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.

REFERENCES

CHAPTER VIII

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 1945 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 I, 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 1965 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 minusculeperhaps 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 of the 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 (N.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).

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21. At the Presidential level the emphasis should be on the establishment of program priorities and not on the consideration of program details.

22. Humphrey, "The Need for a Department of Science," 327 Annals 27 (1960). Also see Stover, The Government of Science 41-44 (1962). The idea for such a department is not new, for as early as 1884 a committee of the National Academy of Sciences made a similar recommendation. Dupree, Science in the Federal Government Ch. XI (1957).

23. In 1962 an Interagency Committee on Oceanography developed a ten-year plan for research in this field and efforts are being made to adhere to its provisions. Hearings, supra note 14, pt. 1 at 225.

24. See note 17 supra.

25. 42 U.S.C. § 1862 (1959).

26. Federal Funds for Research, Development and Other Scientific Activities Table C-17 (NSF 64–11, 1964).

27. "The National Science Foundation . . . excludes political science completely from its fellowship program and virtually excludes it from its research grants and other support. Such exclusion is without rational justification, has

worked and is working an undue, unfair, and discriminatory hardship on political science as a discipline and a profession." From a statement of Dr. Evron M. Kirkpatrick, executive director of the American Political Science Association, hearings, supra note 14, pt. 2 at 1027.

28. 26 U.S.C. § 174 (1959). This section, added to the law in 1954 [68A Stat. 66], permits a taxpayer to "expense" (charge off in full in the year when paid or incurred) research or experimental expenditures, even when they involve what normally would be regarded as capital outlays.

29. A report from Washington in November, 1964 indicated that the Treasury was considering a proposal that would permit firms to take as a credit against their tax liability an amount equal to 75 percent of their research budget. Admittedly this has a serious weakness in that it applies to any taxpayer, even to one which does not increase its research effort. To correct this deficiency some thought was also being given to a proposal that would allow a credit but only in terms of research expenditures that were in excess of those incurred in a selected base year (this particular approach is now in use in Canada). Wall Street Journal, Nov. 9, 1964, p. 1.

30. It would thus bear the same organizational relationship to the Secretary of Defense as does the Defense Supply Agency. The latter was created by Secretary McNamara on August 31, 1961 to assume responsibility for the supply of commercial items to all the services. Hearings before a Subcommittee of the House Committee on Government Operations, 87th Cong., 2d Sess. (7962). In 1963 the Pentagon was reportedly contemplating "eliminating all procurement organizations in the individual services and centralizing all contracting and procurement in either the Defense Supply Agency ... or in an expanded version of it, which might develop into a single Service of Supply for all the armed forces." N.Y. Times, June 29, 1963, p. 9. Regrettably, however, this report failed to materialize. In 1964 all that was done was to assign the Defense Department's Contract Administration Services to the Defense Supply Agency. The Services provide a variety of administrative support but they do not perform the procurement function, and it is this which is critical to a wider dissemination of defense contracts. For background on the Contract Administration Services, see Joint Economic Committee, Background Material on Economic Impact of Federal Procurement 1965, 89th Cong. 1st Sess. pp. 38-41 (1965).

31. After their study of government contracting in the Defense Department, Peck, Cherington, and Scherer concluded that concern for too much participation by the civilian secretaries and their deputies was misplaced. "(I)t is perhaps more amazing that so much authority is delegated to generals and assistant secretaries. Even in the largest U.S. corporations, projects involving more than roughly $100,000 are critically evaluated by at least a vice-president, and often by the company's president and board of directors. Yet, in contrast, Air Force weapon system project officers (usually lieutenant colonels) have authority to approve program changes involving up to $350,000, and the Air Research and Development Command can begin new programs costing up to $1 million and authorize program changes worth up to $5 million on its own initiative." Peck, Cherington, and Scherer, "Organization and Research and Development Decision Making within a Government Department," in National Bureau of Economic Research, The Rate and Direction of Inventive Activity, pp. 395, 400 (1962). 32. Some idea of what might be done was revealed in President Kennedy's appointment of a committee to aid in achieving a 10 percent rise in government

procurement contracts awarded to small business. N.Y. Times, May 3, 1961, p. 48. The Defense Department has had moderate success in fulfilling the 10 percent target. See Hearings on Military Supply and Service Activities in Economy before the Subcommittee on Defense Procurement of the Joint Economic Committee, 88th Cong., 1st Sess. 37, 52 (1963). Office Secretary of Defense, Defense Procurement from Small and Other Business Firms July 1964-May 1965, table II (July 8, 1965) (small business share of prime contracts up from 18 to 20 percent in fiscal 1965 compared with fiscal 1964). Through the deliberate manipulation of such goals and their rigorous enforcement much could be done to broaden the procurement base, for R&D as well as goods. What is required is the will to act. 33. The success of large-scale projects like the atomic submarine program, Mercury, and Apollo is felt to turn on the presence of knowledgeable project engineers who can press industrial contractors to insure that they deliver on time products that meet specifications. Complete confidence cannot be placed in the contractors; they must be closely supervised by managers who can coordinate the work of many engineers into a complete system. Yet NASA and the Defense Department are finding it very difficult to find and hire engineers with this kind of skill. One reason is the comparatively low pay that can be offered by government. N.Y. Times, Oct. 6, 1963, p. 71. And the projects suffer as a result. N.Y. Times, Oct. 4, 1963, p 1 (reports of gross inefficiency and bungled management by contractors and NASA during Project Mercury).

34. There is uncontradictable evidence that private firms, including those engaged in systems management, have grown with the aid of scientific personnel stolen from the government (indeed from the very agencies with which they work under contract). About 20 percent of the scientists, engineers, and administrators hired by Space Technology Laboratories (see Chapter V) between 1954 and 1959, while it was under contract to the Air Force, came directly from government agencies, mostly from the Defense Department. They were attracted by salary increments ranging from $1,000 a year to more than $8,000. General Accounting Office, Initial Report on Review of Administrative Management of the Ballistic Missile Program of the Department of Air Force 87-88, 102-04.

35. Presently the Secretary of Defense is authorized to establish additional civilian positions for specially qualified scientists or professional personnel to carry out R. & D. These positions can be created without reference to usual Civil Service limits on appointments to the higher pay levels. However, such individuals may not be paid at a rate higher than that prevailing for grades GS-18, currently set at $24,500 a year in accordance with the 1964 pay increase act (PL 88-426, 78 Stat. 400). This ceiling is still too low, even though it represents an increase from the pre-1964 level of $20,000. The NASA Administrator is given authority to appoint 425 scientific and relates personnel at the grade 18 level. 42 U.S.C. § 2473 (b) (2).

Persons of this calibre, especially if they combine both technical and managerial skills, can earn substantially more in private industry. Ultimately it must be recognized that certain kinds of personnel simply have to be paid more than others. A skilled technical manager is worth more in the market than a general administrator and government salary schedules will have to reflect this if the requisite kinds of personnel are to be obtained.

36. 4 Patent, Trademark, and Copyright Journal of Research and Education 295, 377-79 (1960). Over the 17 year period 1944-61 defense contractors took title to 13,000 patented inventions arising out of research done for the government. During this same time the government itself acquired title to 11,674 patents, of which 4,431 were attributable to its own employees, the rest coming from outsiders, mostly contractors who had elected not to patent inventions they had made. Of the 11,674 patents secured by the government, 7.228 were traceable to the Defense Department and 2,690 to the work of the AEC. Holman, "The Utilization of Government-Owned Patented Inventions," 7 Patent, Trademark & Copyright Journal of Research and Education 109, 113, 125-26 (1963).

37. Id. at 378.

38. Id. at 380. Estimates as to commercial use of patents generally appear in Rossman and Sanders, "The Patent Utilization Study," I Patent Journal of Research and Education 74 (1957).

39. 4 P.T.C.J. of R. & E., supra note 36, at 377. Compare Holman, supra note 36, at 136 ("Actual commercial use, either by the contractor or by firms licensed by the contractor, was less than 7 per cent of all patented inventions resulting from military contracts").

40. The most frequently cited reasons for not making more extensive use of government-owned inventions mentioned by inventors are that the product or process is only of government use and that there is insufficient market demand