Statement on a Proposed FY 1995 Rescission to the Advanced Technology Program

H.R. 845, a bill to rescind $107 million in FY 1995 funds from the budget of the Commerce Department's Advanced Technology Program, would have disastrous effects not only on the program in FY 95, but in future years as well. While a substantial portion of the ATP's FY 95 appropriation has not yet been formally obligated, essentially all of the appropriation has been committed: plans to use these funds for a general competition and nearly a dozen focused-program competitions in key technologies have been announced, and industry has begun work on research plans based on these announcements.

In addition to the annual ATP general competition open to proposals from all fields of technology, the ATP has announced 11 multiyear focused programs in:

• Tools for DNA Diagnostics
• Catalysis and BioCatalysis Technologies
• Materials Processing for Heavy Manufacturing
• Motor-Vehicle Manufacturing
• Advanced Vapor-Compression Refrigeration
• Component-Based Software
• Digital Video in Information Networks
• Digital Data Storage
• Information Infrastructure for Healthcare
• Manufacturing Composite Structures, and
• Computer-Integrated Manufacturing for Electronics

The proposed rescission would force the cancellation of several of the planned 1995 ATP competitions for these programs. In addition, $62 million would have been applied to new focused program areas to be announced this year. None of those new programs could be started if the rescission passes. The chilling effect of this sudden reversal of announced plans will slow or halt the momentum of new industry collaborations and plans for the long-term, high-risk R&D; which the ATP promotes.

Proposal due dates for these competitions are staggered, but begin March 1 and continue through the Spring. Because deadlines are tight, and an application to the ATP requires the preparation of detailed, multiyear research plans, industry has already begun work based on the program announcements already made. Companies have formed joint ventures and invested tens of thousands of dollars in good-faith proposal-writing efforts.

Over the past several years industry and government, through the ATP, have begun to build the foundation upon which the private sector can pursue the high-risk enabling technologies necessary to long-term national economic success. We must reinforce this fragile new spirit of public-private partnership and cooperation by maintaining the continuity of our commitments and funding for the ATP.

While it may appear that a substantial amount of the available funds for the ATP in FY 95 are not obligated, 89 percent are either obligated or committed and 100 percent are in some stage of allocation no funds are undesignated. "Unobligated" does not equal "available funds." The ATP cannot announce new competitions until Congress appropriates funds. The process of soliciting proposals, allowing industry sufficient time to prepare proposals, evaluating proposals and negotiating cooperative agreements takes six to nine months (among the faster processes in government). There is an inevitable delay between the time funds are appropriated and when they are officially "obligated" from an accountant's point of view.

The ATP represents a small but critical portion of the Federal government's R&D; budget. The ATP represents just over one-half of one percent of Federal R&D; funds, but it is the only portion dedicated to the development of early-stage, pre-competitive civilian technologies. The ATP addresses the gap between basic research (which together with mission-oriented research and development, accounts for almost all of the U.S. government's R&D; spending) and short-term commercial research (which accounts for almost all of U.S. industry's R&D; spending). By sharing costs with companies whose proposals pass stringent merit review, the ATP helps to remedy underinvestment by the private sector in long-term, high-risk R&D;, thus boosting U.S. competitiveness in world markets.

For comparison: In 1993, industry funded nearly 55 percent of all U.S. R&D.; More than 90 percent of that industrial research was concentrated on short-term commercial development and applied research. Fifty-nine percent of the Federal government's $70 billion in 1993 R&D; funding and about 1/4 of all national R&D; was related to defense. Only about 4 percent of Federal R&D; spending in 1993 went to civilian industrial technology, and less than 1/2 of one percent went to high-risk, high-payoff enabling technologies sponsored by the ATP.