helpful in
strengthening Sandia's small-business assistance program. A
bill entitled, ``Laboratory Partnership with Small Business Tax
Credit Act,'' is before the New Mexico state legislature at
this moment. The proposed legislation would provide a limited
gross receipts tax credit to national labs for assisting small
businesses in New Mexico. This credit will stimulate new
economic activity, new jobs, and new taxes. An analysis by
Brian McDonald, former director of the Bureau of Business and
Economic Research at the University of New Mexico, showed that
the average business assistance project of $4,300 yields about
$70,000 in payroll created or retained and approximately $6,000
in additional tax revenue to the state of New Mexico in its
first year. If the state legislature of New Mexico enacts this
bill, it will send a positive signal to DOE and Congress that
New Mexico regards the small business assistance programs of
the national laboratories as very important activities that
should be continued.
Entrepreneurial separations
Several years ago Sandia offered an entrepreneurial
separation program for employees who wanted to venture into the
private sector to start a business based on technology in their
area of expertise. Entrepreneurial ventures are notoriously
risky, and Sandia's entrepreneurial separation policy can
permit a former employee to return if the venture fails.
Optomech Design Company is a small business owned by two
former Sandia employees who elected to take advantage of our
entrepreneurial leave of absence. They are trying to spin-off
laser-engineered net-shaping (LENS) technology into a
commercializable process. If they succeed, Defense Programs
will benefit greatly, Sandia is especially interested in LENS'
design flexibility and low-volume production capabilities for
highly specialized nuclear weapon components, among other
technical advantages. This entrepreneurial venture holds
promise for developing a viable supplier of LENS services and
the general enhancement of LENS technology through stimulation
of interest throughout the wider industrial community.
Perhaps our most outstanding example of a successful
entrepreneurial venture under this separation program is the
MODE Division of EMCORE Corporation. MODE (Micro Optical Device
Engineering) was founded by an employee of Sandia National
Laboratories who had a vision of commercializing a new
semiconductor laser based on fabrication techniques explored in
Sandia's Microelectronics Development Laboratory. His start-up
was acquired by EMCORE Corporation of New Jersey, a
manufacturer of photovoltaic panels and other electro-optical
devices. MODE's vertical-cavity surface-emitting laser (VCSEL)
products have found a spectacular market in the internet and
telecommunications industries. In addition to the MODE
division, EMCORE built a manufacturing plant of photovoltaic
arrays in Sandia Science and Technology Park. EMCORE is the
first high-tech company to locate in that development, which we
hope will become the nucleus of a high-technology cluster in
New Mexico.
The Importance of a High-Technology Cluster
Many studies have demonstrated the importance of technology
clusters to the economic progress of a region. It is an
unfortunate paradox that New Mexico is home to several world-
class institutions of science and technology and yet it remains
one of the most economically disadvantaged states in the
nation. We have a vision to pilot the cluster concept to create
a more integrated technological community in New Mexico that
can be a stimulus for greater investment by high-technology
industry. If successful, we believe this model can be
propagated around the nation, ensuring that the benefits of
technology innovation--a proven driver of economic prosperity--
can benefit all.
Business and industry have an opportunity to tap into an
extraordinary concentration of technological assets in what can
be called the New Mexico Technology Corridor, stretching from
Los Alamos National Laboratory in the north to New Mexico State
University in the south. This corridor contains a world-class
array of technology-based organizations, including Sandia and
Los Alamos national laboratories, the U.S. Air Force Phillips
Research Laboratory, the Santa Fe Institute, White Sands
Missile Range, the Lovelace Respiratory Research Institute, the
University of New Mexico, New Mexico State University, New
Mexico Highlands University, and the New Mexico Institute of
Mining and Technology, Sandia Science and Technology Park is
situated at the crossroads of this corridor.
Sandia National Laboratories, working with Technology
Ventures Corporation (TVC), the City of Albuquerque, and
several landowners, is planning a 285 acre, campus-style
technology center adjacent to Sandia Laboratories in
southeastern Albuquerque. In a campus-like setting just outside
Kirtland Air Force Base, the Sandia Science and Technology Park
will be a short bike ride away from some of Sandia's
outstanding user facilities, including the Microelectronics
Development Laboratory, the Robotic Manufacturing Science and
Engineering Laboratory, the Advanced Manufacturing Processes
Laboratory, and Sandia's Integrated Materials Research
Laboratory, as well as Sandia's teraflops supercomputer,
currently the world's fastest scientific computer. Partners
will be only a short drive away from other exceptional research
facilities that are ready for collaborative projects that will
not only incubate new technologies but will harness them for
economic growth.
We believe the Sandia Science and Technology Park, as an
intersection of a statewide high-technology cluster, will help
the laboratory preserve and enhance its technical capabilities
and human talent for DOE missions into the future.
The Decline of DOE Partnership Programs
Funding for the DOE Technology Partnerships Program has
been in a steep decline for the past six years: from peak
funding in fiscal year 1995 of $212 million to only $14.5
million in FY 2000. The share of the DOE TPP funding available
to Sandia National Laboratories has declined in direct
proportion. From a peak of $94 million in FY 1995, we are
allocated only $4 million for the Technology Partnerships
Program in FY 2000. To adjust to this steep decline in funding,
Sandia sharply reduced the number of new CRADAs it would accept
in subsequent years and had to terminate many partnership
agreements prematurely. The number of new CRADAs has dropped
from a peak of 83 in FY 1994 to approximately 30 in FY 2000.
The TPP funding problem has also forced us to dramatically cut
back on the number of small-business assistance projects we can
perform.
At the outset, the DOE Defense Programs Technology Transfer
Initiative (later changed to Technology Partnership Program)
was intended as a dual-benefit program for both industry and
the laboratories. Unfortunately, when large amounts of funding
were allocated for the TTI program (on the order of $200
million in fiscal years 1994 and 1995) it attracted a
significant lobbying effort by some industrial/political
sectors to ``get their share,'' (notably the automobile,
textiles, and oil and gas sectors). DOE Defense Programs was
unable in some cases to prevent ear-marking of TTI funds for
industry sectors for which the alignment with Defense Program's
mission needs was not clear. Consequently, DOE's Office of
Defense Programs began to ramp-down the ``fenced'' funds (i.e.,
the line item allocation) for partnerships in its budget
requests and pursue instead a program of partnerships
controlled directly by managers of individual programs and
campaigns \1\ in Defense Programs.
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\1\ Campaigns are technically challenging, multi-year, multi-
functional efforts conducted across Defense Programs designed to
develop and maintain specific capabilities.
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This change in strategy has further harmed the partnership
effort because of a fundamental incompatibility in operating
approaches that has arisen. Managers of DP programs and
campaigns have time horizons for deliverable that have caused
them to refrain from investing in partnerships with only
strategic, rather than immediate, value to the program. Some
key DP managers would favor a paradigm of collaborative R&D
only being a procurement function, rather than a strategic
relationship. This is a very different approach. Sandia's
relationships with Intel, IBM, and Goodyear (mentioned earlier
in my statement)--which have been of such great value to our
mission--required a decade or more of CRADAs and other
interactions in order to develop the trust needed for truly
strategic partnerships.
Another major problem with the centralization of
partnership decisions within headquarters is that laboratory
directors have a greatly diminished role in the decision
process. The DP campaign managers, quite appropriately, have a
programmatic focus. But the laboratory directors are
responsible for nourishing the institutional competencies
required for their missions over the long term. they take a
strategic view of their laboratories' need and use industrial
partnerships as a tool for strengthening essential
institutional competencies. Earlier in my statement I described
how this tool has been used at Sandia to strengthen our
institutional competencies in microelectronics, for example.
This strategic view of each laboratory's requirements has
not been a central concern of the more narrow focus of the
campaigns, which reformulated the work into deadline-driven
time lines. But as a result of these changes and lower R&D
budgets, the laboratories were put into a position where it was
necessary to cancel CRADA commitments that had been made in
good faith to industrial partners. The precipitous shrinkage of
TPP funding beginning in FY 1996 forced Sandia to cancel
several active CRADAs. The problem repeated itself this year as
the Technology Partnerships Program at Sandia dropped from $21
million in FY 1999 to $4 million in FY 2000. The result was a
need to cancel 21 CRADAs with work in process, affecting a
total of 38 participating companies--a very painful and
destructive action. You can understand that some of our
industrial collaborators have now begun to question whether we
can be a reliable business partner. When we do not live up to
our commitments, it seriously damages our relationship with
industry in general and our partner companies in particular.
DOE's budget request for FY 2001 would close out the
Technology Partnerships Program line item altogether. DP's
explanation is that CRADAs will be funded at approximately the
same level as FY 2000 ($14.5 million) but from general Defense
Programs funds rather than a line item. But in general, the
reductions in our DP budget have not allowed us to complete
existing CRADA commitments from program funds. Instead, the
pattern has been to leave the laboratories to dispose of any
commitments they can no longer fund. If we get a TPP budget of
zero in FY 2001, I expect that Sandia National Laboratories
will be forced to terminate as many as 30 additional in-process
CRADAs again next year.
Thus, I see the future of Defense Programs partnerships at
a crossroads. The mission benefit of our CRADA portfolio is
undeniable. Yet, since FY 1996, almost all TPP-funded
partnerships have been more narrowly driven by immediate
Defense Programs needs rather than by a strategic view of the
essential role that partnerships play in keeping the
laboratories' technologies robust and at the state-of-the-art
over the long term. The present course will close down the
partnership programs as currently administered by individual
laboratories.
Interestingly, while we have fewer CRADAs today than five
years ago, there is a greater percentage of industry funds-in
with many of our new CRADAs. This trend is encouraging to me in
attesting to the value that our industrial partners place on
their partnerships with us. Companies that have experience with
us have increasingly been willing to foot a larger percentage
of the bill for joint R&D as changes in our program approach
and funding have occurred.
Unfortunately however, companies that have never had
experience with the DOE laboratories are unlikely to enter into
collaborative agreements without cost-sharing. Thus, there is a
definite need for ``seed money'' for catalyzing the initial
partnerships that can build the trust for longer-term
collaborations. Yet, with the demise of TPP funds, very little
seed money will be available for initiating new strategic
relationships with industry.
Observations on Revitalizing the Defense Programs Partnerships Program
I was encouraged that Secretary Richardson accepted the
recommendations of DOE's Research and Development Council
Technology Transfer Working Group, which issued a report in
August 1999, offering several suggestions for strengthening
DOE's technology transfer program. Those suggestions included
streamlining CRADA procedures, promoting public awareness of
opportunities for technology partnerships, developing clear
guidance on intellectual property, and implementing management
reforms. The Secretary also appointed a high-level advisor to
provide leadership on technology transfer issues in the
Department. I applaud these actions; they are steps that are
certainly needed.
It is doubtful in the absence of an explicit appropriation
for partnerships whether sufficient support for strategic
industrial partnerships will be afforded from within the
Defense Programs campaigns. Funding on the level of
approximately $60 million is required for a really useful
Technology Partnerships Program. The total value of the
partnerships portfolio at Sandia in any year will total
approximately twice Sandia's TPP allocation when industry
funds-in are added in. Moreover, as he has already been
demonstrated with the TPP program of the 1990s, the seed money
provided by DOE's investment will often mature into long-term
alliances that will materially benefit the program for many
years to come.
Small business technical assistance is now funded solely
from the Defense Programs Technology Partnerships Program and
must also meet DP expectations for mission benefit. These are
in fact often incompatible, and it places on the table the
question ofhow such activities should be funded. Perhaps
technical assistance efforts should be funded outside of
Defense Programs; or by recognizing that the small dollar
volume required for this worthwhile activity provides
sufficient benefit to the overall health of the laboratories,
it should agree that DP support for such effort is appropriate.
S. 1756 is very important in this respect. It specifies that
small business technical assistance is to be conducted for all
DOE mission areas, although the funding source is not
identified. Without this legislation, the laboratories would
have no legal authority to conduct small business technical
assistance if TPP funding is ultimately zeroed-out.
To revitalize the Technology Partnerships Program, line
item funding will be required. I would hope that a supplemental
appropriation will not be necessary. You and other committees
of Congress can legitimately argue why a $60 million
partnerships effort--in light of its demonstrated value in the
past--cannot be provided from within a $4.6 billion program. As
shown by DOE's own study, the 30-Day Review of the Stockpile
Stewardship Program, Defense Programs is perhaps over-committed
and its resources ``stretched too tightly'' to carry out all of
its responsibilities. The recent Report of the Panel to Assess
the Reliability, Safety, and Security of the United States
Nuclear Stockpile, commissioned by Congress in the Defense
Authorization Act of 1999, expressed similar concerns for
resource shortfalls. I believe it is important to very
seriously review funding requirements, particularly when an
effort with as much demonstrated success and promise as the
Partnership activities hangs in the balance.
Conclusion
I support S. 1756, the ``National Laboratories Partnership
Improvement Act.'' This legislation will permit the national
laboratories to continue to benefit from working
collaboratively wth the private sector. In addition, it will
improve the laboratories' flexibility to enter into partnership
agreements and reduce the time required to negotiate, approve,
and execute agreements. I am particularly encouraged that it
will also help the laboratories foster the regional technology
clusters that provide a local technology base synergistic with
DOE institutions.
The success that we have had working with industry during
the last decade has amply demonstrated the value of industrial
collaborations for DOE laboratories in support of their
missions. It is clearly good public policy to support and
encourage these mutually beneficial, cost-shared partnerships.
National statistics show that the balance has shifted: a
majority of R&D funds are provided by the private sector for
their commercial needs, rather than by federal government for
defense. Increasingly the national laboratories must take
advantage of the scientific and technological advances that are
occurring in the private sector if they are able to be
successful in accomplishing their missions cost-effectively.
------
Appendix--Specific Comments on Language, Senate Bill 1756, ``National
Laboratories Partnership Improvement Act''
Section 4: Regional Technology Infrastructure Program
4(c)(1) Pilot Phase: The funding source for the $1 million
pilot project is not defined. Therefore, the required funding
will reduce funding available for programs. Providing
independent funding would be helpful.
4(e)(1) Minimum Participants: Requiring that every
agreement include a minimum of three parties may slow the
implementation significantly. It is generally easier and faster
to enter into multiple two-party agreements and still meet the
full intent of the legislation. We recommend providing for that
option.
4(e)(3) Competitive Selection: We recommend that this
section be modified to allow for the competitive selection
process to be determined by the laboratory and approved by the
Secretary or his designee. This could be accomplished by
inserting the words ``by the Laboratory Director'' between
``selected'' and ``using'' and by adding the words ``or his
designee'' after ``the Secretary''.
Section 5: Small Business Advocacy and Assistance
This section is well aligned with initiatives we are
currently pursuing at Sandia, and we fully support the
objectives. However, we have concerns about placing into
federal statute a requirement for an organizational office and
function for small business advocacy, rather than to leave to
the laboratories how to best meet that need. We strongly
support the language that will provide for small business
technical assistance within our full mission space, expanding
it beyond our defense mission alone and, thereby, increasing
our ability to provide value to the U.S. small business
community.
5(a) Advocacy Function: Sandia already has initiatives in
place that fully meet the intent and objectives of this
section. We believe it is important that national laboratories
be allowed to have flexibility in how to best accomplish the
small-business advocacy function in view of rapidly changing
environments, and we believe that there is no need to prescribe
by statute the detailed approach or organizational structure.
5(b) Establishment of Small Business Assistance Program:
This is a valuable and important piece of this legislation that
will formally authorize and institutionalize our small business
assistance program. However, it is unclear what funding
source(s) can be used for this effort. If DOE DP/TPP funding
goes away in FY 2001, the Defense Programs laboratories will
have no authorized funding for small business assistance.
Therefore, it would be helpful to indicate that the Secretary
and the laboratories are authorized to use existing
programmatic funding for this activity, through some type of
overhead charge, or better still, to provide specific funding
for this program.
Section 6: Technology Partnerships Ombudsman
Sandia strongly supports this action and has implemented
this initiative at the request of the Secretary. However, we
believe the required organizational structure [(6)(a)(2)
wherein the ombuds ``reports to the Director of the National
Laboratory or facility''] is best if not prescribed by federal
statute and should be left to the laboratories to determine.
Section 7: Mobility of Technical Personnel
While we support the concept embodied in this section, we
believe that implementation will be extremely problematic. We
support the idea of a study [(7)(c)] to determine feasibility.
However, we believe that moving personnel between government
laboratories, private companies, and universities with their
significant differences in benefits and salary practices may
not be practical. We suggest that this may best be left to the
free market activity of parties negotiating their own
employment contracts. However, if this section of the
legislation remains, we feel that it should not exclude non-
technical staff members. Therefore, we suggest that
``scientific and technical personnel'' be changed to
``scientific, technical, and business personnel.''
Section 8: Other Transactions Authority
This authority will be of substantial value in increasing
our partnership agreement flexibility. However, it will
undoubtedly require that the Secretary and DOE General Counsel
issue guidelines and an implementation order. It would be
helpful to include a timetable that would drive the schedule
for implementing this new authority within DOE and the
laboratories.
Section 9: Amendments to Stevenson-Wydler Act
We fully support the intent and proposed improvements in
expediting the agreement process between federal agencies
(DOE), the national laboratories, and our private sector
partners. However, the revised language still indicates that
two separate documents (the Joint work Statement (JWS) as well
as the CRADA) must receive agency approval. With the experience
base now in place in federal agencies and national
laboratories, we believe that should no longer be necessary. We
recommend that approval by the agency of the CRADA alone would
meet all necessary reviews and oversight requirements.
9(a) Strategic Plans: The language, ``or, if permitted by
the agency, in an agency approved strategic plan,'' is
undoubtedly driven by the need to obtain DOE support for this
innovative legislation; that is, to allow the laboratory
directors authority to approve JWSs and CRADAs after DOE
approves an annual strategic plan. We fully support this
strategy. Removing the current requirement for case-by-case
approval for every partnership agreement offers the potential
for a significant time and work reduction in negotiating
agreements. Therefore, it would also be helpful to require DOE
to grant that authority on at least a pilot basis at one or
more laboratories so that it could be implemented and evaluated
on a timely basis.
9(b) Federal Waivers: We are unsure what is driving this
part of the legislation. Sandia has never had a CRADA partner
walk away because of the government's reserved rights. This has
the potential to raise issues (an expectation that the
government's right to ``make or have made'' using the CRADA-
developed intellectual property should be given up) where now
there are none. In addition, even if the government's rights
are waived, we believe it would not be wise for the laboratory
to waive its rights, because of our need to continue to perform
programmatic responsibilities requiring the technology. Unless
there is additional information of which we are unaware, we
would recommend that this clause be removed. We note, however,
that the legislation does indicate that this is expected to be
a fairly rare occurrence, and we can live with the language if
other sites have found this to be an issue.
9(c) Time Required for Approval: 9(c)(4)(v): This is a
particularly progressive and encouraging clause and we endorse
it most heartily. We would look forward to an open negotiation
and DOE that would establish the boundaries and ground-rules
under which the laboratories would be allowed to fully
negotiate and approve partnership agreements.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill S. 517, as ordered reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
DEPARTMENT OF ENERGY ORGANIZATION ACT
Public Law 95-91, as Amended
AN ACT To establish a Department of Energy in the executive branch by
the reorganization of energy functions within the Federal Government in
order to secure effective management to assure a coordinated national
energy policy, and for other purposes.
* * * * * * *
Contracts
Sec. 646. (a) The Secretary is authorized to enter into and
perform such contracts, leases, cooperative agreements, or
other similar transactions with public agencies and private
organizations and persons, and to make such payments (in lump
sum or installments, and by the way advance or reimbursement)
as he may deem to be necessary or appropriate to carry out
functions now or hereafter vested in the Secretary.
* * * * * * *
(g) Other Transactions Authority.--(1) In addition to other
authorities granted to the Secretary to enter into procurement
contracts, leases, cooperative agreements, grants, and other
similar arrangements, the Secretary may enter into other
transactions with public agencies, private organizations, or
persons on such terms as the Secretary may deem appropriate in
furtherance of basic, applied, and advanced research functions
now or hereafter vested in the Secretary. Such other
transaction shall not be subject to the provisions of section 9
of the Federal Nonnuclear Energy Research and Development Act
of 1974 (42 U.S.C. 5908).
(2)(A) The Secretary of Energy shall ensure that--
(i) to the maximum extent practicable, no transaction
entered into under paragraph (1) provides for research
that duplicates research being conducted under existing
programs carried out by the Department of Energy; and
(ii) to the extent that the Secretary determines
practicable, the funds provided by the Government under
a transaction authorized by paragraph (1) do not exceed
the total amount provided by other parties to the
transaction.
(B) A transaction authorized by paragraph (1) may be used
for a research project when the use of a standard contract,
grant, or cooperative agreement for such project is not
feasible or appropriate.
(3)(A) The Secretary shall not disclose any trade secret or
commercial or financial information submitted by a non-federal
entity under paragraph (1) that is privileged and confidential.
(B) The Secretary shall not disclose, for five years after
the date the information is received, any other information
submitted by a non-federal entity under paragraph (1),
including any proposal, proposal abstract, document supporting
a proposal, business plan, or technical information that is
privileged and confidential.
(C) The Secretary may protect from disclosure, for up to
five years, any information developed pursuant to a transaction
under paragraph (1) that would be protected from disclosure
under section 552(b)(4) of title 5, United States Code, if
obtained from a person other than a federal agency.
------
THE STEVENSON-WYDLER TECHNOLOGY INNOVATION ACT OF 1980
Public Law 96-480, as Amended
AN ACT To promote United States technological innovation for the
achievement of national economic, environmental, and social goals, and
for other purposes
* * * * * * *
SEC. 12. COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS.
(a) General Authority.--Each Federal agency may permit the
director of any of its Government-operated Federal
laboratories, and, to the extent provided in an agency-approved
[joint work statement,] joint work statement or, if permitted
by the agency, in an agency-approved annualstrategic plan, the
director of any of its Government-owned, contractor-operated
laboratories--
(1) to enter into cooperative research and
development agreements on behalf of such agency
(subject to subsection (c) of this section) with other
Federal agencies; units of State or local government;
industrial organizations (including corporations,
partnerships, and limited partnerships, and industrial
development organizations); public and private
foundations; nonprofit organizations (including
universities); or other persons (including licensees of
inventions owned by the Federal agency); and
(2) to negotiate licensing agreements under section
207 of title 35, United States Code, or under other
authorities (in the case of a Government-owned,
contractor-operated laboratory, subject to subsection
(c) of this section) for inventions made or other
intellectual property developed at the laboratory and
other inventions or other intellectual property that
may be voluntarily assigned to the Government.
(b) Enumerated Authority.--
(1) Under an agreement entered into pursuant to
subsection (a)(1), the laboratory may grant, or agree
to grant in advance, to a collaborating party patent
licenses or assignments, or options thereto, in any
invention made in whole or in part by a laboratory
employee under the agreement, for reasonable
compensation when appropriate. The laboratory shall
ensure, through such agreement, that the collaborating
party has the option to choose an exclusive license for
a pre-negotiated field of use for any such invention
under the agreement or, if there is more than one
collaborating party, that the collaborating parties are
offered the option to hold licensing rights that
collectively encompass the rights that would be held
under such an exclusive license by one party. In
consideration for the Government's contribution under
the agreement, grants under this paragraph shall be
subject to the following explicit conditions:
(A) A nonexclusive, nontransferable,
irrevocable, paid-up license from the
collaborating party to the laboratory to
practice the invention or have the invention
practiced throughout the world by or on behalf
of the Government. In the exercise of such
license, the Government shall not publicly
disclose trade secrets or commercial or
financial information that is privileged or
confidential within the meaning of section
552(b)(4) of title 5, United States Code, or
which would be considered as such if it had
been obtained from a non-Federal party.
(B) If a laboratory assigns title or grants
an exclusive license to such an invention, the
Government shall retain the right--
(i) to require the collaborating
party to grant to a responsible
applicant a nonexclusive, partially
exclusive, or exclusive license to use
the invention in the applicant's
licensed field of use, on terms that
are reasonable under the circumstances;
or
(ii) if the collaborating party fails
to grant such a license, to grant the
license itself.
(C) The government may exercise its right
retained under subparagraph (B) only in
exceptional circumstances and only if the
Government determines that--
(i) the action is necessary to meet
health or safety needs that are not
reasonably satisfied by the
collaborating party;
(ii) the action is necessary to meet
requirements for public use specified
by Federal regulations, and such
requirements are not reasonably
satisfied by the collaborating party;
or
(iii) the collaborating party has
failed to comply with an agreement
containing provisions described in
subsection (c)(4)(B). This
determination is subject to
administrative appeal and judicial
review under section 203(2) of title
35, United States Code.
(2) Under agreements entered into pursuant to
subsection (a)(1), the laboratory shall ensure that a
collaborating party may retain title to any invention
made solely by its employee in exchange for normally
granting the Government a nonexclusive,
nontransferable, irrevocable, paid-up license to
practice the invention or have the invention practiced
throughout the world by or on behalf of the Government
for research or other Government purposes.
(3) Under an agreement entered into pursuant to
subsection (a)(1), a laboratory may--
(A) accept, retain, and use funds, personnel,
services, and property from a collaborating
party and provide personnel, services, and
property to a collaborating party;
(B) use funds received from a collaborating
party in accordance with subparagraph (A) to
hire personnel to carry out the agreement who
will not be subject to full-time equivalent
restrictions of the agency;
(C) to the extent consistent with any
applicable agency requirements or standards of
conduct, permit an employee or former employee
of the laboratory to participate in an effort
to commercialize an invention made by the
employee or former employee while in the
employment or service of the Government; and
(D) waive, subject to reservation by the
Government of a nonexclusive, irrevocable,
paid-up license to practice the invention or
have the invention practiced throughout the
world by or on behalf of the Government, in
advance, in whole or in part, any right of
ownership which the Federal Government may have
to any subject invention made under the
agreement by a collaborating party or employee
of acollaborating party.
(4) A collaborating party in an exclusive license in
any invention made under an agreement entered into
pursuant to subsection (a)(1) shall have the right of
enforcement under chapter 29 of title 35, United States
Code.
(5) A government-owned, contractor-operated
laboratory that enters into a cooperative research and
development agreement pursuant to subsection (a)(1) may
use or obligate royalties or other income accruing to
the laboratory under such agreement with respect to any
invention only--
(A) for payments to inventors;
(B) for purposes described in clauses (i),
(ii), (iii), and (iv) of section 14(a)(1)(B)
[15 USCS 3710c(a)(1)(B)(i), (ii), (iii), and
(iv)]; and
(C) for scientific research and development
consistent with the research and development
missions and objectives of the laboratory.
(6)(A) In the case of a Department of Energy
laboratory, a designated official of the Department of
Energy may waive any license retained by the Government
under paragraph (1)(A), (2), or (3)(D), in whole or in
part and according to negotiated terms and conditions,
if the designated official finds that the retention of
the license by the Department of Energy would
substantially inhibit the commercialization of an
invention that would otherwise serve an important
federal mission.
(B) The authority to grant a waiver under
subparagraph (A) shall expire on the date that is 5
years after the date of the enactment of the National
Defense Authorization Act for Fiscal Year 2001.
(C) The expiration under subparagraph (B) of
authority to grant a waiver under subparagraph (A)
shall not effect any waiver granted under subparagraph
(A) before the expiration of such authority.
(c) Contract Considerations.--
(1) A Federal agency may issue regulations on
suitable procedures for implementing the provisions of
this section; however, implementation of this section
shall not be delayed until issuance of such
regulations.
(2) The agency in permitting a Federal laboratory to
enter into agreements under this section shall be
guided by the purposes of this Act.
(3)(A) Any agency using the authority given it under
subsection (a) shall review standards of conduct for
its employees for resolving potential conflicts of
interest to make sure they adequately establish
guidelines for situations likely to arise through the
use of this authority, including but not limited to
cases where present or former employees or their
partners negotiate licenses or assignments of titles to
inventions or negotiate cooperative research and
development agreements with Federal agencies (including
the agency with which the employee involved is or was
formerly employed).
(B) If, in implementing subparagraph (A) an agency is
unable to resolve potential conflicts of interest
within its current statutory framework, it shall
propose necessary statutory changes to be forwarded to
its authorizing committees in Congress.
(4) The laboratory director in deciding what
cooperative research and development agreements to
enter into shall--
(A) give special consideration to small
business firms, and consortia involving small
business firms; and
(B) 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 any industrial organization
or other person subject to the control of a
foreign company or government, as appropriate,
take into consideration whether or not such
foreign government permits United States
agencies, organizations, or other persons to
enter into cooperative research and development
agreements and licensing agreements.
(5)(A) If the head of the agency or his designee has
an opportunity to disapprove or require the
modification of any such agreement presented by the
director of a Government-operated laboratory, the
agreement shall provide a 30-day period within which
such action must be taken beginning on the date the
agreement is presented to him or her by the head of the
laboratory concerned.
(B) In any case in which the head of an agency or his
designee disapproves or requires the modification of an
agreement presented by the director of a Government-
operated laboratory under this section, the head of the
agency of such designee shall transmit a written
explanation of such disapproval or modification to the
head of the laboratory concerned.
[(C)(i) Except as provided in subparagraph (D), any
agency which has contracted with a non-Federal entity
to operate a laboratory shall review and approve,
request specific modifications to, or disapprove a
joint work statement that is submitted by the director
of such laboratory within 90 days after such
submission. In any case where an agency has requested
specific modifications to a joint work statement, the
agency shall approve or disapprove any resubmission of
such joint work statement within 30 days after such
resubmission, or 90 days after the original submission,
whichever occurs later. No agreement may be entered
into by a Government-owned, contractor-operated
laboratory under this section before both approval of
the agreement under clause (iv) and approval under this
clause of a joint work statement.
[(ii) In any case in which an agency which has
contracted with a non-Federal entity to operatea
laboratory disapproves or requests the modification of a joint work
statement submitted under this section, the agency shall promptly
transmit a written explanation of such disapproval or modification to
the director of the laboratory concerned.
[(iii) Any agency which has contracted with a non-
Federal entity to operate a laboratory or laboratories
shall develop and provide to such laboratory or
laboratories one or more model cooperative research and
development agreements, for the purposes of
standardizing practices and procedures, resolving
common legal issues, and enabling review of cooperative
research and development agreements to be carried out
in a routine and prompt manner.
[(iv) An agency which has contracted with a non-
Federal entity to operate a laboratory shall review
each agreement under this section. Within 30 days after
the presentation, by the director of the laboratory, of
such agreement, the agency shall, on the basis of such
review, approve or request specific modification to
such agreement. Such agreement shall not take effect
before approval under this clause.
[(v) If an agency fails to complete a review under
clause (iv) within the 30-day period specified therein,
the agency shall submit to the Congress, within 10 days
after the end of that 30-day period, a report on the
reasons for such failure. The agency shall, at the end
of each successive 30-day period thereafter during
which such failure continues, submit to the Congress
another report on the reasons for the continuing
failure. Nothing in this clause relieves the agency of
the requirement to complete a review under clause (iv).
[(vi) In any case in which an agency which has
contracted with a non-Federal entity to operate a
laboratory requests the modification of an agreement
presented under this section, the agency shall promptly
transmit a written explanation of such modification to
the director of the laboratory concerned.]
[(D)] (C) (i) Any Non-Federal entity that operates a
laboratory pursuant to a contract with a Federal agency
shall submit to the agency any cooperative research and
development agreement that the entity proposes to enter
into [with a small business firm] and the joint work
statement if required with respect to that agreement.
(ii) A Federal agency that receives a proposed
agreement and joint work statement under clause (i)
shall review and approve, request specific
modifications to, or disapprove the proposed agreement
and joint work statement within 30 days after such
submission. No agreement may be entered into by a
Government-owned, contractor-operated laboratory under
this section before both approval of the agreement and
approval of a joint work statement under this clause.
(iii) In any case in which an agency which has
contracted with an entity referred to in clause (i)
disapproves or requests the modification of a
cooperative research and development agreement or joint
work statement submitted under that clause, the agency
shall transmit a written explanation of such
disapproval or modification to the head of the
laboratory concerned.
(iv) Any agency that has contracted with a non-
Federal entity to operate a laboratory may develop and
provide to such laboratory one or more model
cooperative research and development agreements, for
the purposes of standardizing practices and procedures,
resolving common legal issues, and enabling review of
cooperative research and development agreements to be
carried out in a routine and prompt manner.
(v) A federal agency may waive the requirements of
clause (i) or (ii) under such circumstances as the
agency considers appropriate. However, the agency may
not take longer than 30 days to review and approve,
request modifications to, or disapprove any proposed
agreement or joint work statement that it elects to
receive.
* * * * * * *