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PREPARED STATEMENT OF Don I. Phillips 

 Executive Director, GUIR Roundtable 

 National Academy of Sciences 

 Page 12 



thus, generates insufficient funds for sustaining and renewing 



base capacity. To correct this deficiency, there have been 



repeated proposals to increase the facilities use charge in the 



indirect cost pools from 2 to 5 percent. In addition, there have 



been proposals to scale use charges to the different rates at 



which different groups of facilities deteriorate. In this 



approach, sponsored research that depends upon expensive 



facilities carries its proportionate share of the costs. As an 



alternative to the use charge, it has been suggested that the 



charge for rent of research space be an explicit component of 



federal R&D grants and contracts to universities. 



Competitive Matching Grants. The ability of grants to be 

 targeted for special purposes, and the fact that they can provide 

 dollars to institutions who find it difficult to raise facilities 

 funds through other means, make this mechanism especially well 

 suited for establishing new capacity. The grants approach 

 balances the "those that have, get" aspects of the indirect cost 

 reimbursement mechanism. Cost sharing requirements and specific 

 merit review criteria are easily included. In addition to 

 competitive matching grants, the federal government could 

 consider formula, or block, grants to states to assists them in 

 creating or renewing regional capacities. 



Competitive Debt Service. An intriguing new idea for 



