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Reforming the Federal R&D System


Written by Joseph Allen
Allen & Associates
Posted: Sep 2, 2013 @ 1:18 pm

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“Strategic planning is worthless—unless there is a strategic vision”

~ John Naisbitt: in Megatrends

“The final test of a plan is its execution”

~ U.S. Army Field Service Regulations

Before attempting to overhaul a complex, deeply entrenched system you’ll need to have an effective plan to get you where you want to go despite predictable opposition, and someone who’s charged with the insuring that the plan is being faithfully adopted.  Two completely independent reports— one looking at improving the commercialization of federally-funded research overall and another focusing on the Department of Energy’s laboratories— produced remarkably complimentary blue prints on both aspects needed to move forward.

This happened recently with the expert panel’s report from The White House Lab-to-Market Inter-Agency Summit, and Turning the Page: Reimagining the National Labs in the 21st Century produced by officials from three Washington organizations that otherwise rarely agree.

Both reports looked at fundamental issues preventing greater commercial development of federally funded R&D. The problem is not so much that needed legal authorities or White House direction is lacking.   Rather, an absence of effective day to day oversight means that the need to change often gets smothered in the system.  Without hands on leadership, huge systems simply don’t change long established behaviors on their own.

The White House Summit brought together 20 outside experts who were asked to look over the $140 billion a year federal R&D system.  The focus was on identifying barriers to effective commercialization of resulting discoveries; how resources and expertise could be leveraged across agencies for increased efficiencies and better results; and what metrics should be applied to gauge performance.

The panel delved below predictable calls for more funding, focusing instead on identifying underlying disconnects in the system:

  • There was no process to identify or leverage common interagency research objectives;
  • In many agencies and programs commercialization was not a priority;
  • There was a lack of knowledge of industry needs and expertise in working with the private sector;
  • Companies were often frustrated in trying to work with government agencies because of needlessly complex agreement terms and delays in finalizing licensing and other deals;
  • Because most federally funded technologies are very early stage, attracting outside funding for development through partnerships is critical if these discoveries are to benefit American taxpayers through the creation of new products, jobs and companies.

Turning the Page shows the damage such disconnects cause in the Department of Energy (DOE) laboratory system.  The report is an unusual consensus from experts in three Washington organizations that traditionally find themselves in opposing camps: The Information Technology & Innovation Foundation, the Heritage Foundation, and the Center for American Progress.

One example underscores the synergy of the reports. Both found undue bureaucratic second guessing of terms and resulting delays in completing deals is a significant problem in the federal system.  The White House panel’s report cited:  “Industry frustration with different agency technology transfer terms, often in agreements under the same statute, unnecessary complexity of legal terms, and delays in finalizing licensing and other deals.”

Turning the Page illustrates what this means in practice:

The DOE Inspector General’s Office has estimated the cost of complying with these multiple layers of bureaucratic requirements to be well into the millions for an individual lab. A study produced by Perspectives, Inc., found that DOE site offices added 16 days to the processing time of collaborative R&D agreements with industry partners on average. Additionally, the study found that this figure did not include the time spent by the contractor to “prepare” the agreement packages in order to maximize likelihood of site-office approval, and that “much time is spent by the laboratories in addressing Site Office requirements and concerns that is not captured in the cycle time estimates.” The reason site-office interference is so burdensome is because DOE, according to respondents in the study, “managed the agreement process with inflexibility in mind.”

(emphasis in original)

One lab estimates that DOE has 110 bureaucratic requirements that must be satisfied before it will approve tech transfer or industry partnership agreements.  Making the morass even worse, the DOE site offices interpret four agreement formats in 17 different ways.

No wonder companies are frustrated. There’s a three way negotiation going on:  between the lab and the company, and an even more complex one between the lab and its agency overlords.  Turning the Page concludes:  Washington should oversee the labs, not micromanage them.

There was also fundamental agreement between the reports on what to do. Recommendations from the White House Summit concentrated on changes to the overall federal R&D system that can be implemented immediately, without requiring legislation. The first was establishing an Office of Innovation and Federal Technology Partnerships at the Office of Management and Budget where it would have sufficient clout to help leverage interagency R&D resources, invite outside stakeholder input on research priorities, assist agencies in adopting best practices, and insure that technology transfer policies are being effectively implemented government-wide.

Turning the Page makes a similar recommendation for DOE: the creation of a new Office of Science and Technology to serve as the Department’s leadership office seeing that fundamental changes are being carried out for improving the performance of its laboratory system.

These recommendations reinforce each other. Having a general oversight office looking at the entire federal R&D system as the White House panel envisions provides “air cover” to the “boots on the ground” implementation office at agencies like DOE, which Turning the Page endorses. Without such strategic and tactical support in place, isolated reform efforts can be overwhelmed when those threatened by change strike back—as they will.

There’s nothing in the world like the U.S. public research system which is on the cutting edge of every field of science. However, to fully benefit from this investment discoveries must move from the laboratory into the marketplace.  This can only happen when partnerships with U.S. industry are be made on terms conducive to commercialization. Additionally, in a time of tight budgets federal research must be efficiently managed even if that means crossing traditional agency borders to leverage resources and increase impact.

Someone must be charged with insuring that the system is running as Congress, the President, and most importantly, the American people intend. Hopefully both reports will do more than gather dust in some forgotten corner of a government office.


About the Author

Joe Allen is a 30-year veteran of national efforts to foster public/private sector commercialization partnerships, and author of numerous articles on technology management for national publications. Joe served as a Professional Staff Member on the U.S. Senate Judiciary Committee with former Senator Birch Bayh (D-IN), and was instrumental in working behind the scenes to ensure passage of the historic Bayh-Dole Act. Joe has served as the Executive Director of Intellectual Property Owners, Inc., a trade association representing major R&D companies, he was involved in the creation of the Court of Appeals for the Federal Circuit, and he also served at the U.S. Department of Commerce as the Director of the Office of Technology Commercialization. From 1992 until 2004, Allen was with the National Technology Transfer Center (NTTC), becoming President in 1997. Clients included NASA, the Department of Defense, EPA, the Department of Veterans Affairs, and the Department of Commerce. Between 2004 until 2007, Allen was the Vice President and General Manager of the West Virginia High Technology Consortium Foundation. In 2008, Joe founded Allen & Associates to continue to facilitate public/private partnerships between universities, federal laboratories and industry.

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  1. Very nice post.
    The office here oversees ~40% of the Navy’s CRADA transactions, and the fourth bullet above speaks to a real hurdle for both our licenses and CRADAs. There has been unnatrually strong resistance to streamlining processes, and the memorandum etc seems to have had little effect on improving transactional efficiency. Your first sentence nails it; full speed ahead!