THE SUPPORT OF BASIC RESEARCH 



It is probably impossible to estimate the extent to which 

 research progress has been retarded by the failure of government 

 to pay full costs of the research it chooses to support. But that 

 the failure has produced irritation, has robbed scientists of time 

 better spent on research, and has forced university administra- 

 tors to beg, borrow, and scrimp to make up the difference is 

 sufficient justification for changing government practice. The 

 overhead which would be necessary to accomplish this very 

 important purpose is, in fact, modest as compared with the over- 

 head which is regularly paid by government on commercial 

 development contracts. 



Research under Government Contracts 



One of the problems faced by industrial companies hold- 

 ing large government contracts has been the difficulty of secur- 

 ing reimbursement for the costs of basic research. On a govern- 

 ment contract, particularly a cost-reimbursable contract, govern- 

 ment auditors have, quite understandably, sought to exclude 

 from the list of reimbursable items anything that could not be 

 directly related to the object of the contract. Thus equipment, 

 salaries, or building maintenance have been accepted as neces- 

 sary for the fulfillment of the contract. But maintenance of the 

 quality of the scientific staff through engagement in basic re- 

 search has frequently been ruled out. 



A company in this predicament has two options. If it 

 chooses to engage in little or no basic research, it risks the loss 

 of some of its abler scientists and it runs the danger of falling 

 behind competitors in its ability to secure contracts for work 

 that involves advanced technology and new scientific ideas. 



Alternatively, if the company does engage in basic research 

 in an effort to avoid the above dangers, it must pay the cost of 

 that research out of profits instead of having those costs re- 



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