10 



percent of the money that is being spent. Our bottom line is the 

 expansion of the program apparently is keeping pace with the in- 

 crease in funding. Although it is still too early to tell what is going 

 to happen down the road when the percentages reach 2.5 percent 

 in 1997, from those that we have seen earlier on, the numbers ap- 

 pear to be consistent. 



To give you a little idea about the competition, we have seen that 

 the number of proposals by agencies have increased from 9 percent 

 to 30 percent at the various agencies. Over 20,000 proposals have 

 been received. The ratio of the awards of proposals has remained 

 fairly constant from a low of about 8 percent at DOE to about 28 

 percent at NIH, Looking back over the last 3 years, we find vir- 

 tually no change in the ratios from the previous 2 years. 



Let me move on now to the Technical Assistance Program. We 

 found that none of the five agencies that we looked at were imple- 

 menting the discretionary technical assistance. As you know, that 

 program provides $4,000 for Phase I and $4,000 annually from the 

 award for Phase II projects. There was pretty much a consensus 

 from the agencies that we talked to that they did not really see 

 much need for the Technical Assistance Program primarily because 

 technical merits of the program is an important part in their as- 

 sessment of the program. 



NASA, for example, scores the technical piece as 40 percent of 

 the score in deciding who gets awards. Also, there seems to be a 

 consensus among the agencies we reviewed that the whole adminis- 

 tration of this piece of the act would become very burdensome with 

 a large number of small awards which would be difficult adminis- 

 tratively to handle, plus the fact that there is a requirement that 

 there only be one vendor to provide this technical assistance by 

 agency. Some, particularly DOD, found that an unrealistic way of 

 managing the program. 



Finally, I want to talk about duplicate funding. This is probably 

 the only problem area we did find. It has become a problem. The 

 extent of the problem is really unknown. Primarily because there 

 is not a lot of data out there which identifies and compared all the 

 projects between agencies. We do have some case studies though. 

 Some agencies have told us that they find examples of a few com- 

 panies receiving two, three, or sometimes five times funding for the 

 same project between agencies. 



We have one classic case here where Justice has filed treble dam- 

 ages of $4.2 million against one firm alleging that this one com- 

 pany received $1.4 million in duplicate funding from NSF, NASA, 

 and various DOD agencies. This one company recycled 11 research 

 ideas 40 times. 



Most of the people we spoke to in the agencies, however, feel that 

 this is only a small percentage of or only a few companies that are 

 responsible for this. We really do not have a feel as to the mag- 

 nitude of the problem. Contributing to this is a number of issues 

 I want to just run through quickly for you. One is innovation is a 

 certification process to begin with. These companies are supposed 

 to certify and identify any other research proposals that are dupli- 

 cate through other agencies. Just the whole certification form is 

 unclear to some firms in exactly what they are certifying to and 

 some are fraudulently certifying. 



