GAO Report Inconclusive on Impacts of Advanced Technology Program

Since the Republican majority captured Congress, NIST’s Advanced Technology Program (ATP) has been subjected to the tugs of opposing ideologies. According to the General Accounting Office (GAO), the program was established during the Bush Administration to “provide support on a cost-sharing basis for industrial research and development projects...that have a significant potential for stimulating economic growth and improving the competitiveness of U.S. industry.” But the new wave of Republicans, elected on promises to cut government spending, believe ATP is supporting research that private industry should, and would, do on its own. The FY 1996 Commerce Appropriations bill (H.R. 2076) attempted to eliminate ATP, but President Clinton’s veto and the budget impasse have precluded the bill’s becoming law. A stopgap continuing resolution currently funds ATP at 75 percent of its FY 1995 level through March 15.

House Science Committee Chairman Robert Walker (R-PA) opposes the program; former chairman George Brown (D-CA) is a supporter. In 1994 Brown asked GAO to examine ATP’s impacts on private-sector research. GAO surveyed 123 companies that had competed for ATP awards from 1990 through 1993 and received high ratings. Of those companies surveyed, 89 received ATP awards. The remaining 34 were designated by GAO as “near winners” because they were ranked highly but did not receive ATP funding. On February 8, Brown released the GAO’s 44-page report, “Measuring Performance: The Advanced Technology Program and Private-Sector Funding.”

GAO recognizes “the difficulty of assessing the net impact of ATP’s investments in technology on the economy,” and of establishing “a causal link between a successful project and government funding earlier in the project.” As one way to determine the program’s effect, GAO studied whether the proposed research programs would have been funded by the private sector whether or not they received ATP dollars.

In a result that is not likely to settle debate over the program, the report concludes that ATP made awards, in nearly equal proportions, to research programs “that would have been funded in its absence and projects that would not have been funded. In addition, ATP achieves other goals, such as aiding the formation of joint ventures and helping companies achieve research milestones faster.” GAO also reported that “half of the near winners continued their projects without relying on ATP funding.” It points out that most projects that continued without ATP awards fell short of their proposed schedules, and it emphasizes the difficulties some companies encountered in seeking external (non-ATP) funding. Brown remarked that the report reveals “the failures of venture capital to step up to fund innovative ideas.” Walker, however, said it gave “further confirmation that ATP is the wrong way to advance U.S. competitiveness.... anytime you hand money out at the government window, you will always have takers.”

In response to the report, the Department of Commerce says “the GAO’s survey results support the conclusion that the ATP is meeting its objective of funding projects that either would not be pursued at all or projects that would have been pursued...at a much slower pace.” It adds, “the fact that some of the near winners were able subsequently to obtain funding is perfectly consistent with ATP’s decision not to fund them. If we believe that an applicant does not need ATP funds to pursue the project, we do not fund them.” The report (RCED-96-47) is available from GAO at 202-512-6000.