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organizations that are capable of handling scientific assignments at the early basic and applied research stages even though they lack the capacity to assume responsibility for an entire project. Today they are effectively excluded by virtue of the propensity of the principal government agencies to contract with a single firm that can perform an entire mission of vast size. By breaking such undertakings into their integral parts and permitting competition at each juncture, defense and space projects would no longer be the exclusive province of a few large corporations.
In the last analysis, however, any effort to alter prevailing contract practices by simply tinkering with the procedure involved is probably doomed to failure, just as Congress has been frustrated over the years in its efforts to assure better opportunities for smaller business. The Department of Defense represents the biggest challenge. Here prevailing attitudes are so thoroughly engrained that the only effective answer appears to lie in shifting the responsibility for awarding research contracts out of the hands of the individual services and placing it squarely in a special agency coming directly under the civilian supervision of the Secretary of Defense. (30) This would have several advantages, but among the more important it would immerse the politically accountable officials of the Defense Department in the contracting process; at present the bulk of contracts are awarded (and modified) at subordinate levels within the services, and only rarely does the civilian hierarchy's top echelon become meaningfully involved. (31) By changing this situation the task of broadening the procurement base can be laid on the shoulders of those who are politically responsive.
To urge that the responsibility for establishing and effectuating procurement policy be assigned to the highest civilian officials in the Defense Department is, in essence, to suggest that until it is recognized that in contracting for the performance of R&D (and the rest of procurement) we are dealing with one of the most powerful forces in the economy, fraught with serious social implications, it is idle to talk about the refinements of a change in policy.
As things now stand the job of awarding billions of dollars in research contracts within the Defense Department is widely diffused among uniformed officers of the armed services and associated civilian employees who are buried so deep in the bureaucracy that they are lar immune from the occasional formal admonitions which call for a broadening of the procurement base. Administrations, departmental secretaries, and Secretaries of Defense come and go; but procurement policy continues in its established course, with most of the money involved going to a coterie of giant armaments makers.
In this environment any concern for large public policies is completely absent. Until this environment is radically altered no change of any consequence in present operations can be expected. Real reform can only come when the highest levels of executive leadership in the government face up forthrightly to the problem and make it a primary issue of administrative policy. (32)
Any effort to improve the decision-making apparatus as it pertains to the award and administration of research contracts is placed in jeopardy, whatever its character, if the government is not placed in a position to attract and retain sufficient number of competent scientific and managerial personnel. At the moment those agencies most heavily engaged in research, specifically the Defense Department and NASA are able to accomplish too limited an amount of the requisite work in their own laboratories, even though this might frequently be more efficient than contracting it out to independent performers.
This is bad enough, but in the short run what is even more critical is that the government lacks the human talent essential to responsible supervision of the research contracting process itself. (33) By setting unrealistic pay ceilings for its own workers and by awarding cost-plus contracts to outside organizations the government has so frustrated its contract operations that in several instances it has had to hire private firms to perform its managerial functions. (34) All too often the government's contract administrators are inexperienced, underpaid, and ineffective, using their period of public service as a means of gaining a more lucrative job with industry. Although there are many able, dedicated individuals engaged in contract work on the government payroll, they are too small a group, excessively burdened with detailed work, to correct the situation.
The key remedy lies in a sizeable increase in authorized manpower and a sharp rise in pay levels for personnel engaged in research whether as scientists or as administrators. Without explicit recognition that the conduct of a multibillion dollar operation requires a sizeable, competitively-compensated work force, possessing both technical and managerial skills, the federal government's R&D
program will remain in the haphazard condition it is in today. The 1964 pay bill helped, but it fell short of the pay levels needed if government is to obtain qualified technical managers. (35) The 1965 pay bill likewise failed to make the needed reforms in government compensation.
Even if there is material improvement in the means by which governmentfinanced research projects are selected and implemented, still other reform is imperative if the resulting accumulation of knowledge is to be put to maximum usefulness. For the reasons set forth in Chapter VII, the public should be permitted to benefit by inventions conceived in the performance of tax-supported research. Accordingly, the government should take title in such inventions. This would put federal agencies in a position where they could ensure full exploitation of scientific discoveries, especially if basic changes are made in our institutional arrangements for the utilization of latent inventions.
As things now stand, neither the agencies of government nor private contractors are making any broad-based effort to apply the new knowledge being amassed at vast public expense. Admittedly, some of the products and processes are being put to use by their monopolistic titleholders. But the simple fact is that most of the inventions made with government research funds are lying dormant. If this situation is to be corrected, two steps are in order: (1) the government should retain title to all inventions which arise out of research it has financed; (2) an appropriate federal agency,
-a new one if need beshould be charged with exploiting these inventions and the related information as promptly and as comprehensively as possible.
A few data will suggest the extent to which new inventions, originating in federal research programs, are presently simply collecting dust. Between 1946 and 1959, according to the 1960 Patent Foundation study, about 32,000 patents were issued on inventions originating in federally-financed research, largely through expenditures of the Department of Defense. Title to 23,000 of these patents was assigned to their private developers: the AEC acquired an estimated 2,500 of the patents; most of the remainder were obtained by government agencies (including the Defense Department, which, as of 1959, owned some 5,500 patents). (36)
Yet of the sizable number of inventions that were made as a result of government research since the end of World War II, a disappointing proportion have actuaily been put to use. Of privately-owned patents pertaining to inventions falling in this category only 13 percent have been licensed. (37) The AEC, which has more than 2,500 patents in its inventory, has done somewhat better-issuing licenses on more than half (close to the 55 per cent utilization rate which is applicable in the case of privately developed and owned inventions). (38) As for patents held by the Defense Department the rate of licensing is unknown, but presumably it is low, well beneath 50 per cent. (39)
Reliability of data of this sort is, of course, difficult to determine. For one thing the Defense Department's patent portfolio, at least as it respects inventions made by private contractors, is believed to be of poor quality. For another, many government-owned patents are used without license application since the gorernment has a policy of not suing for infringement. Moreover, many of the products and discoveries made in the performance of space and defense related research are not easily put to use in commercial markets—they may require additional research and modification before they can be adapted to civilian pursuits. (40) Still, the relevant statistics support the conclusion that most of the inventions stemming from government research remain unutilized ; much of the information amassed is filed away in the recesses of private concerns and gorernment agencies—or even discarded.
If publicly funded research projects and inventions are to be put to maximum use it is imperative to establish suitable means for doing so. At the present time there is no organization in the government whose principal job it is to collect, analyse, disseminate, and exploit the multitude of discoveries emanating from the government's massive and unprecedented research effort. Those gencies spending most of the research money, namely the Defense Department and NASA, are almost entirely concerned with accomplishing their primary missions and no more than that. Whether one agrees with their point of view is unimportant; the fact is that neither devotes any sizable portion of attention to the broad social use of the inventions they inspire.
Significantly, only very limited efforts are made to collect and disseminate the information originating in government research endeavors. A few government units—most notably NASA's Offices of Technical Utilization and Scientific and
Technical Information, the Defense Documentation Center (formerly the Armed Services Technical Information Agency), and the Commerce Department's Office of Technical Services (41)—are provided with negligible sums of money to prepare and process abstracts of research. Most of the abstracts are based on reports selectively volunteered by sponsoring agencies and the standards are low. Many reports are never submitted at all, in spite of contractual requirements and most are written in a fashion suggesting that the researcher desired to keep his finding secret (which, no doubt, is a common objective). Not unexpectedly, the abstracts based on these reports are of limited utility, of more help in any case to engineers than businessmen (and it is the latter who must sense a possible use for a new discovery before it can be placed at the disposal of society).
Only occasionally does an agency use any real initiative to disgorge its findings. (42) What is required is a systematic government-wide effort to process, disseminate and exploit all non-classified research information.
New discoveries do not automatically come into use, as if guided by some benevolent, unseen hand. This is particularly true where the information originates in the course of government research programs which are not primarily intended to generate products and processes for civilian markets. Nevertheless, from this area of activity come inventions which have definite commercial applications; a great deal of the knowledge so acquired has some sort of potential value in the civilian sector. However, neither the government nor the respective private companies will, as things now stand, engage in the kind of program needed to employ this scientific knowledge productively and consistently.
Accordingly, some sort of new agency—the proposed Inventions Development Agency—should be created to take on the responsibility. Preferably housed within the new Department of Science, whose organization has been suggested earlier in this chapter, it would be charged by statute with the task of exploiting to the fullest possible extent and with the least delay, all government-owned patents and the associated scientific knowledge. In some cases this would require additional development work--for example, the construction and demonstration of prototypes. Further research of other sorts might frequently be necessary. No doubt some experimental work would be required simply to devise better techniques for the collection, processing, and dissemination of information concerning products available for commercial application. (43) In some instances the Agency perhaps would have to engage in a deliberate sales campaign to generate interest in a new discovery among private concerns. Actual application would, of course, be in the hands of private companies; the Agency's task would be to stimulate exploitation through all manner of affirmative action.
Since 1948 an agency of this type has existed in Great Britain, where it bears the title of the National Research Development Corporation and has as its chief statutory function “the development or exploitation of inventions resulting from public research.” (44) It has had its greatest success in respect to the British computer industry, which it actually brought into being. But it has also played a significant role in the commercial development of drugs originating in the laboratories of the British universities and, among other things, it continues to support development work on a new cathode tube for color television and on the Hovercraft. (45) A portion of its operating budget has been covered through the royalties it has collected for the licensing of several patents under its jurisdiction. (46)
Besides accomplishing quicker and more complete development of our now largely unused taxpayer-endowed inventions, an Inventions Development Agency could charge royalties in appropriate cases for licensing its patents. This might well generate a sizable amount of revenue, sufficient to, at least in part, defray some of the heavy cost of our $15 billion a year research effort. The British Government, for example, made a very substantial gain on the royalties it collected from the licensing of the Viscount patents. The possible American parallels are obvious. (47)
More importantly, by diffusing widely the knowledge now locked up in the vaults of a relatively few corporations an Inventions Development Agency could help to counteract the trend to concentration now discernible in government research. By involving more participants in the exploitation of the most revolutionary types of scientific information we could broaden our base of government contracting and open up new markets to larger numbers of business firms.
All things considered, if the federal government's massive commitment to research and development is to serve rather than frustrate the public welfare,
thorough reexamination and reform of its programs, policies, and practices are imperative. For too long billions of dollars have been spent without much interest being displayed in the pertinent projects, their selection, their manner of execution, and their long-run social and economic consequences by either the Congress or the Executive. The time has come to face the challenge forthrightly and to take the action required to insure that the government's scientific undertakings truly accommodate the national interest.
1. National Science, Foundation, Federal Organization for Scientific Activities 1962, p. 3 (NSF 62-37, 1962). Most of the factual references contained in this chapter have been alluded to in earlier chapters.
2. 108 Congressional Record 9894–9900 (June 15, 1962). While a Senator, Hubert Humphrey strongly advocated better means for coordinating and disseminating research findings. He noted that simply to find out whether a particular question has been considered may entail inquiries to a dozen or more different agencies, to three national libraries, to 1,000 or so specialized information centers, and to hundreds of individual facilities—often at a cost of $100,000 or more. By contrast some private companies, especially in the drug field, spend large sums to operate elaborate systems designed to find, analyse, and exploit research findings. See Hearings on Patent Policies of Departments and Agencies of the Federal Government Before a Subcommittee of the Senate Select Committee on Small Business 222–23, 86th Cong., 1st Sess. (1959).
3. 64 Stat. 149 (1950), 42 U.S.C. $$ 1861–79 (1959).
4. The Office was established in 1962 by Reorganization Plan No. 2, H. Doc. No. 372, 87th Cong., 2d Sess. The Plan transferred from the National Science Foundation to the new Office the functions of evaluating scientific research programs undertaken by agencies of the government.
5. Both the Bush and Steelman Committee reports, published respectively in 194.5 and 1947, urged the creation of new agencies and offices specialized to the science function. The Steelman Report said flatly that “the ordinary Federal machinery designed to produce consistent policy and effective administration techniques is not organized to function effectively in the areas of scientific research and development.” Both reports urged the formation of an agency like the existing National Science Foundation and the Steelman Report recommended that the President designate a member of the White House staff for purposes of scientific liaison. Bush, Science: The Endless Frontier ch. 5 (a report to the President by the then-Director of the Office of Scientific Research and Development, 1945) ; 1 Science and Public Policy, A Report to the President by His Scientific Research Board (John R. Steelman, chairman) 9, 65–68 (1947).
6. In establishing the Bureau in the Budget and Accounting Act of 1921 Congress directed it to prepare the budget and, subject to the rules and regulations set by the President, authorized it to "assemble, correlate, revise, or increase the request for appropriations of the several departments or establishments.” It is thus the clearing house for all revenue requests originating within the executive branch. 42 Stat. 20 (1921), as amended, 31 U.S.C. § 23 (1958). Some illuminating comments on the preparation of the budget will be found in Smithies, The Budgetary Process in the United States, ch. V (1955). Mr. Smithies was chief of the Bureau's economic branch from 1943 to 1948.
7. Arthur Smithies concludes that "in the defense area the activities of the Budget Bureau are now fully merged with those of the Comptroller of the Department of Defense.” He regards this arrangement as undesirable. “The Defense Comptroller should not have interests identical with those of the Budget Bureau. He should be concerned with working out an integrated program for defense, which is then considered by the President in the competition with other claims on the budget.” Smithies, “Defense Budgets and the Federal Budgetary Process," in Stockfish (ed.), Planning and Forecasting in the Defense Industries 51, 63–64 (1962).
8. For a discussion, see Smithies, op. cit. supra note 6, ch. VI.
9. The organization of the Select Committee is considered in chapter 1, especially at note 12.
10. Banfield, “Congress and the Budget: A Planner's Criticism," 43 American Political Science Review 1217, 1222–23 (1949). For other comments in this vein
see Weidenbaum, “Another Look at the Budget,” Challenge, July 1964, p. 4; Smithies, op. cit. supra note 6, pp. xiv-xv (“Budgeting is essentially an economic problem, involving as it does the allocation of scarce resources among almost insatiable and competing demands").
11. The Budget of the United States for Fiscal 1966, pp. 454–56. The references to dollor amounts are in terms of the requests contained in the 1965 budget.
12. See the 1967 Budget, special analysis H.
13. Within the executive branch the greatest use of the program method of analysis has been in the Department of Defense, under the leadership of Secretary McNamara and former Comptroller Charles J. Hitch. Fund requests have been assembled in terms of defined programs, regardless of the armed service making the request. A strategic war capability purpose budget has been constructed, containing such elements as the various Air Force ICBM systems and the Navy Polaris. This facilitates comparison and choice, making it particularly Useful in identifying areas of duplication and permitting funds to be used for areas of greater relative need (e.g., limited war capability). For an explanation of some of the ideas involved see Hitch and McKean, The Economics of Defense in the Nuclear Age (1960).
14. This problem is only partly mitigated by the fact that Congressional appropriations are in terms of obligational authority, which may not lead to an expenditure of funds until some time in the future. To carry out a major R&D project requires the assembly of a large staff and, particularly for non-profit institutions, the curtailment of a government program works a great hardship on both the institution and the people involved. Hearings on Federal Research and Development Programs Before the House Select Committee on Government Research, pt. 1 at pp. 615–16, 88th Cong., 1st Sess. (1963).
In this connection the President of the University of New Hampshire commented that “the single largest deterrent to the proper conduct of research has been in the timing of the actions of Congress itself with respect to authorizations and appropriations for both ongoing and new programs.” Id. at pt. 2, p. 864.
15. “I stress the urgent importance of more research on the educational process itself. Education represents a national expenditure of the order of $30 billion ; yet the amount of research we do to make education better is minuscule perhaps only a few million dollars.” So testified Dr. James R. Killian, MIT President. Hearings, id. at pt. 2, p. 756. Another witness, Dr. Lindley J. Stiles, Dean of Education at the University of Wisconsin, said that "federal support for research and development to improve schools is an imperative of the times. It represents, perhaps, the soundest type of assistance to education.” Id. at pt 2, p. 1060. "To close the education quality gap" he urged that the federal government spend $200 million a year for the next decade on educational R&D. Id. at 1962–63.
16. Almost all of the $46 million being spent on aviation involves expenditures made by the Federal Aviation Agency in conjunction with the federal airways. The FAA research program is reviewed in hearings, id. at pt. 1, pp. 127-54. For additional comments on the government's transportation research see Barber “Technological Change in American Transportation: The Role of Government Action,” 50 Virginia Law Review 824, 878-82 (1964).
17. Currently the railroads account for more than 40 per cent of intercity freight ton miles; trucks are the next most important transporter, accounting for about a quarter of total ton miles; the airlines account for less than one per cent. Barber, id. at 831. The government's contribution to railroad research, however, is nil. National Academy of Sciences—National Research Council, Science and Technology in the Railroad Industry (1963).
18. For an illustrative indication of some of the doubts about the moon program, see Schneck, “Wasteful Spectacular," 197 Nation 339 (Nov. 23, 1963).
19. These alternative modes of expenditure are from a list offered by Warren Weaver, President of the National Academy of Sciences, who has commented that “scientific considerations” do not justify the "frantic, costly, and disastrous pace moon program. See 78 Commonwealth 323 (June 14, 1963).
20. The Joint Committee would bring to the legislature the kind of expert advice that has been largely absent. The creation in 1964 of a Science Policy Research Division in the Legislative Reference Service of the Library of Congress (W.Y. Times, Aug. 31, 1964, p. 27) to provide information and counsel with respect to scientific matters will help some, but this still only amounts to a reference service and is no substitute for a staff more intimately tied to the Congress. Bills have been offered that would establish a Congressional Office of Science and Technology to provide assistance to the members of both houses. E.g., S. 2938, 88th Cong., 1st Sess. (1963).