New Rules For the ATP Emphasize Partnering, Encourage Teaming Large Companies With Small

The Commerce Department’s National Institute of Standards and Technology today announced several changes to the rules that govern the Advanced Technology Program. The major impacts of the new rules, published in the Federal Register, are to strengthen the ATP’s emphasis on research ventures and consortia with a broad range of participants, and to ensure that large companies pay a majority of costs on their projects.

The changes are the result of a study of the ATP initiated by Commerce Secretary William M. Daley last March. Conducted by the Department’s Technology Administration, the study solicited comments from the public and experts on research and technology on strategies to strengthen the program and increase its effectiveness.

The Advanced Technology Program provides funding to industry, on a cost-shared basis, to carry out research and development on high-risk, high-payoff emerging and enabling technologies. The program concentrates on those technologies that offer significant, broad-based benefits to the nation’s economy but that are not likely to be developed in a timely fashion without the ATP’s support because of the technical risks involved. The subjects of the ATP research projects are proposed by industry. Awards are made on the basis of announced competitions that consider the technical and business merits of the proposed projects.

The most important changes to the ATP introduced by the new rules include:

• a formal definition of the term "large business," based on total annual corporate revenues, for the purpose of ATP competitions. Previously, the ATP had defined only the notion of a "small business" (based on the definition used by the Small Business Administration), raising the possibility that new program rules intended to apply only to truly "big" businesses would unfairly disadvantage thousands of medium-sized firms with limited resources. The new rule requires the ATP to publish annually, as part of the program’s regular "notice of availability of funds," a dollar value to be used as the cut-off for determining "large businesses" during that year’s competitions. The rule anticipates the use of standard measures of corporate wealth such as Fortune magazine’s "Fortune 500" list.
• a new requirement that large companies, when applying to the ATP as individual firms (outside of a joint venture), must provide cost-sharing funds at a minimum of 60 percent of total project costs. Previously, all companies had been treated alike regardless of size, and companies applying as individual firms were not required to provide any specific amount as their part of the cost-share. All single-applicant companies participating in the ATP still are required to pay all indirect costs on their own, a provision that has not changed. The new rule is intended to encourage large companies to participate in joint ventures with other firms and to ensure that they pay a majority of total project costs.
• several modifications to the ATP’s project selection criteria (used in the evaluation of candidate projects) that place greater emphasis on joint ventures and consortia with a broad range of participants and that are intended to encourage the teaming of large companies with smaller companies.
• a new rule governing the valuation of goods, such as computer software, and related services provided by one member of an ATP joint venture to another, for the purposes of computing contributions to cost-shares. Companies may count at least a portion of the actual cost of goods and services that they provide in support of an ATP project toward their share of the project’s costs, but this can be difficult to calculate in the case of certain types of goods—company-developed computer software being the outstanding example—where the actual cost of the product is unclear and hard to document. The new rule is intended to provide a clear and consistent method of valuing such contributions.

The new rules also include some changes to ATP administrative and clerical procedures to provide greater clarity and consistency to the process. The multistep ATP selection process, while not changed, is more clearly defined in the new rules.

The new rules take effect immediately and will apply to future ATP competitions. They do not apply retroactively to ongoing ATP projects. The Federal Register notice announcing the new ATP rules may be read on the ATP World Wide Web page (http://www.atp.nist.gov). Individual copies may be obtained from the ATP by calling 800-ATP-FUND.

As a non-regulatory agency of the Commerce Department's Technology Administration, NIST promotes U.S. economic growth by working with industry to develop and apply technology, measurements and standards.