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Science Policy Study-Hearings Volume 6
THE FEDERAL GOVERNMENT AND THE UNIVERSITY
RESEARCH INFRASTRUCTURE
HEARINGS
BEFORE THE
TASK FORCE ON SCIENCE POLICY
OF THE
CONIMI[TTEE ON
SCIENCE AN]) TEChNOLOGY
HOUSE OF REPRESENTATIVES
NINETY-NINTH CONGRESS
FIRST SESSION
MAY 21, 22; SEPTEMBER 5, 1985
[No. 101]
Printed for the use of the
Committee on Science and Technology
0
U.S. GOVERNMENT PRINTING OFFICE
53-2770 WASHINGTON 1986
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, DC 20402
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COMMITTEE ON SCIENCE AND TECHNOLOGY
ROBERT A. ROE, New Jersey
GEORGE E. BROWN, JR., California
JAMES H. SCHEUER, New York
MARILYN LLOYD, Tennessee
TIMOTHY E. WIRTH, Colorado
DOUG WALGREN, Pennsylvania
DAN GLICKMAN, Kansas
ROBERT A. YOUNG, Missouri
HAROLD L. VOLKMER, Missouri
BILL NELSON, Florida
STAN LUNDINE, New York
RALPH M. HALL, Texas
DAVE McCURDY, Oklahoma
NORMAN Y. MINETA, California
MICHAEL A. ANDREWS, Texas
BUDDY MACKAY, Florida**
TIM VALENTINE, North Carolina
HARRY M. REID, Nevada
ROBERT G. TORRICELLI, New Jersey
RICK BOUCHER, Virginia
TERRY BRUCE, Illinois
RICHARD H. STALLINGS, Idaho
BART GORDON, Tennessee
JAMES A. TRAFICANT, JR., Ohio
GEORGE E. BROWN, JR., California
TIMOTHY E. WIRTH, Colorado
DOUG WALGREN, Pennsylvania
HAROLD L. VOLKMER, Missouri
STAN LUNDINE, New York
NORMAN Y. MINETA, California
HARRY M. REID, Nevada
RICK BOUCHER, Virginia
RICHARD H. STALLINGS, Idaho
MANUEL LUJAN, JR., New Mexico*
ROBERT S. WALKER, Pennsylvania
F. JAMES SENSENBRENNER, JR.,
Wisconsin
CLAUDINE SCHNEIDER, Rhode Island
SHERWOOD L. BOEHLERT, New York
TOM LEWIS, Florida
DON RITTER, Pennsylvania
SID W. MORRISON, Washington
RON PACKARD, California
JAN MEYERS, Kansas
ROBERT C. SMITH, New Hampshire
PAUL B. HENRY, Michigan
HARRIS W. FAWELL, Illinois
WILLIAM W. COBEY, JR., North Carolina
JOE BARTON, Texas
D. FRENCH SLAUGHTER, JR., Virginia
DAVID S. MONSON, Utah
MANUEL LUJAN, JR., New Mexico *
ROBERT S. WALKER, Pennsylvania ***
F. JAMES SENSENBRENNER, JR.,
Wisconsin ***
CLAUDINE SCHNEIDER, Rhode Island
SHERWOOD L. BOEHLERT, New York ~
TOM LEWIS, Florida
SID W. MORRISON, Washington
RON PACKARD, California
DON RITTER, Pennsylvania
JAN MEYERS, Kansas
HARRIS W. FAWELL, Illinois ****
D. FRENCH SLAUGHTER, JR., Virginia ****
DON FUQUA, Florida, Chairman
HAROLD P. HANSON, Executive Director
ROBERT C. KETCHAM, General Counsel
REGINA A. DAVIS, Chief Clerk
JOYCE GROSS FREIWALD, Republican Staff Director
SCIENCE POLICY TASK FORCE
DON FUQUA, Florida, Chairman
JOHN D. Houe1~LD, Study Director
R. THOMAS WEIMER, Republican Staff Member
* Ranking Republican Member.
* * Serving on Committee on the Budget for 99th Congress.
~ Term expired June 30, 1985.
* ** * Term commenced July 1, 1985.
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CONTENTS
WITNESSES
May 21, 1985: Page
Dr. Bernadine Healy, Deputy Director, Office of Science and Technology
Policy, Executive Office of the President, Washington, DC 2
Prepared statement 7
Discussion 16
Henry G. Kirschenmann, Jr., Deputy Assistant Secretary, Procurement,
Assistance and Logistics, U.S. Department of Health and Human Serv-
ices, Washington, DC 21
Prepared statement 34
Discussion 53
Dr. Dale R. Corson, president emeritus, Cornell University, Ithaca, NY,
and chairman, Government-University-Industry Roundtable, National
Academies and Sciences and Engineering, Washington, DC 58
Prepared statement 63
Discussion 70
Dr. T. Edward Hollander, chancellor, Department of Higher Education,
State of New Jersey, Trenton, NJ 76
Prepared statement 81
Discussion 105
May 22, 1985:
Dr. Oliver D. Hensley, associate vice president, Texas Tech University,
Lubbock, TX 110
Prepared statement 124
Hayden W. Smith, senior vice president, Council for Financial Aid to
Education, New York, NY 145
Prepared statement 161
Dr. Frank B. Sprow, vice president, Exxon Research & Engineering Co.,
Annandale, NJ 185
Prepared statement 189
Dr. Donald N. Langenberg, chancellor, University of Illinois at Chicago,
Chicago, IL 206
Prepared statement 211
Panel discussion 230
Questions and answers for the record:
Dr. Sprow 236
Dr. Langenberg 241
September 5, 1985 (Financing and managing university research equipment):
Dr. Richard A. Zdanis, vice provost, The Johns Hopkins University, Balti-
more, MD 246
Prepared statement 251
Dr. Ray C. Hunt, Jr., vice president for business and finance, Charlottes-
ville, VA 260
Prepared statement 264
Dr. Praveen Chaudari, vice president, science and director, physical sci-
ences department, IBM Corp., Armonk, NY 270
Prepared statement 273
Panel discussion 278
Questions and answers for the record 295
Appendix 1.-1982--83 Voluntaiy Support of Education, prepared by the Coun-
cil for Financial Aid to Education and jointly sponsored by the Council for
Advancement and Support of Education and the National Association of
Independent Schools, August 1985 305
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IV Page
Preface * 308
Higher education-Part I:
National estimates 309
Institutional Expenditures and Voluntary Support 310
Higher education-Part II:
Survey results 312
The Recipients 313
The Donors 315
The Purposes 317
Details of support by participating institutions 319
Independent secondary and elementary schools 370
Appendix tables:
A. Voluntary support, colleges and universities, 1983-84 381
B. Colleges and universities reporting in both 1982-83 and 1983-84 382
C. Voluntary support, independent schools, 1983-84 383
D. Independent schools reporting in both 1982-83 and 1983-84 383
E. Voluntary support of higher education, by source and by purpose .... 384
F. Estimated total voluntary support of higher education, 1949-50 to
1983-84 385
Appendix 2.-The Department of Defense Report on Selected University Labo-
ratory Need.s in Support of National Security, prepared for the Subcommit-
tee on Research and Development of the Committee on Armed Services of
the U.S. House of Representatives, April 29, 1985 386
Chapter I: Introduction 389
A. Rationale 389
B. Definitions 390
C. Research disciplines and thrust areas 390
D. Information acquisition 391
Chapter II: DOD support for university laboratories 393
A. Introduction 393
B. Origins of DOD support for university laboratories 394
C. Present DOD support for university laboratories 395
C.1 Direct funding of university research 395
C.2 Instrumentation program 399
C.3 University research initiative 401
C.4 Coordination activities 401
Chapter III: Previous studies 402
Chapter IV: Selective university laboratory modernization 411
A. Introduction 411
B. Disciplines 413
B.1 Chemistry 413
B.2 Electronics 415
B.3 Engineering 416
B.4 Materials 417
B.5 Physics 419
C. Summaries 420
Chapter V: Discussion and recommendations 443
A. Discussion 443
B. Recommendations 446
Appendix 3.-Financing and Managing University Research Equipment, Asso-
ciation of American Universities, National Association of State Universities
and Land-Grant Colleges, and Council on Governmental Relations, Wash-
ington, DC, 1985 452
Contents 455
Summary and recommendations 461
1. Academic research equipment: The Federal role 474
Background and trends 474
Funding mechanisms 481
Federal regulatory issues 491
Recommendations 502
2. The State role in the acquisition and management of research
equipment 507
Introduction 507
Modes of State support 512
Controls on debt financing 516
Controls on purchasing 518
Controls on use of equipment 521
Financial flexibility 521
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V
Recommendations
3. The universities' role in the acquisition and management of re-
search equipment
Introduction
Acquisition of research equipment
Management of research equipment
Optimization of use
Strategic planning
Recommendations
4. Debt financing
Introduction
Implications and analysis in debt financing
Choosing the appropriate debt instrument
Short- to medium-term debt instrument
Long-term debt instruments
Innovative techniques
Recommendations
5. Private support of academic research equipment
Introduction
Mechanisms of corporate support
Other private support
Tax incentives
State tax incentives
R&D limited partnerships
Leasing
Developing a donation strategy
Recommendations
Appendixes
A. R&D expenditures at universities and colleges by year and source
of funds: Fiscal years 1953-83
B. Current fund expenditures for research equipment at universities
by science/engineering field and source of funds: Fiscal years
1982 and 1983
C. Federal instrumentation programs
D. Analysis of loan subsidy programs
E. Representative State regulations
F. Representative State statutes authorizing the issuance of bonds to
fund higher education facilities
G. Iowa State University research equipment assistance program
H. Examples of debt financing
I. Debt financing instrument
J. Examples of equipment donations
Appendix 4.-Adequacy of Academic Research Facilities: A Brief Report of A
Survey of Recent Expenditures and Projected Needs in Twenty-Five Academ-
ic Institutions, prepared under the direction of the Ad Hoc Interagency
Steering Committee on Academic Research Facilities with the assistance of
the NSF Task Group in Academic Research Facilities, April 1984
Appendix 5.-Howard J. Hausman and Kenneth Burgdorf, NIH Program
Evaluation Report: Academic Research Equipment and Equipment Needs in
the Biological and Medical Sciences-Executive Summary, Westat, Inc., pre-
pared for the Program Evaluation Branch, Office of Program Planning and
Evaluation, National Institutes of Health, April 1985
Appendix 6.-Howard J. Hausman and Kenneth Burgdorf, NIH Program
Evaluation Report: Academic Research Equipment and Equipment Needs in
the Biological and Medical Sciences, Westat, Inc., prepared for the Program
Evaluation Branch, Office of Program Planning and Evaluation, National
Institutes of Health, April 1985
719
721
Acknowledgments 724
1. Introduction 734
1.1 Background of the survey 734
1.2 Overview of the survey 738
1.3 Objectives and limitations of this analysis 740
1.4 Contents of this report 741
2. Methodology 743
2.1 Sample design 743
2.2 Survey procedures 749
2.3 Definitions 749
Page
524
527
527
528
534
546
554
554
557
557
558
561
561
571
574
575
577
577
579
583
583
590
592
593
594
594
598
598
600
602
623
628
639
644
649
667
683
695
703
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VI
Page
2.4 Survey response 754
2.5 Data collection for Departments of Medicine 760
2.6 Treatment of date 761
3. Needs and priorities for research equipment assessment by department
heads 763
3.1 Adequacy of current instrumentation 763
3.2 Priorities for increased Federal support 767
3.3 Types of instrumentation most urgently needed 769
3.4 Summary 774
4. Expenditures for research equipment, fiscal year 1983 776
4.1 Department expenditures for instrumentation 776
4.2 Equipment expenditures per research 778
4.3 Summary 781
5. The national stock of academic research equipment 783
5.1 Number of cost of instrument systems 783
5.2 Unit costs 787
5.3 State-of-the-art and obsolete instrumentation systems 797
5.4 Summary 800
6. Age and condition of research equipment 803
6.1 Age of research equipment 803
6.2 Condition of research equipment 812
6.3 Summary 819
7. Funding of equipment in active research use 821
7.1 Means of acquiring research equipment 821
7.2 Funding sources for research equipment 821
7.3 Summary 833
8. Location and use of academic research equipment 835
8.1 Location of equipment 835
8.2 Availability for general purpose use 840
8.3 Annual number of research users per instrument program 843
8.4 Summary 847
9. Maintenance and repair 850
9.1 Assessment of M&R facilities 850
9.2 The costs of M&R 852
9.3 Relationship of means of servicing to working condition 857
9.4 M&R costs and age of instruments 857
9.5 Summary 861
10. Summary 863
10.1 Overview 863
10.2 Department-level findings 863
10.3 The national stock of academic research equipment 865
10.4 Age and condition of academic research equipment 866
10.5 Funding of equipment in active research use 868
10.6 Locations and use of academic research equipment 869
10.7 Maintenance and repair 870
10.8 Group comparisons 871
Appendix A. Comparison tables for all fields of science 875
Appendix B. Department/Facility questionnaire 894
Appendix C. Instrument data sheet 901
Appendix D. Advisory group, phase II survey 906
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THE FEDERAL GOVERNMENT AND THE
UNIVERSITY RESEARCH INFRASTRUCTURE
TUESDAY, MAY 21, 1985
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SCIENCE AND TECHNOLOGY,
TASK FORCE ON SCIENCE POLICY,
Washington, DC.
The task force met, pursuant to call, at 10:10 a.m., in room 2318,
Rayburn House Office Building, Hon. Don Fuqua (chairman of the
task force) presiding.
Mr. FUQUA. This morning our task force begins 2 days of hear-
ings on an important but complex issue, that of the Federal Gov-
ernment's role in providing a research infrastructure at the Na-
tion's research institutions.
This is an issue which, since 1945, seems to come before us peri-
odically. Thus we saw in the 1960's, both the National Science
Foundation and National Institutes of Health provided extensive
support for research facilities and training facilities. In the 1970's,
little concern was expressed about the need for such a role until
the end of the decade when the instrumentation obsolescence issue
was raised, and in the last 2 years, the request for buildings and
building modifications has again come before us.
In addition, our committee has also had to provide for newly
emerging infrastructure needs such as supercomputers. These indi-
vidual research support requirements are all part of. the broader
set of needs which taken together have come to be termed "re-
search infrastructure." This includes in addition to buildings, in-
struments, and computers, such things as research libraries, re-
search hospitals, and a wide range of research support personnel
such as technicians, assistants, and secretarial staff. In these hear-
ings we have begun our inquiry into what the long-term needs for
infrastructure support are likely to be and what the role of the
Federal Government should be in meeting those needs. We expect
to learn what the other sources of support are, such as State gov-
ernment, private giving, and an extensive system of indirect cost
payments which are providing to support and maintain research
infrastructure.
We also want to explore the alternative mechanisms that may
have been available to provide Federal support for research infra-
structure. Should separate categorical programs for the support of
individual infrastructure needs, such as, for example, instrumenta-
tion and supercomputers, be put in place? Should more general in-
stitutional support programs giving more latitude for the individ-
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2
ual institutions be used? Or would it be better to increase signifi-
cantly the payments of indirect costs and through this mechanism
provide the funds for infrastruture needs?
All of these are difficult and important questions. We are de-
lighted to have a group of outstanding witnesses to discuss them
with us today.
We begin with Benjamin Healy, Deputy Director of the Office of
Science and Technology Policy, Executive Office of the President.
Did I say Benjamin? I am sorry, I apologize.
I need new glasses, I guess.
Thank you very much, we will be delighted to hear from you.
[A biographical sketch of Dr. Healy follows:]
BERNADINE HEALY, M.D.'
Dr. Bernadine Healy is Deputy Director of the Office of Science and Technology
Policy, Executive Office of the President. Her appointment was made by President
Reagan and confirmed by the Senate in June of 1984. Prior to that time she was
Professor of Medicine at The Johns Hopkins Hospital and School of Medicine.
Dr. Healy was born in New York City, completed secondary school at the Hunter
College High School, graduated from Vassar College, summa cum laude, in 1965,
and the Harvard Medical School, cum laude, in 1970. She completed advanced post
graduate training in internal medicine, anatomic pathology, and cardiovascular dis-
ease at The Johns Hopkins School of Medicine. She joined the faculty of medicine
and pathology at Johns Hopkins in June 1976 where she had clinical responsibilities
and ran an active research program in cardiovascular pathology. In 1977 she
became Director of the Coronary Care Unit of The Johns Hopkins Hospital. In 1979
she assumed the additional role of Assistant Dean for Post Doctoral Programs and
Faculty Development, a position which included responsibilities for approximately
900 post graduate physicians, and policy issues regarding appointment and academic
advancement of the medical faculty.
Dr. Healy has been President of the American Federation of Clinical Research
(AFCR), and was Chairman of its Public Policy Committee. She is on the Board of
Directors of the American Heart Association, is Chairman of the Scientific Sessions,
and has served as Vice President and Chairman of the Research Committee of the
Maryland affiliate. She has served on the Board of Governors of the American Col-
lege of Cardiology, was a member of several Advisory Committees to the National
Heart, Lung and Blood Institutes and the Cardiovascular Devices Committee of the
Food and Drug Administration.
Dr. Healy is the author or co-author of nearly 200 medical and scientific articles,
mostly in the area of cardiovascular research and medicine, and has served on the
Editorial Boards of numerous scientific journals. She has been a member of the
Board of Directors of the Stetler Research Fund for Women Physicians. Dr. Healy is
a recipient of the 1983 National Board Award for Medicine of the Medical College of
Pennsylvania and is a member of several honorary societies, including Phi Beta
Kappa, Alpha Omega Alpha, and the American Society of Clinical Investigation.
In her present position at OSTP she is involved in life sciences and regulatory
issues; is the OSTP representative to several panels including the National Cancer
Advisory Board and the National Heart, Lung, and Blood Institute Council; is execu-
tive secretary of the White House Science Panel's Study on the Health of the Un,-
versities; and chairs the White House Cabinet Council Working Group on Biotech-
nology.
STATEMENT OF DR. BERNADINE HEALY, DEPUTY DIRECTOR,
OFFICE OF SCIENCE AND TECHNOLOGY POLICY, EXECUTIVE
OFFICE OF THE PRESIDENT, WASHINGTON, DC
Dr. HEALY. Thank you, Mr. Chairman.
I am pleased to be here today to discuss one of the most impor-
tant issues affecting the future of our Nation: the health of our
university system, and specifically, the condition of the research fa-
`Dr. Healy (formerly Bernadine Healy Bulkley).
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3
cilities and equipment in our universities and colleges. I would like
to confine my remarks today to the policy issues we face, on the
assumption that my colleagues from the universities and industry
are in the best position to provide an accurate picture of the physi-
cal condition of research infrastructure in our universities.
Assessing the condition of university research infrastructure is
not an easy task. Each university has unique needs and long-term
objectives, and is at a unique stage of its own physical and intellec-
tual development. Estimates of the cost of renovating and modern-
izing the university research infrastructure ranges from about $5
billion to over $20 billion in a period of around 5 years. To get
more specific than that often requires arbitrary judgments.
What we do know is that present conditions do not make us espe-
cially comfortable about the prospects that our university system
will be able to meet our Nation's needs in coming years.
As many of you are aware, for the past year, a Panel of the
White House Science Council has been studying the health of our
university system. The Panel was asked to address one fundamen-
tal question: "Are our colleges and universities prepared to train
and educate the talent we need to remain preeminant in an age of
rapid technological change and intense competition?"
In a matter of months, the Panel, which is chaired by Mr. David
Packard, will release its report. As the Panel has addressed the
issue of infrastructure at some length, many of my remarks will
resemble those expressed in the forthcoming report. I should stress,
however, that I do not claim to speak on behalf of the Panel; and
because their work is not yet completed, I will not be able to dis-
cuss their recommendations in great detail.
The central issue the Panel is addressing is not merely whether
the universities are physically equipped, or have adequate faculty,
to train the talent our Nation needs today. The real issue is wheth-
er our Nation is in a position to ensure that the universities are
able to train such talent consistently and continuously for the fore-
seeable future. This is a subtle, but important distinction.
We are concerned about more than the specific infrastructure
problems we currently face. The American university system is dis-
tinctive in that our universities conduct research and education ac-
tivities simultaneously. In fact, in most graduate programs in sci-
ence and engineering, the graduate student is being trained while
he or she participates in research. Research in universities thus
yields a dual dividend: talent and new knowledge. Strengthening
the research capabilities of a university by definition strengthens
the education capabilities of the university, and vice versa.
The link is important, because it is largely due to the simultane-
ous practice of research and training that America maintains such
undisputed world leadership in science. In no other nation are stu-
dents trained by such eminent practicing scientists as they are in
the United States. That we have won the overwhelming majority of
the Nobel Prizes in science in the last decade attests to that suc-
cess.
But world leadership in technology is a much more complex en-
deavor. Our technological capabilities reside in a complex interrela-
tionship among Government, industry, and the universities. At the
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4
risk of oversimplifying a bit, let me try to describe this interrela-
tionship.
Industry employs scientists and engineers to apply new knowl-
edge to specific problems-the result of which is new technology.
The universities' role is to provide new talent, in the form of new
scientists and engineers and new knowledge on a continuous basis.
Government's role is to provide the climate that promotes the ap-
propriate investment by both the public and private sectors to meet
the Nation's present and future demands for talent and new
knowledge.
Ideally, this interrelationship is a partnership among the three
central institutions. The partnership works best through team-
work, with each partner reinforcing the other's capabilities to re-
spond to the challenges of competition and technological change.
it is industry that is most affected by rapid change; it is industry,
too, that most heavily depends on universities to help it. adapt and
contribute to change. Of the three, industry in particular feels the
heat of competition. industry, therefore, is the key to the universi-
ties' ability to adapt to the changing demands of the world around
them.
The universities are uniquely able to assess their own immediate
strengths and weaknesses. The reason: Because they are nearest to
the problems, and because, in their research and teaching activi-
ties, they are made aware of society's needs, and their own institu-
tions' abilities to respond to them.
The Government is, however, the only one of the three in a posi-
tion to take the broad, long-term view. Industry is necessarily con-
cerned about the nearer term-issues like the number of engineers
graduated per year in a given field. These issues are resolved in a
supply and demand interaction between industry and the universi-
ties. But the Government is in a special position to worry about
long-term issues like the productivity of the research enterprise,
the quality of the talent and new knowledge our universities
produce, the overall ability of the universities to adapt and respond
to the changing demands of industry and the rest of society, and so
on.
These are global needs vital to our Nation that the Federal Gov-
ernment must address, along with our universities, our State and
local governments and our industries.
This is why so many say that Federal funding of basic research is
an investment. The Government is not buying packages of research
results; it is investing in the long-term strength of the research and
education enterprise.
So, what does this mean when we discuss the condition of infra-
structure in our universities? We all agree that there are deficien-
cies. But the central question is not so much what to do about the
present condition of the university research infrastructure. The
real question is more fundamental: Is the partnershp among indus-
try, Government, and the universities functioning in a manner
which ensures that the United States will maintain a healthy,
modern research infrastructure?
I think most of us would agree that, given its present condition,
and in spite of the strengthened commitment to the basic research
enterprise which Chairman Fuqua and the Committee on Science
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5
and Technology, and many others in Congress have shown in the
last several years, the partnership may not be adequate to the task.
Although there has been a 30 percent real growth in basic research
funding since 1981 and a 23 percent real growth in university basic
research funding since 1980, there has been little emphasis on in-
frastructure. In fact, none of the three partners have fully ad-
dressed this issue in the last decade or more, although we have in
the last few years begun to see some significant improvement.
After Sputnik, the Government began a whole series of programs
of investment in new facilities and equipment. Our research capac-
ity in this Nation expanded rapidly, and the system produced much
of the talent and new knowledge upon which today's technological
revolution is based.
But in the early 1970's, these investments were discontinued.
Construction stopped. By the late 1970's, the universities warned
that unless the Government came up with new facilities funding,
the research infrastructure was in trouble. Industry was making
some contributions, but those were small compared to the benefits
they derived from the talent and new knowledge produced by the
universities.
For most of the decade of the 1970's and into the early 1980's,
the universities themselves behaved largely as dependents of the
Government, abdicating their responsibility for infrastructure and
biding their time until Federal facilities programs were resumed.
And the Government, not fully acknowledging its responsibility for
the long-term health of the system, attempted not to invest in the
research enterprise, but to procure packets of research results at
the lowest possible price.
Facilities use allowance reimbursements, for example, are based
on an average useful life of 50 years for a university laboratory.
The actual average useful life of a modern laboratory is probably
closer to 20 to 25 years, as it is for industrial laboratories. As for
research equipment, in addition to having unrealistically long am-
ortization periods-15 years, in contrast to the actual 6 to 8-the
Government also micromanages the purchase of new equipment.
Although financial accountability is an integral part of good Fed-
eral management, the level of detail required by 0MB circular A-
110 in documenting the need for any piece of equipment costing
more than $5,000 is an unnecessary burden. The Government also
requires inventories of all research equipment owned by an institu-
tion, presumably to serve as a basis on which to compare the A-lb
screening documents.
Well, what should we do? Simply creating a new multibillion
dollar facilities program may, over the near term, improve the con-
dition of infrastructure, but it won't restore teamwork to the part-
nership, or prevent a boom-bust cycle. It is equally important that
change take place in the attitudes and performance of each of the
three partners.
The Government must focus on our research expenditures as in-
vesting in the research enterprise and not just procuring research
results. This means bearing the reasonable and necessary costs of
the research it sponsors. But it means more than that. As I indicat-
ed earlier, the Federal Government shares the responsibility along
with the universities to respond and adapt to the changing de-
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6
mands of society. As regards infrastructure specifically, I would say
bringing amortization periods for both facilities and equipment into
line with those for industry would be a wise and appropriate
change. In addition, much of the Federal paperwork and manage-
ment associated with university research should be reevaluated
and eliminated if inappropriate or unnecessarily burdensome.
The universities must assume a far more significant and respon-
sible role in managing the Nation's investment in university re
search. The Government-university relationship should be a mutu-
ally reinforcing, mutually beneficial, equal partnership. I would
like, for example, to see a system in which the universities would
be reimbursed realistically for facilities and equipment used in
Federally-sponsored research and for the universities to take a
leadership role in identifying cost savings associated with research
overhead.
As for industry, a direct involvement by industry in the universi-
ty research process offers significant benefits to both. Direct contri-
butions of state-of-the-art research equipment, and industry-univer-
sity cooperation in its use and maintenance, is one remedy for
some of the weaknesses in the partnership. Unrestricted donations,
as well as donations toward renovation or new construction of fa-
cilities, should be encouraged.
I would anticipate that some of this will cost money. But we
must ask ourselves, can our Nation remain competitive in this fast-
changing age if we are not training the very best talent we can?
An increased Federal commitment to university research is indeed
an investment-an investment that we probably cannot get along
without. Because only the universities train and educate the talent
that is so central to our continued world leadership in both science
and technology, university research is the highest priority in the
civilian R&D effort.
Yet, of the more than $20 billion we spend on civilian R&D,
about $6 billion is invested in university research. This balance
may be inapprorpiate to today's circumstances. Since the budget
deficit forces us to select from among competing priorities, I would
suggest that we continue what we all began several years ago, and
redirect civilian R&D funds from lower priority areas, particularly
technology development projects, to the highest priority, universi-
ty-based basic research. This would permit us to be both fiscally re-
sponsible and attentive to the need for investment in the future
growth, prosperity and leadership of our Nation.
I would be pleased to answer questions. Thank you.
[The prepared statement of Dr. Healy follows:]
PAGENO="0013"
7
PROPOSED REMARKS OF DR. BERNADINE HEALY, M.D.
DEPUTY DIRECTOR
OFFICE OF SCIENCE AND TECHNOLOGY POLICY
EXECUTIVE OFFICE OF THE PRESIDENT
MAY 21, 1985
Mr. Chairman, I am pleased to be here today to discuss
one of the most important issues affecting the future of our
nation: the health of our university system, and specifically,
the condition of the research facilities and equipment in our
universities and colleges. I would like to confine my remarks
today to the policy issues we face, on the assumption that my
collegues from the universities and industry are in the best
position to provide an accurate picture of the physical
condition of research infrastructure in our universities.
Assessing the condition of university research infrastructure
is not an easy task. Each university has unique needs and long
term objectives, and is at a unique stage of physical and
intellectual development. Estimates of the costs of renovating
and modernizing the university research infrastructure range
from about $5 billion to over $20 billion in a period of around
five years. To get more specific than that would require arbitrary
judgments. What we do know is that present conditions do not
make us especially comfortable about the prospects that our
university system will be able to meet our nation's needs in
coming years.
PAGENO="0014"
8
As many of you are aware, for the past year, a Panel of
the White House Science Council has been studying the health of
our university system. The Panel was created by Dr. George A.
Keyworth, the President's Science Advisor, who asked them to
address one fundamental question: "Are our colleges and universities
prepared to train and educate the talent we need to remain
preeminant in art age of rapid technological change and intense
competition?"
In a matter of months, the Panel, which is chaired by
Mr. David Packard, will release its report. As the Panel has
addressed the issue of infrastructure at some length, many of my remarks
today will resemble those expressed in the forthcoming report.
should stress, however, that I do not claim to speak on behalf
of the Panel; moreover, because their work is not yet completed,
I will not be able to discuss their recommendations in great detail.
The central issue the Panel is addressing is not merely
~.~~ther the universities are physically equipped, or have adequate
faculty, to train the talent our nation needs today. The real
issue is whether our nation is in a position to ensure that the
universities are able to train such talent consistently and
continuously for the foreseeable future. This is a subtle, but
important distinction.
If I may digress for a moment, I think I can demonstrate to
you why we are concerned about more than the specific infrastructure
PAGENO="0015"
9
problems we currently face. The Mterican university system is
distinctive in that our universities conduct research and education
activities simultaneously. In fact, in most graduate programs in
science and engineering, the graduate student is being trained
while he or she participates in research. Reearch in universities
thus yields a dual dividend: talent and new knowledge. Strengthening
the research capabilities of a university by definition strengthens
the education capabilities of the university, and vice versa.
The link is important, because it is largely due to the
simultaneous practice of research and education that America maintains
such undisputed world leadership in science. In no other nation
are students trained by such eminent practicing scientists as they
are in the U.S. That we have won the overwhelming majority
of the Nobel prizes in science in the last decade attests to
that success.
But world leadership in technology is a much more complex
endeavor. Our technological capabilities reside in a complex
interrelationship among government, industry, and the universities.
At the risk oL oversimplifying a bit, let me Lry to describe
this interrelationship. Industry employs scientists and engineers
to apply new knowledge to snecific problems--the result of which
is new technology. The universities' role is to provide new talent,
in the form of new scientists and engineers and new knowledge on
a continuous basis. Government's role is to provide the
climatethat promotes the appropriate investment by both the
PAGENO="0016"
10
public and private sectors to meet the nation's present and future
demands for talent and new knowledge.
Ideally, this interrelationship is a partnership among the
three central institutions. The partnership works best through
teamwork, with each partner reinforcing the other's capabilities
to respond to the challenges of competition and technological
change.
It is industry that is most affected by rapid change; it
is industry, too, that most heavily depends on universities to
help it adapt and contribute to change. Of the three, industry
in particular feels the heat of competition. Industry, therefore,
is the key to the universities' ability to adapt to the changing
demands of the world around them.
The universities are uniquely able to assess their own immediate
strengths and weaknesses. Ask a researcher which wheels need grease--
a new NMR machine, larger computing capacity--and he or she can
answer immediately. The reason: because they're nearest to the
problems, and because, in their research and teaching activities,
they are made aware of society's needs, and their own institutions'
abilities to respond to them.
The government is, however, the only one of the three in a
position to take the broad, long-term view. Industry is necessarily
PAGENO="0017"
11
concerned about the nearer term--issues like the number of engineers
graduated per year in a given field. These issues are resolved in
a supply and demand interaction between industry and the universities.
But the government is in a special position to worry about long-term
issues like the productivity of the research enterprise, the
quality of the talent and new knowledge our universities produce,
the overall ability of the universities to adapt and respond to the.
changing demands of industry and the rest of society, and so on.
These are global needs vital to our nation that the federal government
must address, along with our universities, our State and local
governments and industry.
This is why so many say that federal funding of basic research
is an investment. The government is not buying packages of research
results; it is investing in. the long term strength of the research
and education enterprise.
So, what does this mean when we discuss the condition of
infrastructure in our universities? We all agree that there are
deficiencies. But the central question, I hope I have now
explained, is not so much what to do about the present condition
of the university research infrastructure. The real question
is more fundamental: Is the partnership among industry,
government, and the universities functioning in a manner which
ensures that the U.S. will maintain a healthy, modern research
infrastructure?
PAGENO="0018"
12
I think mostof us would agree that, given its present
condition,. and in spite of the strengthened commitment to the
basic research enterpise which Chairman Fuqua and the Committee
on Science and Technology, and many others in Congress have shown
in the last several years, the partnership may not be adequate to the
task. Although there has been a 30% real growth in basic research
funding since 1981 and a 23% real growth in university basic
research funding since 1980, there has been little emphasis on
infrastructure. In fact, none of the three partners have fully
addressed this issue in the last decade or more, although we have
in the last few years begun to see some significant improvement.
After Sputnik, the government began a whole series of programs
of investment in new facilties and equipment. Our research capacity
in this nation expanded rapidly, and the system produced much of
the talent and new knowledge upon which today's technological
revolution is based.
But in the early l970s, these investments were discontinued.
Construction stopped. By the late l970s, the universities warned
that unless the government came up with new facilities funding, the
research infrastructure was in trouble. Industry was making some
contributions, but those were small compared to the benefits they
derived from the talent and new knowledge produced by the
universities. The universities themselves behaved largely as
dependents of the government, abdicating their responsibility
for infrastructure and biding their time until federal facilities
PAGENO="0019"
13
programs were resumed. And the government, not fully acknowledging
its responsibility for the long term health of the system, attempted
not to invest in the research enterprise, but to procure packets of
research results at the lowest possible price. Facilities use
allowance reimbursements, for example, are based on an average
useful life of 50 years for a university laboratory. The actual
average useful life of a modern laboratory is probably about
20-25 years, as it is for industrial laboratories. As for research
equipment, in addition to having unrealistically long amortization
periods--15 years, in contrast to the actual 6 to 8--the government
also micromanages the purchase of new equipment. Although financial
accountability is an integral part of good federal management, the
level of detail required by 0MB Circular A-lb in documenting the
need for any `-~ece of equipment costing more than $5,000 is an
unnecessary burden. The government also requires inventories of
all research equipment owned by an institution, presumably to serve
as a basis on which to compare the A-lb screening documents.
Well, what should we do? Simply creating a new multi-
billion dollar facilities program may, over the near term, improve
the condition of infrastructure, but it won't restore teamwork to
the partnership. it is equally important that change take place in
the attitudes and performance of each of the three partners.
The government must focus on our research expenditures as
investir~ in the research enterprise and not procuring research
results. This means bearing the reasonable and necessary costs of
PAGENO="0020"
14
the research it sponsors. But it means more than that. As I
indicated earlier, the federal government shares the responsibility
along with the universities to respond and adapt to the changing
demands of society. As regards infrastructure specifically, I
would say bringing amortization periods for both facilities and
equipment into line with those for industry would be a wise and
appropriate change. In addition, much of the federal paperwork and
management associated with university research should be reevaluated
and eliminated if inappropriate or unnecessarily burdensome.
Accordingly, however, the universities must assume a far more
significant and responsible role in managing the nation's investment
in university research. The government-university relationship
should be a mutually reinforcing, mutually beneficial, equal partner-
ship. I would like, for example, to see a system in which the
universities would be reimbursed realistically for facilities and
equipment used in federally sponsored research and for the universities
tr take a leadership role in identifying cost savings asso ia~c~d
.,~hresearch overhead.
As for industry, a direct involvement by industry in the
university reearch process offers significant benefits to both.
Direct contributions of state-of-the-art research equipment,
and industry-university cooperation in its use and maintenance,
is one remedy for many weaknesses in the partnership. Unrestricted
donations, as well as donations toward renovation or new construction
of facilities, should also be encouraged.
PAGENO="0021"
15
I would anticipate that some of this will cost money. But
we must ask ourselves, can our nation remain competitive in this
fast-changing age if we're not training the very best talent we
can? An increased federal commitment to university research is
indeed an investment--an investment that we probably can't get
along without. Because only the universities train and educate
the talent that is so central to our continued world leadership
in both science and technology, university research is the highest
priority in the civilian R&D effort. Yet, of the more than $20
billion we spend on civilian R&D, about $6 billion is invested in
university research. This balance may be inappropriate to today's
circumstances. Since the budget deficit forces us to select from
among competing priorities, I would suggest that we continue what
we all began several years ago, and redirect civilian R&D funds
from lower priority areas, particularly technology development
projects,
to the highest priority, university based basic research. This
would permit us to be both fiscally responsible and attentive
to the need for investment in the future growth, prosperity, and
leadership of our nation.
I would now be pleased to answer any questions you might
have.
PAGENO="0022"
16
DISCUSSION
Mr. FUQUA. Thank you very much, Dr. Healy.
That was a very constructive statement, I might add.
Dr. Keyworth has testified before the committee before and dis-
cussed in generalities this same issue. The question that I guess
comes to my mind is the fact that we are talking about doubling
the universities' capacity to produce new Ph.D.'s or even tripling it
maybe, by the year 2010 to meet the demands that have been fore-
cast that would be required.
Now, what I am concerned about is are we just trying to meet
the current demands and not factoring in that increased number
that we are going to need? Do you have any opinion about that?
Dr. HEALY. I think I--
Mr. FUQUA~ I hope I am making myself clear.
Dr. HEALY. Yes, you are, and I quite agree with your concern,
and the White House Science Council Panel has been trying to
stress the fact that the issue is not whether facilities are adequate
or whether the equipment today is adequate, but what about the
long-term future? Are we strategically planning? I think this is
clearly an issue of broadest and pressing concern. I think the com-
mittee such as yours and the White House Science Panel are the
kinds that should be addressing these issues. I think industry and
the universities now are worried about their budgets and their
planning for the next 3 months and the next year.
Mr. FUQUA. You would be a hero about your comments about
Circular 110.
Dr. HEALY. Heroine.
Mr. FUQUA. Can we expect that to be implemented any time
soon?
Dr. HEALY. Any time soon? Depends how you define soon. As you
know, things don't work with real swiftness sometimes.
Mr. FUQUA. You also mentioned in your statement about the
changing of the amortization schedules and so forth. I think it
would be an excellent idea. However, that is more in the long-
range and really doesn't address the short-range situation where
we are approaching 20 years in some of those that were built in the
late 1950's and early 1960's when those programs were then in use,
plus the equipment associated with that, too. You also state that
the universities themselves behave largely as dependents of the
Government, abdicating their responsibilities and biding their time
until a Federal program on facilities is resumed. Is there anything
that can be done to change the attitude on the part of the universi-
ties?
Dr. HEALY. I think there have been signs of change. I think that
was prevalent in the 1970's when people expected big construction
grants to be resumed that we saw in the 1960's. I think that most
of our major research universities have recognized that they
cannot afford to wait for what might come along. I think there
are-we are seeing substantial movement and more creative ap-
proaches as you have suggested in floating bond issues to renew in-
frastructure.
But I think that the problem is so large that in all likelihood the
universities, when they are doing a substantial amount of federally
sponsored research, particularly, cannot handle it alone. I think
the Government has to be a partner in it.
PAGENO="0023"
17
To this extent, the universities that have taken the lead in start-
ing to renew their infrastructure and come up with more creative
approaches to the problem are not functioning as dependents. I
think it is important that they truly be part of that investment
partnership with the Federal Government as part of it.
Also, the State governments-I think we are seeing a very excit-
ing motion on the part of State and local governments to become
part of this effort both with industry and with universities.
Mr. FUQUA. Thank you.
Mr. BROWN.
Mr. BROWN. Thank you, Mr. Chairman.
Dr. Healy, I have been looking both at your testimony and at the
text of the National Science Engineering and Technology Policy
Priorities Act which this committee spawned several years ago, and
I am wondering if there are any defects in language of this act
which may have led to development of some of these critical prob-
lems, such as the infrastructure problem, and while I must confess
to some pride of authorship as far as this committee is concerned
in the act-I have a tendency perhaps to gloss over its deficien-
cies-nevertheless, it seems to me this act clearly places on the
Office of Science and Technology Policy the responsibility for ascer-
taining, in a long-range way, the development of problems of this
sort, and recommending to the President and to Congress strategies
for dealing with it. I sense that this problem has crept up on us
without being faced up to realistically, and yet I don't see from the
standpoint of what the Congress could have done, any way to
better anticipate than to lay out the responsibilities as we have in
this act.
Can you discuss with me why broad problems of this sort can de-
velop without receiving adequate attention and sometimes narrow-
er problems? To give you an example of a narrower problem, I was
reading in the last couple days-I think it was the Scientific Ameri-
can magazine article-lamenting the lack of support for basic re-
search in mathematics, a fundamentally important field to us, and
if this is true, that for 10 years we have been neglecting this, it is a
problem that requires some action. Why are we not getting a sur-
facing of these problems in a more timely fashion and recommen-
dations for solution to them?
Dr. HEALY. Well, I think that perhaps right now we are. You can
argue why has it taken us so long, but I think that one of the
things that makes me extremely optimistic is that I think the prob-
lems of our research universities, the essentiality of our research
universities to the Nation as a whole, is being perceived in a bipar-
tisan fashion and is clearly perceived by the Congress and is per-
ceived by the administration.
I don't think it is a coincidence that, really totally independent-
ly, your committee has addressed this issue and the White House
Science Office has taken this on. I think that you may be nudging
me a bit and suggesting we may have done it a little sooner over at
OSTP, but we did start this about a year ago and I think that both
your-the congressional efforts and efforts of the administration
are trying to remedy perhaps this past fault which is not thinking
enough strategically, thinking in terms of procuring packets of re-
search or putting out immediate fires, or dealing with problems in
PAGENO="0024"
18
the next few months, rather than saying: "Is this of substantial in-
vestment that we must nurture, can we get along with boom and
bust approaches to investment, does this require a commitment?"
I think one of the fundamental problems in all our investment in
science, as well as in universities, is the perception that because we
renegotiate the budget every year and go through the hassles of
the budget process, we are somehow renegotiating the commitment
to invest in our scientific enterprise. The nature of the scientific
enterprise is one that you cannot for a moment question the impor-
tance of that investment. It is not an entitlement program. It is not
a subsidy program that can be subject to cancellation or severence;
it is the essence of our productivity and our future.
I sense, and I suspect you do as well, that at this point in time,
people are aware of that perhaps as never before. The problems
have been developing a long time. I don't see that they will be
solved overnight, but I think there is a bipartisan and rather wide-
spread and rather vocal commitment to the fact that things must
change.
Mr. BROWN. Well, I obviously pick on the administration or any
agency of it that I can from time to time, and one of the things
that I pick on in OSTP is that rarely do they seem to have read the
act. There is, for example, within this act the emphasis upon the
importance of supporting high quality basic research which this ad-
ministration has to be commended for encouraging. On the other
hand, there is also the emphasis upon the Five-Year Outlook, and
annual reports of developing problems in science which I cannot
commend this administration for doing much about and in fact,
they seem to have shorted it considerably over the period of years.
Now, I think that is the appropriate role for us in Congress to
point out where you are doing things right and where you are not
doing things right, and I hope that we can continue that, but spe-
cifically I see nothing that represents a timely response to the ad'
monitions contained here to maintain a continuing surveillance
over all of the aspects that relate to the health of science in this
country, and I question whether possibly your office has the re-
sources to accomplish this.
As far as this committee is concerned, I think we would like to
give you those resources but we get very little encouragement in
trying to do that.
Dr. HEALY. Well, I would agree with you, I think that the Office
of Science and Technology Policy, which is a very small policy
office within the EOP, does not have the resources to fulfill the
task outlined in the act, and I think there is no place else within
the executive branch of Government that that is being carried out
in a global way.
Sometimes even within agencies-for example, our wonderful
NIH-you don't even have a global strategic look at the overall $5
billion investment there. It tends to be separated up into individual
institutes. So I think that the importance of strategic 5-year looks
at our overall research enterprise, both within very broad categori-
cal areas and also across the Government in general when we are
investing $50 billion in research, is important.
I would agree with you. It must be done better than it is being
done. As you know, the President's Commission on Industrial Com-
PAGENO="0025"
19
petitiveness recommended that there be a Department of Science.
And I really believe-and as you know Dr. Keyworth in the Office
has supported that-and I believe that that was not a self-serving
support, but rather a recognition of the fact that when you have
something which is so essential to the fabric of our Nation, it af-
fects all walks of life, all people, and that you don't have a coordi-
nated opportunity within the administration to look at science in
its broadest pespective, to bring it to the table, to examine it in a
strategic way, that there is a problem. It needs to be remedied. I
think the support for the Department of Science and Technology
was not a bureaucratic escalation. It really was an attempt in part
to respond to the very spirit of that act you are speaking about.
Mr. BROWN. I sensed that that was the case, and I commend the
results of that work. I note also looking at broad approaches to
some of the problems in science that face us, that the National
Academy has recently done a study of international competitive-
ness of some of our basic industries. I would suspect that that was
an unaccustomed task for the Academy because they had to look at
a wide range of nonscientific problems that relate and couple that
with the science and technology problems in order to reach a con-
clusion. But they did and they emerged with some rather good re-
sults in my opinion. If the Academy can go through that strain, I
don't see why the Office of the President cannot go through that
strain and tie together some of these pressing national problems
and this is the language, the authority is contained in the language
of the act.
There is no question about that. But there is reluctance in any
administration-I am not ,iust picking on this one-to carry out
functions which they don t quite perceive, they don't quite-it
doesn't quite fit into their priority scheme for meeting the needs of
the country. We suffer as a consequence of that.
Dr. HEALY. Well, believe it or not, I read that act in great detail
and I think that it should be taken seriously and often the advice
of acts like that need to be accompanied by a check.
Mr. BROWN. We sometimes find that Science Advisors are not
willing to admit that until after they have left office, however.
Dr. HEALY. I hope that is not a premonition.
Mr. BROWN. Thank you.
Mr. FUQUA. Thank you.
Mr. Lujan.
Mr. LUJAN. Thank you, Mr. Chairman.
I think my colleague from California missed the last point that it
ought to be accompanied by a check. He didn't comment on that.
I think you have made an excellent presentation, which you
made very well, to show the relationship between industry, univer-
sities and the Government and what each of our responsibilities
are. There is an emphasis as there should be in this particular
earing on university research. And with that emphasis, and
oming from the office that you do-Dr. Keyworth maybe right at
he very beginning, as a matter of fact, got into trouble with some
f his colleagues at the Government laboratories by saying more of
his should be done over at the university level rather than the
overnment laboratories-at least that is what I understood at the
ime, being a great advocate of the laboratories since they exist in
PAGENO="0026"
20
my home district. But is it the feeling of OSTP that we don't do
enough in university research? You mentioned $6 billion of the $20
billion in civilian research, that only that amount goes to universi-
ties. You don't think that is enough?
Dr. HEALY. Well, I think that I don't have the means to answer
that question, but I think that question needs to be asked and I
think that is a fundamental and quite strategic question that needs
to be asked.
Is it roughly $16 billion being spent in our Federal laboratory
systems?
Mr. LUJAN. If you take defense it is 40.
Dr. HEALY. It is more, yes. One question is not necessarily to dis-
mantle our Federal laboratory systems, which are superb, but
rather to ask whether there could be better use of those facilities
by some of our private research universities, more operation with
the Federal laboratories and industry.
As you know, Mr. David Packard chaired the Federal laboratory
study which OSTP completed over a year ago with a strong recom-
mendation that there be more use of the Federal laboratories by
the private sector, both the universities and the industries. That
isn't as far along as~ it should be perhaps.
Mr. LUJAN. But basically I keep getting the feeling that OSTP
feels that we have to beef up that university research rather than
just continue it as it was. The reason I ask that question--
Dr. HEALY. Yes.
Mr. LUJAN [continuing]. What this whole thing is about is what
should our science policy be and should that policy be that a larger
percentage of the R&D budget go to the universities? That is a very
crucial question we will have to address in the report.
Dr. HEALY. I would say that it is fair to say that the general feel-
ing is that the university-based research should be the No. 1 priori-
ty; that the very unique system of doing so much of our first class
basic research out in a diverse and complicated system of private
universities, the diversity of that system is such an important part
of its creativity. And I think that it is the feeling of the Office and
of the Panel that that should be the No. 1 priority, and that that
again may mean that $6 billion is not enough.
But I cannot say, and I don't think the Panel is going to say, x
billion is what we need. I think that that question has to be asked
and I think that the answer is likely to be this is not a zero sum
game.
Mr. LUJAN. I am just wondering, as an aside, if OSTP does differ-
ent kinds of studies? And what leads me to that question is one of
the witnesses the other day had a chart of postgraduate students in
this country and showed how many were U.S. nationals and how
many were nationals of other countries, and probably paid for by
their governments to go to school. And I remember the bottom line
which was engineers, that only something less than 50 percent of
postgraduate engineering students were U.S. nationals, and I had
never thought about it until just now, but I am wondering if those
do enroll in universities that are well funded or that we have good
research programs with? Is OSTP in a position to do that kind of
study?
PAGENO="0027"
21
Dr. HEALY. We, as part of the University Panel, were looking at
the foreign students that were coming into the research universi-
ties here and interestingly, the consensus of the Panel, and also of
a questionnaire in which we solicited opinion from the outside com-
munity and in hearings we held in general, was that the foreign
students at research universities are a very positive force.
Mr. LUJAN. Do they take up the room or just--
Dr. HEALY. We tend to get the very best and that in fact is a
positive, net positive for the intellectual environment of our uni-
versities. There was really no sense, and frankly this surprised me,
because in the field of medicine which is my background, some-
what different, there was not the sense that they were taking posi-
tions away from American students.
Mr. LUJAN. There was room over and above what we required?
Dr. HEALY. There was more than just room, there was a need.
They were not producing enough in some of these areas on our
own, among our own, and we needed to have some of this talent.
Mr. LUJAN. That is interesting.
Thank you very much.
Mr. FUQUA. Thank you very much, Dr. Healy. We appreciate
your being here and for your remarks this morning.
Our next witness will be Henry G. Kirschenmann, Deputy Assist-
ant Secretary for Procurement, Assistance, and Logistics at the De-
partment of Health and Human Services.
We would be pleased to hear from you.
[A biographical sketch of Mr. Kirschenmann follows:]
HENRY G. K!RSCHENMANN, JR.
Henry G. Kirschenmann, Jr. is the Deputy Assistant Secretary for Procurement,
Assistance and Logistics in the Department of Health and Human Services. As such
he is one of the Department's chief career officials and advisors to the Office of the
Secretary in the grant and procurement area. He is also responsible for developing
audit resolution policy and overseeing the process within the Department.
Prior to being appointed to his current position, Mr. Kirschenmann served in var-
ious financial management positions in the Department and at the National Insti-
tutes of Health. He was involved in developing and implementing cost policy and
other financial management policy for colleges and universities and other non-profit
organizations, State and local governments and hospitals which receive grants and
contracts from the Department. He was also involved in establishing indirect cost
rates. Mr. Kirschenmann has served with the Defense Contract Audit Agency, was a
staff member of the national accounting firm of Price Waterhouse and Company,
and has held various positions in industry.
He holds a Bachelor's Degree from the University of Maryland, a Master's Degree
from The American University and is a certified public accountant. He is the recipi-
ent of Senior Executive Performance Awards, the Department of Health, and
Human Service's Superior Service Award, and two achievement awards and the
President's Citation from the Association of Government Accountants.
STATEMENT OF HENRY G. KIRSCHENMANN, JR., DEPUTY ASSIST-
ANT SECRETARY, PROCUREMENT, ASSISTANCE AND LOGISTICS,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. KIRSCHENMANN. Thank you, Mr. Chairman. It is a pleasure
to be here.
I and my Department are pleased to assist the task force in its
tudy of Government science policy by providing information on
ayments for indirect costs to colleges and universities. As we un-
erstand it, the task force is interested in knowing the amounts of
PAGENO="0028"
22
indirect costs paid to the institutions as part of the total costs of
research grants and contracts, as well as the extent to which these
payments support the research infrastructure of the institutions.
We have endeavored to meet the task force's request and have
developed a substantial amount of information on this subject
which we believe you will find useful. The information, in the form
of a series of charts and graphs, is attached to my statement. I
note, however, that the amounts and percentages on indirect costs
shown in the charts are approximations based on an analysis of
available information on total Federal R&D obligations to colleges
and universities, NIH indirect cost payments, and components of
indirect cost rates, supplemented by detailed information on cer-
tain indirect cost subcomponents provided by 50 major research
universities.
In order to put this information in perspective, some background
on indirect costs might be useful. Indirect costs are the costs of ad-
ministrative and supporting services which cannot be readily iden-
tified with specific research projects, instructional programs, or
other university activities. They are therefore grouped in a series
of cost pools and allocated between research and other activities
based on cost allocation procedures.
The portion of indirect costs allocated to research is then further
* distributed to individual research projects by an indirect cost rate,
which is expressed as a percentage of direct research costs. The in-
stitutions negotiate these rates annually with a "cognizant" Feder-
al agency. HHS is the cognizant agency for about 95 percent of the
colleges and universities receiving Federal research, although some
of the major institutions, such as MIT and Stanford, negotiate their
rates with the Department of Defense.
Universities generally have six principal components of indirect
costs:
One, use allowances or depreciation on buildings and equipment.
Use allowances are essentially a simplified form of depreciation;
Two, operation and maintenance of facilities, which covers such
costs as utilities, janitorial services, repairs and maintenance, and
similar expenses;
Three, general administration, encompassing the institution's ex-
ecutive offices, administrative services, such as accounting and pur-
chasing, and other costs of a general nature;
Four, departmental administration, consisting of the expenses of
deans' offices and administrative expenses at the academic depart-
ment level;
Five, sponsored projects administration, which are specialized
services related to the management of sponsored research and
training, such as review of grant applications and monitoring grant
terms and conditions;
Six, the costs of institutional libraries, including the salaries of
library staff and books and periodicals.
With that as background, I would now like to turn to the specific
information requested by the task force, as detailed in the attached
charts:
Total Federal R&D obligations to colleges and universities have
gone from $1.9 billion in fiscal year 1972 to over $5 billion in fiscal
PAGENO="0029"
23
year 1983, an increase of about 160 percent. Specific year-by-year
information is shown in graph and chart 1.
GRAPH 1
TOTAL FEDERAL R & 0 OBLIGATIONS
TO COLLEGES AND UNIVERSITIES
`I)
z
0
*
5-~
4.-~
77Z~
7;~
~/
7~7
4444~~4
1*
0~
7 (~ff //
6~i~ 79 ~o ~i a
FlSC~4L. YEAR
,
I
/7/,
PAGENO="0030"
24
CHART 1
TOTAL FEDERAL R & D OBLIGATIONS
TO COLLEGES AND UNIVERSITIES
IN MILLIONS OF DOLLARS)
AUARD I NG AGENCY
TOTAL HHS DOD NSF OTHERS
72 1,853 879 244 335 307
73 1,871 904 233 349 386
74 2,085 1,129 184 376 396
75 2,246 1,205 191 405 446
76 2,431 1,296 212 437 486
77 2,803 1,452 267 491 593
78 3,386 1,658 452 532 744
79 3,874 1,967 529 588 791
80 4,160 2,026 556 634 945
81 4,411 2,113 700 617 981
82 4,553 2,111 814 690 939
83 5,022 2,360 913 759 989
84 DATA NOT YET AVAILABLE FROM NSF
SOURCE: TABLE 8-2 -- FEDERAL OBLIGATIONS TO UNIVERSITIES
AND COLLEGES IN NSF'S PUBLICATION ~FEDERAL
SUPPORT TO UNIVERSITIES, COLLEGES AND
SELECTED NONPROFIT INSTITUTIONS'.
As shown in graph and chart 2, during the same 1972 to 1983
period, total estimated indirect cost payments by all Federal agen-
cies have increased by 275 percent, from about $400 million to $1.5
billion. At NIH, indirect costs are now running about 32 percent of
total university research grant costs, up from 22 percent in 1972.
This disproportionate growth in indirect costs, in comparison with
direct costs, has been a concern to sponsoring agencies and the re-
search community for some time, and is currently being reviewed
by the White House Office of Science Technology Policy.
PAGENO="0031"
(1) ______________________
z
0 _______________________
APPROXIMATE AMOUNT PAiD TO COLLEGES AND UNIVERSITIES
FOR INDIRECT COSTS UNDER R & D AWARDS
BY ALL FEDERAL AGENCIES
(IN MILLIONS OF DOLLARS)
72 393
73 419
74 491
75 562
76 624
77 720
78 885
79 1,039
80 1,050
81 1,247
82 1,310
83 1,480
1~ 706
11,925
25
GRAPH 2
APPROXIMATE AMOUNT PAID TO COLLEGES AND UNIVERSITIES
FOR INDIRECT COSTS UNDER P & D AUARDS
BY ALL FEDERAL AGENCIES
1.6
1.7
1.6
1.5
1.3
1.2
1.1
0.9
0.8
0.7
n~.
`-~
,`.~
~`
`I
~i
/~,
7-~
~-
,,,
,~
7~
"1
z
`*i
.
r7~/
1771 Vi
`i
`i
`i
"~
`i
`i
0
0
0
/A VI,' V~A r,.
Y
I
2'
`1
`1
`2'
7
2'
"A VA VA Vi
/`~
`i
0
`,
`i
"i
0
0
0
.
.`
.
r
,`
r
r
._,A A A~
-~
-~
-~
-!=
-~
-~
-~
-~
(*~
7'
I,
,~
`1
~,
(i
z
7
fj
~~1
z
u.~.
/J
V
0
6
`7
0
".4.
0.3
ni,.
r77~-i,JI 11-,
2'~
V
/1
V
. L~JI 1.T.~1 V~~'
6
6
`C-,
`i-,
&~
0.1
0
A~
~1L
`C-i
~,`
`.~
~`
~-,4
£-~L
72 73 74 75 76 77 78
79
80 81 82 83 84
FiSC~óL YEAR
CHART 2
84
TOTAL
PAGENO="0032"
26
Based on an analysis of fiscal year 1982 through 1984 indirect
cost~ rates negotiated by HHS, the largest component of indirect
costs is departmental administration, which averages one-third of
the rate. Operation and maintenance of facilities is next at 28 per-
cent, followed by general administration at 15 percent. Use allow~
ances on buildings and equipment is currently running between 9
percent and 10 percent of the rate; sponsored projects administra-
tion is 7 percent; and library is 4 percent. What that translates to
is administrative cost equalling about 55 percent of the rate as op-
posed to such things as use charges and operation and maintenance
facilities cost.
CHART 3
AVERAGE PERCENT OF EACH COST COMPONENT TO THE TOTAL INDIRECT COST RATE
FOR MAJOR RESEARCH UNIVERSITIES NEGOTIATED BY HHS
COST COMPONENTS 1982 1983 1984
USE ALLOWANCES/DEPRECIATION
ON BUILDINGS & EQUIPMENT 97. 97. lox
OPERATION AND MAINTENANCE
OF PHYSICAL PLANT 277. 28% 287.
GENERAL ADMINISTRATION 177. 157. 157.
DEPARTMENTAL ADMINISTRATION
(INCLUDING DEANS' OFFICES) 32% 337. 337.
SPONSORED PROJECTS ADMINISTRATION 77. 77. 77.
LIBRARY 57. 47. 47.
STUDENT SERVICES 17. ox ox
OTHER 27. 37. 3%
TOTAL RATE 1007. 1007. 1007.
The rest is in minor items, such as a small portion of student
service costs associated with students working on research projects.
As indicated in chart 3, these percentages have held reasonably
steady for the 3-year period. Chart 4 shows the rate components ex-
pressed as a percentage of direct research costs.
PAGENO="0033"
27
CHART 4
AVERAGE INDIRECT COST RATE COMPONENTS
FOR MAJOR RESEARCH UNIVERSITIES NEGOTIATED BY HHS
COST COMPONENTS 1982 1983 1984
USE ALLOUANCES/DEPREC I AT I ON
ON BUILDINGS & EQUIPMENT 4.2 4.3 4.5
OPERATION AND MAI-N'rENANCE
OF PHYSICAL PLANT 12.0 12.8 13.3
GENERAL ADMINISTRATION 7.4 7.1 7.3
DEPARTMENTAL ADMINISTRATION
(INCLUDING DEANS' OFFICES) 14.2 15.2 15.4
SPONSORED PROJECTS ADMINISTRATION 3.3 3.2 3.1
LIBRARY 2.1 2.0 2.0
STUDENT SERVICES 0.6 0.2 04
OTHER 1.0 1.2 1.4
TOTAL RATE 44.7 46.0 47.1
RATES ARE EXPRESSED AS A PERCENTAGE OF TOTAL DIRECT COST
OF ORGANIZED RESEARCH EXCLUDING CAPITAL EXPENDITURES, MAJOR
SU9CONTRACTS AND OTHER DISTORTING ITEMS.
Chart 5 shows the approximate dollar amount paid to the institu-
tions for each indirect cost component from fiscal year 1982 to
1984. The total amount paid during this period was about $4.5 bil-
lion, broken down in round numbers as follows:
Use allowances, $400 million; operation and maintenance, $1.2
billion; general administration, $700 million; departmental admin-
istration, $1.5 billion; sponsored projects administration, $300 mil-
lion; library, $200 million; other, $150 million.
53.277 0 - 86 - 2
PAGENO="0034"
CHART 5
APPROXIMATE AMOUNT PAID TO UNIVERSITIES
FOR INDIRECT COST COMPONENTS
BY ALL FEDERAL AGENCIES
(IN MILLIONS OF DOLLARS)
---3 YEAR---
COST COMPONENTS 1982 1983 1984 TOTALS RATIO
USE ALLOUANCES/OEPRECIATION
ON BUILDINGS & EQUIPMENT 123 138 163 424 97.
OPERATION AND MAINTENANCE
OF PHYSICAL PLANT 351 412 482 1245 287.
GENERAL ADMINISTRATION 216 228 264 709 167.
DEPARTMENTAL ADM IN I STRAT ION
(INCLUDING DEANS' OFFICES) 415 489 558 1462 337.
SPONSORED PROJECTS ADMINISTRATION 97 103 112 312 77.
LIBRARY 62 64 72 198 47.
STUDENT SERVICES 18 6 4 28 17.
OTHER 29 39 51 .119 37.
TOTALS 1310 1480 1706 4496 1007.
PAGENO="0035"
29
Charts 6, 7, and 8 take this indirect cost component analysis one
step further, to more detailed breakouts of each indirect cost com-
ponent into various subcomponents which we thought might be of
interest to the task force. These are very rough approximations
based on estimates provided to us by 50 major research universities
or information on these institutions in our regional negotiation
files.
PAGENO="0036"
COST COMPONENTS
USE ALLOWANCES/DEPREC I AT ION
-BUILD I NGS/ IMPROVEMENTS
-EQUIPMENT
OPERATION AND MAINTENANCE
OF PHYSICAL PLANT
-UT IL I T I ES
-REPAIRS & MAINTENANCE
-CUSTODIAL SERVICES
-SECURITY
-OTHER
GENERAL ADMINISTRATION
-EXECUT I VE MANAGEMENT
-FINANCIAL OPERATIONS
-ADMINISTRATIVE SERVIC1ES
-OTHER
DEPARTMENTAL ADM I NI STRAT ION
-OEANS OFFICES
-DEPT. HEADS & FACULTY ADM.
-SUPPORT STAFF
-OTHER
SPONSORED PROJECTS ADMINISTRATION
-OFFICE OF GRANTS & CONTRACTS
-ACADEMIC DEPT. CHARGES
-OTHER
LIBRARY
-SALARIES & WAGES
-BOOKS 6 PERIODICALS
-OTHER
STUDENT SERVICES
OTHER
TOTAL RATE
12
6,'
5;'
1;'
3,'
3;'
3;'
5,'
6,'
8,'
11;'
7,'
12
6,'
5~4
1;'
4,'
3,'
3,'
4,'
5,'
8,'
11~4
12
6
4,'
3,'
3,' C.'.,
4" c
5,'
8,'
11;'
7;'
7,'
5,'
0;'
2,'
2,'
i ~
1;'
CHART 6
AVERAGE PERCENT OF EACH COST RATE COMPONENT AND SUOCOMPONENT
TO THE TOTAL INDIRECT COST RATE
FOR MAJOR RESEARCH UNIVERSITES NEGOTIATED BY HHS
1982 1983 1984
COMPONENT SUBCOMPONENT COMPONENT SUOCOMPONENT COMPONENT SUBCOMPONENT
9,' - -- -- 9~. 10 -
4,' 4,' 4,'
5,' 6,'
15;'
33;'
2?,'
28
28
j7,'
15
327~
33,'
5_4
0
2
2
1;'
2
4,'
5,'
04
2,'
2,'
i;'
1,'
.
1;'
0;'
0,'
2
3,'
3,'
100;'
lao;'
100,'
PAGENO="0037"
COST COMPONENTS
USE ALLOWANCES/DEPREC IAT I ON
-AU I LO I NGS/ I MPROVEMENTS
-EQUIPMENT
OPERATION AND MRINTENAI4CE
OF PHYSICAL PLANT
-UT IL I TIES
-REPAIRS 6 MAINTENANCE
-CUSTODIAL SERVICES
-SECUR I TY
-OTHER
GENERAL ADMINISTRATION
-EXECUT I VE MANAGEMENT
-FINANCIAL OPERATIONS
-ADMINISTRATIVE SERVICES
-OTHER
DEPARTMENTAL ADM IN ISTRAT ION
-DEANS' OFFICES
-DEPT. HEADS & FACULTY ADM.
-SUPPORT STAFF
-OTHER
SPONSORED PROJECTS ADMINISTRATION
-OFFICE OF GRANTS & CONTRACTS
-ACADEMIC DEPT. CHARGES
-OTHER
LIBRARY
-SALARIES & UAGES
-BOOKS & PERIODICALS
-OTHER
STUDENT SERVICES
OTHER
TOTAL RATE
1.8
2.4
5.2
2.5
2.3
0.5
1.3
1.5
2.2
2.4
3.5
4.8
3.0
2.9
2.3
0.2
0.8
1984
COMPONENT SUBCOMPONENT
4.5
1.9 1.9
2.4. 2.6
13.3
S.?
2.8
2.5
0.6
1.?
7.3 -
1.3
1.5
2.2
2.4
15.4
3.8
5.3
3.2
3.1
3.1
2.2
0.2
0.?
2.0
1982
COMPONENT SU8COMPONENT
CHART 7
AVERAGE INDIRECT COST RATE COMPONENTS AND SUBCOMPONENTS
FOR MAJOR RESEARCH UNIVERSITES NEGOTIATED BY HHS
1983
COMPONENT SUBCOMPONENT
9.5
2.?
2.4
0.6
1.6
1.3
1.4
2.
2.
3.?
5.2
3.2
3.1
2.2
0.2
0.8
4.2
12.0
7.4
14.2
3.3
2. 1
0.6
1.0
44.?
4.3
12.8
7.1
15.2
3.2
2.0
0.2
1.2
46.0
0.9
0.5
0.6
0.9
0.5
0.6
0.9
0.5
0.6
0.1
1.4
4?. 1
RATES APE EXPRESSED AS A PERCENTAGE OF TOTAL DIRECT COST OF ORGANI2ED RESEARCH
EXCLUDING CAPITAL EXPENDITURES,NAJOR SUOCONTRACTS AND OTHER DISTORTING ITEMS.
PAGENO="0038"
COST COMPONENTS
USE ALLOWANCES/DEPRECIATION
-BUILOINGS/ IMPROVEMENTS
-EQUIPMENT
OPERATION AND MAINTENANCE
-UT ILl TIES
-CUSTODIAL SERVICES
-SECUR$TY
GE~0ERAL AOMINISTRATION
-EXECUTIVE MANAGEMENT
-F INANCIAL OPERAT IONS
-ADMINISTRATIVE SERVICES
DEPARTMENTAL AOMINISTRAT ION
-DEANS OFFICES
-DEPT. HEADS & FACULTY ADA.
-SUPPORT STAFF
SPONSORED PROJECTS ADMINISTRATION
-ACADEMIC DEPT. CHARGES
LIBRARY
-SALARIES 6 WAGES
-BODES & PERIODICALS
STUDENT SERVICES
OTHER
TOTALS
1, 245
402 200
1110
21
264
53
05
13?
190
1)6
114
112
2?
72 31
19
22
530
2119
230
156
120
141
210
229 CAD
359
305
299
312 210
19
190 06
52
20
119
4,496
APPROXIMATE AMOUNT PAID ~D UNIVERSITIES
FOR INDIRECT COST COMPONENTS ANt) SUDCOMPONENTS
BY ALL FEI)EIOTIL AGENCIES
IIN MILLIONS OF DOLLARS)
1902
123
53
70
1903 1904 --3 YEAR TOTALS
COMPONENT SUBCOMPDNENT COMPONENT SUOCOMPONENT COMPONENT SUBCOMPONENT
130 163 424
60 70 103
75 93 241
351
152
412
175
15
44
10
52
216
39
43
64
220
41
46
6?
415
102
409
120
55
100
9?
60
103
72
23
25
62
2?
16
19
64
20
1?
19
IS
--
6
--
4
29
;,;;;
39
1,400
--
St
1,706
1,462
2$
119
4,496
PAGENO="0039"
33
This analysis shows, for example, that of the $424 million paid
for building and equipment use allowances from 1982 to 1984, ap-
proximately $183 million was for buildings and $241 million for
equipment. Similarly, of the $198 million paid for library expenses,
$146 million was attributable to library staff and operating ex-
penses while .$52 million covered books and periodicals.
Depending upon how broadly one defines "research infrastruc-
ture," some or all of these components or subcomponents of indi-
rect costs might be viewed as infrastructure costs. It seems clear
that, as a minimum, the building and equipment use allowance
components would constitute part of the infrastructure. The same
could be said of part or all of the operation and maintenance com-
ponent. The library and other components represent various types
of technical or administrative support, which might also be consid-
ered part of. the infrastructure, depending on the purpose to be
served.
That concludes my prepared statement, Mr. Chairman. I hope
this information proves useful to the task force in its study and
would be glad to respond to any questions the task force may have
about the data.
[The prepared statement of Mr. Kirschenmann follows:]
PAGENO="0040"
34
STATEMENT
BY
HENRY G. KI RS CHENMANN, JR.
DEPUTY ASSISTANT SECRETARY FOR PROCUREMENT, ASSISTANCE AND LOGISTICS
DEPARTMENT OF HEALTH AND HUMAN SERVICES
BEFORE THE
TASK FORCE ON SCIENCE POLICY
COMMITTEE ON SCIENCE AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
TUESDAY, MAY 21, 1985
PAGENO="0041"
35
Mr. Chairnian and Members of the Science Policy Task Force:
We are pleased to be able to assist the Task Force in its study
of Government science policy by providing information on oayments
for indirect costs to colleges and universities. As we
understand it, the Task Force is interested in knowing the
amounts of indirect costs paid to the institutions as part of the
total costs of research grants and contracts as well as the
extent to which these payments support the research
infrastructure of the institutions.
We have endeavored to meet the Task Forces request and have
developed a substantial amount of information on this subject
which we believe you will find useful. The information, in the
form of a series of charts and graphs, is attached to my
statement. I must emphasize, however, that the amounts and
percentages on indirect costs shown in the charts are rough
approximations based on an analysis of available information on
total Federal R & D obligations to colleges and universities, NIH
indirect cost payments, and components of indirect cost rates,
supplemented by detailed information on certain indirect cost
subcomponents provided by 50 major research universities.
PAGENO="0042"
36
ifl order to put this information in oerspective, some background
on indirect costs might be useful, indirect costs are the costs
of administrative and supporting services which cannot be readily
identified with specific research projects, instructional
programs or other university activities. Theyare therefore
grouped in a series of cost pools and allocated between research
and other activities based on cost allocation procedures. The
portion of indirect costs allocated to research is then further
distributed to individual research projects by an indirect cost
rate, which is expressed as a mercentage of direct research
costs. The institutions negotiate these rates annually with a
"cognizant' Federal agency. JUS is the cognizant agency for
about 95% of the colleges and universities receiving Federal
research, although some of the major lnstitutionS, such as JIT
and Stanford, negotiate their rates with the Department of
Defense.
Universities generally have six principal components of indirect
costs:
1. Use Allowances or Depreciation on buildings and
equipment. (Use allowances are essentially a simplified
form of depreciation.)
PAGENO="0043"
37
2. Operation and Maintenance of facilities, which covers
such costs such as utilities, janitorial services,
repairs and maintenance, and similar expenses.
3. General Administration, encompassing the institutions
executive offices, administrative services, such as
accounting and purchasing, and other costs of a general
nature.
4. Departmental Administration, consisting of the expenses
of deans' offices and administrative expenses at the
academic department level.
5. Sponsored Projects Administration, which are specialized
services related to the management of sponsored research
and training, such as review of grant applications and
monitoring grant terms and conditions.
6. The costs of institutional Libraries, including the
salaries of library staff and books and periodicals.
PAGENO="0044"
9
U
With that as background, I would now like to turn to ~he sDecific
information reauested by the Task Force as :~etailed in ~he
attached charts:
o Total Federal R&D obligations to colleges and
universities have gone from $1.9 billion in FY 1972 to
over $5 billion in FY 1983, an increase of about 160%.
Specific year-by-year information is shown in Graph and
Chart 1.
o As shown in Graph and Chart 2, 5uring the same 1972 to
1983 period, total estimated indirect cost payments by
all Federal agencies have increased by 275~, ~rom r~bout
$400 million to $1.5 billion. At WIH, ~ndiroct ~osts ~re
now running about 32~ of total university research grant
costs, up from 22% in 1972. This disproportionate growth
in indirect costs, in comparison with direct costs, has
been a concern to sponsoring agencies and the research
community for some time, and is currently the subject of
a study by the White House Office of Science and
Technology Policy.
o Based on an analyis of FY 1982 through 1984 indirect cost
rates negotiated by HHS, the largest component of
PAGENO="0045"
39
indirect costs is Departmental Administration, which
averages one-third of the rate. Operation and
Maintenance of facilities is next at 28%, followed by
General Administration at 15%. Use Allowances on
buildings and equipment is currently running between 9%
and 10% of the rate; Sponsored Projects Administration is
7%; and Library is 4%. The rest is in minor items, such
as a small pOrtion of student service costs associated
with students working on research projects. As indicated
in Chart 3, these percentages have held reasonably steady
for the three-year period. Chart 4 shows the rate
components expressed as a percentage of direct research
costs.
o Chart 5 shows the approximate dollar amount paid to the
institutions for each indirect cost component from FY
1982 to 1984. The total amount paid during this period
was about $4.5 billion, broken down (in round numbers) as
follows:
-- Use Allowances $400 million
-- Operation & Maintenance $1.2 billion
-- General Administration $700 million
-- Departmental Administration $1.5 billion
-- Sponsored Projects Administration $300 million
-- Library $200 million
-- Other $150 million
PAGENO="0046"
40
o Charts 6, 7 and 8 take this indirect cost comoonent
analysis one step further, to more detailed breakouts of
each indirect cost component into various subcomponents
we thought night be of interest to the Task Force. These
are very rough approximations based on estimates provided
to us by 50 major research universities or information on
these institutions in our regional negotiation files.
This analysis shows, for example, that of the $424
million paid for building and equipment use allowances
from 1982 to 1984, approximately $183 million was for
buildings and $241 million for equipment. Similarly, of
the $198 million paid for library expenses, ~l46 million
was attributable to library staff and operating expenses
while $52 million covered books and ~ericdicals.
Depending on how broadly one defines "research infrastructure",
some or all of these components or subcomponents of indirect
costs might be viewed as "infrastructure" costs. It seems clear
that, as a minimum, the building and equipment use allowance
components would constitute part of the infrastructure. The same
could be said of part or all of the Operation and Maintenance
component. The Library and other components represent various
types of techical or administrative support, which might also be
considered part of the infrastructure, depending on the purpose
to be served.
PAGENO="0047"
41
That concludes my prepared statement Mr. Chairman. I hope this
information proves useful to the Task Force in its study and
would be glad to respond to any questions the Task Force may have
about the data.
PAGENO="0048"
42
0
z
0
*
GRAPH 1
TOTAL FEDERAL R & D OBLIGATIONS
TO COLLEGES AND UNIVERSITIES
4
3
2
.
92~4~
7-
~!=~""
/
I,
-~
-~
-~
0 , * * . . I I
72 73 74 75 76 77 76 79 80 81 82 83
FISCAL. YEAR
PAGENO="0049"
AGENCY-----
NSF OTHERS
335 307
349 386
376 396
405 446
437 486
491 593
532 744
588 791
634 945
617 981
690 939
759 989
FROM NSF~-~-~~
SOURCE: TABLE B-2 -- FEDERAL OBLIGATIONS TO UNIVERSITIES
AND COLLEGES IN NSF'S PUBLICATION UFEDERAL
SUPPORT TO UNIVERSITIES, COLLEGES AND
SELECTED NONPROFIT INSTITUTIONS'.
43
CHART 1
TOTAL FEDERAL R & D OBLIGATIONS
TO COLLEGES AND UNIVERSITIES
IN MILLIONS OF DOLLARS)
TOTAL
HHS
AUARDING
DOD
72
73
1,853
1,871
879
904
244
233
74
2,085
1,129
184
75
2,246
1,205
191
76
2,431
1,296
212
77
2,803
1,452
267
78
3,386
1,658
452
79
3,874
1,967
529
80
4,160
2,026
556
81
4,411
2,113
700
82
4,553
2,111
814
83
5,022
2,360
913
84
DATA NOT YET
AVAILABLE
PAGENO="0050"
44
GRAPH 2
APPROXIMATE AMOUNT PAID TO COLLEGES AND UNIVERSITIES
FOR INDIRECT COSTS UNDER R & D AUARDS
BY ALL FEDERAL AGENCIES
1....
1.7~
~I
Cl)
(j
1.5
1.4
~
::~.
0.5
7_
:::~~ ~
~
r~IE;i
~72 73 74 75 76
77 78 79
FISCM.. YEAR
80 81 82
83 84
PAGENO="0051"
45
CHART 2
APPROXIMATE AMOUNT PAID TO COLLEGES AND UNIVERSITIES
FOR INDIRECT COSTS UNDER R & 0 AUARDS
BY ALL FEDERAL AGENCIES
(IN MILLIONS OF DOLLARS)
72 393
73 419
74 491
75 562.
76 624
77 720
78 885
79 1,039
80 1,050
81 1,247
82 1,310
83 1,480
84 1,706
TOTAL 11,925
PAGENO="0052"
46
CHART 3
AVERAGE PERCENT OF EACH COST COMPONENT TO THE TOTAL INDIRECT COST RATE
FOR MAJOR RESEARCH UNIVERSITIES NEGOTIATED BY HHS
COST COMPONENTS 1982 1983 1984
USE ALLOUANCES/DEPRECIATION
ON BUILDINGS & EQUIPMENT 97. 97. 107.
OPERATION AND MAINTENANCE
OF PHYSICAL PLANT 277. 287. 287.
GENERAL ADMINISTRATION 17X 157. 157.
DEPARTMENTAL ADMINISTRATION
(INCLUDING DEANS' OFFICES) 327. 337. 337~
SPONSORED PROJECTS ADMINISTRATION 7Z 77. 77.
LIBRARY 57. 47. 47.
STUDENT SERVICES 17. 0% 0%
OTHER 2% 37. 3%
TOTAL RATE 1007. 100% 1007.
PAGENO="0053"
47
CHART 4
AVERAGE INDIRECT COST RATE COMPONENTS
FOR MAJOR RESEARCH UNIVERSITIES NEGOTIATED BY HHS
COST COMPONENTS 1982 1983 1984
USE ALLOUANCE5/DEPRECIATION - -
ON BUILDINGS & EQUIPMENT 4.2 4.3 4.5
OPERATION AND MAINTENANCE
OF PHYSICAL PLANT 12.0 12.8 13.3
GENERAL ADMINISTRATION 7.4 7.1 7.3
DEPARTMENTAL ADMINISTRATION
(INCLUDING DEANS' OFFICES) 14.2 15.2 15.4
SPONSORED PROJECTS ADMINISTRATION 3.3 3.2 3.1
LIBRARY 2.1 2.0 2.0
STUDENT SERVICES 0.6 0.2 O..~
OTHER 1.0 1.2 1.4
TOTAL RATE 44.7 46.0 47.1
RATES ARE EXPRESSED AS A PERCENTAGE OF TOTAL DIRECT COST
OF ORGANIZED RESEARCH EXCLUDING CAPITAL EXPENDITURES, MAJOR
SUBCONTRACTS AND OTHER DISTORTING ITEMS.
PAGENO="0054"
CHART 5
APPROXIMATE AMOUNT PAID TO UNIVERSITIES
FOR INDIRECT COST COMPONENTS
BY ALL FEDERAL AGENCIES
(IN MILLIONS OF DOLLARS)
----3 YEAR---
COST COMPONENTS 1982 1983 1984 TOTALS RATIO
USE ALLOUANCES/DEPRECIATION
ON BUILDINGS & EQUIPMENT 123 138 163 424 9%
OPERATION AND MAINTENANCE
OF PHYSICAL PLANT 351 412 482 1245 28%
GENERAL ADMINISTRATION 216 228 264 709 16%
DEPARTMENTAL ADMINISTRATION
(INCLUDING DEANS' OFFICES) 415 489 558 1462 33%
SPONSORED PROJECTS ADMINISTRATION 97 103 112 312 7%
LIBRARY 62 64 72 198 4%
STUDE1~4T SERVICES 18 6 4 28 1%
OTHER 29 39 51 119 37.
-TOTALS 1310 1480 1706 4496 1007.
PAGENO="0055"
COST COMPONENTS
USE ALLOWANCES,DEPREC I AT ION
-BUILD I NGS/ IMPROVEMENTS
-EQUIPMENT
OPERATION AND MAINTENANCE
OF PHYSICAL PLANT
-UTILITIES
-REPAIRS & MAINTENANCE
-CUSTODIAL SERVICES
-SECURITY
-OTHER
GENERAL ADM IN I STRAT ION
-EXECUTIVE MANAGEMENT
-FINANCIAL OPERATIONS
-ADMINISTRATIVE SERVICES
-OTHER
DEPARTMENTAL ADM IN I STRAT ION
-DEANS OFFICES
-DEPT. HEADS & FACULTY ADM.
-SUPPORT STAFF
-OTHER.
SPONSORED PROJECTS ADMINISTRATION
-OFFICE OF GRANTS & CONTRACTS
-ACADEMIC DEPT. CHARGES
-OTHER
LIBRARY
-SALARIES & WAGES
-BOOKS & PERIODICALS
-OTHER
STUDENT SERVICES
OTHER
TOTAL RATE
125
65
55
15
35
35
35
55
65
85
115
75
65
125
65
55
15
45
35
35
45
55
85
115
75
75
55
OX
2X
125
65
45
35
35
45
55
85
115
75
75
55
OX
25
2X
15
15
CHART 6
AVERAGE PERCENT OF EACH COST RATE COMPONENT AND SUOCOMPONENT
TO THE TOTAL INDIRECT COST RATE
FOR MAJOR RESEARCH UNIVERSITES NEGOTIATED BY HHS
1982 1983 1984
COMPONENT SUOCOMPONENT COMPONENT SUBCOMPONENT COMPONENT SUBCOMPONENT
9X 95 105
45 45
55 SX
275 28X 285
175 155 155
325 335 335
75 7~ 75
OX
25
4X 4X
15 OX OX
2S 3X 35
100X bOX
2X
2X
25
15
15
PAGENO="0056"
COST COMPONENTS
USE ALLOUANCES/DEPREC I AT I ON
-AU I LD I NGS/ I MPROVEMENTS
-EQUIPMENT
OPERATION AND MAINTENAnCE
OF PHYSICAL PLANT
-UT I L I T I ES
-REPAIRS & MAINTENANCE
-CUSTODIAL SERVICES
-SECUR I TV
-OTHER
GENERAL ADMINISTRATION
-EXECUT I VE MANAGEMENT
-FINANCIAL OPERATIONS
-AOM IN I STRAT I YE SERV I CES
-OTHER
DEPARTMENTAL ADM IN I STRAT I ON
-OEANS OFFICES
-DEPT. HEADS & FACULTY ADM.
-SUPPORT STAFF
-OTHER
SPONSORED PROJECTS ADMINISTRATION
-OFFICE OF GRANTS 6 CONTRACTS
-ACADEMIC DEPT. CHARGES
-OTHER
LIBRARY
-SALARIES & UAGES
-BOOKS & PERIODICALS
-OTHER
STUDENT SERVICES
OTHER
TOTAL RATE
CHART 7
AVERAGE INDIRECT COST RATE COMPONENTS AND SURCOMPONENTS
FOR MAJOR RESEARCH UNIVERSITES NEGOTIATED BY HHS
1982 1983
COMPONENT SU8COMPONENT COMPONENT SUACOMPONENT
4.2 - 4.3
1.9 1.9
2.4 2.4.
12.0 12.8
5.2 5.5
2.5 2.7
2.3 2.4
0.5 0.6
1.0 1.6
1.3
1.5
2.2
2.4
14.2
4.8
3.0
2.9
2.3
0.2
0.8
0.6
1.0 --
44.7
1984
COMPONENT SUBCOMPONENT
4.5
1.9
2.6
13.3
5.?
2.8
2.5
0.6
1.?
1.3
1.5
2.2
2.4
3.8
5.3
3.2
3. 1
2.2
0.2
0.?
7.4
2. 1
7.1
15.2
3.2
2.0
0.2
1.2
46.0
1.3
1.4
2.
2.
3.?
5.2
3.2
3.1
2.2
0.2
0.8
0.9
0.5
0.6
0.9
0.5
0.6
7.3
15.4
3.1
2.0
0.1
1.4
47.1
0.9
0.5
0.6
RATES ARE EXPRESSED AS A PERCENTAGE OF TOTAL DIRECT COST OF ORGANI2ED RESEARCH
EXCLUDING CAPITAL EXPENDITURES,MAJOR SUACONTRACTS AND OTHER DISTORTING ITEMS.
PAGENO="0057"
COST COMPONENTS
USE ALLOWANCES/DEPRECIATION
-BUILDINGS, IMPROVEMENTS
-EQUIPMENT
OPERATION AND MAINT~NAI9CE
OF PHYSICAL PLANT
-UTILITIES
-REPAIRS & MAINTENANCE
-CUSTODIAL SERVICES
-SECURITY
-OTHER
G~(ERAL ROMINISTRAT ION
-EXECUTIVE MANAGEMENT
-F INANC IAL OPERAT IONS
-ADMINISTRATIVE SERVICES
-OTHER
DEPARTMENTAL ADMINISTRATION
-DEANS' OFFICES
-DEPT. HEADS & FACULTY ADA.
-SUPPORT STAFF
-OTHER
SPONSORED PROjECTS ADMINISTRATION
-OFFICE OF GRANTS & CONTRACTS
-ACADEMIC DEPT. CHARGES
LIBRARY
-SALARIES & UAGES
-BOOKS B PERIODICALS
-OTHER
STUDENT SERVICES
OTHER
TOTALS
1904 --3 YEAR TOTALS--
COMPONENT SUBCOMPONENT COMPONENT SURCOMPONENT
163 424
70 103
93 241
APPROXIMATE AMOUNT PAID ~O UNIVERSITIES
FOR INDIRECT COST COMPONENTS AND SUOCOMPONENTS
BY ALL FEDERAL AGENCIES
(IN MILLIONS OF DOLLARS)
1902 1903
COMPONENT SUBCOMPONENT COMPONENT SUOCOMPONENT
123 130
93 60
70 70
391 412
192 170
73 06
15 10
44 52
216 220
39 41
43 46
70 74
410 409
102 120
142 16?
0? 102
05 100
9? 103
60 72
6 6
23 25
62 64
2? 20
16 1?
19 19
10 -- 6 --
29 -- - ~9 --
1,310 1,400
402 200
21
264 40
93
05
950 13?
190
1,6
112 70
7
27
72 31
.19
4
St
1,245 530
259
230
54
156
700 120
141
210
229
1,462
305
312 210
19
06
52
20 20
119
119
4496
4,496
PAGENO="0058"
52
Notes to Charts
1. Total payments for indirect costs by all Federal agencies in
Chart 2 are estimates based on the amount of indirect costs paid
to universities by NIH each year as a percentage of total NIH
research grant obligations to the institutions for the sane year.
The percentage for each year was applied to total Federal R & D
obligations to universities published by NSF .to arrive at the
approximate amount paid for indirect costs by all Federal
agencies.
2. NSF has not as yet published Government-wide data on R & D
obligations for FY 1984. Consequently, the estimated indirect
cost amount for FY 1984 in Chart 2 is based on the rate of growth
between 1983 and 1984 in NIH research grant obligations applied
to the 1983 Government-wide R & D data published by NSF.
3. Average indirect cost rate components for FY 1982 to 1984 in
Charts 3 and 4 are averages for the approximately 120 largest
research universities that negotiate their indirect cost rates
with HHS. Universities that negotiate their rates with the
Department of Defense are not included. Universities under HHS
negotiation cognizance receive about 80% of total Federal R & D
obligations. The 120 largest schools used to develop the
averages receive over 70% of the total Federal R & D obligations.
4. The approximate dollar amounts paid for each indirect cost
component in Chart 5 were developed by multiplying the percentage
for each of the average rate components in Chart 3 by the
estimated total Government-wide indirect cost payments for FY
1982, 1983 and 1984 in Chart 2.
5. The breakdowns of rate components into subcomponents in
Charts 6, 7, and 8 are very rough approximations based on
estimates provided by 50 large research universities or
information on these institutions in HHS negotiation files.
PAGENO="0059"
53
DISCUSSION
Mr. FUQUA. Thank YOU very much.
This will certainly be very helpful to us in what we are trying to
do.
I understand that rates for each indirect cost category are negoti-
ated separately with each of the universities. Does the Government
verify later as a followup that these sums were in fact expended by
the instiutions for the purposes intended?
Mr. KIRSCHENMANN. Yes, we do, Mr. Chairman. That process
takes place in two steps. We have a force of negotiators throughout
the country that review each of the proposals that are submitted
and those proposals are based on an institution's audited financial
statement for the most part, and a number of institutions are also
subjected to audit on site by our audit agency. So the answer to
your question is yes.
Mr. FUQUA. Well, you were here earlier for the testimony of Dr.
Healy when she was talking about the-making the basis signifi-
cantly shorter for depreciation for buildings, from 50 years down to
a shorter period of time, and also for instruments. How would you
view that?
Mr. KIRSCHENMANN. In my view, that is a policy decision based
upon what it is that one intends these reimbursements to accom-
plish at a university. The current rules are based on the conven-
tional accounting concepts of a going concern which is that an in-
stitution should be. reimbursed for the costs associated with the
conduct of a given project and that assumes certain conventions
such as the base on the useful life of an asset, however that asset-
however long that asset can be kept in service.
One could reimburse this on some basis other than that. I would
point out, however, that the cost principles right now are quite
flexible on what they would permit an institution to do. For the
most part, institutions use a use charge in claiming reimbursement
for facilities. That use charge is 2 percent for buildings which as-
sumes a 50-year life, and about 162/3 percent for equipment-excuse
me, 6% percent for equipment, which assumes a 16 or 17 year life.
The cost principles permit an institution to depreciate those
assets .over its useful life to the institution which would in most
cases be substantially less if they want to. Most institutions do not
now. I hope I have answered your question. That was a wordy re-
sponse.
Mr. FUQUA. Well, in your chart 2 the amount of indirect paid to
universities is about $1.19 billion.
Mr. KIRSCHENMANN. Yes.
Mr. FUQUA. If use charges remain constant at approximately 9 to
10 percent, would we be correct to infer that .in the same time
period just over $1 billion was provided to the universities in build-
ing and equipment use charges?
Mr. KIRSCHENMANN. Yes, sir, that is correct. That equates to
about $100 million a year.
Mr. FUQUA. Do you have any idea how they spent that money?
Did any of it go back to refurbishment of the buildings, replace-
ment of equipment?
PAGENO="0060"
54
Mr. KIRSCHENMANN. We know how they spent the sums reim-
bursed for operation and maintenance, which is repair and janitori-
al services and so on. Those moneys were spent for that purpose.
We don't know how they actually spent the cash that they received
for the amortization, use charges on the building itself. We do
know they spent that money initially and all we are doing is reim-
bursing them for that past expenditure. Whether they actually
took the cash that they received and reinvested that in plant or
they used it for some other purposes, we don't know.
Mr. FUQUA. Or for operating expense?
Mr. KIRSCHENMANN. Or for operating expense, we don't know.
Mr. FTJQUA. Or paying salaries?
Mr. KIRSCHENMANN. That is correct.
Mr. FUQUA. But your followup doesn't reveal that?
Mr. KIRSCHENMANN. No, it doesn't. Itdoesn't.
Mr. FUQUA. Do you think it should?
Mr. KIRSCHENMANN. Well, only if you-under the current con-
cept, no. We really don't care what they use the cash for.
Mr. FUQUA. Yes, OK.
Mr. KIRSCHENMANN. Yes.
Mr. FUQUA. And they have contractual arrangements, too.
Mr. KIRSCHENMANN. Yes; if that is important to the Government
as a policy, we could, yes.
Mr. FUQUA. Mr. Brown.
Mr. BROWN. It seems to. me, Mr. Kirschenmann, that this system
would allow for some alleviation of the problems with the universi-
ties, if it were treated as a tool trying to alleviate the problems. In
other words, if the problem is inadequate equipment and facilities,
then what you have allowed is, indirect cost for use allowance
could be used to amortize new facilities and equipment. If the
amount were large enough to be substantial, it might mean that
you would have to reexamine whether or not the current amount,
which you say is running between 9 and 10 percent, is adequate,
maybe it would take 15 or 20 percent to handle the problems that
are surfacing in these .institutions, which vary from institution to
institution, of course. There is no theoretical reason why that
couldn't be done, and then the increased use allowance could be
used to make the mortgage payments. on the new facilities and
equipment.
Mr. KIRSCHENMANN. There. is no real reason other than the ac-
counting convention, that is correct. One might also develop a
policy. which would reimburse an institution for its mortgage pay-
ment until such time as that facility is paid for and then subse-
quent to that, one might have a policy that no further charge can
be made to the government, there are all--
Mr. BROWN. I am using mortgage in the broad sense. If the insti-
tution had the flexibility both to reimburse they could proceed in
some reasonable basis to acquire the things that they needed and
then to defray some portion of the cost at least out of the user fee
that they received.
Mr. KIRSCHENMANN. Yes, sir.
Mr. BROWN. I don't know that you can answer this question or
not, but you refer to the fact that. a study is being made by the
White House Office of Science and Technology Policy, and I assume
PAGENO="0061"
55
that that study might make some recommendations with regard to
this kind of issue. Is that a correct assumption?
Mr. KIRSCHENMANN. I believe they are looking at alternatives
and may make a recommendation. Dr. Healy would be in better po-
sition to answer than I am.
Mr. BROWN. It is quite obvious that this isn't a static situation in
view of the fact that you have had 50-percent increase in indirect
costs over the last 12 years.
Mr. KIRSCHENMANN. That is correct.
Mr. BROWN. Are you familiar with the increase cost ratios that
are applied by various types of private enterprise to direct labor
costs?
Mr. KIRSCHENMANN. Yes, sir.
Mr. BROWN. For example, an engineering firm that has a con-
tract with the Government to perform a certain task would apply
an indirect cost to their direct labor cost in order to determine
some reasonable figure. Can you give me an idea what kind of
ratios might be customary in those?
Mr. KIRSCHENMANN. Those rates are very, very high compared to
university rates. I think if you take the manufacturing overhead,
and engineering overhead, and G and A, the most large R&D or
manufacturing firms defense industry particularly apply, you are
talking about well over 100 percent. I am not sure that is a fair
comparison.
Mr. BROWN. I am not sure it is either. Some intermediate-that
may set the limit to what a fair comparison would be?
Mr. KIRSCHENMANN. Yes, sir.
Mr. BROWN. And the question, what goals are we trying to
achieve? Now, in a private contract, the firm is going to make sure
that its billings provide the income necessary to keep its equipment
and facilities up to date, I presume.
Mr. KIRSCHENMANN. Yes, I would presume, yes, sir.
Mr. BROWN. So that if we were interested in achieving that for
university research, we might want to have a little more flexibility
in those indirect costs.
Mr. KIRSCHENMANN. Yes, sir, what I don't know, what I can't re-
spond to you right now, is the percentage of that industrial over-
head rate that is applicable to its facilities.
Mr. BROWN. I understand that, part of it would be their profit
margin.
Mr. KIRSCHENMANN. That is also in there, that is right.
Mr. BROWN. And, of course, we don't normally associate that
profit margin with university research.
Mr. KIRSCHENMANN. That is correct.
Mr. BROWN. We are getting a bonus there.
Mr. KIRSCHENMANN. Yes, sir.
Mr. BROWN. That is correct.
Mr. FUQUA. Mr. Lewis.
Mr. LEWIS. Thank you, Mr. Chairman.
I understand that the indirect cost category rates are negotiated
separately with each university. Does the Government come back
and audit in these areas and determine how and where the indirect
funding was expended, or is the university in a position to-uncom-
PAGENO="0062"
56
promising position like some of our defense contractors-deal with
indirect cost?
Mr. KIRSCHENMANN. We do know with reasonable certainty that
where these costs that are being reimbursed are incurred. As I
mentioned to the Chairman, the only area we do not know is
whether the actual cash that is reimbursed to a school for its cap-
ital, amortization use charges and so forth, is actually used to re-
place though. We don't know that, but we do know that all the
other expenditures, all the other claims that they make, this
charge that they make, in the indirect cost proposals are in fact
expended for those purposes, yes, sir.
Mr. LEwIs. Is that done on an annual audit or audit per contrac-
tor?
Mr. KIRSCHENMANN. Well, it is done annually or semiannually
by our negotiations staff in the field, and then there are periodic
audits, onsite audits, by audit agencies of at least a major institu-
tion. That is not done every year, but it is done sufficiently often, I
think, to give us reasonable assurance what the institutions identi-
fied in their proposal actually do spend.
Mr. LEWIS. Is there a possibility that we could see a fixed base
contract, fixed contracts for the institutions that x number of dol-
lars for a particular project that they have the right to spend any-
where they want without an audit?
Mr. KIRSCHENMANN. Well, one could have that policy. I think
what people like myself, from the administrative side that has to
go back in and look at those charges, would like is some definition,
some reasonable definitive statement as to what it is those moneys
are to be expended for and to what extent there would need to be
an accountability for them and, for example, how one computes
that amount. But given those caveats, I think it could be done; yes.
Mr. LEWIS. Do we have a situation where one university or one
group could submit RFP's for particular projects rather than then
go after. a grant after that to make it more competitive?
Mr. KIRSCHENMANN. I am sorry, I didn't understand the ques-
tion.
Mr. LEWIS. I didn't understand it myself. Rather than apply for a
grant, is there some way universities could be more competitive for
research. programs, rather than just apply for a grant?
Mr. KIRSCHENMANN. Well, my sense of the Research Grants Pro-
gram certainly at our department, NIH, is that it is highly com-
petitive. I don't know whether you would get any more competition
by moving into the procurement arena as opposed to the grant
arena. I have sat in on a number of study group evaluations of pro-
posals, and I can tell you they are very stringent evaluations. I
think there is a great deal of competition out there. To answer
your question, I don't think you would increase competition by
going to the procurement arena.
Mr. LEWIS. Do we have a situation where you would have a grant
issued and at the completion of that grant x research has been ac-
complished, but then a followup grant is issued to another organi-
zation or university, and how do you--
Mr. KIRSCHENMANN. For the same project?
Mr. LEWIS. Yes.
PAGENO="0063"
57
Mr. KIRSCHENMANN. I guess that could occur, and I know it
occurs. I am really not the best person to ask that question. You
would be better served by asking somebody in the scientific area. I
do know, for example, that there are instances in which a project,
a principal investigator on a project, changes universities and the
grant would go with that individual because he is key to the con-
duct of it.
Mr. LEWIS. Thank you.
Mr. FUQUA. Thank you very much. We appreciate your being
with us today, and we will also, without objection, make the entire
comments, including the charts, part of the record.
Mr. KIRSCHENMANN. Thank you.
Mr. FUQUA. Next is Dale Corson, Chairman of Government-Uni-
versity-Industry Research Roundtable in the Academy of Sciences.
[A biographical sketch of Dr. Corson follows:]
DR. DALE R. CoRsoN
Dale R. Corson is President Emeritus, and was the eighth president of Cornell
University. He was appointed President by the Board of Trustees on September 5,
1969 after serving since July 1, 1969 as Provost with "full executive and administra-
tive responsibility and authority for the management of Cornell." From July 1, 1977
until June 30, 1979 he served as Chancellor.
Dr. Corson was appointed Provost of Cornell University in 1963 after four years as
Dean of the College of Engineering.
He joined the Cornell faculty as an assistant professor of physics in 1946 and
helped design the Cornell synchrotron housed in the Newman Laboratory of Nucle-
ar Studies. He was appointed associate professor of physics in 1947, became a full
professor in 1952 and was named Chairman of the Department of Physics in 1956,
and Dean of the College of Engineering in 1959.
He is co.author of two books, Electromagnetic Fields and Waves and Electromagne.
tism, and has written numerous papers for physics journals.
Dr. Corson has been a member of the American Council of Education's Board of
Directors and its Commission on Plans and Objectives for Higher Education and the
Panel of International Technical Cooperation and Assistance, a subpanel ofPresi-
dent Lyndon B. Johnson's Science Advisory Committee. He is a former member of
the Executive Committee of the National Association of State Universities and Land
Grant Colleges.
He has also been a member of the National Science Foundation's Panel on Sci.
ence Development Programs and a consultant to the Ford Foundation's Overseas
Development and International Affairs Programs. He has also been a member of the
New York State Commission on Industrial Research and Development and the New
York State Science Advisory Council.
Locally, he is a member of the Board of Directors of the Tompkins County Trust
Company in Ithaca. He also serves as a Director of the International Minerals and
Chemical Corporation and of the Kmart Corporation.
He is a member of the New York Academy of Sciences, the American Association
for the Advancement of Science, and is a fellow of the American Academy of Arts
and Sciences. He is also a member of the National Academy of Engineering.
He is listed in Who's Who in America, American Men and Women of Science,
Leaders in Education and The International Who's Who.
Dr. Corson was President of the Association of Colleges and Universities of the
State of New York (ACUSNY) from 1974-76. ACUSNY includes, as members, most
of the 200 public and private colleges and universities in New York State.
He was Chairman of the Commission on Physicians for the Future, which was es-
tablished in early 1974 by the Josiah M. Macy, Jr. Foundation in response to the
growing controversy relating to an impending physician surplus or shortage in the
United States. From 1979 to 1981 he served as Chairman of the National Research
Council's Committee on Satellite Power Systems; and was a member of the National
Commission on Research. In 1982 he served as Chairman of the Panel on Scientific
Communication and National Security, sponsored by the National Academy of Sci-
ences and the National Academy of Engineering. He currently serves as Chairman
of the International Advisory Panel on Chinese University Development under
World Bank sponsorship.
PAGENO="0064"
58
Dr. Corson was a staff member of the Massachusetts Institute of Technology Ra-
dation Laboratory from 1941-43. He served as a technical advisor in Air Force head-
quarters in Washington from 1943-45 and received an Air Force Commendation for
his achievements during World War II in the introduction of new radar techniques
into military air operations. At the end of the war, he joined the staff of Los Alamos
Scientific Laboratory, assuming primary responsibility for the organization of
Sandia Laboratory, which later became a major engineering facility of the Atomic.
Energy Commission. He received a Presidential Certificate of Merit in 1948 for his
contributions to national defense.
Dr. Corson, a native of Pittsburg, Kansas, received his bachelor of arts degree
from the College of Emporia in 1934, his master of arts degree in physics from the
University of Kansas, 1935, and his Ph.D. in physics from the University of Califor-
nia in 1938. He was associated with the design and construction of the 60-inch cyclo-
tron at the University of California Radiation Laboratory. He is a fellow of the
American Physical Society and a member of Phi Beta Kappa, Tau Beta Pi and
Sigma Xi.
Dr. Corson received an honorary doctor of laws degree from Hamilton College in
1973, similar honorary degrees in 1972 from Columbia University, and from Elmira
College in 1977. In 1970, the College of Emporia awarded him an honorary doctor of
humane letters degree. In 1975 the University of Rochester awarded him an honor-
ary doctor of science degree. He was awarded a distinguished service citation by the
University of Kansas Alumni Association in 1972 and, in 1971, received the Out-
standing Alumnus of the Year Award from the College of Emporia.
Dr. Corson's hobbies include hiking, mountain climbing, canoeing, photography
and sailing.
He is married to the former Nellie E. Griswold and has four children.
STATEMENT OF DR. DALE R. CORSON, PRESIDENT EMERITUS,
CORNELL UNIVERSITY, ITHACA, NY; AND CHAIRMAN, GOVERN-
MENT-UNIVERSITY-INDUSTRY RESEARCH ROUNDTABLE, NA-
TIONAL ACADEMIES OF SCIENCES, WASHINGTON, DC
Dr. CORSON. Mr. Chairman, and members of the task force, my
name is Dale Corson, and I am chairman of the Government-Uni-
versity-Industry Research Roundtable, sponsored by the National
Academies of Sciences and Engineering. I am a physicist by train-
ing, and I am the emeritus president of Cornell University. I am
happy to appear before you today to talk about the infrastructure
for academic research, a topic of great national importance.
To begin with, let me define what I mean by "infrastructure."
Definition: By infrastructure for university-based research, I mean
the people, the facilities, the necessary equipment, including some
very large equipment, the research libraries, and the institutional
arrangements best designed to promote effective, research. These
arrangements extended beyond those between the Federal Govern-
ment and the research universities. They now include the States
and industry.
In discussing these topics, I will be describing a system of nation-
al investment in a research enterprise designed to serve best our
national interest. I emphasize the word "investment."
Another concept that must characterize the research system is
that of partnership.
A concept that I reject is that of procurement in promoting the
research enterprise. Research is too unpredictable and too fragile
to treat in this way.
Finally, I want to keep the concept of excellence squarely before
us.
Let me now discuss the elements ,of the infrastructural system
and let me begin with the people. This is the most important ele-
PAGENO="0065"
59
ment of all. Without qualified people at all levels, nothing else
matters.
I want to emphasize the importance of skilled supporting techni-
cal staff and to state my belief that an adequate flow of such
people may be in jeopardy. At Cornell University, there are five or
six supporting staff for every faculty member. Many of these are
unskilled workers and secretaries. Many others, however, are
skilled technical staff. These include electronic technicians, instru-
ment makers, and an increasing number are super technicians, op-
erating centralized and complex facilities. This latter group is a
growing group of technical workers that we may find in short
supply in the future.
I base my concern on the state of high school science and mathe-
matics teaching, which may also jeopardize the flow of scientists
themselves. No more than 20 percent of high school students are
exposed to physics, and only 50 percent are exposed to as much as
2 years of science of any kind. Only 6 percent of high school stu-
dents take 4 years of mathematics.
How can we interest enough people in science and engineering to
meet our future needs, whether for research scientist or for super-
technician careers, given the state of affairs?
Research instruments and research equipment generally have
reached a state of obsolescence that limits the amount and the
quality of research that is possible in the research universities. In
engineering, this is a factor turning young research people away
from academic careers. The result is an inability of universities to
fill available engineering faculty teaching and research positions.
Academic careers are simply not as attractive as are industrial ca-
reers. It is ironic that the great interest in computers and comput-
er-related technologies has attracted more and more engineering
students at the undergraduate level, but the same technologies are
pulling graduates into attractive jobs after the bachelors degree
and are deflecting them from graduate study which would prepare
them for academic research and teaching careers. In light of this
situation, more than half of the young faculty appointments that
are being made in engineering are foreign nationals.
There~ have been more comprehensive studies of the instrumenta-
tion and equipment shortages than I can give here. I want to stress
that as we learn more and more about the underlying phenomena
in the fields we study, we learn more and more about how to meas-
ure the things we want to measure. Inevitably, these new measur-
ing instruments are large and expensive-very expensive. What we
can do with it, however, is little short of miraculous. Today
progress in many fields is limited by the unavailability of instru-
ments that cost hundreds of thousands of dollars.
As the need for very expensive equipment develops, the shared
use concept is essential. Shared use is one example of the partner-
ship concept that I believe is so important. Other partnerships
must also be developed to magnify the impact of the Federal
agency equipment support programs that we have begun in recent
years. Company-funded instrumentation programs have been im-
portant in selected areas. More directed attention to partnership
with the states in sorting out responsibilities for both research and
53-277 0 - 86 - 3
PAGENO="0066"
60
instructional equipment would be beneficial. Finally, opportunities
for pooling funds and distributing the debt risk should be explored.
In connection with the equipment problem, and related to the
people problem, is the issue of equipment maintenance. The Feder-
al Government, the State governments and the universities must
resolve the issue of cost sharing and provide for adequate support
staff in this area.
Facilities, as typified by research laboratories, represent another
large national need. One must distinguish those cases where new
facilities are absolutely essential to the progress of the science in
question from those where the science can continue to be done in
the old facilities but at the price of less than optimum productivity.
I can put no numbers on the problems. I know of no studies
which have provided adequate data. The total need for new and
renovated facilities is certainly measured in billions of dollars.
To provide facilities, we need a national program, again based on
the partnership concept, that will regularize the facilities appro-
priation process, that will provide for comprehensive merit review
taking into account social and economic factors, as well as scientif-
ic merit, and which will leverage Federal funds to the maximum
degree possible.
As we develop programs to address these facility needs, we must
think about new ways to finance them. Given the magnitude of the
problem, and given the degree to which the national welfare de-
pends on solving such problems, the Federal Government must nec-
essarily play the lead role. There is no possiblity, however, that the
Federal Government will provide funds in an amount sufficient to
relieve the accumulated need.
Various approaches to financing have been proposed for discus-
sion within the Research Roundtable. I put them forward here not
as recommendations but as suggestions deserving further examina-
.tion. I also assume that any national program will include some, or
a combination, of these approaches.
Using the terms of the financial world, equity financing can be
provided through direct Federal appropriations, set-asides from
current federal R&D programs, realistic depreciation charges on
Federal research grants and matching funds from universities,
from States, from industry and from gifts.
Further leverage on these funds can be provided through debt fi-
nancing. We must look for a way to use Federal funds as a base for
a national program of construction bond issues, preferably tax-
exempt, to be amortized over a period of years-say 10 or 15-from
one, or a combination, of the equity sources listed above.
The Government-Industry-Research Roundtable, which I repre-
sent, will conduct a 2-day conference in July, under joint sponsor-
ship with the Office of Science and Technology Policy and the Na-
tional Science Board, to explore approaches such as these to pro-
vide academic research facilities. We expect to have congressional
representation at the conference, of course.
I include research libraries as a part of the research infrastruc-
ture. The ways these libraries are opened and used have evolved
substantially over the past two decades and they hold the promise
for entirely new ways to communicate through the written word.
The systems now in place are impressive-in a matter of seconds
PAGENO="0067"
61
an investigator can locate any book or other bibliographic material
cataloged by any one of the Nation's major research libraries.
There is also the promise of replacing the hard text copy of writ-
ten material with computer screen readouts or rapid printouts of
text that is of interest. This promise is still a long way from mate-
rialization, however. In fact, the computerized library systems, as
they exist, still have a long way to go to provide the optimum serv-
ice to scientific investigators. We must find ways to invest in li-
braries in the same way we invest in other research infrastructure.
Finally, I will discuss the institutional relationships which I
think important in promoting research of the quality best designed
to serve the national interest. I have already touched on this sub-
ject in my discussion of "investment" versus "procurement" con-
cepts.
I want to emphasize that the system we developed following
World War II, based on the Bush Report, is an excellent system.
However, over the decades the system has adapted to changing con-
ditions and changing requirements by applying patches. The cur-
rent system of rules, regulations and procedures is inappropriate
for the most effective operation of the research system. It is time to
take a look at the entire research supporting enterprise to see how
it might be simplified and modified to serve the national need more
efficiently. To this end, the Research Roundtable is sponsoring a 1-
day event on June 5 to explore the issues.
There are other institutional arrangements that are important.
With fewer tenure-track positions available, universities must find
new ways to appoint more research scientists, and they must find
ways to bring "new blood" into their aging faculties.
We have seen the evolution of many cooperative ventures be-
tween universities and industry in recent years. The Research
Roundtable is conducting a set of case studies of new university-in-
dustry alliances to examine what the effects are. A central ques-
tion to be addressed concerns what new institutional arrangements
within universities and within industry are necessary to make the
alliances productive?
The most productive research at the frontiers of science demand
interdisciplinary approaches. Modifications in Federal funding pro-
cedures and in university structure and reward systems are re-
quired in order to pursue these opportunities.
Another institutional arrangement worthy of consideration is
that by which national laboratories develop programs that are of
joint interest with industry and universities.
I will conclude by mentioning, with no detailed discussion or
analysis, the most difficult and complex of all infrastructure
issues-the appropriate size of the academic research system, the
roles of the research universities and their relationship to other in-
stitutions in our society.
Our system has been driven by a number of forces since World
War II. In the years after that war, there was. popular belief that
science could solve any societal problem. When that illusion was
fading, Sputnik put renewed vigor into our educational and re-
search systems, and there was a period of great vitality. The move
to the "Great Society" in the 1960's led to an enormous expansion
of our educational system, and we built capacity that we do not
PAGENO="0068"
62
now need. As we back away from the concepts of that era, great
strains have been introduced. As we seek ways to relieve those
strains, we must examine the overall size and scope of the educa-
tional and research enterprise. Some parts of the system will need
expansion. Other parts will need contraction.
I have no advice on how best to carry out this difficult examina-
tion. The Research Roundtable has not come to grips with it.
To sum up: I have interpreted the term "infrastructure" broadly.
I see the entire system supporting our national research effort as a
national investment enterprise, including many sectors of our soci-
ety, with the Federal Government necessarily being one of the
principal partners. The enterprise is in need of revitalization, and
as the task force proceeds with its study, there are two concepts I
hope you will keep before you: "investment" and "partnership."
Thank you for the opportunity to discuss these matters with you.
[The prepared statement of Dr. Corson follows:]
PAGENO="0069"
63
U.S. HOUSE OF REPRESENTATIVES
SCIE?~E AN) TEQiN)LOGY CX].Q4ITTEE
TASK FOI~E ON SCIE~ICE POLICY
Testiirony by Dale R. Corson
on
¶EHE FEDERAL GCIVERRIENT AN) ThE UNIVERSITY RESEAI~H INFRASTRUCIIJRE
May 21, 1985
Mr. Chairman and ineirbers of the Task Force. My name is Dale Corson
and I am Chairman of the Government-University-Industry Research I~und-
table, sponsored by the National Academies of Sciences and Engineering. I
am a physicist by training and I am the &~ritus President of Cornell Uni-
versity. I am happy to appear before you today to talk about the Infra-
structure for Academic Research, a topic of great national inçortance.
Th begin with, let me define what I mean by "infrastructure".
DEFINITION. By infrastructure for university-based research I mean the
people,. the facilities, the necessary equipi~nt, including some very
large equipoent, the research libraries and the institutional är-
rangernents best designed to proirote effective research. These ar-
rangements extend beyond these between the federal government and
the research universities. They now include the states and indus-
try.
PEOPLE. The people I include are these essential to support efficient
research programs. These include technicians, mechanicians,
research assistants, secretarial and administrative staff.
FACILITIES. By facilities I mean the buildings, the laboratories, the
machine shops, and the specialized technical operation facilities
designed to house and to support research projects effectively.
EQUIPMENT. By equipoent I mean these essential scientific instruments and
machines which are too large and too expensive to be supported on a
single principal investigator's grant or contract. As research
equipoent becomes larger and trore expensive, it is increasingly
necessary to supply such equipoent on an institutional, regional or
even national basis.
RESEAI~H LIBRARIES. The major research libraries provide the biblio-
graphic foundation of the nation's research effort. They face
serious problems as they strive to serve research ends adequately.
Among the problems are the requirement, and the opportunity, to use
n~i computer and corrirunications technology, the need to meet
expanded expectations for collection coverage, and the need to
provide easy access and service reliability. The rapidly rising
cost of such services is a major part of the problem.
INE'TITUTIO~L ARRAr~EMENrS. Here I mean organizational arrangements
designed to further the objectives of the relevant research
programs. Included are institutional relationships within
universities, between universities, between universities and
PAGENO="0070"
64
industrial laboratories and, especially, between universities and
sponsoring federal agencies and state governments.
In discussing these topics I will be describing a system of national
investment in a research enterprise designed to serve best our national
interest. I emphasize the word "investment." I will be describing a
system intended to make research in science and engineering prosper to the
maxisun degree possible. `1k) do this, the system must support the enter-
prise adequately, on a base broad enough to permit the research to
progress effectively in any promising direction.
Another concept that rmist characterize the research system is that
of "partnership". Altbough the partnership must involve many sectors of
our society, the research universities and the Federal Government are by
far the must important elements of the system. These are the elements
that I will be discussing primarily.
Industry and state governments are playing mere inportant roles in
the research system, and we must find ways to nurture these relation-
ships. We must bring other institutions of our society into the research
supporting system, as well; for example the financial world. We must find
ways to finance the provision of facilities and the large equipoent so
that we do not rely totally on the federal government for the enormeus
capital outlays required.
A concept that I reject is that of "procurement" in prometing the
research enterprise. Over a long time our research system, which has been
the envy of the world, has gradually assumed mere and mere features char-
acteristic of the federal procurement system, designed for the procurement
of "things". There has been a trend toward specification of particular
research results required and toward the use of the mechanisns of the pro-
cureinent process to address that requirement. Research is too unpre-
dictable and too fragile to treat in this way.
Finally, I want to keep the concept of "excellence" squarely before
us * In the words of the late Philip Handler, former President of the
National Academy of Sciences: "In science the best is vastly mere
iir~ortant than the next best".
Let me now go back and discuss the elements of the infrastructural
system, and let me begin with the people. This is the must important
element of all. Witbout qualified people at all levels, nothing else
matters. The must important people of all are the scientists and
engineers themaelves, and while they do not constitute part of the infra-
structure, it is important to consider them in any discussion of science
policy. I will not pursue this subject here but I will discuss the issue
in a separate letter to the Task Force.
In defining the scope of the study the Task Force stated that "only
PAGENO="0071"
65
these aspects of science and engineering education which are directly
related to research activities sheuld be covered in the Study". I am
unsure of the intent of this statement but I want to emphasize the
importance of skilled supporting technical staff and to state my belief
that an adequate flow of such people may be in jeopardy.
At Cornell University there are five or six supporting staff for
every faculty nester. Many of these are custodial staff, other unskilled
workers and secretaries. Many others, hewever, are skilled technical
staff supporting the work of the research faculty. These include elect-
ronic technicians, instrument makers and other sore or less traditional
workers. An increasing nurrter, hewever, are "super technicians", oper-
ating centralized and complex facilities. Prrong these are electron
microscopy centers, nuclear magnetic resonance facilities, the very lowest
temperature cryogenic laboratories, and crystal growing facilities in
"super clean" rooms.
This is a growing group of technical workers that we may find in
shert supply in the future.
I base my concern on the state of high scheol science and math-
ematics teaching, which may also jeopardize the flow of scientists
themselves. ~ sore than 20% of high scheol students are exposed to
physics these days, and only 50% are exposed to as such as two years of
science of any kind. Only 6% of high scheol students take four years of
mathematics. Further, the number of science teachers in training is
declining.
How can we interest enough people in science and engineering to meet
our future needs, whether for research scientist or for super technician
careers, given this state of affairs? Both the structure and the
infrastructure of research may be at risk.
Research instruments ~ research equipment generally have reached a
state of obsolescense that limits the anount and the quality of research
that is possible in the research universities * In engineering this has
reached proportions that is a factor in turning young research people away
from academic careers. The result is an inability of universities to fill
available engineering faculty teaching and research positions. Academic
careers are simply not as attractive as are industrial careers. It is
ironic that the great interest in computers and computer-related tech-
nologies have attracted sore and sore students at the undergraduate level
but the same technologies are pulling graduates into attractive jobs after
the bachelors degree and are deflecting them from graduate study which
would prepare them for academic research and teaching careers.
In light of this situation, sore than half. of the young faculty
appointments that are being made in engineering are foreign nationals.
There have been better comprehensive studies of the instrumentation
PAGENO="0072"
66
~ ~4pnent shortages than I can give here. I want to stress the large
equipoent which is required for the best research in some fields. As we
learn sore and sore about the underlying phenomena in the fields we study,
we learn sore and sore about how to measure the things we want to measure.
Inevitably, these new measuring instruments are expensive. For example,
as we go to smaller and smaller structures in microelectronic tech-
nologies, we reach limits where optical photo-lithographic techiques for
making the small chip structures are inadequate, and we sost go to x-ray
lithography and to electron beam writing techniques. The equi~ient to do
this is large.and expensive--very expensive. What we can do with it,
however, is little short of miraculous.
A technology that has proved of enornous usefulness in studying
atomic and solecular structures, including those in living bodies, is
nuclear magnetic resonance. Such a machine, large enough to accorrodate a
human body, costs hundreds of thousands of dollars. The same techoology
provides powerful analytical tools in fields as diverse as materials
science and irolecular biology. Thday progress in many fields is limited
by the unavailability of instruments such as these.
These large and expensive machines are leading to the concept of
pooled use. The using pool may be all the interested departments in a
single university or it may be a regional facility serving all the
research laboratories, university and industrial, in the region. As the
need for very expensive equipoent develops, the shared use concept is
essential.
Shared use is one example of the "partnership" concept that I
believe is so important. Other partnerships rust also be developed to
magnify the impact of the federal agency equiçrnent support prograrrs that
have begun in recent years. Company-funded instrumentation programe have
been important in selected areas * There appears to be real potential for
constructive partnership with the states, especially when one considers
the instructional equipsent needs which appear to be fully as important as
the research needs in many places. Some states have launched substantial
prograirs for upgrading scientific equipoent. More directed attention to
partnership with the states in sorting out responsibilities for both
research and instructional equi~xnent would be beneficial. Finally, debt
financing has been used to fund equipient acquisition. (~portunities for
pooling funds and distributing the debt risk should be explored.
In connection with the equipoent problem, and related to the
"people" problem, is the issue of equi~*rent maintenance. As the equi~xrent
becomes sore sophisticated and expensive, the maintenance technicians
require sore training and corsnand higher salaries. The federal
government, the state governments and the universities must resolve the
issue of cost sharing and provide for adequate support staff in this area.
The increasing cost and sophistication of research equipiient, and
the requirement to develop partnership approaches, as I have outlined
above, are straining the current administrative procedures and rules, at
both the state and the federal levels. The available procedures require a
PAGENO="0073"
67
thorough review.
Facilities, as typified by research laboratories, represent another
large national need. It is iir~ossible for me to put any nuither on the
magnitude of the need. One irust distinguish these cases where new facil-
ites are absolutely essential to the progress of the science in question,
from these where the science can continue to be done in the old facil-
ities, but at the price of less than optin-um productivity.
In the essential category are "clean" laboratories for work at the
frontier in microelectronics, "contained" laboratories for areas of bio-
technology such as recoritinant D~ work, facilities to handle toxic waste
and perhaps adequate animal care facilities. It is iir~ossible, or at best
cost ineffective, to provide such badly needed facilites by renovating old
buildings. Research in the fields I have mentioned is facility limited.
In other areas with inadequate facilities, renovation may be both
adequate and cost effective. Again I can put no nunters on the problems.
I know of no studies which have provided adequate data. The total need
for new and renovated facilities is certainly measured in billions of
dollars.
Th provide facilities, we need a national program, again based on
the parthership concept, that will regularize the facilities appropriation
process, that will provide for corrprehensive merit review taking into
account social and economic factors as well as scientific merit, and which
will leverage federal funds to the maxirrusn degree possible.
As we develop programs to address these facility needs we irust think
about new ways to finance them. Given the magnitude of the problem, and
given the degree to which the national welfare depends on solving such
problems, the federal government nust necessarily play the lead role.
There is no possibility, however, that the federal government will provide
funds in an anuunt sufficient to relieve the accurrailated need.
Various approaches have been proposed for discussion within the
Research Roundtable. I put them forward here not as recorranendations but
as suggestions deserving further examination. I also assume that any
national program will include some, or a contination, of these
approaches.
Using the terms of the financial world, equity financiang can be
provided through direct federal appropriations, set-asides from current
federal R and D programs, realistic depreciation charges on federal
research grants and matching funds from universities, from states, from
industry and from gifts.
Further leverage on these funds can be provided through ~ fit-ian-
cing. We rust look for a way to use federal funds as a base for a
national program of construction bond issues, preferably tax-exempt, to be
PAGENO="0074"
68
anortized over a period of years-say 10 or 15-frorn.one, or a coirbin-
ation, of the equity sources listed above
The Government-Industry-Research Roundtable, which I represent, will
conduct a tvo-day conference in July, under joint sponsorship with.the
Office of Science and Technology Policy and the National Science Bc4j~1, to
explore approaches such as these to provide academic research facilities
Part of the discussion will focus on financing mechanisns. We are~bring-
ing experts from the investment banking werld into the planning for this
conference. We expect to have Congressional representation at the cOn-
ference, of course.
I include research libraries as a vital part of the research
infrastructure. These libraries are essential elements in the preser-
vation and transmission of knowledge and in the creation of new know-
ledge. The ways these libraries are operated and used have evolved
substantially over the past tvo decades, with consequent expansion in
staff, equipment and expense-especially the latter.
New data management technology and new congrunication technology have
given the research scientist research tools not previously available, and
these tools bold the promise for entirely new ways to comrrunicate through
the written vord. The systenE now in place are impressive-in a matter of
seconds an investigator can locate any book or other bibliographic
material cataloged by any one of the nation's major research libraries.
There is also the promise of replacing the hard text copy of written
material with computer screen readouts or rapid printouts of text that is
of interest. This promise is still a long way from materialization, bow-
ever. In fact the computerized library systeirs as they exist, still have
a long way to go to provide the optirrum service to scientific inves-
tigators.
These libraries, with their new library services, are essential
elements of the research enterprise. We rrust find ways to invest in then
in the same way we invest in other research infrastructures.
Finally, I will discuss the institutional telationships which I
think important in pronoting research of the quality best designed to
serve the national interest.
I have already touched on this subject in my discussion of "invest-
ment" vs "procurement" concepts. Consideration of these concepts leads to
study of the entire granting and contracting practices in the support of
research. I want to emphasize that the system we developed following
World War II, based on the Bush Report and leading to the creation of the
National Science Foundation and the greatly expanded National Institutes
of Health, is an excellent system.
However, over the decades the system has adapted to changing
PAGENO="0075"
69
conditions and changing requirements by applying patches. Substantial
bureaucratic accretion has resulted and elements of the system, must
notably the infrastructure that we are addressing here today, have gone
unattended. The current system of rules, regulations and procedures is
inappropriate for the must effective operation of the research system. It
is time to take a look at the entire research supporting enterprise to see
hew it might be sinplified and rrodified to serve the national need note
efficiently. ¶E~ this end, the Research Poundtable is sponsoring a one-day
event on June 5 to explore the issues. Participants will include federal
agency officials, university officials, research scientists, research
administrators and others concerned about the efficacy of the system.
There are other institutional arrangements that are iirportant. I
think that new organizational patterns are necessary for the univer-
sities. With fewer tenure-track positions available they must find new
ways to appoint rrore research scientists, and they must find ways to bring
"new blood" into their aging faculties.
We have seen the evolution of many cooperative ventures between
universities and industry in recent years. There are inportant reasons
for these devèloixnents. I believe that industry is mure dependent on
universities than in the past for help in bringing new. ideas to the
marketplace. The developuents in biotechnology are one exasple. Micro-
electronics and artificial intelligence are others * These develognents
have proceeded at a time when universities are resource limited in
pursuing research in these fields. So they, too, look to the new
industrial alliances with enthusiasm.
The new technologies and the new alliances bring with them pressures
on the university for nore effective multidisciplinary research and edu-
cation. The must productive research at the frontiers of science also
demand interdisciplinary approaches. At a syirposium last year hunoring
the 1983 Pmerican Nobel laureates, several earlier Nobel laureates from a
variety of disciplines all said that the must exciting science is devel-
oping at the interface between disciplines, not within single discip-
lines. Modifications in federal funding procedures and in university
structure and reward systens are required in order to pursue these
opportunities.
The Research Roumdtable is conducting a set of case studies of new
university-industry alliances to examine~ what the effects are. What is
happening to graduate education in the participating universities? Are
the alliances effective in bringing new and inportant ideas to the market
place sooner? What new institutional arrangements within universities and
within industry are required to make the alliances productive?
Another institutional arrangment s~rthy of consideration is that by
which the federally supported national laboratories develop programe that
are of joint interest with industry and universities. I want only to
mention this, witheut any analysis of the opportunities.
I will conclude by mentioning, with no detailed discussion or
PAGENO="0076"
70
analysis, the nx)st difficult and corr~lex of all infrastructure issues-the
appropriate size of the academic research system, the roles of the
research universities and their relationship to other institutions in our
society.
Our system has been driven by a nurrber of forces since World War
II * In the years after that war there was popular belief that science
could solve any societal problem. When that illusion was fading Sputnik
put renewed vigor into our educational and research systems and there was
a period of great vitality. The cove to the "great society" in the l960s
led to an enornous expansion of our educational system and we built
capacity we do not now need. As we back away from the concepts of that
era, great strains have been introduced. As we seek ways to relieve these
strains we cost examine the overall size and scope of the educational and
research enterprise. Some parts of the system will need expansion. Other
parts will need contraction.
I have no advice on how best to carry out this difficult examin-
ation. The Research Roundtable has not come to grips with it. Some
states, Michigan for exarr~le, are tackling the problem in the context of
their own needs.
Th sum up: I have interpreted the term "infrastructure" broadly. I
see the entire system supporting our national research effort as a
national investment enterprise, including many sectors of our society,
with the federal government necessarily being one of the principal
partners. The enterprise is in need of revitalization and as the Task
Force proceeds with its study there are two concepts I hope you will keep
before you: "investment" and "partnership".
Thank you for the opportunity to discuss these matters with you.
DISCUSSION
Mr. BROWN [acting chairman]. Thank you, Dr. Corson.
I commend you and the Research Roundtable for the initiatives
that you are taking. I perceive in these initiatives the possibility of
developing the strategies to address a number of the problems that
we face if all of your meetings and conferences are successful. I
hope they will be.
I brought out earlier in questioning Dr. Healy the fact that many
of the things that you are doing are embodied in the Science Policy
Act, which placed some of these responsibilities on the President's
Science Advisor. I note that in your activities, you are maintaining
a close liaison with that office, and I hope that you will consider
that what you are doing is an extension to what we have indicated
is desirable in that particular piece of legislation.
Let me raise one problem which you will be addressing in some
of your activities, but it seems to me to be particularly important,
and that is the situation involving maintaining an adequate supply
of competent research faculty. In a situation where you may, and
in fact have in some parts of the past, recent past, experienced a
decline in students, a decline in the number of tenured faculty
which the institutions are able to maintain has been part of the
decrease in students. At the same time, our needs for the research
that would be done by those faculty members is increasing, which
seems to perhaps indicate too close a coupling between the teach-
ing and the research activity. We may be needing an increase in
PAGENO="0077"
71
research at the same time we are needing a decrease in teaching
because of the decline in the number of students.
Now, there are solutions to that problem. One direction, of
course, is this greater emphasis on cooperative research between
universities and industries, which would provide an outlet for addi-
tional university research personnel, and would be beneficial to all
concerned, and there are probably other avenues, such as placing a
greater emphasis upon the kind of research institutions that are
best exemplified by the Max Plank Institutes in Germany.
Is it your feeling that the Research Roundtable might be able to
present some attractive solutions to this problem which could be
considered in terms of some rather significant changes in the way
we organize the research and teaching capabilities of this Nation
as a whole?
Dr. CORSON. Well, let me address the problem. Let me say at the
beginning that it is going to take the best effort of everybody that
can be brought to bear on the problem to deal with these issues,
and I want to point out that Dr. Healy is a participant in some of
our Roundtable activities; we maintain close link to that office.
When you asked if we can provide solutions, you are asking for a
great deal. If you want to talk about illumination and discussion of
the problems, we can certainly do that. Let me talk a little bit
about the university versus the research institute, which you
raised.
We are in a difficult situation in the country right now. The uni-
versities are under a great deal of strain in the first place. In the
sciences, we have little opportunity to make new faculty appoint-
ments in the next decade even because of the bulge of faculty
people that came in during the great expansion in the universities
in the 1960's in physics and chemistry and mathematics; this is
particularly serious. At Cornell, for example, in those three depart-
ments in the next decade, unless something special is done, there
are no opportunities for more than two or three appointments in
all three departments, and all three are large departments.
At the same time, the need for research in areas that are pri-
marily university-based, are to a large degree university-based, is
growing. For example, in biotechnology, microelectronics, in artifi-
cial intelligence and other computer developments, there is a need
for universities to link themselves with industry or for industry to
link themselves with universities in bringing these new technol-
ogies to the marketplace more rapidly.
A great deal more research is needed in these areas, but the uni-
versities have no capacity to appoint the necessary people except in
engineering, where there are openings that can't be filled. But in
the basic sciences, there is no opportunity to appoint new people,
and there is not going to be for a decade. So this means that the
universities must develop some new structures, or we must have
some new restructure, as you point out.
There is a Soviet model which is research institutes largely di-
vorced from universities. I don't think that is a very good model. A
more successful model is this Max Plank Institute, one that you
mentioned, which again is divorced from the universities, but I
think more closely tied to the universities than in the Soviet case.
There is-as Dr. Healy pointed out in her testimony, we built so
PAGENO="0078"
72
much strength into our system, where we tied teaching and re-
search, that it seems to me that it by far will be best to serve our
national interest if we maintain that link and find ways to solve
the problems.
The way we are going to solve the problems, I think, is to build
research institutes that are going to be parallel in part, linked to
universities, but not with a staff that is full-fledged members of
university faculties. They can be adjunct appointments, joint ap-
pointments, they can teach classes, the institute people can teach
classes, they can supervise graduate students if the arrangements
are developed most effectively-the institutes will be separately fi-
nanced and managed probably. It is good to take all the wisdom
anybody can bring to bear in developing these, this relationship,
but I think it is essential, if we are to provide research activities
that these new fields require, where that activity is based to a
large extent in the universities.
I don't know exactly how it is going to go, but these institutes
are springing up in biotechnology, microelectronics, and my own
strong recommendation is to keep the teaching and the research to-
gether. One can make a strong case for the proposition that the
role of the university is to teach people to solve difficult, novel
problems and that the way we do that is by apprenticing students
to people who are themselves solving difficult, novel problems and
in the process, we are turning out some of the world's best scien-
tists, and we are producing some of the world's best research.
Mr. BROWN. Well, I appreciate that response. I think that we
have the capability in this country to develop a model which is su-
perior to anything that any other country has done. In each of the
other countries that we can look to, the ones that you have men-
tioned and others, their particular structural pattern arose out of
their historical experience, just as ours did. Our superiority is
going to consist of developing for ourselves, based on our historical
experience, something that is better suited to cope with the prob-
lems of the future and the capabilities to analyze and visualize
what that structure will be that will give us our leadership in the
world.
There are the problems that we have referred to here that need
to be overcome. The coupling of research in teaching at a time
when they get out of phase, the problems that you have at Cornell,
the problems that your teaching is basically disciplinary while the
need for interdisciplinary research is growing, and we have to de-
velop a model in which we can combine the strengths of both kinds
of systems. And it woUld be my hope that in your wisdom in the
Research Roundtable that you could, at least in stimulating a dis-
cussion of these things, pose some alternatives that could be exam-
ined critically, and we could develop some answers that will help
us to cope with the next generation instead of continually worrying
about the failures of the past.
Dr. CoRsoN. One of our working groups is addressing this very
issue, the changes in the structure of the university among other
institutions; it is going to have to take place if we are to meet the
challenge adequately. The chairman of that working group is
Harold Shapiro, president of the University of Michigan, and the
PAGENO="0079"
73
cochairman is Ed Jefferson, who is CEO of Du Pont. We have got
some good talent thinking about the problem.
Mr. BROWN. I think there comes to my mind some of the out-
standing interdisciplinary research organizations in this country, of
which the Bell Labs and Watson Laboratories at IBM are exam-
ples. The research done there is first-rate quality and includes both
the applied and basic research. There is also a strong emphasis on
teaching; a good number of the staff that I have met there are ad-
junct professors at some institutions,~ outstanding institutions gen-
erally.
Yet to achieve a proper meld between those facilities, those insti-
tutions, and the needs of the great teaching and research universi-
ties is going to take some real imagination if we are going to solve
our problems.
Dr. CORSON. I am assured by my efforts over the past 20 years to
build that kind of activity at Cornell, and I know some of the
things that work, and I know a lot of the things that don't work.
Mr. BROWN. Thank you, Mr. Chairman.
Mr. FUQUA [presiding]. Mr. Lewis.
Mr. LEWIS. I have no questions.
Mr. FUQUA. I have one question, Dr. Corson. Back when you
were president of Cornell, and starting after Sputnik when the Na-
tional Defense Education Act, some of the others, we had some
block grant programs at universities then that later changed to
more project type grants. Do you see that as having an impact on
the decline of some of the infrastructure that we are talking about
today? In other words, have we caused our own problem?
Dr. CORSON. I think the problem is so complex, it is hard to place
blame in any one place, but some of the block grant programs were
extraordinarily successful. Let me give an example.
In about 1960, the Defense Department started the Materials Re-
search Laboratory venture. ARPA [Advanced Research Projects
Agency], was the sponsor. NSF took that over after a few years,
and they promoted a series of interdisciplinary laboratories in the
materials field. There are something like 11 of those in the first
round and a few more were added later.
Those appear to me to be some of the most successful federally-
sponsored research efforts going. Those are block grants, at least at
Cornell it is, where the grant comes to the university, and the
whole program is reviewed very carefully by high level review
teams periodically, NSF organizations. The program is adminis-
tered locally by a steering committee made up of working scien-
tists, university administrators, and I don't know what the freedom
is, the degree of freedom-I have forgotten-to use that money for
facilities, but we have built with that program large central facili-
ties.
For example, there is a so-called millidegree facility-very lowest
temperatures-for doing cryogenic work on superconductivity. A
high pressure facility where people have now made solids and are
perhaps on the verge of making metallic hydrogen, which will pro-
vide a great deal of understanding about some of the fundamental
structural possibilities for new materials.
There are crystal growing facilities, clean rooms, maximum
cleanliness-these have all been built out of that block grant pro-
PAGENO="0080"
74
gram with local decision. There is an opportunity to fund young
people when a young investigator develops new ideas, where in
some of the conventional funding mechanisms there at least would
be a long delay, and perhaps you would stand no chance against
the established investigators; he can get support based on the confi-
dence of his local peers.
There is the opportunity to support established investigators who
want to change fields, who have a new idea. It has been, in my
opinion, one of the most successful federally-supported programs-I
don't mean at Cornell, but the whole MRL [Material Research Lab-
oratories] around the country-and I applaud that, and I hope
there will be more opportunities to go that direction in the future.
And I do not believe the program has been abused in any way by
this system.
Mr. FUQUA. Thank you very much. We appreciate that.
Mr. BROWN. Before you leave, Dr. Corson, it has occurred to me
from time to time that one of the reasons for the excellence of our
biological research and our leadership in this area and our general
health research might be the fact that we have a model of very
close cooperation between our outstanding hospitals in this country
and our outstanding medical schools frequently.
I know you can think of many examples of this. Massachusetts
General and Harvard and others to the point where over the last
10 years, or 20 years, in establishing new Federal hospitals, veter-
ans hospitals, for example, it has almost become a requirement
that they be associated with a medical research facility at a medi-
cal school, or something of that sort. That seems to have been
healthy, both in terms of fundamental research in biology and
medicine and in improved health care for individuals. We are talk-
ing about doing something like this in the nonbiological sciences. I
am wondering if we shouldn't conceptualize this a little bit more
clearly than we have.
It seems to me that what we have seen is almost an accidental
growth in this kind of coupling between research and teaching in-
stitutions, and that perhaps we should recognize the need to formu-
late specific policy to encourage this in all of the fields of science.
We are looking at plant biotechnology today as being a neglected
area. Perhaps one of the reasons for that is that we don't have that
kind of close coupling between research and practice in the plant
field that we have had in the human field and that we need to en-
courage it there as well in physics and chemistry and engineering
and all of the other areas that we are talking about.
I don't know how this could be brought about, but it seems to me
that this is the line of thinking that we are pursuing in an effort to
bridge this gap that seems to exist here.
Dr. CORSON. Let me comment a little bit about the complexities
of doing that.
It depends on the nature of the technology at hand and the
degree to which the university or the research scientists participate
in the application of the science that he helps develop. In medicine,
whereas you point out the medical college and the medical college
faculty and the teaching hospital is the preeminent place where
new medical technology is applied, that is the one place where the
people who are doing the research are also the ones who are-the
PAGENO="0081"
75
applied scientists who the applied science tests-are carried out in
the hospital by the very people who have done it there. They are
all MD's that are involved.
If you go to the other extreme, and you go to aeronautical engi-
neering, there is no possibility that the university can become
closely involved with the application of the basic science at hand.
The scale is simply too large for the university to be closely linked.
The scale, whatever the entire price is, must be human scale to
have universities directly involved with facilities on campus. To
apply high velocity gas dynamics in rocket development is not fea-
sible. The scale is wrong.
At the intermediate range are some of the plant agricultural ac-
tivities, for example, in plant genetics----developing new seed vari-
eties, disease-resistant seed varieties. These are developed in uni-
versities and in university-related experiment stations up to the
point where samples of new seed in sufficient quantity to grow a
small crop to carry the tests through that implementation stage
before the seeds are turned over to large seed companies for quan-
tity production. This is an intermediate situation that is on a scale
where the link between the university that does the basic science
and the applier of that science can be close enough to make it prof-
itable.
I think we have to look at the technology involved. Some of it is
going to be well served by bringing the university and industry
close together in the cooperative venture that is typified in a medi-
cal school teaching hospital setting. Others of it are going to be on
such a scale that it is impractical. I suspect that many of the
things that we are talking about in microelectronics and biotech-
nology are on a scale that make the cooperation profitable.
Mr. BROWN. Well, I don't want to question the validity of your
point there, but it seems to me that the scale is in the eye of the
beholder. There has been for 40 years a close working relationship
between the Caltech, for example, and Jet Propulsion Laboratory,
which has done a lot of work in the aircraft propulsion, aerody-
namics and so forth, as well as being the foundation of the space
program. I am not sure that they have the best possible coupling
there, but they do have a coupling which is important.
Dr. CORSON. Yes, it is a rather loose coupling.
Mr. BROWN. Yes, but--
Dr. CORSON. MIT and Lincoln Laboratory. MIT and Draper Lab-
oratories and all missile guidance.
Mr. BROWN. If we think in terms of institutional changes for
both the universities and industrial research facilities, we might be
able to overcome some of these problems of scale that you are talk-
ing about.
Dr. CORSON. I think that we must address those problems and
face up to the troubles and find ways of making new relationships
work. I think we can.
Mr. BROWN [presiding]. Thank you very much, Dr. Corson, for
your very helpful testimony.
Our last witness this morning is Dr. Edward Hollander, chancel-
lor, Department of Higher Education of New Jersey, and we wel-
come him here this morning, and we very much appreciate your
PAGENO="0082"
76
being able to be here on I understand what is fairly short notice,
Dr. Hollander.
Dr. HOLLANDER. Yes, sir.
Mr. BROWN. It is a tribute to your understanding of the impor-
tance of the subject that we are discussing, and we are very grate-
ful to you.
STATEMENT OF DR. T. EDWARD HOLLANDER, CHANCELLOR, DE-
PARTMENT OF HIGHER EDUCATION, STATE OF NEW JERSEY,
TRENTON, NJ
Dr. HOLLANDER. Thank you very much. I have given you two
statements, a longer statement for the record, and then a shorter
statement which I would like to present directly to the committee.
Mr. BROWN. The full statement will appear in the record.
Mr. HOLLANDER. Thank you.
Higher education has contributed to national science policy by
building a basic research capability upon an intellectual base
rooted in the liberal western tradition. Future progress rests upon
stimulating the graduate and research capabilities of America's
universities as a national policy. One means to achieve this end is
a new collaboration between higher education, the State, the Fed-
eral Government, and industry.
My purpose here is to call for a renewal of the public role in fur-
therance of science education at all levels, in furtherance of gradu-
ate and research capabilities in the sciences and applied sciences
and in the stimulation of the higher education-industry partner-
ship.
Using my own State, New Jersey, as illustration, I will report on
how one State has responded to the withering away of national
commitment to the infrastructure of higher education. Subsequent-
ly, I shall argue for a renewed Federal commitment to complement
State efforts.
In New Jersey, Governor Kean is determined to make higher
education more entrepreneural. While protecting institutional base
budgets from enrollment erosion, he has proposed funding new ini-
tiatives on a challenge grant basis, that is, requiring that public
and independent institutions compete for new funds. Additionally,
the Governor has secured passage of a $90 million bond issue and
has directed annual appropriations towards economic development
through support of basic and applied research at New Jersey's uni-
versities. Still further, he~ has supported financing of improvement
in science and mathematics education at all levels of schooling in
the State.
A longstanding and major State commitment to science and tech-
nology is New Jersey's support of the intellectual and technological
infrastructure of research-oriented institutions. For example,
almost half of the State's total appropriation for higher education,
or $300 million annually, supports the State's three public universi-
ties, Rutgers, the University of Medicine and Dentistry of New
Jersey, and the New Jersey Institute of Technology. These funds
include support for research facilities, laboratories, and libraries.
They permit reduced faculty teaching loads to support research,
basic and applied. They support special highly paid distinguished
PAGENO="0083"
77
research scientists and humanities. The State finances the gradu-
ate programs that educate the Nation's instructors and research
scientists. Private funds and Federal support have built and main-
tained similar efforts at Princeton University and. Stevens Institute
of Technology.
The point is that this Nation's university-based research capacity
has been built and is maintained in large measure by State govern-
ment.
New in New Jersey this year is Governor Kean's challenge to
New Jersey's higher education institutions to reach for national
status through improved quality. The State is helping Rutgers Uni-
versity to increase its operating budget by $60 million annually,
over a 3-year period. The new funds will strengthen the universi-
ty's research capability by financing the recruitment of world-class
scholars, young faculty members and graduate assistants. New
funds will enhance the library and finance computer acquisitions.
A similar program has been established for the State's technologi-
cal university, the New Jersey Institute of Technology.
Complementary challenge grant programs have been established
for all of the State's teaching institutions. A challenge grant fund
of up to $30 million, over 3 years, will strengthen the nine State
colleges. A fund that could reach. over $25 million is dedicated to
providing competitive grants for technological equipment acquisi-
tions and computer applications at all public and private institu-
tions. Over $3 million has already been provided to retrain primary
and secondary school teachers of mathematics and science. New
teacher training requirements emphasize liberal education with a
required major in a field of study in the sciences, social sciences, or
the humanities. Remedial education is required to be provided to
every freshman admitted to a public college who is deficient in
verbal or mathematical ability. Competitive challenge grant funds
also are available to strengthen education in the humanities, for-
eign languages, global education, and the improvement of teaching.
Merit-based scholarships for, undergraduates and State graduate
fellowships tell students we care about scholarship and intellectual
development. All of these efforts and others are designed to
strengthen quality ~~in undergraduate teaching, with emphasis in
science and technology.
These efforts are complemented by the new funding of science
and technology as recommended by the report of the Commission
on Science and Technology.
The Commission, after an 18-month study, proposed a program
for economic development using the State's research universities.
Peer review teams identify fields of priority development in the
State and select institutions best able to undertake collaborative
research with industry. State funding is contingent upon matching
industry funds for research activity. State capital funds finance
major research centers for industry-academic research in priority
fields. University-based technical extension centers disseminate
state-of-the-art development throughout the industry. Research
grants to faculty and institutions stimulate research interest and
attract faculty to areas selected for priority development in the
State. Funds are also available to finance new facilities for new
technology programs in scientific and technological fields.
PAGENO="0084"
78
Last year a $90 million bond issue was passed to implement the
recommendations of the Commission. The Commission's operating
budget, established especially to stimulate research, is $16 million
for the 1985-86 fiscal year.
What has been accomplished or provided for thus far?
A $24 million Center for Advanced Biotechnology will be con-
structed for Rutgers University and the University of Medicine and
Denistry of New Jersey. Partial capital support will be provided to-
wards Princeton University's $43 million biotechnology program.
An additional $11 :inilhion will finance construction at the Waks-
man Institute of Rutgers and at the University of Medicine and
Denistry of New Jersey.
New Jersey Institute of Technology will house a new Cooperative
Research Center for Hazardous and Toxic Waste Management. The
~center is also supported by the National Science Foundation. Indus-
trial company members, currently 12, contribute research guidance
and $30,000 each to annual operating needs.
A Center for Ceramics Research has been established at Rutgers
with support from the National Science Foundation. The Center
enjoys over $1 million in industrial support through affiliate fees of
$30,000 from each of 32 companies. Under consideration is the de-
velopment of a second wing for research in fiber optic materials.
Rutgers University's Cook College will house a Center for Ad-
vanced Food Technology. Food processing is a $6 billion industry in
New Jersey.
The Commission also has made grants in the areas of telematics,
surface modification technology, and computer-aided manufactur-
ing. New areas under study are fisheries development and aquacul-
ture.
New Jersey has been selected as a national site for a supercom-
puter facility. Commission funding helped sway the decision New
Jersey's way. The State funding will lend the supercomputer to
New Jersey's research universities.
Two computer-integrated facilities-one in South Jersey and one
in Newark-will be established jointly by NJIT and the State's
community college. The centers will provide research and training
in the application of robotics to the manufacturing process.
New educational and training programs have been established
throughout the State's higher education system in such fields as
laser optics, computer-aided design, software development, and ro-
botics. Industry has been an active partner in program develop-
ment.
New Jersey's efforts are ambitious and expensive. We believe
that a stronger higher education systems serves New Jersey's resi-
dents who seek collegiate education in the State's institutions.
We believe, too, that strengthening the higher education system's
capacity for teaching and research in science and technology con-
tributes significantly to the State's economy, to employment and
the economic well-being of all of our residents. Through each pro-
gram in the Governor's science and technology efforts and the col-
lege grant program, New Jersey's research institutions are better
able to contribute to national needs and national goals in science
and technology.
PAGENO="0085"
79
New Jersey efforts are no different from the efforts of many
States across the Nation. States support the research universities
in the public sector and, in many States, in the private sector as
well.
Special State efforts in science and technology are also common.
Through such efforts, States finance initiatives that are also prop-
erly the responsibility of the Federal Government.
Where is the Federal Government in these initiatives?
Federal financing of research through the National Science
Foundation, the National Endowments, and Federal departments
related directly to applied research needs-Federal efforts in these
areas have been adequate, if not substantial.
Even so, the States have had to shoulder at least two burdens
that deserve Federal help because they are primarily national
rather than State priorities.
While States have maintained the intellectual and technological
infrastructure for graduate education in the sciences, engineering
and related technologies, they do not, should not and cannot fi-
nance fellowship for students who enroll in such studies.
Doctoral students in all disciplines serve a national need; they
are highly mobile individuals who often leave a State upon comple-
tion of doctoral studies. This support in doctoral studies clearly is a
Federal responsibility and not a. State responsibility. The Federal
Government has been derelict in this area.
National graduate fellowships, awarded competitively, will
assure that the most talented young people will pursue careers in
basic and applied research. Now many of the best students are
drawn to study in business, law, engineering and other professions
where high rewards are coupled with less costly academic prepara-
tion.
Our doctoral programs in science and engineering enjoy heavy
enrollments of foreign students who constitute a majority of stu-
dents at our public institutions.
Where is the next generation of American research scientists?
They are not at our universities in sufficient numbers today.
The States cannot afford to pay for all of the costly research fa-
cilities and state-of-the-art equipment needed in today's research
and instructional programs. The States do shoulder a large share of
the costs. That they cannot come near to doing the whole job is re-
flected in the higher dependence on obsolete, poorly maintained
and inadequate equipment.
We have come to be dependent on private industry for donations
of obsolete equipment. The States need Federal help to maintain
up-to-date facilities for teaching and research.
The New Jersey unemployment rate is 6.2 percent, below the na-
tional average. It is low because our State has created a climate
supportive to emergent industries. New university/industry re-
search collaboration can spinoff new companies, new industries,
new jobs. The new jobs replace those lost in the declining blue-
collar industries.
Our unemployment rate of 6.2 percent is too high. In part, it is
so high because vacant positions go begging while the unemployed
and underemployed are not qualified to fill them.
PAGENO="0086"
80
We are determined to keep the economy growing by stimulating
applied research and entrepreneurship. We are equally determined
to keep the economy growing by improved technological literacy
among all potential employees in all of the States, urban as well as
surburban communities.
We want a renewed Federal effort in support of basic research to
complement the new State initiatives.
Thank you very much.
[The prepared statement of Dr. Hollander follows:]
PAGENO="0087"
81
1Etl JERSEY'S SCIEIICE AHD TECHMOLCGY IHITIATIVE
TESTIflOUY CF T EDUARD HOLLANDERJ C.HAHCELLCR
OF HIGHER EDUCATION, NEW JERSEY
TO THE US HOUSE OF REPRESENTATIVES SUB-CO~1ITTEE
OH SCIEIICE AtJD TECHNOLOGY POLICY
NARCH 21, 1985
(DETAILED REPORT ATTACHED)
PAGENO="0088"
82
Higher education haS contributed to national science policy by
nuilding a basic research capability upon an intellectual base rooted
in the liberal western tradition Future progress rests unon
stimulating the graduate and research capabilities of Anierica's
universities as a national policy One means to achieve this end is a
new collaboration between higher education, the state, the federal
government and industry,
My purpose here is to call for a renewal of the public role in
furtherance of science education at all levels, in furtherance
graduate and research capabilities in the sciences and applied
sciences and in the stimulation of the higher education-industry
partnership,
Using my own state, Mew Jersey, as illustration, I will report
on how one state has responded to the withering away of national
cornitment to the infrastructure of higher education, SubseQuently, I
shall argue for a renewed federal cocmnitrnent to complement state
efforts
In New Jersey, Governor Kean is determined to make higher
education more entrepreneural. While protecting institutional base
budgets from enrollment erosion, he has proposed funding new
initiatives on a "challenge grant" basis, that is, requiring that
public and independent institutions compete for new funds.
Additionally, the governor has secured passage of a $90 million bond
PAGENO="0089"
83
issue and has directed annual appropriations tonards economic
development through support of basic and applied research at hew
Jersey's universities, Still further, he has supported financing of
improvement in science and matnematics education at all levels of
schooling in the state.
A long-standing and major state coanitment to science and
technology is hew Jersey's support of tne "intellectual and
technological" infrastructure of research oriented instititutions,
For example, almost half of the state's total appropriation for higher
education, or $300 million annually, supports the state's three public
universities, Rutgers, the University of tledicine and Dentistry of hew
Jersey and the hew Jersey Institute of Technology, These funds
include support for research facilities, laboratories and libraries,
They permit reduced faculty teaching loads to support research, basic
and applied, They support special highly paid distinguished research
scientists and humanists, The state finances the graduate programs
that educate the nation's instructors and research scientists.
Private funds have built and maintained similar efforts at Princeton
University and Stevens Institute of Technology,
The point is that this nation's university based research
capacity has been ouilt and is maintained in large measure by state
government,
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hew in lew Jersey tlis year is Governor Kean's cnallenge to ieu
Jersey's hig;ier education institutions to reach for national status
through improved quality, The state is helping Rutgers University to
increase its operating budget by $60 million annually (over a
three-year period). The new funds will strengthen the University's
research capability by financing the recruitment of world-class
scholars, young faculty members, and graduate assistants, New funds
will enhance the library and finance computer acquisitions, A similar
program has been established for the state's technological university,
tile New Jersey Institute of Technology,
Complementary "challenge grant" programs have been established
for all of the state's teaching institutions. A challenge grant fund
of up to $30 million (overthreeyears) will strengthen the nine state
colleges. A fund that could reach over $25 million is dedicated to
providing competitive grants for technological equipment acquisitions
and computer applications at all public and private institutions,
Over three million dollars has already been provided to retrain
primary and secondary school teachers of mathematics and science, New
teacher training requirments emphasize liberal education with a
required major in a field of study in tile sciences, social sciences or
the humanities Remedial education is required to be provided to
every freshman admitted to a public college who is deficient in verbal
or mathematical ability, Competitive challenge grant funds also are
available to strengthen education in the humanities, foreign
languages, global education, and tile improvement of teaching,
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85
flerit-o~ed sc~io1arships for undergraduates and state graduate
feii~I3n~ps tell students we care about scholars~iip and intellectual
deveio~ment, All of these efforts and others are designed to
strengtnen quality in undergraduate teaching, with emphasis in
science and technology,
Tflese efforts are complemented by the ne! funding of science
and technology as recommended by the report of the Cormiiission on
Science and Technology, Established by Executive Order in 1932 on my
recommendation and the recommendation of several college presidents,
the Commission proposed a program of economic development through new
partnerships between graduate research institutions,
The Commission, after an eighteen month study, proposed a
program for economic development using the state's research
universities, Peer review teams identify fields of priority
development in the state and select institutions best able to
undertake collaborative research with industry, State funding is
contingent upon matching industry funds for research activity, State
capital funds finance major reseach centers for industry-academic
research in priority fields, University-based technical extension
centers disseminate state-of-the-art development throughout tile
industry, Research grants to faculty and institutions stimulate
research interest ond attract faculty to areas selected for priority
development in the state, Funds are also available to finance new
facilities for new teaching programs in scientific and technological
fields,
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86
Last year a $90 million oond issue was passed to implement tie
recmmiiendutions of tfle Commission The Cormimission's operating budget
established especially to stimulate research is $16 million for the
1935-86 fiscal yeur What has been accomplished or provided for thus
far?
-- A $211 million Center for Advanced Biotechnology will be
constructed for Rutgers University and the Unrversity of
Nedicine and Dentistry of New Jersey, Partial capital
support will be provided towards Princeton University's $43
million biotechnology program An additional $11 million
will finance construction at the Uaksman Institute of
Rutgers and at the University of Medicine and Dentistry of
New Jersey,
-- New Jersey Institute of Technology will house a new
Cooperative Research Center for Hazardous and Toxic Waste
Management, The center is also supported by the National
Science Foundation, Industrial company members, currently
12, contribute research guidance and $30,000 each to annual
operating needs.
-- A Center for Ceramics Research has been established at
Rutgers with support from the National Science Foundation
Tne center enjoys over one million dollars in industrial
support through affiliate fees of $30000 from each of 32
companies. Under consideration is the development of a
second wing for reseach in fiber optic materials.
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-- Rutgers University's Cook College ~iill louse a Center for
Advanced Food Technology, Food processing is a $5 billion
industry in New Jersey,
-- Tne Cornission also has made grants in the areas of
telematics, surface modification tecnnolojy, and computer
aided manufacturing, New areas under study are fisheries
development and apuaculture,
-- New Jersey has been selected as a national site for a
supercomputer facility, Commission funding helped sway the
decision New Jersey's way, The state funding will lend the
supercomputer to New Jersey's research universities,
-- Two computer integrated facilities--one in Soutn Jersey and
one in Newark--will be established jointly by UJIT and the
state's community colleges, The centers will provide
research and training in the application of robotics to the
manufacturing processes,
-- New educational and training programs have been established
throughout the state's higher education system in such
fields as laser optics, computer aided design, software
development and robotics, Industry has been an active
partner in program development,
New Jersey's efforts are ambitious and expensive, tie believe
tnat a strong higher education system serves New Jersey's residents
who seek collegiate education in the state's institutions, We
believe, too, that strengthening the higher education systems capacity
PAGENO="0094"
88
for teac:ling and research in science and technology contriojtes
significantly to the state's economy, to employment and t;ie economic
well-being of all of our residents Through each progran in tne
Governor's science and technology efforts and tie challenge grant
program, New Jersey's research institutions are better able to
contribute to national needs and national goals in science and
technology,
New Jersey efforts are no different from the efforts of many
states across the notion. States support the research universities in
the public sector and, in many states, in tne private sector as well
Special state efforts in science and technology are also comon.
Through such efforts, states finance initiatives that are also
properly tile responsioility of the federal government.
Where in the federal government are t~iese initiatives? Federal
financing of research through the National Science Foundation, the
National Endo~iients, and federal departments related directly to
applied research needs. Federal efforts in these areas have been
adequate, if not substantial. Even so, the states hove had to
shoulder at least two burdens that deserve federal help because they
are primarily national rat~1er than state priorities.
Wnile states have maintained the "intellectual and
technological" infrastructure for graduate education in the sciences,
engineering and related technologies, they do not, should not and
PAGENO="0095"
89
cannot finance fellowthip for students who euroll in such studies.
Doctoral students in all disciplines serve a national need; tney are
hignly caaile individuals who often leave a state upon completion of
doctoral studies, This support in doctoral studies clearly is a
federal responsibility and not a state responsibility, The federal
government has been derelict in this area, national graduate
fellowships, awarded competitively, will assure that the most talented
young people will pursue careers in oasic and applied researcu, ~Iow
many of the best students are drawn to study in business, law,
engineering and other professions where high rewards are coupled with
less costly academic preparation, Our doctoral programs in science
and engineering enjoy heavy enrollments of foreign students who
constitute a majority of students at our pualic institutions, Where
is tne next generation of American research scientists? They are not
at our universities in sufficient numbers today,
The states cannot afford to pay for all of the costly research
facilities and state-of-the-art ec~uipment needed in today's research
and instructional programs, The states do shoulder a large share of
the costs, That they cannot come near to doing the whole job is
reflected in the higher dependence on obsolete, poorly maintained and
inadequate equipment, We have come to be dependent on private
industry for donations of obsolete equipment, T;ie states need federal
help to maintain up-to-date facilities for teaching and research,
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The New Jersey unemployment rate is 62%, oelo~ the national
average It is lots because our state has created a climate supportive
to emergent industries. Maw university-industrY research
collaboration COfl spin-off new companies, new industries, new jobs.
The new jobs replace tflose lost in the declining blue-collar
industries.
Our unemployment rate of 6,2% is too high, In part, it is so
high because vacant positions go begging while the unemployed and
underemployed are not qualified to fill them,
We are determined both to keep the economy growing by
stimulating applied research and entrepreneurshiP, Ne are eaually
determined tO keep the economy growing by improved technological
literacy among all potential employees in all of the states, urban as
well as suburban comunities, We want a renewed federal effort in
support of basic research to complement the new state initiatives.
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At technent :o
Test imony
Dr. T. Edward Hollander inited States Congress
Chancellor of Higher Education ~as~ington, D.C.
State of New Jersey Nay 21, 1915
Peoort to the u.S. House of Representatives Sub-Committee
on Science and Technology Polic.'
(Appendix to Oral Statement)
Our nation and most of the developed world are undergoing a
furudarrentsl transition from industrial economies to informstioo/
knowledge-based economies. It is a transition as profoundly altering as
the Great Depression of the 1930s, when the United States emeroed fully
from its agricultural past to its industrial present. Nhether we call
it a "ruegatrend," to use John Naisbitt~s popular word, or the core
conventional phrase of economists, that of "structural change, it is
real; it is here now, and it is no longer an idea to be planned for the
future.
Change will result in shifts: from new manufactured products to new
services; from a workforce which was predominantly blue collar to one
that is white collar; and from heavy, rigid technologies to automated,
flexible technologies. The most obvious example of the latter is the
powerful new generation of microcomputers, which are highly portable and
adaptable to torumorrow' a software developments. For individuals, the
shift will be from an emphasis on manual dexterity -- or running a
machine-to cognitive skill -- understanding a technology. Each change
underscores a basic characteristic of our knowledge-based society.
These changes promise a new and vital role for higher education.
It is in the higher education classroom and laboratory -- at our
two-year and four-year colleges and universities -- that training for
entry-level jobs will occur. Educators must employ greater rigor in
determining what our students
-- 20 million students each year -- study and learn. As we ensure the
development of "computer literacy," along with other forms of technical
training, we must also cultivate older, more basic literacies essential
to educated men and women.
At the same time, those who hire the graduates of higher education
-- business and industry -- must seek and he encouraged to collaborate
in the development of instructional needs and personnel exchanges. The
relationship between these two sectors, higher education and industry,
is no longer sequential; it will become increasingly interactive and
lifelong. Programs of customized training, Which represent a successful
collaboration of industry and community Colleges, are but one example of
53-277 0 - 86 - 4
PAGENO="0098"
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cons interaction. There is a need for coc:inunng e~ucation to combat
obsolescence in the face of changing knowledge. :~igher Education hss
m~rh ro learn -- and offer in return -- fron tie exoarcences of
cor~orate training pro~raos in this area, :i:h their affective use of
telecourses and videoco.~oling.
To ignore this challenge to both partners is to risk a greater
consecuence to our society -- to enter the 1990s, ;;nen labor nhortages
are oredicted, with vast numbers of our countrymen unemployed,
underemployed, or, worse still, unemployable.
It is my purpose to call for a renewal of the nublic role am part
of these partnerships. Governments, both federal and state, are kidding
themselves if they expect business and industry to support, in any
meaningful way, the costs of basic scientific research and instruction.
Beyond this recognition, it is essential to make a further
distinction between the province of the states and the federal
government in the development of natiOnal science and technology
policies. It is both unfair and unrealistic to expect individual states
to shoulder the burden of the nation, if the federal government proposes
to retreat from its traditional responsibilities. This is especially
true in the sponsorship of basic research, where the budgets of the
National Science Foundation, the National Institutes of Health, and the
mission agencies must be advanced beyond maintenance levels. Only the
federal government can command the resources necessary to support
effectively basic research. Despite the exigencies of the deficit, if
the federal government pursues policies of under-funding higher
education and research, I doubt that the new partnership between hioher
education and industry will reach its full potential -- and the
difference will not be trivial.
By the same token, we should not exempt state governments from this
support problem. My report is offered as a representative of one of the
nation's largest state systems of higher education. I believe that,
during the first four years of the current national administration, the
states, and in particular Hew Jersey (the state I know best), have
responded well to the changing locus of higher education support. We
are providing the support for what I would call the "intellectual and
technological infrastructure." This represents funding for the
financing of the facilities and the equipment for research and
instruction, as well as the salaries for top-flight faculty and
technical personnel.
Using my own state, New Jersey, as my illustration, I hope to
portray the magnitude of this support. This funding is occurring both
through the on-going and expanded efforts of the Nev Jersey Department
of Higher Education and through a special science and technology
initiative of our Governor, which recently became a permanent Commission
on Science and Technology. I shall describe both sources. I also
intend to offer some general observations on the role of the states in
science and technology, expanding on my previous point about what the
states can and cannot do.
PAGENO="0099"
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The State appropriation for higher education s;pport in ew Jersey
is aooroachinc $650 iillion, for the coning fi.~:m year. Of this
amount, nearly 50%,or $298,316,000, is aoprooriated to support New
Jersey's three pthiic doctoral-level irnetituticns Oi higher education
(i.e., Nutgers Univeraity, New Jersey Institute ci Technology, and the
University of ledicine and Dentistry of New Jersey). These amounts
constitute base support. The Department receives another $40 million
for debt service, to ceet the capital construction costs of higher
education facilities. These construction obligations are distinct from
the $90 million science and technology bond which the voters of New
Jersey overwhelmingl'.r approved, in November 1984, for the construction
of new research laboratories and centers and instructional facilities.
Beyond these base level and construction oblications, the Governor
has recommended special initiatives for both instructional and research
improvements in higher education. These initiatives include an $8
million "challenge grant for excellence" to Rutgers iniersity, to be
expended as follows:
(1) World - class scholars $1,200,000
(2) Junior faculty ... 989,000
(3) Graduate assistantships ~44,000
(4) Faculty support, . . . 2,267,000
(5) Libraries ~00,000
(6) Computers - ... . .. 1,300,000
(7) Academic facilities ..... 1,000,000
S8, 000, 000
The New Jersey Institute of Technology will receive $3.7 million
for similar purposes, broken down as follows:
(1) Instructional equipment- .... $3,000,000
(2) Faculty chairs , - ~00,000
(3) Computer networking . . . 100,000
$3,700,000
With a "technology and computers fund" of neary $7.6 million, the
Department of Higher Education will undertake prcgrams to modernize
scientific and engineering equipment, facilities and curricula, and to
integrate computers into the college curriculun. In addition, programs
will upgrade the technical knowledge and skills of teachers and college
faculty contribute to the technological literacy of all New Jersey
citi zens.
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(1) Technical/engineering education ~:anrs. $2,873,000
(2) South Jersey Regional c:M Center. 300,000
(3) ath/science/computer science ciaching
initiative 1,000,000
(4) Comouters in curriciPt 2,919,000
(5) Information-age initiative 500,000
$7, 592,000
These several initiatives combine to form a major instructional
improvement program in New Jersey, with primary emphasis on scienceand
technology. Improvements in research are being stimulated by the
Commission on Science and Technology, especially where these efforts
support New Jersey's high technology economic development strategy.
The Governor's Commission on Science and Technolog~' was established
by Executive Order in July 1982, to create a bluepdnt and action plan
for the economic development of New Jersey, in a post-smokestack
industrial era. This program of economic development emphasizes the
applications of science and technology, through new partnerships between
graduate research academic institutions and industry.
The Commission has identified the components of a technology
development strategy that builds on New Jersey's industrial mad academic
strengths. The strategy requires that we make investments in ideas,
enterprise and people. It also requires coordinated efforts by both
public and private sectors. Finally, it requires a long-term commitment.
One of the Commission's most important recommendations is that the
infrastructure for New Jersey's science and technology initiative --
the laboratories and research centers -- be provided through a major
capital improvement program. These improvements will he accelerated now
that the voters have approved the referendum for the $90 million `Jobs,
Science and Technology Bond.' Details on this bond issue are provided
in a later section of this report.
The Commission's funding programs emphasize the technology fields
that have been designated as `priority' (materials science,
biotechnology, hazardous substance management, food technology, and
telematics) for New Jersey's development orogram. Moreover, these
grants have been received, in the main, hi those institutions housing
Advanced Technology Centers in these priority fields or, in the case of
Stevens Institute of Technology, a Technology Extension Center in
polymer processing.
The program expenditures of the Commission for the current fiscal
year (FY 1985) amount to more than $9 rillion, which provide operational
funding for the Centers and new categories of support, such
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as :nn.~vat~on Partnerships (matching research grants for selected
scientific and engineering projects). In addition to broader ranges of
ou~por~, 1-is aopro~riation continues to fund the priority technology
fields and add start-up support in second-stage fields, such as
materials ~.andling and lisharies development.
The Science and Technology Budget for FY 1986 requests funds
tota~l~.nc 516 million for new and on-going programs and administrative
experisas.
These allocations are commensurate with the levels of funding
recommended by the expert peer review panels which the Commission
engaged to evaluate the relative strengths of New Jersey's science and
technology initiatives. Especially significant is the funding for new
areas of science and technology research. Such funds are vital to the
Commission's plan of diversifying high technology opportunities for the
state.
There are several sources of non-State revenue which will
strengthen the research programs of New Jersey' a higher education
institutions, principally as a consequence of the Commission's matching
grant requirements as applied to appropriated funds. The most
significant sources are from the federal government and industry.
The Commission's matching guidelines currently require that each
State-funded dollar for "research and operating" support of New Jersey's
high technology initiative be equally matched from non-State sources
(generally, industry and the federal government). Under the category of
"capital equipnment," with the understanding that corporate giving
patterns have proven to be much more conservative, the Commission is
requiring that one-third of the total cost be represented by matching
funds from non-State sources.
The Commission currently projects industrial and federal matching
funds to reach $23 million, in FY 1986. The attainment of this
multiplier effect on appropriations is an important measurement of the
payback of New Jersey's investment in science and technology
development, as one important aspect of the State's overall program of
economic development and new revenue generation.
FY 1986 will see the initiation of several important new programs
by the Commission. Among these new programs is the establishment of a
nationally-based advanced scientific supercomputer center in new Jersey;
a research center to investigate fiber optical materials; an
industrially co-sponsored plastics recycling research program; and a
private industry challenge grant organized by the American Electronics
Association, with the anticipation of State matchinc, to fund graduate
education, faculty development, and instructional equipment in
electrical engineering and computer science.
PAGENO="0102"
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These and other initiatives will ce overseen ow a permanent New
Jersey Cor~icsion on Science and Technology, a:gnei iOto law on ~crii I,
1585, reslacing the temoorary Governor's Commission.
I :ndicated earlier, the technol~ny infrastructure for many of
these orojects will occur through the $90 million `Jobs, Science and
Technology 3ond.' These ~noroVement3 .;itl proceec according to the
following ;eneral exsenditjre sian:
A. Advanced Technology Centers
Major construction orojects are proposed on sitCs at or near New
Jersey's graduate research institutions of higher education.
Construction, which could include the acquisition of real property,
principally would occur at Rutgers, the New Jersey Institute of
Technology (UJIT) , and the University of ~edic:ce and Dentistry of New
Jersey (UV.DNJ), although some capital improvements night qualify at
private higher education institutions such as, Stevens Institute of
Technology and Princeton. (For planning ourpotes, a construction cost
of S200, per square foot, has been used to arrive at these budget
estimates.)
(1) BiotechnolOgy. The Advanced Technology Center for
Biotechnology, for which the most significant capital
improvements were recommended by the Commission on Science and
Technology, actually refers to five interrelated projects,
which together total S40 million. The core facility, to be
known as the New Jersey Center for Advanced Biotechnology and
Medicine, would be new construction located on the adjoining
campuses of Rutgers and `JMDNJ in Piscataway. It is here that
the major research projects of Rutgers and UMDNJ jointly would
be conducted and where senior staff, including the director,
and technical support would be housed. The capital cost of
this project are $23,600,000.
This core facility would be backed-up by three satellite
facilities, all within close proximity to the new Center.
First, a fermentation and biomaterials seoaration facility
would be added to the current Waksman Institute for Molecular
Biology, at a total capital cost of S4 million. Second, the
clinical research facility for the Center would be housed at
the Middlesex General~UniVersitY Hospital, in New Brunswick,
where renovations are proposed at $4.6 million. Third,
existing laboratories at both Rutgers and UMDMJ would be
integrated into the research complex of the core facility,
with building modification and new equipment costs targeted at
$3 million.
Finally, the Science and Technology Commission has
recommended, and the presidents of both Rutgers and UMDNJ also
have called for, a contribution of $5 million to the capital
PAGENO="0103"
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facilities in :eolecular biology, proposed for construction at
Princeton. This amount represents only a small portion of the
546 million investment Princeton is ~akins in ~olecu1ar
biology, hut it would signify a genuine endorsement by New
Jersey of the new spirit of cooperation in this field, amonc
Rutgers, UNDNJ, and Princeton, and help to draw these three
institutions closer together for combined research.
Developing a world-class center in biotechñolocy in New
Jersey, with all its component parts, requires serious
attention to the advantages of this three-way relationship.
(2) Hazardous and Toxic Substance Management. Although without a
central facility, the Cooperative Research Center for
Hazardous and Toxic Waste began its research activities in
1984.. The Center is supported by the Commission, the National
Science Foundation, and industrial company members (currently
twelve), each contributing research guidance and an annual fee
of S30,000 toward research sponsorship.
The research and public policy programs of the Center, which
will emphasize such areas as incineration, biological and
chemical treatment, and physical treatment, will be assets to
both New Jersey and the nation. They will bring
university-level research to bear on such problems as toxic
waste clean-up, as well as apply these fundings to such
economic growth areas as resource recovery.
The Center will receive a core facility, both to meet this
potential and to draw together the five graduate institutions
of higher education -- led by NJIT ~- that have formed the
research consortium to do the work. The Commission has
recommended that $7 million of the bond issue be assigned to
this facility, with new construction to occur in Newark, at
the campus of NJIT. Additional funds will be provided for
land acquisition.
(3) Advanced Ceramics. The Center for Ceramics Research (CCR) at
Rutgers, performing lead-edge research in one of the so-called
new materials of the future, is fast approaching world-class
status -- both in the independent judgment of leading faculty
from MIT and as assessed recently by Hiqh Technologv
Magazine. The Center has an industrial membership of
thirty-two companies, with its annual affiliates fee to
$30,000, all of which translate into an industrially-sponsored
research program of nearly Sl million, per year. CCR also is
supported by the National Science Foundation.
The recommendations of the Commission are designed to ensure
that CCR attains this world-class standing and generates
benefits of primary inportance to `1ev Jersey. The latter will
occur through a further enhancement of CCR's research program
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emphasizing technology transfers to :ew Jersey's small and
medium-size industrial ceramics companies and through the
provision of a core facility oo CCN on the 3usch campus of
Rutgers. Currencly, CCR operates from borrowed (and out
crown) space at the Engineering School.
The Commission has recommended 59 nillion for this core
facility. in addition, preliminary discussions have been held
on the development of a "second wing of this facility, for
the research and prototype development of optical fibers --
the materials over which fiber optic network transmissions
occur. CCR has nascent strengths in this area that many
companies and the U.S. government wish to.encourage.
(4) Food Technology. Food technolocy encompasses the study of
chemical, biological, and engineering aspects of food and food
processing, packaging, and storing. The food industry is an
important part of New Jersey's economic base; food processing
represents annual shipments of over 36 billion in New Jersey.
~t the same tine, the state has experienced a loss of
employment in the overall food industry, wit:i the relocation
of production centers.
The proposed Center for Advanced Food Technology, with a
capital requirement of $6 million, will strengthen New
Jersey's research and economic base in this industry by
providing new food products and developing more efficient and
economical food processing and related techniques. * The
nucleus of this Center will be formed around the Food Science
Department at Cook College/Rutgers. The core facility, to be
located on the Cook campus, will draw together the strengths
of nearly a dozen academic departments, including
Biochemistry, Chemistry, Nutrition, Plant Physiology,
;iechanical Engineering, Chemical Engineering, and Materials
Science. In addition to strengthening joint research and
development programs, this facility will include a pilot plant
designed to bridge the technical gap between laboratory
research and commercialization. Given the cross-disciplinary,
commercial orientation of the Center, we anticipate that it
will help to spin-off new businesses in such areas as
ingredient supplies, chemical and packaging supplies,
processing and sensory equipment and instrumentation,
warehousing, and waste disposal.
(5) Stage Two Needs. Although the Cocmissionuas not able to
ascertain additional needs with the sane finality as those
identified above, its report e~ohasizes that there will he
other capital requirements over the next several years. We
already have mentioned the optical fiber materials area as a
possible `second wing' of the Center for Ceramics Research.
Another academic area where we anticipate requirements for
PAGENO="0105"
99
temital improvements is the field of telematics --
representing the growing confluence of computer technologies
telecommunication. A third area, under the gemeral
reedinu of materials science, is surface ~odific.~tjo~
zec~ologv. ~7e helieve there will other needs, as well.
For this reason, the Science and Technology Commission
:t:mmgl7 urged tnat sufficient funding -- $15 million -- be
`sil~ole to permit timely forward movement in these areas as
uoon as their importance is confirmed and their requirements
~tore precisely identified. These determinations will be the
responsibility of the new permanent Commission.
3. Undergraduate Technical and Engineering Facilities
To ensure the instructional improvements that are needed for a
technolocy-trained workforce in New Jersey, the Commission recommended
that substantial capital funds -- $23 million -- be provided to maintain
high quality science and technology education at the public four-year
and community colleges, as well as at many independent institutions of
higher education. These funds will be applied to the constrection and
improvement of instructional laboratories, computer and educational
facilities, and huilding space for technical equipment installations.
Projects to be funded from this portion of the bond issue will be
for major capital expenditures valued at more than $250,000, and with ~n
extended use-life expectancy. These expenditures will differentiate
themselves by dollar size and nature from current technology initiative
grant programs to higher education institutions and especially Eros
Chapter 12 projects that fund the county colleges. A competitive grant
process, within each sector, will be used. All projects drawn from this
$23 million fund will receive the approval of the Board of Higher
Education.
C. Other Technology Initiatives
(1) South Jersey En9ineerina~ Facilities. At present, there are no
facilities for undergraduate or continuing professional
engineering training in South Jersey. There is an increasing
need for such programs with the growth Of technology-based
businesses in this area of the State. The bond sets aside S3
million for construction of needed facilities as part of the
establishment of a new yest Campus for Burlington County
College. The last two years of undergraduate engineering
training and continuing Professional education for the
industrial community will be provided here. The program will
te a cooperative venture between Burlington County College and
the New Jersey Institute of Technology.
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CD) 2r)J~~ Assisted Design/Computer Assiste~ Canufacturing
_____ A regional county collese-based :raining center for
conpucer assisted design and commuter assisted nanufactcrinq
`CAD/CAM) will be established with $4 million of the bond
?roceeds. This center .;ill focus on rohr:ics technologies cod
would ne used by the community colleges in South Jersey for
rechnician training. A consortico of county colleges will
omerate the center.
(3) Other srojects, to be designated. The State Board of Higher
Education will retain control over $3 million. These funds
will be used to meet future needs for construction and
renovat ion.
Sunmar-, Observations
High technology development is currentll, of great concern to many
state governments. Various measures exist to promote advanced
scientific and technological growth at the state level. These include
sumpor:ing technological training programs and removing barriers to
business development which are imposed by individual states. Some of
the most important activities which will promote the growth of advanced
technological industries cannot, however, be undertaken at the state
level. These include the removal of tariffs on American goods in
foreign countries, and the reform of federal regulations concerning
business taxation and investment, in the following discussion, the
focus is on those areas which individual states can and cannot affect to
promote high technology development.
What State Government Can Do: Education And Economic Development
State governments can play a significant role in high technology
development through their involvement in education and economic
development. Specific measures which enhance high technology
development are outlined below.
A. Industry - Education Alliance: State governments can seek to
increase and strengthen collaboration in research and
instructional support between their industries and academic
institutions, by encouraging
I. the development of joint appointments and improved salary
packages to enhance the recruitment and retention of
engineering and computer science faculty, esnecially of
faculty;
2. the development of joint and third-party suoport mechanisms to
encourage specialized graduate courses and research at the
cutting edge of science and technology, jointly conducted
research and development and exchanges of personnel;
PAGENO="0107"
101
3. technolog, transfers, especially to small end medium-sized
industria. enter~rises, to increase :he actual implementation
of high technology research and development; and
4. tie develo~rsent :)f incer-institutjonal "centers of
excellence,' witn industry particimation and with a precise
focus on isissior. (e.g., telecommur.~cetjons, biogenetics),
since a critical mass" of faculty and fecilities, supporting
infrastructure, and economic resources is viewed as essential
to successful imolementation.
B. ~ggineering Education and Training: Recognizing the high
level of responsibility which states must accept for the
health of engineering education, state government can identify
ways to expand the applied scientific, technical, engineering
and computer science caoabilities of their higher education
institstio-is, including
1, aggressively recruiting promising undergraduates for graduate
programs in ~ielis like engineering and computer science, with
support from both publicly-sponsored and industry-sponsored
stipends (based upon work commitments for sponsored students);
2. increasing higher education's capacity to train a more
technology-oriented work force, especially through associate
degree programs and programs of customized training;
3. providing greater access to professional engineering and
technical careers for students who traditionally have entered
scientific fields in limited numbers (i.e., women and
minorities);
4. expanding continuing education opportunities, particularly at
the professional and technical levels, to overcome job skill
obsolescence; and
5. a re-examination of those policies which may preclude making
the pay of engineering faculty competitive, including the
removal of disincentives to entrepreneurship.
C. Equipment and Facilities: State government can seek to
overcome any equipment or facilit, `~eficiencies at their
institutions of higher education, ~including
1. improvement and upgrading of the research and instructional
equipment at these institutions, through both equipment
donations from industry and industry_government matching
support programs; and
PAGENO="0108"
102
2. in combination i:itn other capItal nueds for higner education,
-ie authorization oi general reenue `sci~nce and tecono~ogy"
bond issues to finance laboratory inorovenents and related
areas of deferred ~aintenance.
D. Research/Industrial Parks: State covernment can also
investigate the feauibili:~7 of stinuating public/private
research and induscrial parks, incliding the provision nf io~:
cost financing from the States economic development agencies
for the construction of such par~cs intareeted urban areas
capable of benefitting from close interaction with academic
research centers.
E. The Economic and Working Environment: State governments can
assist their agencies by helping to investigate the economic
obstacles to and incentives for high technology development,
including
1. the usefulness of revising the corporate tax code, and
especially the provision of loss carry-overs, to encourage
capital formation and new business investment;
2. the viability and potential use of differential tax rates, and
tax abatements, as well as easements on the availability of
loans, industrial bonds and grants, as incentives to high
technology industrial start-ups;
3. government regulations on business operations, including those
pertaining to environmental protection, to determine whether
obstacles to economic development can be alleviated;
4. the participation of financial institutions, especially those
vertically-integrated institutions that can assist high
technology development in all its phases, from research to
commercialization; and
F. Scientific and Technological Literacy: State government can
identify programs to improve science education and
technological and computer literacy at all educational levels,
such as
1. the feasibility of establishing science and mathematics
teacher training institutes at colleges and universities to
meet shortages of qualified teachers in t~e secondary schoolris
in these fields;
2. the encouragement of programs which serve to ~demystify~
science and technology as subject-areas beyond everyday
comprehension;
PAGENO="0109"
103
3. tne develomment of special high school programs to increase
the pooi off qt~alified minority group students who concentrate
on science and mathematics as preparation for higher education
and rele:ant careers; and
4. the development of enriched undergraduate programs for
econoaicaiiy and educationally disadvantaged students to
increase entry and eventual empio~ment in technological fields.
~1hat state goverments cannot do: improve export market conditions,
reform federal tax and environmental regulations.
Several of the most important measures which need to be taken in
order to promote high technology growth in the United States cannot be
carried out at the state level. These are in addition to the
fundamental role of the federal government in Sponsoring basic research,
as dtscussed earlier. Among these measures are the following:
s~. cmoroving the market conditions abroad for high technoloav
products. ~1any foreign countries have extremely high tariffs
against imported goods which are produced using advanced
technology. These countries claim to be protecting domestic
producers of the same goods. The federal government can lobby
for greater free trade in products resulting from
sophisticated technological processes. State governments have
no authority to conduct foreign affairs, so they can do little
to improve this situation.
B. Imoroving the business climate by-lowering corporate taxes and
eliminating unnecessary regulation of high technology
industries. State governments are limited in the degree to
which they can foster high~ technology development by' corporate
taxes and regulations imposed at the federal level. State
governments can press the federal government for change, but'
there is nothing they can do legislatively to ameliorate the
situation.
C. Controlling migration of the labor force. The manufacturing
side of high technology development involves blue-collar
workers engaged in running factories in which Sophisticjted
products are made. High technology firms are eager to locate
in states with large numbers of skilled and unskilled
laborers. Other states may suffer a loss of workers, if more
attractive positions exist elsewhere in the country. There
may be little that state governments can do to prevent these
migrations.
that the federal government can do: help to modernize on-camDus
facilities and equipment for basic research.
This report describes major initiatives occurring at the state
level, and in particular in New Jersey, aimed at improvements in science
PAGENO="0110"
104
and technology. Joining forces with local industries and major
co:pnretiooa, the states are providing leadership in the education of
students and in the formation of industrial policies for economic
de.eloprcent and ne~ jos creation. For these efforts and policies fully
no succeed, however, we need the active particimanion of the federal
government, especially to help meet the considerable costs of the
infrastructure for `aasic science and research.
The days are past when we should expect the federal government to
provide the sole support for these needs. Support from the federal
government must be matched by the states, the recipient higher education
institutions, and industry. My report indicates that these sources are
both available and actively engaged in making improvements. What also
must occur is leadership from Washington.
While states have maintained the ~intellectual and technological~
infrastructure for graduate education in the sciences, engineering and
related technologies, they do not, should not and cannot finance
fellowship for students who enroll in such studies. Doctoral students
in all disciplines serve a national need; they are highly mobile
individuals who often leave a state upon completion of doctoral
studies. This support in doctoral studies clearly is a federal
responsibility and not a state of responsibility. The federal
government has been derelict in this area. National graduate
fellowships, awarded competitively, will assure that the most talented
young people will pursue careers in basic and applied research.
I am calling on this committee to support legislation for a major
laboratory modernization program for on-campus facilities and equipment
in basic research. This legislation should seek increased
appropriations for NSF, NIH, and the mission agencies, with the costs
shared fairly by higher education, industry, and states. It is only in
this way that we can hope to remove the twenty years of neglect faced by
these laboratory facilities and restore them as the driving engines of
our science and technology machinery.
There should be no underestimation of the magnitude of this
problem. Several years ago, my Department analyzed the costs to remedy
the serious disrepair of research equipment, alone, at our major
academic institutions. The result was estimated, conservatively, as a
$40 million problem in New Jersey, and a $1 billion problem,
nationwide. Our Commission on Science and Technology responded quickly,
but within the limits of the State's resources, hyrecommending that
more than $4 million be spent for these improvements~in New Jersey,
during FY 1984. In subsequent fiscal years, we have rais~ed this level
to the $6-7 million range, annually.
We have made improvements but the eradication of this equipment
oroolem, and the construction of the facilities to nouse these
rb r men a is 1Oi~ m ~ d srenai coo 1 a is oal a
a major infusion of federal support that we will aver be able to race
above these maintenance levels. The national and ~nternationsl
~cuirenent5 of science and technology do not permit cm no stay at
naintenance levels. We must advance through growth and expansion.
PAGENO="0111"
105
DISCUSSION
Mr. BROWN. I can assure you that is a very impressive statement
and testimony to the leadership which New Jersey has given. I
hope you are correct that the other States are doing as well.
Dr. HOLLANDER. Some are.
Mr. BROWN. Some are. But it would make me rest easier at night
if I felt they were.
Mr. Lewis, do you have any questions?
Mr. LEWIS. I have one, Mr. Chairman.
You are stating, Doctor, that you want renewed Federal effort in
support of basic research. How do we compare to, say, the Soviet
Union or to Japan in that area?
Dr. HOLLANDER. I can't answer that question specifically. I be-
lieve we do very well.
Mr. LEWIS. Do you feel that we provide more assistance for stu-
dents, for doctoral theses than, say--
Dr. HOLLANDER. I can't `answer that question.
Mr. LEWIS. How do you~ feel, then, we need to do more?
Dr. HOLLANDER. Well, our efforts in New Jersey are essentially
supporting applied research. There is a direct and tangible reward,
if you like, to our taxpayers in that research.
The payoff is clear,~ and it is not too difficult, has not been too
difficult, for us to persuade taxpayers to support investments in re-
search in the universities where those investments in the taxpay-
ers' minds are ~related to the creation of new jobs, a greater tax
base.
We have greater difficulty arguing for support of basic research,
more theoretically oriented research, which we do support indirect-
ly in our support of the staffings at the universities and facilities at
the universities. But that fundamentally is a Federal responsibility;
it crosses State lines. It is of interest to the Nation, and our institu-
tions participate in that effort, as do the major universities
throughout the country.
But the Federal Government really has a responsibility to do for
those institutions, in terms of basic research, what we in New
Jersey are doing with taxpayer money for applied research.
Mr. LEWIS. Do you feel that the Federal Government should also
be involved in establishing chairs for various scholars in the State
university systems?
Dr. HOLLANDER. I would say that would be a lesser priority. I
think that is more of a State responsibifity than Federal responsi-
bility.
1 would define the priorities in the Federal responsibility as facil-
ity, maintaining equipment up to date, and national graduate fel-
lowship programs in support of doctoral studies.
Mr. LEWIS. Thank you.
Thank you, Mr. Chairman.
Mr. BROWN. Dr. Hollander, I would like to explore with you just
a little bit more the role of the Commission on Science and Tech-
nology which you have described in your statement.
I gather that that is ongoing?
Dr. HOLLANDER. Yes.
Mr. BROWN. A permanent commission?
PAGENO="0112"
106
Dr. HOLLANDER. It will be continuing.
Mr. BROWN. A continuing commission established how long ago?
Dr. HOLLANDER. About 2 years ago.
Mr. BROWN. And it has a separate operating budget, and were
some of these or most of these initiatives that you have described
recommended by this commission?
Dr. HOLLANDER. Yes, they were. The Commission was staffed ini-
tially by the department, my department, the Department of Higher
Education. It was comprised of university presidents as well as
chief executive officers of major corporations in the State.
We set up a system of peer review to evaluate, first, where we
thought the State would grow on the basis of pure and applied re-
search and, two, where our universities really had a capability of
making a contribution.
Where those two coincided, the Commission recommended major
State funding of a Center for Advanced Technology in that area.
Where the Commission based on peer review felt that we needed
capability in the area, the commission recommended funding of
what we call innovative partnership. That is funding of research by
faculty and encouraging industry to also fund research to build up
a capability, hopefully, to lead to an advanced center for research
in that area, and that has been done.
The third part of it, also recommended by peer groups, is a strat-
egy for dissemjnation. That is to make the result of the research
available not just to one or two companies, but the whole industry
in the State, the service organization based at the university.
Mr. BROWN. How would you categorize the degree of cooperation
from your industrjes' CEO's; have they played a prominent role in
developing the kind of cooperation you have described here?
Dr. HOLLANDER. An important role; in fact, the most important
role, in my judgment, was their identification of, if you like, world-
class national capability, nationally recognized researchers in a
number of fields where they had heretofore been skeptical of the
research capability in the state outside of Princeton.
Their investment with the Commission led to their direct commit-
ment of resources in support of some of the centers, but more im-
portant than that, their commitment of support for increased State
financing of our higher education system. And that aspect, as a
result of the Commission activity, benefited all the institutions in
the State.
Mr. BROWN. In other words, their support of the State's funding
provided the political?
Dr. HOLLANDER. They helped sell the bond issue. They also
helped sell it under conditions which they recommended involving
matching support, that is, requiring matching support in all the
areas. That is built into all of our proposals.
Mr. BROWN. How long do you anticipate, or is it possible to quan-
tify this, that you will begin to see some measurable results in
terms of economic impact, impact on the unemployment rate and
so forth, from this kind of a comprehensive program?
Dr. HOLLANDER. That is hard to say. It is going to come slowly at
first, and hopefully faster later on. There has been some impact al-
ready. There have been a number of firms that located or will be
PAGENO="0113"
107
spun off from research activities as a direct result of the Commis-
sion and other efforts of the university.
For example, one, a new pharmaceutical house was established
by a university researcher at our medical school. The company has
since gone public and that has brought research jobs into the State,
and if the research is successful, possibly something beyond that.
We have got spinoffs that have greatly affected over a longer
period. Even before this Commission, there has been collaboration
between our universities and the pharmaceutical industry and
chemical industry which are very strong in New Jersey. These
have been more formalized with the centers, where collaborative
research can take place.
I don't know how long it will take to spin off into new companies
or new products or expansion based on patentable products from
the research efforts. That is really hard to say. And I guess even if
it isn't directly discernible, the impact indirectly on the State's eco-
nomic environment and attitude toward the State on the part of
new companies, I think, is considerable.
Mr. BROWN. Well, I am very grateful to you for your testimony,
Dr. Hollander. It has been a major contribution to the work of our
task force, and we appreciate your being here this morning.
Dr. HOLLANDER. Thank you for inviting me.
Mr. BROWN. The task force will be adjourned.
[Whereupon, at 12:10 p.m., the task force recessed, to reconvene
Wednesday, May 22, 1985, at 10 a.m.]
PAGENO="0114"
PAGENO="0115"
THE FEDERAL GOVERNMENT AND THE
UNIVERSITY RESEARCH INFRASTRUCTURE
WEDNESDAY, MAY 22, 1985
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SCIENCE AND TECHNOLOGY,
TASK FORCE ON SCIENCE POLICY,
Washington, DC.
The task force met, pursuant to recess, at 10:05 a.m., in room
2318, Rayburn House Office Building, Hon. Don Fuqua (chairman
of the task force) presiding.
Mr. FUQUA. Today we continue hearings on the role of the Feder-
al Government in supporting the research infrastructure of Ameri-
ca's universities. Yesterday we heard from several members of the
administration, a representative of the State governments, and the
National Academy of Science.
Today we are privileged to hear from several of the major asso-
ciations of research universities, from a representative from Ameri-
can industry, and from two individuals who can tell us about spe-
cialized aspects of funding and manpower issues affecting the re-
search infrastructure.
These hearings before the task force will give us a sound basis
for developing the recommendations we will have next year con-
cerning this important issue. We hope to learn more about the
fiscal issues which directly affect the maintenance of the research
infrastructure and, based on what we have learned, we may wish
to ask our witnesses some supplemental questions. We hope they
will be able to continue to give the benefit of their experience in
the coming months.
Our first witness this morning will be Dr. Oliver D. Hensley,
chairman, Study Group on Research Personnel, Society of Research
Administrators, and associate vice president for research, Texas
Tech, Lubbock, Tx.
We will be pleased to hear from you at this time.
[A biographical sketch of Dr. Hensley follows:]
* DR. OLIVER D. HENSLEY
Associate Vice President Texas Tech University.
Chairman of the Society of Research Administrators Study Group on Research
Support Personnel.
Years
Chemist, Drew Chemical Co 10
Public schoolteacher 6
Research administrator, faculty member and principal investigator at Uni-
versity of Illinois 2
(109)
PAGENO="0116"
hG
Years
Southern Illinois University . 6
Northeast Louisiana University 9
Texas Tech University 1
STATEMENT OF DR. OLIVER D. HENSLEY, CHAIRMAN, STUDY
GROUP ON RESEARCH SUPPORT PERSONNEL, SOCIETY OF RE-
SEARCH ADMINISTRATORS, AND ASSOCIATE VICE PRESIDENT
FOR RESEARCH, TEXAS TECH, LUBBOCK, TX
Dr. HENSLEY. Mr. Chairman, members of the task force, I am
Oliver Hensley, associate vice president for research at Texas Tech
and chairman of the Society of Research Administrators' Study
Group on Research Support Personnel.
I want to thank you for inviting me to testify about the signifi-
cance of research support personnel to university research and
about their impact on national and university research policy. I
will want to emphasize the importance of reassessing both national
and institutional policies and linking these others. The topic that I
am talking about is most important to the maintenance of excel-
lence of university research and to the continuing welfare of the
Nation.
I have been studying research support personnel, one part of the
infrastructure, for 5 years. It is difficult to give uniform data about
them.
I will share with you some personal impressions about research
support personnel and some interrelated modeling problems that
exist with that particular group, and then point out some of the
highlights of recent developments from a comprehensive SRA
study of research support personnel.
First, I would like to talk about the significance of research sup-
port personnel to research. It is not understood by policymakers
and, consequently, this group has been ignored in science policy.
Second, I believe that the exact size of the total research support
personnel population is not presently known, but there are esti-
mates that they number more than a half million and are the fast-
est growing group in academia.
Third, the present national cost of maintaining university re-
search personnel is enormous. I believe that it is the biggest part of
the university research budget and that their cost is increasing at
an astounding rate.
Fourth, I believe that quality support services can be maintained
with a strong congressional commitment to support this part of the
infrastructure.
Fifth, the direct and indirect cost reimbursement mechanism as-
sociated with project funding is an adequate and a fair way of
maintaining the infrastructure if policymakers will accept the fact
that the full cost of research must be recovered for every project
and if policymakers will update their personal perceptions and
share formal models that keep pace with the changing times.
Sixth, I believe that a continuing comprehensive study can be
made by research support personnel and other segments of the in-
frastructure if Congress, the National Science Foundation, and the
professional associations such as SRA will arrange for and support
the periodical exchange of timely information.
PAGENO="0117"
111
Your hearings are an excellent start in that direction. The Socie-
ty of Research Administrators will respond by inviting one of your
members to speak about the task force agenda at our national con-
ference in St. Louis in October of 1985.
I would like to spend some time just highlighting the results of
this comprehensive SRA study. The majority of my remarks will be
included in the written presentation I have given to you. Time does
not permit the full coverage of that, so I will just headline some of
the more important findings.
The most important finding of the SRA study group was that
this part of the infrastructure, the research support personnel, has
grown so fast that it really has not been studied and it is complete-
ly undervalued because policymakers at the national level and in
the institution really don't understand the significance of this par-
ticular group.
The SRA study group found that Federal agencies, university as-
sociations, and the professional societies have not valued research
support personnel enough to distinguish them from other groups
and then to study them. They also found out that there was a wide
acknowledgment that research personnel are essential to the con-
tinued advancement of science, to the advancement of specific mis-
sions of postsecondary institutions, and to American technological
leadership. Yet, this vital group's value for science remains largely
unrecognized, its size, contribution, and composition universally
unknown and the field generally ignored by disciplined inquiry.
For some time the Society of Research Administrators has real-
ized that many national and institutional issues could not be ad-
dressed rationally by the university and their several sponsors
until a working definition and a common classification was devel-
oped for research support personnel [RSP]. They recognized that
the lack of knowledge about this part of the infrastructure was the
primary problem leading to a host of secondary difficulties related
to the Government-university partnership. Second, they realized
that it was creating numerous institutional operating problems di-
rectly affecting the daily activities of the principal investigor.
Third, it was instigating many personal difficulties related to
morale, productivity, and job satisfaction of the research support
person.
For example, the secondary problems of capping indirect costs, of
decaying support services in the universities, and, of technical per-
sonnel shortages within academia and industry stem from inad-
equate information on research support personnel. Also, valid in-
formation related to this group is essential to the development of
modern university personnel management systems and to the re-
cruitment, morale, and retention of this essential group of individ-
uals within academia.
Effective and employee-accepted subsystems of performance ap-
praisals, job classification, and equitable employee incentives are
dependent upon national norms for particular jobs. Development of
these key systems, their specific components and employee satisfac-
tion with their university jobs, requires basic national information
and specific national indicators related to this group.
PAGENO="0118"
112
In the past the National Science Foundation has gathered a
great deal of information on scientists and engineers, but they have
completely neglected this group.
In 1983 the society established a study group to investigate the
problems related to the RSP. After 2 years of investigation, the
study group has developed:
One, an acceptable definition to universities;
Two, a functional classification system; and
Three, an indepth analysis of divisional research support person-
nel patterns in universities.
The RSP are now defined as those individuals other than stu-
dents who render assistance directly or indirectly to principal or
coinvestigators. Research support personnel may be assigned di-
rectly to a project or they may provide indirect or occasional assist-
ance to the researcher or project director. This heterogeneous
group of employees include Ph.D.-level analysts, special mechanics,
many types of clerical individuals, and accounting personnel as
well as all levels of academic administrators.
The study produced some indicators of the composition of the
RSB which I would like to present. To give us a common frame of
reference, I call your attention to the SRA "Taxonomy of Research
Support Personnel" within the research establishment.
PAGENO="0119"
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PAGENO="0120"
114
For many years the model for research within universities has
been primarily researchers and students with a sponsor. This
model changes things. The largest group of people in the universi-
ties now, excluding students, are research support people. That
group has not been looked at. That third dimension that you see
running down on the model has really not been investigated by in-
stitutional policymakers or national policymakers.
There is a large, large number-almost 75 percent-of the people
who in some way make their living associated with university re-
search who are tied up in this group, and it has been completely
unstudied. The students have been studied; the researchers have
been studied; and certainly the sponsors. There is a large group of
them.
This model of the research establishment attempts to explain in
a graphic fashion the composition and the complex interaction of
the principal types of people in a modern research community. It
also provides a shocking picture of the size and signfficance of the
research support personnel. Moreover, it helps institutional data-
gathering and policymaking if we have first classified individuals
according to their primary purpose.
Each of the classes of individuals has well-defined roles that de-
termine the traditional relationship with one another. If we under-
stand the composition of the establishment, we should be able to
formulate policy that facilitates the achievement of research goals.
Note that the support types are in the middle between the re-
searcher and the sponsor. This places them in a brokerage position,
making them valuable to both sponsor and the researcher.
You will notice that there are 12 functional classes in the SRA
taxonomy for research support people. They range from grants and
contracts officers down to medical support personnel.
If you will turn to the next page, you will see a model that is
used to classify these individuals. Universities use a variety of or-
.ganizational structures and support positions to administer re-
search funds. These positions are shown in table IV-1.
PAGENO="0121"
115
Table IV-1
The 1~ypical Divisional Patterns Used by Universities
to Organize Their Research Support Activities
in Grants arsi Contracts Offices
Directors of Grants
and Contract Offices
Pre-award
Division
Post-award
Division
Pre-award and
Post-award
Integration
Director of Research
& Developnent
Director of Ccm~unity
Support
Director of Prepare-
tiai/Reviecq
~
General Ngr. of Devmt.
Dean/Director Office
of Research
Director of Res. Main. Director of Sponsored
. Prograns
Director of Grants & !
Contracts Main. Director of Res. Sew.
Director of Projects Director of Research
Devmt. & Main.
Director of Prog.
Devmt. & Main.
Director Award 1~at.
& Resources Info.
Dir. Fed. Res. Furaling
Sew. Office Res. &
. Prog. Madn.
Interns (Mainistra-
tive)
!
!
`DIRFCIORS &
. DEA~
~
~
.
Assoc. General Ngr.
Deputy Dir. Res.
Develoçmmnt
Assoc. Dir. Contracts
& Grants
Deputy Dir, of Prog.
Assoc. Dir. Sponsored
Progress
Deputy Dir. of
!
ASSOCIATE &
DEPIJIY
DIRECIORS
Assist. Dir, for
Research Services
Assist. Dir. of
Program Devint.
Assist. Dean for
Res/Res Pros Sec.
Assist. Dir, of Assist. Dir. Office of!
Research Mmin. Prog. & Devmt. Main.!
Assist. Ngr. Sponsored ! Assist. Dir. Sponsored! ASSISTANt
Progs. Acctg. Office Prograris Main. DIRECtORS
Assist. Dir. Sponsored!
Projects/Bus. Affairs!
Coord. Sponsored
Prograrts
.
Sr. Grants & Contracts Sponsored Projects
Administrator Administrator
A~IRA~VE
Coord. Grants & Con~ Sponsored Progrsrrs (XXRDINAIDRS
Administrator
Main. Grants & A1MtNIS'JIATIVE
Contracts Office Administrative ASSISTANtS
! Assistants
Some universities use a preaward division, some use a post-
award division, and some use an integrated approach, but some
place within the university there is someone with the title "Direc-
tor of Research Sponsored Programs." There are assistants, there
are coordinators, and there is a whole list of other types of clerical
support.
The next page, table IV-3, you see the composition of the people
who are directors of contract offices. You get some idea from a
sampling of about 20 institutions of how many males and females
you have and a salary range. You can see where some of the costs
associated with research go, if you are talking about people who
are in support positions.
PAGENO="0122"
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PAGENO="0123"
117
There have been 10 other study members who have made inten-
sive studies of their functional classes and have provided a current
picture of the composition of their category of research support.
Taken together, these 12 studies provide the best indicators of
what positions are included in the university research infrastruc-
ture.
The study group estimates that currently 75 percent of the total
research personnel are employed in support positions. If you will
turn two pages over, you will see a copy of the SRA summary re-
sults. Here you see an example of where institutions have 1,700
faculties but 7,300 support personnel, giving them a percentage of
faculty at 19 percent with 81 percent of support people. If you will
look at the amount of money that they are getting in the way of
Federal research funds, you see that they are getting over $200
million in Federal support to support research.
Some idea of the size of the group can be found if we look at
table II, called an "Analysis of Research at Selected University De-
partments (1939-40)." At that time Vannevar Bush reported that
there was approximately 82 percent faculty in relation to 18 per-
cent support people in 1940, in the beginning where university re-
search began to really take off and grow very, very rapidly.
PAGENO="0124"
118
Figure 1.
1F2.O The SRA Taxonomy For the Research Support Personnel within the
Research Establishment
PAGENO="0125"
119
Many of us still hold that outmoded concept in mind, that we
think of an investigator and maybe a part-time person supporting.
That type of research still exists in universities, but it is not the
type of university research that we really have. We have a few in-
vestigators and a large support group.
One of the problems that comes up is the indirect cost. Reducing
rapidly increasing indirect costs is of considerable concern to the
Congress, to the scientific community, and to users of basic re-
search and technological innovation. The disproportionate continu-
ous, rising, indirect cost for university research is one of the most
serious and frequently discussed problems confronting the academe
today. That rise in indirect costs can be partially explained by a
related rise in the percent of research support people in universi-
ties.
We constantly talk about the rising indirect cost rates. We must
constantly think also about the infrastructure that it takes to sup-
port that, and the infrastructure is pretty much captured in our in-
direct cost return.
If one reviews the arguments for indirect costs, it is obvious that
neither university administrators nor Government officials know
enough about the support cost, nor do they have the foundation in-
formation on the research support personnel, to justify those costs
to the faculty or to the taxpayer.
Earlier we saw that research support people are estimated to be
at least 75 percent of the total research personnel. They can be di-
rectly or indirectly identified with some kind of research function.
At this time we should look at the total cost of university re-
search. That means looking both at the direct cost and the indirect
cost, and then look at the contribution that research support
people make to these costs.
Since most universities cannot presently determine exactly who
and for how much time each research support personnel is as-
signed to an organized research unit, it is impossible to say precise-
ly what the mix of costs are within university organized research
budgets, but one writer guessed that the principal investigator
costs are less than 20 percent of total direct cost for research and
that research support people account for more than 50 percent of
the total research cost. Moreover, the trend is for more research
support costs; thus, higher indirect cost rates.
Figure 4 shows three university research administrators' ópin-
ions about what the relationship and the distribution might be
among major cost factors in university research. Exact knowledge
of this ratio should be determined.
PAGENO="0126"
120
FIGURE 4. A GRAPHIC REPRESENTATION OF ESTINATED RSP COSTS IN RELATION
TO TOTAL UNIVERSITY RESEARCH COSTS.
TOTAL RESEARCH COSTS
During the past 5 years I have given the questionnaire on size
and significance of research support personnel to several hundred
faculty and science policymakers to determine their image of the
size and significance of the research support personnel. Most of
those interviewed have dangerously low estimates of the size of this
group and hold an outmoded picture of how research is organized
and conducted on today's campus.
~Moreover, they conceive of university research in an antiquated
and parochial fashion. Most look upon university research as being
confined to basic research. This narrow, personal image is rein-
forced by the Bowman model for American research which was
adopted informally by the Federal Government in the forties when
Vannevar Bush sent to President Harry S. Truman his recommen-
dations for the advancement of national research.
Isaiah Bowman, in his recommendations, maintained that scien-
tific research could be divided into three broad categories: one,
pure research; two, background research; three, applied research
and development.
Briefly stated, Bowman suggested that pure research should be
performed by universities and applied research and development
should be conducted by industry, with some being done by Govern-
ment labs. He provided an elaborate rationale to explain the
proper roles and relationships of public and private research orga-
nizations and to guide the Government's aid to them.
Today, the National Science Foundation uses categories 1 and 3
of the Bowman model to gather scientific information from univer-
sities. Most agency directors and university administrators have
adopted the conventional rationale set forth by Bowman in "Sci-
ence-the Endless Frontier."
A large part of existing Government and university policy starts
with the Bowman model. Today policymakers now use current NSF
data and the Bowman model to formulate new policy.
It is my opinion that the Bowman model is inappropriate for un-
derstanding today's research activities, as it discourages scientific
Direct Costs
I Indirect Costs
`~ RSP Contc D Other Costs
PAGENO="0127"
121
interaction and it does not allow a quantification of the products of
research. I suggest that the 1984 model to classify university re-
search activities, which you will see on the next page, is more rep-
resentative of what the universities presently do and is a more
powerful and precise model for information gathering on university
research. More importantly, this model encourages the develop-
ment of industrial as well as Government sponsorship of university
research. The 1984 model is more realistic as it shows the vast
scope of innovative problem-solving activities that society currently
demands of the university, in addition to the university's conven-
tional training mission.
PAGENO="0128"
A MODEL FOR CLASSIFYING
UNIVERSITY RESEARCH ACTIVITIES
CLASSES
OF
BASIC
APPLIED
PRODUCTION
ACTIVITIES
RESEARCH
RESEARCH DEVELOPMENT RESEARCH
A
`PROCESS B
OUTPUTS C
TECHNOLOGICAL
INNOVATION
DISCIPLINARY
IMPERATIVES
EXPLORING
NATURAL/HUMAN
PHENOMENA
KNOWLEDGE
ARTICLE
ALGORITHM
ORGANIZATION
PRIORITIES
STEPPING
UP-A MODEL
SOLUTION
PROTOTYPES
SOCIAL
UTILITY
RENDERING
INTO
PRACTICE
I NVENT IONS
PATENTS!
TRADE
SECRETS!
COPYRIGHT
MARKET
MANDATES
PRODUCTIVITY
IMPROVEMENT
PRODUCTS
GOODS/SERVICES
SOC IAL!D ISCIPLINAR~
NEEDS
INTERDISCIPLINARY!
INTERSECTOR
IDEAS
ADOPTION OF AN
INNOVATION
PAGENO="0129"
123
Policymakers must understand that universities perform the
vital task of creating new knowledge, of inventing new devices, of
developing prototypes, of improving production of goods and serv-
ices, and of transferring technology.
Not only has the scope of the work of the university expanded,
but the volume of the work has increased many hundredfold. In
1939 to 1940 the total university research expenditure was $30 mil-
lion. In 1985 the expenditure is well over $10 billion, a 300-fold in-
crease.
Universities have been transformed in the past 40 years. Univer-
sity research is big business. It provides the fuel, innovation that
propels our technological society. Slow the production of these in-
novations and American technology is slowed. There is a wide-
spread perception that scientists and engineers are usually the
people who conceive our inventions. This is true, but we have scoto-
mas in our national and institutional policies that have long ex-
cluded the research support person, a group essential for universi-
ties to conduct modern science and to produce an expanding varie-
ty of innovations. To draft policy that will facilitate research, we
must not only have new data; we must have realistic personal per-
ceptions of the subject and valid models to follow.
I am pleased that the Science and Technology Committee has
structured a broad-ranging study of Government science policy. A
comprehensive reassessment of the relationship among the organi-
zations and the research establishment is much needed. Your hear-
ings are most timely, as I believe that our research universities are
caught in a great wave of technological change that requires both
national and institutional policymakers to assess both our policy
and our national models, in light of four decades of dramatic uni-
versity transformation..that promises to become increasingly more
rapid in the remaining years of this century.
Hopefully, the results of your study will stimulate and provide a
guide for self-studies by universities and professional associations.
I thank you.
[The prepared statement of Dr. Hensley follows:]
53-277 0 - 86 - 5
PAGENO="0130"
124
The Significance of Research Support Personnel
(RSP) to University Research
and Their Impact on
Research Policy
I am Oliver Hensley, Associate Vice President for Research at Texas
Tech University and Chairman of the Society of Research Administrators
Study Group on RSP. I want to thank the Task Force for inviting me to
testify about the significance of Research Support Personnel (RSP) to
university research and about their impact on national and university
research policy. The topic is most important to the continuing
excellence of univ~ersity research and to the welfare of the nation.
The Task Force has asked for a broad review of the entire question
of the composition of the university research infrastructure and the
role of the government in providing and maintaining it.
I will begin by sharing with you some personal impressions about
research support personnel and then point out some of the highlights of
recent developments from the comprehensive SRA Study of the RSP. (1)
The significance of the RSP to research is not understood by policy
makers; consequently they have been ignored. (2) The exact size of the
total RSP population is not presently known, but there are estimates
that they number more than a half-million. (3) The present national
cost of maintaining university research support personnel is enormous
and their costs are increasing at an astounding rate. (4) Quality
support services can be maintained with a strong Congressional
commitment to support this part of the infrastructure. (5) The direct
and indirect cost reimbursement mechanism associated with project
PAGENO="0131"
125
funding is an adequate and a fair way of maintaining the infrastructure
if policy makers will accept the fact that the FULL costs for research
must be recovered for every project and if policy makers will update
their personal perceptions and formal models to keep pace with the
changing times. And, (6) a continuing, comprehensive study can be made
of the RSP and other segments of the infrastructure if Congress, the NSF
and the professional associations such as SRA will arrange for and
support the periodical exchange of timely information. Your hearings
are an excellent start in that direction. The SRA will respond by
inviting one of your members to speak about the Task Force agenda at our
national conference in St. Louis on October 1, 1985.
In a moment V will provide some crude indicators of the size and
composition of the RSP which in my opinion currently constitutes the
greatest single segment of university research costs. As an expenditure
item in the annual budget it is far greater than buildings, equipment,
materials and supplies and, yes, even larger than the costs for the
support of principal investigators. This is not a commonly held opinion
in the research establishment as the data to support this opinion is
scanty and the thesis only recently formed. Nevertheless, there is
mounting evidence that support personnel are now the largest group on
campus if students are excluded.
The Significance of RSP Is Not Understood
The SRA Study Group on RSP found that Federal agencies, university
associations and the professional societies have not valued the RSP
enough to distinguish them from other groups and then to study them.
They also found that there was wide acknowledgement that RSP, the
largest group of personnel in research universities, excluding students,
PAGENO="0132"
126
are essential to the continued advancement of science, to the
achievement of the specific missions of post-secondary institutions, and
to American technological leadership. Yet, this vital group's value for
science remains largely unrecognized; its size, contributions, and
composition universally unknown; and the field generally ignored by
disciplined inquiry. A literature search brought out the fact that the
RSP are incidentally mentioned in studies by the National ~Research
Council, the National Academies and the federal science agencies "as
large groups of people vital to the success of the research enterprise"
and then these agencies effectively ignore the problems of the RSP by
immediately moving on to what they consider to be more critical issues.
In a survey of maj~r research universities, the Study Group had a very
poor response from officers responsible for personnel data gathering.
They disclaimed any responsibility for distinguishing this class of
employee as the RSP are not perceived to have a high priority for study
within their institutions.
For. some time, the Society of Research Administrators has realized
that many vital national and institutional issues could not be addressed
by the university and their several sponsors until a working definition
and a common classification system was developed for research support
personnel. They recognized that the lack of knowledge about the RSP was
the PRIMARY PROBLEM leading to a host of secondary difficulties related
to the government/university partnership; creating numerous
institutional-operating-problems directly affecting the daily activities
of the principal investigator; and instigating many personal
difficulties related to morale, productivity, and job satisfaction of
the research support person. For example, the secondary problems of
PAGENO="0133"
127
capping indirect costs, of decaying support services, and of technical
personnel shortages within academe and industry stem from inadequate
information on the RSP. Also, valid information related to this group
is essential to the development of modern university personnel
management systems and to the recruitment, morale, and retention of
these essential individuals within the academy. Effective and
employee-accepted subsystems for performance appraisals, job
classification and equitable employee incentives are dependent upon
national norms for particular jobs. Development of these key systems,
their specific components, and employee satisfaction with their
university jobs requires basic, national information and specific
indicators relatedto this group.
In 1983 the Society established a Study Group to investigate the
problems related to the RSP. After two years of investigation the Study
Group has developed an acceptable definition, a functional
classification system and in-depth analysis of divisional RSP patterns
in universities. Research Support Personnel (RSP) are now defined as
those individuals (other than students) who render assistance directly
or indirectly to principal or co-investigators. Research Support
Personnel may be assigned directly to a project or they may provide
indirect or occasional assistance to the researcher orproject director.
This heterogeneous group of employees includes Ph.D.-level analysts,
special mechanics, and general clerical and accounting personnel, as
well as academic administrators.
Some Indicators of the Composition of the RSP
To give us a common frame of reference I call your attention to
Figure 1, Taxonomy for Research Support Personnel Within The University
PAGENO="0134"
128
Figure 1.
1F2.O The SRA Taxonomy For the Research Support Personnel within the
Research Establishment
PAGENO="0135"
129
Research Establishment. This model attempts to explain in a graphic
fashion the composition and complex interactions of the principal types
of people in the modern research community. It helps in our data
gathering and policy making if we can classify individuals first by
their primary purposes as:
(1) Students
(2) Researchers
(3) Research Support Personnel
(4) Sponsors
Each of these classes of individuals have well defined roles that
determine the traditional relationships with one another. If we
understand the comjiosition of the establishment, we should be able to
formulate policy that facilitates the achievement of research goals.
Note that the support types are in the middle between the researcher and
sponsor. This places them in a brokerage position making them valuable
to both the sponsor and the researcher.
You will notice that there are twelve functional classes in the SRA
Taxonomy of RSP.
o Grant and Contract Office Directors o Program Development Officers
o Business Managers o Animal Care Personnel
o Research Shop Personnel o Laboratory Personnel
o Clerical Personnel o Academic Officers
o Research Center Personnel o Agricultural Extension
Personnel
o Medical Personnel o Other RSP
Within each of the functional classes you will notice Divisional
Patterns such as those Dr. Charles Gale has prepared for the Directors
PAGENO="0136"
130
Table IV-1
The Typical Divisional Patterns Used by Universities
to Organize Their Research Support Activities
In Grants and Contracts Offices
Directors of Grants
and Contract Offices
Pre-award
Division
!
! Post-award
! Division
Pre-awardand
Post-award
Integration
!
!
!
Director of Research
& Developiant
Director of Ccminity
Support
Director of Prepare-
tion/Review
General Ngr. of Devat.
Dean/Director Office
of Research
! Director of Des. Main.
I
Director of Grants &
I Contracts Main.
!
Director of Projects
I Devait. & Main.
I
I
~
I
!
~
~
I
.
~
Director of Sponsored
Programs
Director of Res. Sew.
Director of Research
Director of Prog.
Devat. & Main.
Director Award Mgmt.
& Resources Info.
Dir. Fed. Des. Funding
Serv.OfficeRes.&
Prog. Main.
Interns (Mministra-
tive)
!
I
!
!
!
!
I
! DIBFCIDPS &
I DEA~
!
!
I
!
I
~
Assoc. General Mgr.
Deputy Dir. Des.
Deve~o~nt
I Assoc. Dir. Contracts
& Grants
`
! Deputy Dir, of Prog.
Developnent
Assoc. Dir. Sponsored
Programs
Deputy Dir, of
Sponsored Prog.
ASSOCIATE &
DEEUI?
DIR3~IORS
Assist. Dir. for
Research Services
Assist. Dir. of
Program Devmt.
Assist. Dean for
Res/Des Prom Svc.
I Assist. Dir. of
. Research Main.
I Assist. ~r. Sponsored
! Progs. Acctg. Office
!
I
Assist. Dir. Office of
Prog. & Devat. Main.
Assist. Dir. Sponsored ASSISTANT
Programs Athdn. DIRECIORS
Assist. Dir. Sponsored
Projects/Bus. Affairs
Cooed. Sponsored
Programs
I Sr. Grants & Contracts
! Administrator
I
Cooed. Grants & Con.
!
Adam. Grants &
Contracts Office
.
Sponsored Projects
Administrator
Sponsored Programs
Administrator
Administrative
Assistants
tM~t~~RATIVE
COORDINATORS
A1IIINISRDATIVE
ASSLS'EANIS
PAGENO="0137"
rt
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Ills'
~8~88~~8 88~
U1O~O\O~QLn ~O ~c~-'sjio
~lI~F~lII ~
PAGENO="0138"
132
of Grant and Contract Offices, Table IV-l. In Table IV-3 a further
analysis is made of the composition of the class by providing statistics
on gender and salary.
Dave Canham, another Study Group member, has designed A Pattern for
Classifying Business/Fiscal Officer Positions (Table VI-l) and has
completed a thorough analysis of gender and salary ranges for 577
subjects in fiscal officer positions. Ten other Study Group members
have made intensive studies of their functional class and have provided
a current picture of the composition of their class of RSP. Taken
together these studies provide the best indicators of what RSP are
included in the university research infrastructure.
The Size and GrowtEh of the RSP. Currently no one in the United States
knows the size of RSP in American universities. This lack of knowledge
leads to a number of misconceptions of the composition of the research
establishment and the significance of the RSP to higher education and
research advancement. Although there are no current official records,
one can obtain an idea of the growth of the RSP in the university from
occasional statistics related to different groups within the university.
Statistics such as those published by Bush (l3a) show that selected
university departments held a ratio of 82% professional, to 18% support
personnel in 1939-1940.
PAGENO="0139"
Table VI-I. A Pattern for Classifying Business/Fiscal Officer Positions
Vice President Financial Affairs
cI~
I I I U ! III I IV
I V ! VI
I ! I BUSINESS I FISCAL
I I AIFIRATIVE
I (F~Ffl~OILING ! ACXXXJNI'ING I AFFAIRS ! MAN~NF
I BUDGEFIBU I SERVICES
I
I I I
I I
I
I Controller
I Accounting
Business I Director
I Director I Director
I
!
I Manager I
Manager I Fiscal
I Budgeting ! Mministrative
I
1
1 1 1 Services
I I Service
!
I ! I
I !
I
I Assistant
Director of I
Assistant I Fiscal
I Manager I
I
! Controller
Accounting !
Business I Manager
Budgets I
I
I
I Manager I
I I
I
I
I IAsslstant
I
I I I IDirector
I I
I I I !Fiscal
!
I I IServices
!
I I I I
I
`
I
I Audit I Chief or !
Fiscal
I Budget
I
I Supervisor I Senior I
Coordinator
I Analyst
I
I Accountant I
I I,II,Ill
1
1.
1
1
I Auditor
Accountant 1
Fiscal
I
I
I,II,III,IV,VI
! Accounting
I
1
1,11,111
I
I
I
I
Accounting
I I
I
Professionals
Associate
I I
I
I I
I
Accounting
I I
I
Technician
I
I I
I
I
I
I I
I
PAGENO="0140"
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a
a
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j~*~
~
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~,
~
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~t~a
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~
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PAGENO="0141"
135
The SRA Research Committee guessed in 1983 that there were probably
3 or more RSP for every investigator in their institutions (76).
Although limited to 20 institutions, the returns of the 1983 SRA Survey
support that estimate showing a ratio of 25% of Faculty. to 75% Support
Personnel. These figures exclude graduate and undergraduate students.
From these information sources, Hensley and Grace (CC) made the;~
following rough estimate for distribution of research support personnel
in research universities in 1984 and they estimated the total RSP in
American universities to be well over 500,000 members. Unfortunately,
there has been no exact determination of their number, but the Summary
results from the SRA Survey of RSP 1983 show the wide range of
percentages of RS?in individual universities. As one might expect the
re.search universities had a much higher percentage of RSP than did the
institutions with an undergraduate instructional orientation One
research institution reported a high ratio of 897 RSP to 117 faculty
while another institution with a ~ma1l amoUnt of. research reported only
a 53% RSP to 47.1% faculty. Although the correlation is not perfect,
crude preliminary data indicates that higher education. institutions with
large expenditures for research have a high percentage of support
personnel.
FIGURE 1. ESTIMATED DISTRIBUTION OF RESEARCH PERSONNEL WITHIN THE UNIVERSITY 1983.
PAGENO="0142"
136
A comparison of 1984 statistics with the 1939-40 statistics show a
reversal in the mix of professional and support personnel. Today, there
seems to be more RSP than researchers.
If we are to understand the phenomenal growth and the significance
of this overlooked group, we should investigate first the rapidly
expanding role that university research plays in American society as the
size of the total RSP is dependent upon that variable. Next, we should
think about the increasing functions that the RSP assume in the
development of research as their value is related to their performance
of support activities. All of us make decisions based on our personal
images of real world subjects and on professionally accepted formal
models of what th& collective mind tells us is the larger and more
generally accepted representation of reality. Our policy making is
derived from those images. Therefore, any review of institutional and
national policy must begin with an assessment of the personal
perceptions of policy makers about the size and significance of the RSP
to modern science and then consider those images in the mosaic of
existing policy that guides individual actions and institutional data
gathering.
The Cost of Maintaining Research Support Personnel. If RSP are to be
maintained the Federal government must supply the full cost of federally
sponsored research. Similarly, industry, the states, and foundations
should supply their full share of indirect costs. If each sponsor pays
their freight for the RSP, there will be few problems with maintaining
the university research infrastructure . Unfortunately, the
relationship between the value of RSP and the rising indirect cost rates
is not understood by many members of the research establishment.
PAGENO="0143"
1. 1,700 18.8%
2. 4,021 18.9%
3. 1,917 29.5%
4. 2,780 19.3%
5. 1,870 23.8%
6. 109 11.0%
7. 1,505 19.0%
8. 1,271 36.6%
9. 710 23.7%
10. 858 25.0%
11. 550 20.0%
12. 845 26.4%
13. 888 21.8%
14. 829 37.7%
15. 939 31.0%
16. 830 33.2%
17. 1,770 38.6%
18. 330 33.3%
19. 458 24.5%
20. 400 47.1%
TOTALS 24,580 23.7%
239,869,000
71,204,000
41,850,060
37,034,000
26,367,000
23,415,000
13,933,000
13,162,000
10,484,000
10,263,000
9,776,000
8,450,000
7,979,000
7,177,000
6,221,000
5,477,000
2,923,000
2,628,000
1,523,000
1,039,000
137
SRA 1983 ~ RESULT
PERCENT
OF
FACULTY TOTAL
PERCENT
SUPPORT OF
PERSONNEL TOTAL
TOTAL
PERSONNEL
FEDERAL
RESEARCH
AWARDS
7,300 81.2%
17,200 81.1%
4,583 70.5%
11,627 80.7%
5,985 76.2%
880 89.0%
6,382 81.0%
2,202 63.4%
2,285 76.3%
2,569 75.0%
2,200 80.0%
2,355 73.6%
3,180 78.2%
1,371 62.3%
2,094 69.0%
1,670 66.8%
2,815 61.4%
600 66.7%
1,414 75.5%
450 52.9%
9,000
21,221
6,500
14,407
7,855
989
7,887
3,473
2,995
3,427
2,750
3,200
4,068
2,200
3,033
2,500
4,585
930
1,872
850
79,162 76.3% 103,742
PAGENO="0144"
138
A large number of secondary national and institutional issues
(deteriorating laboratory conditions, personnel shortages, performance
appraisals, merit salary increases, allocation of shrinking resources,
affirmative action employment, and rising indirect costs) are constantly
being raised in every quarter of the research community and each could
use its own full related literature search to convince the reader of the
importance of the RSP to each issue. We will review in this testimony
only one issue--the relationship of the increasing RSP numbers and their
productivity to the escalating indirect costs.
Reducing rapidly increasing indirect costs is of considerable
concern to Congress, to the scientific community, and to users of basic
research and technblogical innovation. The disproportionate, continuous
rising indirect costs for university research is one of the most serious
and frequently discussed problems confronting the academy today. Gross
(33), Warner (83), Wyngaarden (86), and others have complained about a
wide range of problems, yet no one has systematically and empirically
identified the components of the problem. Lang (47), notes that the
determination of what is an "indirect" cost as distinguished from a
"direct cost" is to a large extent arbitrary, and depends on political,
subjective judgments. Lang (48) has been told by administrators "that
if pressed too much on `indirect costs' university administrators will
find it necessary to adapt their accounting systems to claim as a direct
cost what is now classified as indirect." All of this leads into
extremely complicated tertiary questions of funding, political
pressures, and the value of the RSP. Stokes (75) noted in his analyses
of the top 100 universities indirect coat policies that there were
significant differences between the administrative groups (business
PAGENO="0145"
139
officers and research administrators) and research faculty on the
general topic of indirect costs. Also, the professional societies (26,
31, 47) have accused the university administrator with ducking and
dodging the fundamental issue of indirect costs, and have characterized
the assignment of costs as a four-dimensional shell game. Several
long-time university administrators felt the conflict between faculty
and administrators and universities and sponsors should be reduced with
a rational accounting of RSP costs, and called to NCURA and SRA's
attention that the lack of standards for classification prevents
cooperation between the fiscal side of university management and the
science side.
When testifyii~g to the Committee on Science~ and Technology of the
House of Representatives on 24 March 1980, David Saxton, President of
the University of California, recognized varying points of view and
acknowledged that there was vast disagreement among elements within the
research establishment as to who bears the expense of rising indirect
costs. He cautioned,
In trying to cone to grips with this issue (of Circular A-21), we
are not dealing with a couple of monoliths; the Federal Government
does not present an absolute unified view of the issues, and on the
other side, neither do the universities. Our faculty, for example,
is as convinced as anyone in the Government that indirect costs are
too high. They believe that indirect costs come at the expense of
their own grants.
It is obvious that neither university administrators nor government
officials know enough about the support costs nor do they have the
PAGENO="0146"
140
foundation information on RSP to justify these costs to faculty or
taxpayers.
Earlier we saw that RSP are estimated to be at least 75% of the
total research personnel who can be directly or indirectly identified
with some research function. At this time, we should look at the total
costs of university research, direct costs and indirect costs, and the
estinated contribution of the RSP to those costs.
Since most universities cannot presently determine exactly who and
for how much time each RSP is assigned to an organized research unit, it
is impossible to say precisely what the mix of costs are within the
university organized research budget, but one writer guessed that
principal investig~tor costs are less than 20% of total direct costs for
research and that the RSP account for more than 50% of total research
costs and that RSP costs are rapidly growing. Figure 4 shows three
university administrator's opinions about what the relationship and
distribution might be among the major cost factors in university
research (CF). Exact knowledge of this ratio should be determined.
FIGURE 4. A GRAPHIC REPRESENTATION OF ESTIMATED RSP COSTS IN RELATION
TO TOTAL UNIVERSITY RESEARCh COSTS.
TOTAL RESEARCH COSTS
Direct Costs
Indirect Costs
E.I RSP Cont~
fJ Other Costs
PAGENO="0147"
141
Anderson (3), Hensley (40), and Jung (44) have postulated that the
alarming increases in agency indirect cost rates are only a gross
indicator of the declining quality of work and is a contributing factor
to rising support costs. They analyzed the work-social interaction of
RSP in six institutions and found that certain employees spend better
than 80% of the "working hours" on work related activities; however,
other employees !pend less than 30% of their working-time on work
related activities. These findings should be more frightening than the
150% increase in indirect costs as these costs would not show up in
indirect cost studies (87).
During the past five years I have given the Questionnaire on the
Size and Significance of RSP to several hundred faculty and science
policy makers to determine their image of the size and significance of
the RSP. Moat of those interviewed have dangerously low estimates of
the size of the RSP and hold an outmoded picture of how research is
organized and conducted on today's capus. Moreover, they conceive of
university research in an antiquated and parochial fashion. Most look
upon university research as being confined to basic research. This
narrow personal image is reinforced by the Bowman Model for American
research which was adopted informally by the Federal government in the
forties when Vannevar Bush sent to President Harry S. Truman his
recommendations for the advancement of national research. Isaiah Bowman
In those recommendations maintained that scientific research could be
divided into three broad categories: (1) pure research; (2) background
research; and (3) applied research and development. Briefly stated,
Bowman suggested that pure research should be performed by universities
and applied research and development should be conducted by Industry with
PAGENO="0148"
142
with some being done by government labs. He provided an elaborate
rationale to explain the proper roles and relationships of public and
private research organizations and to guide the governments aid to them.
Today, NSF uses categories (1) and (3) to gather scientific information
from universities and most agency directors and university
administrators have adopted the conventional rationale set forth in
Science--The Endless Frontier. A large part of government and
university policy starts with the Bowman Model and then uses NSF data as
their base to formulate policy.
It is my opinion that the Bowman Model is inappropriate for
understanding today's research activities, as it discourages scientific
interaction, and i~ does not allow a quantification of the products of
research. I suggest that the 1984 Model for Classifying University
Research Activities is more representative of what universities
presently do and is a more powerful and precise model for information
gathering on university research. More importantly this model
encourages the development of industrial as well as government
sponsorship of university research. The 1984 Model is more~ realistic as
it shows the vast scope of innovative problem solving activities that
society currently demands of the university, in addition to its
conventional training mission. Policy makers must understand that
universities perform the vital tasks of (1) creating new knowledge, (2)
inventing new devices, (3) developing prototypes, (4) improving
production of goods and sevices, and (5) transferring technology. Not
only has the scope of the work expanded, but the volume of work has
increased many hundred-fold.
PAGENO="0149"
A MODEL FOR CLASSIFYING
UNIVERSITY RESEARCH ACTIVITIES
CLASSES OF BASIC APPLIED PRODUCTION TECHNOLOGICAL
~CTIVITIES RESEARCH RESEARCH DEVELOPMENT RESEARCH INNOVATION
A DISCIPLINARY SOCIAL ORGANIZATION MARKET SOCIAL/DISCIPLINAF
IMPERATIVES UTILITY PRIORITIES MANDATES NEEDS
PROCESS B EXPLORING RENDERING STEPPING PRODUCTIVITY INTERDISCIPLINARYi
NATURAL/HUMAN INTO UP-A MODEL IMPROVEMENT INTERSECTOR
PHENOMENA PRACTICE SOLUTION IDEAS
OUTPUTS c KNOWLEDGE INVENTIONS PROTOTYPES PRODUCTS ADOPTION OF AN
ARTICLE PATENTS! GOODS/SERVICES INNOVATION
ALGORITHM TRADE
SEC RET S/
COPYRIGHT
PAGENO="0150"
144
Universities are big business. They provide the fuel and
innovation that propels our technological society. Slow the production
of innovation and technology is slowed. There is a widespread
perception that scientists and engineers are usually the people who
conceive our innovations--this is true; but nationally we have scotomas
that have long excluded the RSP--a group essential for universities to
conduct modern science and produce an expanding variety of innovations.
To draft policy that will facilitate research, we must not only have new
data, we must also have realistic personal perceptions of the subject
and valid models.
I am pleased that the Science and Technology Committee has
structured a broad ranging study of government science policy. A
comprehensive reassessment of the relationships among the organizations
in the research establishment is much needed. Your hearings are most
timely, as I believe that our research universities are caught in a
great wave of technological change that requires both national and
institutional policy makers to reassess our policies and national models
in the light of four decades of dramatic university transformation that
proaises to become increasingly more rapid in the remaining years of
this century. Hopefully, the results of your study will stimulate and
provide a guide for self studies by universities and professional
associations.
PAGENO="0151"
145
Mr. FUQUA. Thank you very much, Dr. Hensley.
I think at this point we will take a short recess while we go vote.
What we will do today, in the interest of time, because I also
think many of the questions are interrelated to each other, is that
we will hear from all of the other witnesses and then we will have
questions at the end of everyone.
Dr. HENSLEY. I will remain.
~Recess taken.]
Mr. FUQUA. We will resume the meeting.
We have three other members who have not spoken. If the three
other members will take their places at the table, we will resume
with Mr. Smith, who is senior vice president ofthe Council for Fi-
nancial Aid to Education.
STATEMENT OF HAYDEN W. SMITH, SENIOR VICE PRESIDENT,
COUNCIL FOR FINANCIAL AID TO EDUCATION, NEW YORK, NY
Mr. SMITH. Thank you, Mr. Chairman.
It is a pleasure to appear before this task force. The Council is
very appreciative of the opportunity to share some of its informa-
tion and hopes that it will be useful to the work of this committee.
The Council is known throughout the corporate and academic
worlds as CFAE. I will use those initials here.
By way of identification, CFAE is a nonprofit service agency cre-
ated in 1952 by eminent business leaders. Its purpose is to encour-
age the widest possible support of higher education by private
donors, especially the corporate community itself. It is supported
exclusively by voluntary contributions from some 400 business cor-
porations, and our program consists of research, publications, and
consultations with business executives-all designed to encourage
corporate support of higher education. We are best known to the
corporate community at large through a public service advertising
campaign that uses the well-known slogan, "Give to the College of.
Your Choice."
I am appearing here today to provide the task force with some
information on the extent to which private donors, including indi-
viduals, industrial firms, and foundations, have supported the ac-
quisition and maintenance of the research infrastructure in Ameri-
can universities. I intend also to comment on current and future
trends of this type of support and to discuss several elements of
Federal fiscal policy that impinge on donors' incentives.
Among the research activities for which CFAE is well known is
its annual survey of voluntary support of education. We are the
only agency that gathers such data, and we are the leading author-
ity on this type of information. I have previously furnished to the
task force copies of our 1982-83 survey report, and I would like to
walk you through a couple of the numbers in here, just to highlight
the findings.
If you will turn to page 3 in this report, you will find charts
which depict our estimates of the total voluntary support received
by all colleges and universities. These estimates are prepared from
our survey findings and they take into account the relative impor-
tance of different kinds of institutions and the differential response
rates that come from them.
PAGENO="0152"
146
Chart 1. EstImated Voluntary Support of Colleges end UnIversItIes by Major Sources and In Total
ri ions of dollars)
- Current doll am
Adjusted for Higher Education Price Index (1967 = 100)
Alumni
1,400
1,200
E ~111flhIItIHhIIllITh
0_~~R,AA_a_a_a -
1972- `74- 76- 78- 80- `82- 1972- `74- `76- `78- 80- 82
73 75 77 79 81 83 73 75 77 79 81 83
FoundatIons auskesa Coporattons
1.200
1,000 -~
800-
:~i~d
-
:
20:01111
1972- 74- `76- `78-
73 75 77 79
-1--u'.
80- `82- 1972- 74- 76- 78- 80- 82-
`81 83 73 75 77 79 81 63
The chart on the left shows that voluntary support rose from
$2.16 billion in 1975, which was a recession year, to $5.16 billion in
1983. Although we don't have a complete analysis of the data from
the 1984 survey at this time, there is enough information off our
computer to permit an estimate of $5.6 billion. This implies the pri-
vate giving to higher education has increased at an average rate of-
11.2 percent per year over the last 9 years, which, when corrected
for inflation, represents a real growth of about 3.5 percent annual-
ly.
If you will turn to page 4, table 1 gives a breakdown of our esti-
mates by source and by purpose. The individual donors, you will
note, account for roughly half of-all voluntary support, and the dol-
lars are divided about equally between institutional alumni and all
other individuals. Business corporations and private foundations
account for about one-fifth of the total; the remainder comes from
religious denominations and a variety of other sources.
1972- `74- `76- `78- `80- 82-
73 75 77 79 81 83
PAGENO="0153"
147
Table 1. Estimated Voluntary Support by Source and Purpose (millions)
% Change, 1982-83
v. 1977-78
1977-78 1981-82 1982-83 v. 1981-82 v. 1977-78 adj. for HEPI
TOTAL VOLUNTARY SUPPORT $3,040 $4,860 $5,160 + 6.2 + 69.7 + 10.7
Sources
Alumni $ 714 $1,240' $1,237 - 0.2 + 73.2 + 13.0
Nonalumni Individuals 766 1,097 1,190 + 8.4 + 55.4 + 5.0
Foundations 623 1,003 1,018 + 1.4 + 63.4 + 6.8
BusinessCorporations 508 976" 1,112 +13.9 +118.9 +42.9
Religious Denominations 158 175 206 + 17.7 + 30.4 -14.1
Other 271 369 397 + 7.6 + 46.4 - 4.4
Purposes
Unrestricted $ 934 $1,348 $1,506 + 11.7 + 61.2 + 5.2
Physical Plant 447 747 791 + 5.9 + 77.0 + 15.3
Research 480 676 750 + 10.9 + 56.3 + 2.1
Student Aid 429 658 689 + 4.7 + 60.6 + 4.7
Faculty Compensation 185 284 334 + 17.6 + 80.5 + 17.4
Other 565 1,1471 1,090 - 5.0 + 92.9 +25.6
Current Operations $1,825 $2,870" $3,125 + 8.9 + 71.2 + 11.6
Capital Purposes 1,215 1,990' 2,035 + 2.3 + 67.4 + 9.1
Price Indices (1967 = 100)
Consumer (CPI) 188.5 280.8 293.8 + 4.6 + 55.9
Higher Education (HEPI) 201.3 290.4 308.8 + 6.3 + 53.4
~Inc1sdes beqsests from Edward Malllnckrodt, Jr., of $77 million to Harvard University and $38 million to Washington University for"other"
capital purposes
~Inc1sdes newsreelfilmlibraryvalued at$30.4 million from Hearst CorporationtoUniversisyof Californiaat LosAsgeles for"otlser"purpcaes.
Includes $115 million In bequests and $30.4 million gift-in-kind.
I call your attention to the fact that support from the business
community has grown faster than that from any other source since
1978 and, even when adjusted for inflation, represents a gain of 43
percent over this period. A significant part of this extraordinary
growth consists of inventory giving; that is, gifts of products manu-
factured by the donor companies. This form of giving is now domi-
nated by the computer companies, and the gains are known to be
associated with the Economic Recovery Tax Act of 1981 which pro-
vided an enhanced deduction for certain contributions of this type
of equipment.
The table also shows that about 60 percent of total support was
designated for current operations and about 40 percent for capital
purposes, including endowment. I regret that our data don't ade-
quately distinguish between gifts for endowment and those for
buildings and other physical facilities.
Since the interest of the task force at this hearing is in research
infrastructure, I intend to provide a little supplementary data that
bears on this interest.
The purposes for which voluntary support is given are shown for
two general categories. About 30 percent of the total is not restrict-
ed as to purpose by the donors and may, therefore, be allocated by
the recipient institutions according to their perceptions of need. Al-
though it becomes comingled with other general funds, some of this
money is eventually used for research support.
Among the restricted purposes is the category of research. You
will note that an estimated $750 million was given specifically for
this purpose in 1983. I will shortly expand on this figure to indicate
what information we have as to its source and content.
PAGENO="0154"
148
Some private giving to higher education is restricted to physical
plant purposes. You should note the estimate of $791 million.
About 10 percent of this money consists of current operating sup-
port that is restricted to use in maintaining buildings and other
physical facilities. The remaining 90 percent is for capital purposes.
This would include some of the research infrastructure, but we
have no information as to the exact amounts.
I also call your attention, however, to the category of "other pur-
poses," which now exceeds $1 billion. In fact, the amounts reported
in this category in both actual and inflation-adjusted terms have
been growing very rapidly during the last 5 years.
Our impression from talking to those in the academic community
is that much of this increase consists of support for academic pro-
grams, library acquisition, and support of individual departments
or schools within the institutions. While we have made some
changes in the breakdowns by purpose for our 1984 survey, it is un-
likely that we will be able to determine just how much of these
miscellaneous grants is going to research support. It is probable,
however, that some part-and perhaps a very large part-of the de-
partmental support is used for this purpose.
On page 5, table 2, there are a few significant figures. The last
column on the right shows the total support now constitutes only
6.3 percent of the total operating and capital expenditures of all
colleges and universities.
Table 2. Voluntary Support in Relation to Enroll
ment, Inflation and Instit
utional Expenditures
T~t~l P,k~ I,,di,~,
E,i,,ut~d V~1~r00y S~pp~t
A~ % ,f
(1967-100)
Y~ ~ CPI HEPI
T~t~1 P~ St~d~t
(biI1i~~~~) ~ (CPI)
To~.I P~, Sthd~t
~ ~ (CPI)
I,tit~~th~,u1
~
1949-50 2,659 71.7 n.a.
$ 2.5 $ 940 $1,310
$ 240 $ 90 $126
9.6
1965-66 5,967 95.9 95.0
15.2 2,547 2,656
1,440 241 251
9.5
1970-71 8,581 118.8 128.6
26.9 3,135 2,639
1,860 217 183
6.9
1975-76 11,185 165.9 177.2
42.6 3,809 2,296
2,410 215 130
5.6
1980-81 12,097 259.6 263.9
70.5 5,828 2,245
4,230 350 135
6.2
1982-83 12,358 293.8 308.8
82.5 6,676 2,272
5,160 418 142
6.3
Average Annual Percentage Change:
1949-50 to 1965-66 5.2 1.8 na.
11.9 6.4 4.5
11.9 6.4 4.4
1965-66 to 1970-71 7.5 4.4 6.2
12.1 4.2 -0.1
5.3 -2.0 -6.1
1970-71 601975-76 5.4 6.9 6.6
9.6 4.0 -2.7
5.3 -0.2 -6.6
1975-76 to 1980-81 1.6 9.4 8.1
10.6 15.7 -0.4
11.9 10.2 0.8
1980-81 to 1982-83 1.1 6.4 8.2
8.2 7.0 0.6
10.4 9.3 2.6
Historically, this percentage has been higher than this. For ex-
ample, as recently as the mid-1960's it was about 10 percent. It fell
slowly to less than 6 percent in the mid-seventies and has been on
a slight up trend.
Throughout the period for which we have these data, voluntary
support has risen much faster than the rate of inflation. This is
true whether inflation is measured by the Consumer Price Index,
or the CPI, or the Higher Education Price Index, HEPI. It has also
risen faster than the number of students, and support per student
is shown to be now more than four times what it was in 1950. How-
ever, since the mid-1960's the growth of private giving has been
slower than the combined effects of inflation and enrollment
PAGENO="0155"
149
growth, so that support per student measured in constant dollars is
now 40 percent less than it was in 1966.
There has also been a decline in institutional expenditures per
student, measured in constant dollars. We take these facts to sup-
port the view that there has been some decline in the quality of
higher education that has probably affected both instruction and
research.
At the back of the report are several summaries and historical
tables of data. On page 72, table E gives our estimates of voluntary
support with a breakdown between current and capital money and
the distribution by sources for all years since 1950.
PAGENO="0156"
150
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0
0
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0
0
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PAGENO="0157"
151
There are two points worth noting. Support for capital purposes,
which would include research infrastructure, typically exceeded
support for current operations until about 1970. Since then, operat-
ing support has consistently accounted for the larger share. The
distribution of total support by sources displayed an extraordinary
stability. The gifts and bequests from individuals have consistently
accounted for about half of the total, with roughly equal shares
from alumni and nonalumni donors.
The only major trends are a generally declining share from reli-
gious denominations, some decrease in the share of private founda-
tions since 1969, and a significant increase in the proportion of the
total that comes from business corporations. We expect these
trends more or less to continue.
The remainder of the tabular material in this report represents
not our estimates of the total for all higher education, but the
amounts actually reported by the participating institutions.
Let me skip down and just call your attention to one of these
tables, which is table C on page 70, which is a distribution of re-
ported support by type of institution.
PAGENO="0158"
Table C VOLUNTARY SUPPORT OF HIGHER EDUCATION BY TYPE OF INSTITUTION
(Including percentage of Grand Total and average per institution; dollar totals and averages in thousands)
TYPE OF
INSTITUTION' 1973.1974 1974-1975 1975-1976 1976-1977 1977-1978 1978-1979 1979-1980 1980-1981 1981-1982 1982-1983
Private $701,160 (40.2%) $648,477 (38.7%) $731,914 (38.7%) $804,997 (37.6%) $877,122 (37.4%) $1,001,888 (35.2%) $1,202,420 (39.4%)" $1,328,044 (40.0%) $1,513,497 (37.0%)) $1,530,592 (35.0%)
Universities (68) Av. $10,311 (69) Av. $ 9,398 (71) Ac. $10,309 (73) Av. $11,027 (69) Av. $12,712 (73) Av. $13,724 (74) Av. $16,249 (75) Av. $17,707 (74) Av. $20,453 (73) Av. $20,967
Private 26,671 (1.5%) 17,860 (1.0%) 24,852 (1.3%) 20,337 (1.0%) 28,325 (1.2%) 20,230 ( 0.8%) 16,158 ( 0.5%) 14,680 ( 0.4%) 20,802 ( 0.5%) 20,438 ( 0.4%)
Men's Colleges (14) Av. $1,905 (13) Av. $1,373 (16) Av. $1,553 (11) Av. $1,849 (9) Av. $ 3,147 (6) Av. $ 3,372 (7) Av. $ 2,308 (5) Av. $ 2,936 (7) Av. 9 2,972 (9) Av. $ 2,271
Private 68,291) 3.9%) 64,460) 3.8%) 74,422) 4.0%) 71,866) 3.4%) 80,723) 3.4%) 80,856) 3.2%) 97,548) 3.2%) 118,947) 3.8%) 127,333) 3.1%) 155,421 ( 3.6%)
Women's Cotleges (78) Ac. $ 875 (80) Ac. $ 805 (81) Ac. $ 919 (69) Av. $1,042 (80) Av. $ 1,009 (73) Ac. $ 1,108 (74) Ac. $ 1,318 (73) Ac. $1,629 (77) Ac. $1,654 (77) Av. 9 2,018
Private 461,117 (28.4%) 426,579 (25.8%) 470,983 (24.9%) 571,410 (26.7%) 620,795)26.4%) 624,425 (24.4%) 732,832 (24.0%) 784,468 (23.7%) 1,018,482 (24.9%) 1,075,872 (24.6%)
Coed Colleges (463) Av. $ 995 (453) Ac. $ 941 (448) Ac. $1,051 (476) Ac. $ 1,200 (459) Ac. $1,352 (449) Ac. $1,391 (473) Ac. $1,549 (440) Ac. 9 1,783 (496) Ac. $ 2,053 (495) Ac. 9 2,173
Professional 84,365) 4.8%) 69,327) 4.1%) 93,036) 4.9%) 89,475) 4.2%) 94,651) 4.0%) 95,267) 3.7%) 128,104) 4.2%) 121,276) 3.7%) 155,347) 3.8%) 185,809) 4.3%)
& Specialized (51) Ac. $ 1,654 (54) Ac, $1,283 (55) Ac. $1,692 (59) Ac. $1,517 (61) Ac. $1,552 (67) Ac. $1,422 (68) Ac. 0 1,884 (62) Ac. $1,958 (73) Ac. 0 2,128 (90) Ac. 0 2,065
Public 386,181 (22.1%) 430,831 (25.6%) 476,915)25.2%) 562,405)26.3%) 623,444)26.6%) 715,156)28.0%) 856,193)28.0%) 929,238)28.0%) 1,216,681 (29.9%)) 1,362,397)31.2%)
InstitutIons (208) Ac. $1,874 (207) Ac. $ 2,081 (216) Ac. $ 2,208 (213) Ac. $ 2,640 (209) Ac. $ 2,983 (214) Ac. $ 3,342 (218) Ac. 0 3,927 (209) Ac. $ 4,448 (258) Ac. 0 4,716 (267) Ac. $ 5,103
Two.Year 19,086(1.1%) 17,009(1.0%) 18,709(1.0%) 18,137) 0.8%) 22,865)1.0%) 18,173) 0.7%) 21,797) 0.7%) 21,413) 0.6%) 34,060) 0.8%) 37,643) 0.9%)
InstitutIons (108) Ac. $ 176 (110) Ac. $ 154 (104) Ac. $ 180 (105) Ac. $ 173 (178) Ac. $ 128 (90) Av. $ 202 (105) Ac. 9 208 (64) Ac. $ 334 (116) Ac. $ 254 (126) Ac.) 299
GRAND TOTAL $1,746,851 (100%) $1,674,543 (100%) $1,890,832 (100%) $2,138,627 (100%) $2,347,925 (100%) $2,555,995 (100%) $3,055,053 (100%) $3,318,064 (100%) $4,086,204 (100%) $4,368,171 (100%)
(988) Ac. $1,765 (986) Ac. $1,698 (991) Ac. $1,908 (1,008) Ac. $2,128 (1,065) Ac. $2,205 (972) Ac. $2,630 (1,019) Ac. $2,998 (928) Ac. $3,576 (1,101) Ac. $3,711 (1,137) Ac. $3,842
`In every survey each Institution Is classified in the category appropriate to its status In thatyear. Since
the status of many Institutions has changed over the years, the data by category are not strictly rum-
parablefromonesurvey toanother. SeeTabtr3onpage7foracomparlsonof 198l.O2and 1982.83data
on an adjusted basis.
"Includes nonrecurring transfer of $105 million.
* (Includes $115 mitlion in bequests.
§Inctudes $30.4 million gift-in-kind.
PAGENO="0159"
153
A group of 70 or 75 private universities consistently accounts for
between 35 and 40 percent of the total received by all institutions,
but the most significant change on this table in terms of institu-
tional shares is the growth of public colleges and universities from
about 22 percent of the total to 31 percent over this particular
period of time, and a declining share received by the categories of
smaller private colleges.
All this information is stored on computer tapes since 1966, and
it is possible to prepare special tabulations and analyses of these
data to serve particular purposes. In order to address the specific
subject of this hearing, I prepared a few supplementary tables and
they are appended to the statement itself.
Table 1, for example, shows the preliminary figures from our
1983-84 survey and the estimated $5.6 billion in total support is
broken down by source. I am sorry that we do not have figures yet
for a breakdown by purpose.
PAGENO="0160"
Table 1. Estimated Voluntary Support, by Source and Purpose (millions)
Percent change, 1983-84
1978-79 1982-83 1983-84
v.1978-79
v.1982-83 v.1978-79 adj. for HEPI
TOTAL VOLUNTARY SUPPORT
$3,230 $5,160 $5,600
+ 8.5 +73.4
+15.6
Purposes:
Current Operations
Capital Purposes
$2,010 $3,125 $3,405
1,220 2,035 2,195
+ 9.0 +69.4
+ 7.9 +79.9
+12.8
+20. 1
Price Indices (1967-100):
Consumer (cP1)
Higher Education (HEPI)
206.4 293.8 304.8
216.9 308.8 325.4
+ 3.7 +47.7
+ 5.4 +50.0
Sources:
Alumni
$ 785
$1,237
$1,305
+ 5.4
+66.2
+10.8
Nonalumni individuals
736
1,190
1,316
+10.6
+78.8
+19.2
Foundations
701
1,018
1,081
+ 6.2
+54.2
+ 2.8
Business Corporations
556
1,112
1,271
+14.3
+128.6
+52.7
Religious Organizations
161
206
190
- 7.8
+18.0
-21.6
Other
291
397
437
+10.1
+50.2
-
PAGENO="0161"
155
The results do reflect a continuation of current trends or recent
trends. Again, I call your attention to the fact that support from
business corporations has shown an extraordinary inôrease in infla-
tion-adjusted terms over the previous 5 years. Much of this growth,
perhaps as much as $250 million, is associated with the addition of
section 170(e)(4) to the Internal Revenue Code. This is the section
that provides the enhanced tax deduction in the case of inventory
gifts of scientific property that are made to institutions of higher
education to be used for research or experimentation or for re-
search training in the physical or biological sciences.
To throw some light on this matter, we conducted a survey of the
leading industrial corporations last fall. Our report on that survey
is available as well. I have provided copies to the task force.
Although the response to this particular survey was relatively
low, the data we did obtain reveals clearly that this type of giving
is dominated by companies in the electrical machinery industry, es-
pecially the companies that manufacture computers, medical in-
struments, and other electronic products. That is shown on the
table on page 2 of the special survey report.
Gifts of Company Products
Industry 1983 19814
Manu facturing:
Electrical machinery (21) $61,729,490 (19) $95,281,540 (1'J)
Chemicals & drugs (6) 13,910,196 (3) 167,917 (3)
Food, beverage & tobacco (4) 32,939 (3) 36,1420 (3)
Machinery (4) 1180.000 (3) 311,700 (3)
Fabricated metals (3) 32,800 (3) 252,000 (3)
Primary metals (3) 3,818 (1) 1,000 (1)
Paper & lumber (3) 1,500 (1) 11,800 (1)
Printing & publishing (2) `41,1185 (2) 33.809 (2)
Petroleum & gas (2) 12,500 (2) 13,500 (2)
Transportation equipment (1) 25,000 (1)
Subtotal - Manufacturing (49) $76,269,728 (38) $96,109,286 (32)
Nonmanufacturing:
Transportation (2) $ 40,1403 (2) $ `45,000 (1)
All others (3) 300 (1) 500 (1)
Subtotal - Nonmanufacturing (5)$ `40,703 (3) $ 115,500 (2)
GRAND TOTAL (54) $76,310,431 (141) $96,155,186 (311)
(Numbers in parentheses show the number of companies reporting.)
I should also call to your attention that the numbers shown on
this report reflect a tax deduction value of the gifts to the donors.
The colleges and universities report a significantly higher figure
because they tend to report the list price value.
It is my personal view that this enhanced deduction should be
extended to all inventory gifts of company products and not limited
to any class of qualified recipients or to any designated purposes.
The formula used for the tax reduction adequately protects the
public interest in preventing the kinds of abuses that led to the re-
strictive legislation in the Tax Reform Act of 1969. It would clearly
provide additional incentives for contributions of state-of-the-art
53-277 0 - 86 -
PAGENO="0162"
156
equipment to the scientific laboratories on the Nation's campuses
as well as a broad array of other products that are useful and
needed by charities generally.
Table 2, the supplementary table attached to the statement,
gives a breakdown of the research support by donor groups taken.
from the surveys of 1973 and 1983. This type of support is shown to
be of relatively little interest to individual givers, and what they do
give accounts for a very small share of the total support. Contribu-
tions for research purposes are clearly a major growing interest to
corporations and foundations, and between them they account for
about 70 percent of the total.
Table 2. Voluntary Support for Research Purposes, by Donor Groups (millions)
Alumni
Nonalumni Individuals
Foundations
Business Corporstions
Religious Organizations
Other
Table 3 shows the sources of total support, research support, and
physical plant support for 1983 with a division between current op-
erating support and support for capital purposes. While capital
support accounts for about 42 percent of overall giving, it com-
prises only 9 percent of giving for research purposes. The bulk of
research support obviously goes for institutional operating budgets.
Table 3. Total Voluntary Support, Research Support, and Support for Physical Plant,
by Purpose (Current Operations and Capital Purposes), 1982-83 (millions)
On the physical plant side, however, it was 92 percent capital,
and some part of that $614 million of capital support for physical
plant purposes was undoubtedly aimed at the kind of research in-
frastructure in which this task force is interested, although we do
not have any specific information as to exactly how much.
1972-73
1982-83
Amount
1
Percent
of total
support
$
13.3
5.8
3.2
37.6
16.3
8.0
89.0
38.6
21.7
53.9
23.4
21.6
.1
-
.1
36.9
16.0
29.3
Percent
Amount
1
of total
support
$
24.8
3.9
2.4
77.2
12.2
7.7
207.4
32.7
24.1
232.0
36.6
24.6
.4
-
.3
92.9
14.6
27.7
$230.8 100.0 13.2
$634.7 100.0 14.5
Support
for
Total Voluntary Support Research Support Physical Plant
Alumni
tlooalumni Inds.
Foundations
Corport ions
Religious Orgns.
Other
Total
Cur.
Cap.
$1,046.9 $ 503.8 $ 543.1
1,007.2
450.5
556.7
862.1
497.2
364.9
941.6
662.4
279.2
174.4
150.2
24.2
335.9
260.3
75.6
Total Cur. Cap. Total Cur. Cap.
$ 24.8 $ 18.0 $ 6.8
77.2 48.6 28.6
207.4 198.2 9.2
232.0 222.7 9.3
.4 .1 .3
92.9 90.1 2.8
Total $4,368.1 $2,524.4 $1,843.7
$132.5 $
153.3
177.9
167.0
16.1
22.6
7.8 $124.7
11.3 142.0
14.3 163.6
16.0 151.0
2.6 13.5
3.4 19.2
$643.7 $577.7 $ 57.0 $669.4 $ 55.4 $614.0
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157
Table 4 gives an historical overview of estimated research sup-
port and shows the percentage of research to estimated total sup-
port for all purposes. You will note that there is a modest up trend
in this percentage. Prior to 1975, for example, it averaged 12.8, and
in no year was it as high as 15 percent. In the last 10 years, howev-
er, it has averaged 15 percent, and in no year was it less than 13.9.
Table 4. Estimated Voluntary Support and Support of Research, 1954-55 to 1983-84
Total Support
Voluntary* of
Support Research
1954-55 $ 475 $ 60 12.5
1956-57 840 85 9.9
1958-59 760 105 14.0
1960-61 900 125 14.1
1962-63 1,050 140 13.4
1964-65 1,400 155 11.2
1965-66 1,440 205 14.4
1966-67 1,480 185 12.4
1967-68 1,600 200 12.5
1968-69 1,800 225 12.5
1969-70 1,780 215 12.1
1970-71 1,860 245 13.3
1971-72 2,020 260 12.8
1972-73 2,240 290 13.0
1973-74 2,240 290 13.0
1974-75 2,160 325 15.0
1975-76 2,410 355 14.7
1976-77 2,670 400 14.9
1977-78 3,040 475 15.7
1978-79 3,230 505 15.7
1979-80 3,800 575 15.1
1980-81 4,230 630 14.9
1981-82 4,860 675 13.9
1982-83 5,160 750 14.5
1983-84 5,600 840 15.0 (est.)
While prediction is always hazardous, I believe that there are
reasons to anticipate further growths in this percentage. One
reason is the growing relative importance of corporate support in
the total picture. In the past 15 years the percentage of corporate
giving to total support has increased from less than 15 to more
than 22 percent, and it is still rising. Since a high proportion of
corporate support is designated for research purposes, continued
growth in the relative importance of corporate giving will cause
some further rise in the overall importance of research support.
The second reason is that there has been, and continues to be, a
growing sense of partnership between the corporation and the
campus, especially in the research area. The universities are now
PAGENO="0164"
158
making special efforts to enhance further this community of inter-
est.
Table 5 gives some detail of corporate support and corporate sup-
port of research by type of institution in 1982-83. The most rele-
vant figures here are those which show the relative importance of
the public and private institutions. Although the corporations give
more to private institutions than to public colleges and universi-
ties, the proportion of support designated for research purposes at
public institutions has more than doubled the corresponding
number for private colleges and universities.
Table 5. Corporate Support of Colleges and Universities and Corporate Support of
Research, by Type of Institution, 1982-83 (millions)
Corporate
Research
Support
Note: Numbers in parentheses are numbers of participating institutions.
You should note that the division of corporate support at 4-year
institutions between public and private colleges is now in the ratio
of about 46 to 54. Twenty-five years ago the ratio was 25 to 75, and
this shift reflects a long-term trend of growing importance-it re-
flects the growing importance of public research in universities to
the business community. Given that the corporate support of public
institutions is growing more rapidly than that for private colleges,
and given the relatively greater importance of research support in
public institutions, it also follows that a continuation of these
trends will invariably raise research support as a percentage of
total giving by corporations.
Total
Corporate
Support
Private Universities (73)
Private Men's Colleges (9)
Private Women's Colleges (77)
Private Coeducational Colleges (495)
Private Professional & Specialized Insts. (90)
Total Private Four-Year Institutions (744)
Total Public Four-Year Institutions (267)
Total Four-Year Institutions (1,011)
Two-Year Institutions (126)
Grand Total, All Institutions (1137)
$
334.1
$
74.3
22.2
1.5
-
-
13.4
.2
-
127.9
1.9
1.5
27.9
6.2
22.2
$
504.8
$
82.7
16.3
428.6
149.3
34.8
$
933.4
$
232.0
24.8
8.2
-
$ 941.6 $ 232.0 24.6
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159
Over and above the gifts and grants that corporations provide to
the colleges and universities for research purposes are two other
forms of research support from business. One is contract research
in `which the university performs specific research of a proprietary
or quasi-proprietary nature as a quid pro quo for the money it re-
ceives under the contract. The second covers a variety of coopera-
tive research projects, and these are typically informal arrange-
ments under which one or more persons on the corporate side join
with their academic counterparts to pursue a specific line of in-
quiry. The corporation will often loan or donate equipment to, and
pay the out-of-pocket costs of, such projects. In both these cases, of
course, our numbers exclude the corporate money received by the
institution.
The growth of all these related shifts in the past 3 or 4 years has
undoubtedly been stimulated by the provisions of the Economic
Tax Recovery Act of 1981 which added section 30 to the Internal
Revenue Code, and this is the 25 percent credit for increasing re-
search activities, which will expire or sunset at the end of this
year. The success of this legislation in accomplishing its purposes-
namely, to increase corporate research and development activi-
ties-and the desirability of increasing such activities further indi-
cate the need for making this section to become permanent. In
view of the fact that the credit now applies to 65 percent of any
incremental contract research expenditures, including contract re-
search at universities, it would be most unfortunate if this section
were allowed to expire. Indeed, the credit should be renewed at a
higher percentage, even 100 percent, of the contract research on
campus eligible for this 25 percent credit.
I have a final word about public policy in this whole area of pri-
vate giving to higher education. Educational support is part of the
total charitable contributions from individuals, corporations, and
foundations. The basic motivation for making contributions has
little or nothing to do with the tax laws; people and corporations
give for reasons that are independent of taxation. However, once
the decision to give has been made, the charitable deduction does
have an influence on the amount that is given. While this is theo-
retically true for all individuals, it is particularly true for those in
the upper tax brackets.
The relevance of this to the purpose of this hearing is that pri-
vate contributions for research and for research infrastructure at
universities in the future will depend greatly on the content of the
tax laws with respect to the charitable deduction. Any simplifica-
tion of the income tax involving the reduction of marginal rates
will indirectly tend to reduce the amounts that people and corpora-
tions give, simply because it would increase the after-tax cost of
contributions. Since there is a valid objective to be served by such
rate reduction, then the indirect impact on charitable giving is
simply a burden that will have to be borne.
However, there have been specific proposals for altering the
charitable deduction itself, and these would have additional and
direct negative effects on giving, including research support to
higher education. One proposal would put a floor on the deduction,
so that only contributions in excess of some specific dollar amount
or some percentage of income would be deductible. Another propos-
PAGENO="0166"
160
al would limit the deduction for gifts of property to the lower of
cost or inflation-adjusted cost, and deny any deduction for capital
appreciation in such gift property. A third proposal would elimi-
nate the present provision for an above-the-line deduction for non-
itemizers. All three of these proposals, taken together, would seri-
ously erode the present levels of charitable giving in general and
support of higher education in particular.
I would hope that the members of this task force will conclude
that private support of research and of research infrastructure at
universities, although small in relation to support by Government
in recent years, is a necessary, desirable, and vital activity, to be
encouraged to the maximum reasonable extent. And should any of
the above tax proposals become part of a tax simplification bill, I
would hope that the members of this task force will oppose those
proposals as contrary to the public interest.
This concludes my prepared statement. If there are any ques-
tions or needs for amplification of any of the above facts, I will be
happy to try to provide the answers.
Mr. FUQUA. Thank you very much, Mr. Smith.
[The prepared statement of Mr. Smith follows:]
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161
PRIVATE SUPPORT OF RESEARCH AT COLLEGES AND UNIVERSITIES
Testimony of
Hayden W. Smith
Senior Vice President
Council for Financial Aid to Education
680 Fifth Avenue
New York, New York 10019
Task Force on Science Policy
Committee on Science and Technology
U.S. House of Representatives
Hay 22, 1985
PAGENO="0168"
162
PRIVATE SUPPORT OF RESEARCH AT COLLEGES AND UNIVERSITIES
Hayden W. Smith
Senior Vice President
Council for Financial Aid to Education
680 Fifth Avenue
New York, New York 10019
My name is Hayden W. Smith. I am senior vice president
of the Council for Financial Aid to Education, located in New York
City. The Council is known throughout the corporate and academic commun-
ities by its initials, CFAE, and I shall use them here.
CFAE is a nonprofit service agency created in 1952 by eminent
corporate leaders. Its purpose is to encourage the widest possible
support of higher education by private donors, especially the corporate
community itself. It is supported exclusively by voluntary contributions
from some 400 business corporations. Its program consists of research,
publications, and consultation with business executives to encourage
corporate support of higher education. It is best known to the country
at large through a public service advertising campaign that uses the
well-known slogan, "Give to the College of Your Choice."
I am appearing here today to provide the Task Force with
information on the extent to which private donors, including individuals,
industrial firms, and foundations, have supported the acquisition and
maintenance of the research infrastructure at American universities. I
intend also to comment on current and future trends in this type of
PAGENO="0169"
163
support, and to discuss several elements of federal fiscal policy that
impinge on donors' incentives.
Among the research activities for which CFAE is well known is
the annual Survey of Voluntary Support of Education. We are the only
agency that gathers such data and we are the leading authority on this
type of information. I have previously furnished copies of our latest
survey report to the Task Force, and will comment on its contents as they
bear on the purpose of this hearing.
The report before you covers the academic year 1982-83. This
represents the 24th survey of private giving to education that we have
conducted since 1955. The survey has been an annual undertaking since
1965, and is now cosponsored by the Council for Advancement and Support
of Education and the National Association of Independent Schools.
Although it includes data on private support of private precollege
schools, I will exclude them from our discussion today.
The survey questionnaires are mailed to virtually all of the
3,000 institutions of higher education in the United States. The informa-
tion requested includes the amounts, sources, and purposes of private
gifts, grants, and bequests received during the previous academic or
fiscal year. We specifically request the exclusion of pledges, endowment
income, and any receipts which represent payment for services rendered.
While we cannot guarantee the accuracy of the figures provided, we have
no reason to believe that they contain any significant errors.
The response rate varies from year to year but generally
amounts to 35 percent. On the basis of careful comparisons with finan-
PAGENO="0170"
164
cial data previously gathered by the U.S. Office of Education (now the
Department of Education), it is clear that those institutions participat-
ing in the survey typically account for about 85 percent of the total
dollars received by all colleges and universities. The nonparticipating
institutions are primarily two-year colleges, the smaller state colleges
and universities, and very specialized private schools such as religious
seminaries and bible colleges, most of which receive little or no volun-
tary support.
If you will turn to page 3 of the 1982-83 report you will
find charts which depict our estimates of voluntary support of higher
education for the previous decade. These estimates are prepared from the
survey findings by means of a careful analysis of the reported data,
taking into account the relative importance of different kinds of institu-
tions and the differential response rates.
The chart on the left shows that total voluntary support
rose from $2.16 billion in 1974-75, which was a recession year, to $5.16
billion in 1982-83. Although we do not yet have a complete analysis of
the data from the 1983-84 survey, there is enough information off the
computer to permit an estimate of $5.6 billion. This implies that
private giving to higher education has increased at an average rate of
11.2 percent per year over the last nine years which, when corrected for
inflation, represents a real growth of about 3.5 percent annually.
Table 1 on page 4 gives breakdowns of our estimate by source
and by purpose. Individual donors account for roughly half of all
voluntary support, and the dollars are divided about equally between
institutional alumni and other individuals.
PAGENO="0171"
165
Business corporations and private foundations each account for
about one-fifth of the total; the remainder comes from religious denotnina-
tions and a variety of other sources. I call your attention to the fact
that support from the business community has grown faster than that from
any other source since 1977-78, and even when adjusted for inflation
represents a gain of 43 percent over this period. A significant part of
this extraordinary growth consists of inventory giving, i.e. gifts of
products manufactured by the donor companies. This form of giving
is now dominated by the computer companies, and the gains are known to be
associated with the Economic Recovery Tax Act of 1981 which provided an
enhanced deduction for certain contributions of this type of equipment.
The table also shows that about 60 percent of total voluntary
support was designated for current operations and 40 percent for capital
purposes, including endowment. I regret that our data do not adequately
distinguish between gifts for endowment and those for buildings and other
physical facilities. Since the interest of the Task Force at this
hearing is' in `research infrastructure, I intend to provide some supplemen-
tary data that bears on this interest.
The purposes for which voluntary support is given are shown
for a few general categories. About 30 percent of the, total is not
restricted as to purpose by the donors and may, therefore, be allocated
by the recipient institutions, according to their perceptions of need.
Although it becomes comingled with other general funds, some of this
money is eventually used for research support. Among the restricted
purposes is the category of research, and you will note that an estimated
$750 million was given specifically for this purpose in 1982-83. I will
shortly expand on this figure to indicate what information we have as to
PAGENO="0172"
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its source and content.
Some private givi'ig to higher education is restricted to physical
plant purposes, and you should note the estimate of $791 million. About
ten percent of this money constitutes current operating support that is
restricted to use in maintaining buildings and other physical facilities;
the remaining 90 percent is for capital purposes. This would include some
research infrastructure, but we have no information as to the amounts.
I also call your attention to the category of "other" purposes,
which now exceeds $1 billion, and to the fact that the amounts reported in
this category in both actual and inflation-adjusted terms have been growing
very rapidly in the past five years. Our impression from talking to those
in the academic community is that much of this increase constitutes support
of academic programs, library acquisitions, and support of individual
departments or schools within the institutions. While we have made some
changes in the breakdowns by purpose for the 1983-84 survey, it
is unlikely that we will be able to determine how much of these miscellan-
eous grants is going for research purposes. It is probable, however,
that some part, and perhaps a large part, of the departmental support is
used for this purpose.
There are a few significant figures in Table 2 on page 5. The last
column on the right shows that total voluntary support now constitutes only
6.3 percent of the total operating and capital expenditures of all colleges
and universities. Historically this percentage has been higher than
this; for example, as recently as the mid-1960s it was about ten percent,
then it fell slowly to less than six percent in the mid-1970s, and it has
since been in a slight uptrend.
PAGENO="0173"
167
Throughout the period for which we have these data, voluntary
support has risen much faster than the rate of inflation, and this is
true whether inflation is measured by the Consumer Price Index (CPI) or
the Higher Education Price Index (HEPI). It has also risen faster than
the number of students, and support per student is now more than four
times what is was in 1950. However, since the mid-1960s the growth of
private giving has been slower than the combined effects of inflation and
enrollment growth, so that support per student measured in constant
dollars is now 40 percent less than it was in 1966. There has also been
a decline in institutional expenditures per student, measured in constant
dollars, and we take these facts to support the view that there has been
some decline in quality in higher education that has probably affected
both instruction and research.
At the back of the report are several summary and historical
tables of data. On page 72, Table E gives our estimates of voluntary
support, with a breakdown between current and capital money and the
distribution by source, for all years since 1950. There are two points
worth noting. Support for capital purposes typically exceeded support
for current operations until 1970; since then operating support has
consistently accounted for the larger share. And the distribution of
total support by source has displayed an extraordinary stability; the
gifts and bequests from individuals have consistently accounted for about
half of the total, with roughly equal shares from alumni and nonalumni
donors; the only major trends are a generally declining share from
religious denominations, some decrease in the share of foundations since
1969 and a significant increase in the proportion of the total that
comes from business corporations.
PAGENO="0174"
168
The remainder of the tabular material in this report represents
not our estimates for all higher education but amounts actually reported
by the participating institutions. Of special interest to this Task
Force is the bottom half of Table D on page 71. The amounts reported
over the last ten years have shown remarkable stability in terms of
purpose; there has been a decline in unrestricted money from about 33
percent to 29 percent and a corresponding increase in the "other" cate-
gory from 17 to 21 percent; support for physical plant and for research
each account for about 15 or 16 percent every year, student aid has been
relatively constant at 13 percent, and faculty compensation at about 6
percent.
Finally, I call your attention to Table C on page 70, which
shows that a group of 70 or 75 private universities consistently accounts
for between 35 and 40 percent of the total support received by all
institutions. The most significant change in the institutional shares is
a growth for the public colleges and universities from 22 to 31 percent
of the total and a corresponding decline in the shares received by the
four categories of smaller private colleges.
All this information has been stored on computer tape since 1966,
and it is possible to prepare special tabulations and analyses of these data
to serve particular purposes as needed. In order to address the specific
subject of this hearing, we have prepared a few supplementary tables, and
they are appended to this statement.
Table 1 shows the preliminary figures from the 1983-84 survey.
The estimated $5.60 billion of total support is broken down by source, and
the results reflect a continuation of recent trends. Again I call your
attention to the fact that support from business corporations has shown
PAGENO="0175"
169
an extraordinary increaae in inflation-adjusted terms over the previous
five years. Much of this growth, perhaps as riuch as $250 million,
is associated with the addition of section l70(e)(4) to the Internal
Revenue Code. This section provides for an enhanced tax deduction in the
case of inventory gifts of scientific property that are made to institu-
tions of higher education and to be used for research or experimentation
or for research training in the physical or biological sciences.
To throw some light on this matter, we conducted a survey of
the leading industrial corporations last year, and our report on that
survey is svailable to this Task Force. Although the response rate was
relatively low, the data we did obtain reveals clearly that this type
of giving is dominated by the companies in the electrical machinery
industry, especially companies that manufacture computers, medical
instruments, and otherelectronic products. The numbers shown on page
2 of that report reflect the tax-deduction ~value of the gifts made, and
this figure is significantly lower than the list price value used by
recipient institutions in our voluntary support survey.
It is my personal view that this enhanced deduction should
be extended'to all inventory gifts of company products and not limited
to any class of qualified recipients or to any designated purposes.
The formula used for the tax deduction adequately protects the public
interest in preventing thekinds of abuses that le4 to the restrictive
legislation in the Tax Reform Act of 1969, and it would clearly provide
additional incentives for contributions of state-of-the-art equipment to
the scientific laboratories on the Nation's campuses as well as a broad
array of other products that are useful and needed by charities generally.
PAGENO="0176"
170
The second supplementary table attached to this statement
gives a breakdown of research support by donor groups taken from our
voluntary support surveys of 1972-73 and 1982-83. This type of support
is of relatively little interest to individual givers, and what they do
give accounts for a small share of the total. Contributions for research
purposes are clearly of major and growing interest to corporations
and foundations, and they account for about 70 percent of the total.
Table 3 shows the sources of total support, research support,
and physical plant support in 1982-83 with the division between current
operating support and support for capital purposes. While capital
support accounted for 42 percent of overall giving, it comprised only 9
percent of giving for research purposes. The bulk of research support
obviously goes for institutional operating budgets. Physical plant
support, on the other hand, was 92 percent capital. Some part of the
$614 million reported in the survey was undoubtedly aimed at the kinds of
research infrastructure in which this Task Force is interested, but we do
not have any information as to how much.
Table 4 gives an historical overview of estimated research
support and shows the percentage of research support to estimated total
support for all purposes. There is a very modest uptrend in this percent-
age. Prior to 1974-75 it averaged about 12.8 and in no year was it as
high as 15.0; in the last ten years it has averaged 15.0 and in no year
was it less than 13.9.
While prediction is always hazardous, I believe there are
reasons to anticipate further modest growth in this percentage. One
reason is the growing relative importance of corporate support in the
total picture; in the past 15 years the percentage of corporate giving to
PAGENO="0177"
171
total voluntary support has increased from less than 15 percent to
more than 22 percent and it is still rising. Since a high proportion of
corporate support is designated for research purposes, continued growth
in the relative importance of corporate support will cause some further
rise in the relative overall importance of research support. A second
reason is that there has been, and continues to be, a growing sense
of partnership between the corporation and the campus, especially in the
research area, and universities are making special efforts to enhance
further this community of interest.
Table 5 gives some detail of total corporate support and
corporate support of research by type of institution in 1982-83. The
most relevant figures here are those which show the relative importance
of public and private institutions. Although corporations give more
to private institutions than to public colleges and universities, the
proportion of support designated for research purposes at public institu-
tions is more than double the corresponding number for private colleges
and universities.
Please note that the division of corporate support of four-year
institutions between public and private colleges is in the ratio of
46-to-54; 25 years ago the ratio was 25-to-is, and this shift reflects a
long-term trend of growing importance of public research universities to
the business sector.
Given that corporate support for public institutions is growing
more rapidly than that for private colleges and universities, and given
the relatively greater importance of research support at public institu-
tions, if follows that a continuation of these trends will invariably
PAGENO="0178"
172
raise research support as a percentage of total corporate support of
higher education.
Over and above the gifts and grants that corporations provide
to colleges and universities for research purposes, there are two other
forms of research support from business. One is contract research, in
which the univesity performs specific research of a proprietory or
quasi-proprietory nature as a quid pro quo for the money it receives
under the contract. The second covers a variety of cooperative research
projects. These are typically informal arrangements under which one or
more persons on the corporate side join with their academic counterparts
to pursue a specific line of inquiry; the corporation will often loan or
donate equipment to, and pay the out-of-pocket costs of, such projects.
In both these cases, of course, our numbers exclude the corporate money
received by the institution.
The growth of these relationships in the paat three or four
years has undoubtedly been stimulated by theprovision in the Economic
Recovery Tax Act of 1981 whichadded section 30 to the Internal Revenue
Code. This is the 25 percent credit for increasing research activities,
and it will expire or "sunset" at the end of this year. The success of
this legislation in accomplishing its purposes, namely to increase
corporate research and development activities, and the desirabliity of
increasing such activities further, indicates the need for making this
section of the Code permanent. And, in view of the fact that the credit
now applies to 65 percent of any incremental contract research expendi-
tures, including contract research at universities, it would be most
unfortunate if this section were allowed to expire. Indeed, the credit
PAGENO="0179"
173
should be renewed and a higher percentage -- even 100 percent -- of
contract research on campus should be made eligible for the 25 percent
credit.
A final word on public policy in the area of private giving
to higher education. Educational support is a part of total charitable
contributions from individuals, corporations and foundations. The
basic motivation for making contributionè has little or nothing to do
with the tax laws; people and corporations give for reasons that are
independent of taxation. However, once the decision to give has been
made, the charitable deduction does have an influence on the amount that
is given. While this is theoretically true for all individuals, it is
particularly true for those in the upper tax brackets.
The relevance of this to the purpose of this hearing is that
private contributions for research and for research infrastructure at
universities in the future will depend greatly on the content of the
tax laws with respect to the charitable deduction. Any simplification
of the income tax involving the reduction of marginal rates will indirect-
ly tend to reduce the amounts that people and corporations give, simply
because it would increase the after-tax cost of contributions. Since
there is a valid objective to be served by such rate reduction, then
the indirect impact on charitable giving is simply a burden that will
have to be borne.
However, there have been specific proposals for altering
the charitable deduction itself, and these would have additional and
direct negative effects on giving, including research support to higher
PAGENO="0180"
174
education. One proposal would put a floor on the deduction, so that
only contributions in excess of some specific dollar amount or some
percentage of income would be deductible. Another proposal would limit
the deduction for gifts of property to the lower of cost or inflation-
adjusted cost, and deny any deduction for capital appreciation in such
gift property. A third proposal would eliminate the present provision
for an above-the-line deduction for nonitemizers. All three of these
proposals, taken together, would seriously erode the present levels
of charitable giving in general and support of higher education in
part icular.
I would hope that the members of this Task Force will cocciude
that private support of research and of research infrastructure at
universities, although small in relation to support by government in
recent years, 18 a necessary, desirable, and vital activity, to be
encouraged to the maximum reasonable extent. - And should any of the
above tax proposals become part of a tax simplification bill, I would
hope that the members of this Task Force will oppose those proposals
as contrary to the public interest.
This concludes my prepared statement. If there are any
questions or needs for amplification of any of the above facts, I
will be happy to try to provide the answers.
PAGENO="0181"
Table 1. Estimated Voluntary Support, by Source and Purpose (millions)
Percent change, 1983-84
1978-79 1982-83 1983-84
v.19 1S-19
v.1982-83 v.1978-79 adj. for HEPI
Purposes:
Current Operations
Capital Purposes
$2,010 $3,125 $3,405
1,220 2,035 2,195
+ 9.0 +69.4
+ 7.9 +79.9
+12.8
+20.1
206.4 293.8 304.8 + 3.7
216.9 308.8 325.4 + 5.4
+47.7
+50.0
TOTAL VOLUNTARY SUPPORT
$3,230
$5,160
$5,600
+ 8.5
+73.4
Sources:
Alumni
Nonalumni individuals
$
785
736
$1,237
$1,305
+ 5.4
+66.2
Foundations
701
1,190
1,316
+10.6
+78.8
Business Corporations
1,018
1,081
+ 6.2
+54.2
Religious Organizations
1,112
1,271
+14.3
+128.6
206
190
- 7.8
+18.0
+15.6
+10.8
+19.2
+ 2.8
+52.7
-21.6
Price Indices (1967-100):
Consumer (cPI)
Higher Education (HEPI)
PAGENO="0182"
Table 2. Voluntary Support for Research Purposes, by Donor Groups (millions)
1972-73
19 82-83
Percent
of total
Amount % support
Alumni $ 13.3 5.8 3.2
Nonalumni Individuals 37.6 16.3 8.0
Foundations 89.0 38.6 21.7
Business Corporations 53.9 23.4 21.6
Religious Organizations .1 - .1
Other 36.9 16.0 29.3
Percent
of total
Amount 1 support
$ 24.8 3.9 2.4
77.2 12.2 7.7
207.4 32.7 24.1
232.0 36.6 24.6
.4 - .3
92.9 14.6 27.7
$230.8 100.0 13.2
$634.7 100.0 14.5
PAGENO="0183"
Table 3. Total Voluntary Support, Research Support, and Support for Physical Plant,
by Purpose (Current Operations and Capital Purposes), 1982-83 (millions)
Support for
Total Voluntary Support Research Support Physical Plant
Alumni
Nonalumni Inds.
Foundations
Corport ions
Religious Orgns.
Other
Total
Total
Cur.
Cap.
$1,046.9 $ 503.8 $ 543.1
1,007.2
450.5
556.7
862.1
497.2
364.9
941.6
662.4
279.2
174.4
150.2
24.2
335.9
260.3
75.6
Total Cur. Cap. Total Cur. Cap.
$ 24.8
$ 18.0 $ 6.8
77.2
48.6
207.4
198.2
232.0
222.7
9.2
.4
92.9
.1
90.1
.3
2.8
$4,368.1 $2,524.4 $1,843.7
$132.5
153.3
177.9
167.0
16.1
22.6
$ 7.8 $124.7
11.3 142.0
14.3 163.6
16.0 151.0
2.6 13.5
3.4 19.2
$643.7 $577.7 $ 57.0 $669.4 $ 55.4 $614.0
PAGENO="0184"
178
Table 4. Estimated Voluntary Support and Support of Research, 1954-55 to 1983-84
Total Support
Voluntary* of
Support Research %
1954-55 $ 475 $ 60 12.5
1956-57 840 85 9.9
1958-59 760 105 14.0
1960-61 900 125 14.1
1962-63 1,050 140 13.4
1964-65 1,400 155 11.2
1965-66 1,440 205 14.4
1966-67 1,480 185 12.4
1967-68 1,600 200 12.5
1968-69 1,800 225 12.5
1969-70 1,780 215 12.1
1970-71 1,860 245 13.3
1971-72 2,020 260 - 12.8
1972-73 2,240 290 13.0
1973-74 2,240 290 13.0
1974-75 2,160 325 15.0
1975-76 2,410 355 14.7
1976-77 2,670 400 14.9
1977-78 3,040 475 15.7
1978-79 3,230 505 15.7
1979-80 3,800 575 15.1
1980-81 4,230 630 14.9
1981-82 4,860 675 13.9
1982-83 5,160 750 14.5
1983-84 5,600 840 15.0 (eat.)
PAGENO="0185"
Table 5. Corporate Support of Colleges and Universities and Corporate Support of
Research, by Type of Institution, 1982-83 (millions)
Private Universities (73)
Private Men's Colleges (9)
Private Women's Colleges (77)
Private Coeducational Colleges (495)
Private Professional & Specialized Insts. (90)
Total Private Four-Year Institutions (744)
Total Public Four-Year Institutions (267)
Total Four-Year Institutions (1,011)
Two-Year Institutions (126)
Grand Total, All Institutions (1137)
Total
Corporate
Support
Corporate
Research
Support
$
334.1
$
74.3
22.2
1.5
-
-
13.4
.2
-
127.9
1.9
1.5
27.9
.
6.2
22.2
$
504.8
$
82.7
16.3
428.6
149.3
34.8
$
933.4
S
232.0
24.8
5 941.6 5 232.0 24.6
Note: Numbers in parentheses are numbers of participating institutions.
PAGENO="0186"
180
~ Council for Financial Aid
~ to Education, Inc.
A ~id 680 Fifth Avenue. New York. New York 10019
CORPORATE GIFTS OF COMPANY PRODUCTS AND OTHER PROPERTY
TO EDUCATION
Introduction
Corporate interest in donations of company products to colleges
and universities grew sharply after the passage of the Economic Recovery
Tax Act (ERTA) in August 1981. ERTA provided for enhanced tax deductions
for gifts from inventory of products to be used In research or research
training in the physical and biological sciences. CFAE started to collect
data in 1982 about the total amounts of these gifts and of gifts of other
types of property to education In its two annual surveys-Voluntary Support
of Education and Corporate Support of Education. In the 1983 edition of
the latter, 25 corporations reported donations of $147.5 million in company
products to education. But no details existed about the nature of these gifts
and company policies concerning them. Hence, a special survey was indicated.
In the fall of 198'4, "product-property-gift" questionnaires were
sent to 1,663 corporate contributions officers to solicit these additional
details about gifts to education only. A total of 298 companies responded;
102 made gifts of company products, other property or both. An additional
7 had no formal programs but were beginning to track such contributions,
which were usually made by divisions or subsidiaries. The remaining 189
did not make such gifts.
Survey Results
A breakdown of the responses by type of program and by industry
sector follows:
Industry
Type of Program ------------ ---- Total
Manufac- Nonmanu- Unknown
turing facturing
Company products
only 19 2 21
Both products and
other property 30 3 33
Other property
only 15 30 3 ~48
TOTAL 614 35 3 102
PAGENO="0187"
181
Despite the fact that all of these companies indicated the existence
of programs for making product or property gifts, not all of them made such
gifts in any given year or even every year, nor could all of them put a value
on such gifts. Some companies have not kept track of such gifts in the past.
Some gifts were equipment that had already been fully depreciated and had no
book value. Some companies did not answer all questions. Although the size
of the sample is too small to permit generalization to the total corporate
community, the data reported are sufficient to provide a valuable insight
into the amount and nature of these gifts. The respondents also represent
the major company product donors known to CFAE.
Gifts of Company Products
Nineteen companies in 8 manufacturing industries made donat~ions of
company products only. An additional 30 manufacturers in those 8 and two
other industry groups gave both company products and other property.
Two companies in a service industry gave company products, one through
a manufacturing subsidiary. Three companies in three additional nonmanu-
facturing industry groups reported the existence of programs for making
both types of gifts, although only one reported making such gifts during
the period covered by the survey (1983 and 1984).
The value of product gifts, where known and reported, was as follows:
Gifts of Company Products
Manufacturing:
Electrical machinery (21)
Chemicals & drugs (6)
Food, beverage & tobacco (4)
Machinery (4)
Fabricated metals (3)
Primary metals (3)
Paper & lumber (3)
Printing & publishing (2)
Petroleum & gas (2)
Transportation equipment (1)
Subtotal - Manufacturing (49)
Nonmanufacturing:
Transportation (2) $ 40,403 (2)
All others (3) 300 (1)
GRAND TOTAL (54) $76,310,431 (41) $96,155,186 (34)
1983 1'~84
$61,729,490 (19)
13,910,196 (3)
32,939 (3)
480,000 (3)
32,800 (3)
3,818 (1)
1,500 (1)
141,485 (2)
12,500 (2)
25,000 (1)
$76,269,728 (38)
$95,281,540 (14)
167,917 (3)
36,1420 (3)
311,700 (3)
252,000 (3)
1,000 (1)
11,800 (1)
33,809 (2)
13,500 (2)
$96,109,286 (32)
$ 45,000 (1)
500 (1)
$ 45,500 (2)
Subtotal - Nonmanufacturing (5)$ 40,703 (3)
(Numbers in parentheses show the number of companies reporting.)
PAGENO="0188"
182
As can be seen in the table, the electrical industry dominated this
type of giving. Of the 19 electrical machinery companies donating their
products in 1983, 7 (or 36.8 percent) said they gave only to colleges, while
12 (or 63.2 percent) gave to both colleges and precollege institutions. In
1984, 6 (42.9 percent) gave to colleges only and 8 (57.1 percent) gave to
both educational levels. None gave only to precollege institutions in
either year.
Of the remaining 33, 13 (44.8 percent) gave to colleges only, 6 (20.7
percent) to precollege institutions only and 34 (34.5 percent) to both. Four
did not indicate an educational level.
There was considerable variation in valuation practices. Of the 54
companies reporting donations of company products, 22, or just under 41
percent, used the sales price, list price or fair market value to notify
recipients of the value of the gift. Another 18, or 33.3 percent, em-
ployed a lesser figure, including the discounted price, the book value.
cost, or half the difference between cost and resale price. These latter
mechanisms may apply to the "other property" gifts that some of these
companies made, because the questionnaire did not differentiate between.
the two types of gift when asking for methods of notifying donees of gift
values. Just over one quarter (13, or 25.9 percent) either did not answer
or did not notify recipients of the value of the gift. One company, for
example, explained that the donation was already fully depreciated. Obviously,
this comment applied to gifts of other property.
Forty of the manufacturers and three of the nonmanufacturers donating
only company products took them as a tax deduction in 1983; the numbers dropped
to 37 and 3, respectively, in 1984. Some of the respondents made no product
gifts in 1983; others made none in 1984. The sample was different each year.
Gifts from 11 companies were eligible for the enhanced deduction under
Section 170(e)(3) of the Internal Revenue Code for "care of the ill, the
needy, or infants." Gifts from 21 companies were eligible for the enhanced
deduction under Section 17O(e)(4) for research or research training, as
provided in ERTA. Although 15 of the companies indicated that they
had written policies and forms for certification by the recipient about
the use of the donations, only four were able to provide copies.
Gifts of Other Property
Other property donations were almost entirely used or surplus items.
They are often unplanned, and data about their value tend to be very lumpy.
Most frequently they were used furniture or office equipment, but also included
used audiovisual or computer equipment, used vehicles or paper and office
supplies. Occasionally, companies gave real estate and art works, usually
on a one-time basis, and some of them at times provided construction materials
or pro bone services, with no tax deduction being taken on the latter.
PAGENO="0189"
Of the `45 manufacturing companies that donated other property to
educational institutions, the 30 that gave both products and property
represented 10 industries; the 15 that confined their gifts to other
property were in only 7 of these industries. The 30 nonmanufacturers
that gave other property were in 7 industry groups, with the three that
also gave company products in three of those groupings.
The breakdown of corporate gifts of other property by industry
groupings is as follows:
Corporate Gifts of Other Physical Property
Industry --~ 1983
Manufacturing:
Electrical machinery (11!)
Chemicals & drugs (9)
Petroleum & gas (6)
All others (16)
Nonmanufacturing:
Utilities (9)
Insurance (7)
Banking (6)
Telecommunications (5)
Engineering & Construction (2)
All others (`4)
$ 302,672 (7)
97,500 (`4)
51,500 (2)
2,1142,616 (`4)
15,000 (2)
20,000 (1)
(20)
(Numbers in parentheses show the number of companies reporting.)
Only 714 of the respondents indicated the educational level to which they
made property gifts. Almost half (36, or 148.7 percent) gave to both colleges
and universities and precollege institutions; 30, or `40.5 percent, gave to
colleges only and 8, or 10.8 percent, to schools only.
183
19814
$ 1,876,7142
(6)
$ 2,576,000
(5)
8,699,218
(`4)
276,917
(3)
1,760,753
(3)
71,700
(3)
1,5214,078
(5)
188,662
(6)
Subtotal - Manufacturing (145) $13,860,791 (18)
Subtotal - Nonmanufacturing(33)$ 2,629,288
$ 3,113,279 (17)
$ 18,116 (5)
9,200 (3)
1,3142,3147 (14)
10,000 (2)
$ 1,379,663 (114)
$ 117,500 (2)
Unknown (anonymous replies) (3) $ 623,500 (3)
GRAND TOTAL (81)
$17,113,579 (`41) $ `4,610,'4'12 (33)
PAGENO="0190"
184
Of the `~8 companies that only gave property, 28 notified recipients
of the value of their gifts. Fifteen, or 31.2 percent, used the list price
or fair market value; 13, or 27.1 percent, applied a variant, such as the
net depreciated value, the salvage value or an appraised value. The rest
(20, or ~1.7 percent) either did not answer or had already depreciated the
property and therefore took no tax deduction on it. Slightly over half (26)
of the companies took a tax deduction for their property gifts in 1983;
exactly half did so in 198'4.
Where do Proposals Originate?
Most requests for company products came from recipients, but an
almost equal number of offers of gifts originated with the companies. Most
of the companies responded to requests as well as made their own offers.
Three respondents also received proposals from employees outside the
contributions function for gifts to organizations they worked with.
Requests for gifts of "other" property originated equally from donee
requests and from within the companies. Again, most companies received
proposals from both sources. Two also received proposals from employees
who had worked with the recipient organization.
Discounted Pricing
Fourteen of the companies donating only their own manufactured products
also sold their products to educational institutions at discounted prices.
These companies were in three industries: electrical machinery, printing
and publishing and petroleum and gas. Most of them indicated that they
gave standard, industry-wide discounts. A few, however, reported that
discounting was done only by certain divisions or subsidiaries andthat there
was no company-wide policy. A few others were in the process of setting up
a company policy. The remainder of the respondents either reported that
their company had no such policy or did not answer the question.
CFAE Research
1/30/85
PAGENO="0191"
185
Mr. FUQUA. Now we will hear from Dr. Frank Sprow, vice presi-
dent of Exxon Research &~Engineering Co.
[A biographical sketch of Dr. Sprow follows:]
DR. FRANK B. SPROW
Dr. Sprow received his Bachelor of Science (1962) and Master of Science (1963) de-
grees in Chemical Engineering from MIT and his Ph.D. in Chemical Engineering
(1965) from the University of California at Berkeley.
Dr. Sprow assumed his current position in December 1982 as Vice President,
Technology Support for Exxon Research and Engineering Company, Clinton, New
Jersey. Technology Support is responsible for managing business and technical sup-
port to ER&E's R&D and engineering activities. This includes financial, legal, ana-
lytical, computing, and other areas. Construction and planning for ER&E's new fa-
cilities are also included.
He began his career with Exxon at Baytown, Texas, in 1965 and worked in vari-
ous engineering and supervisory positions there. In May 1971, Dr. Sprow joined
Exxon U.S.A.'s Supply Department in Houston, and later became Head of Com-
merce-Raw Materials, responsible for negotiations for purchase and sale of Exxon's
U.S. crude oil supplies. He then became Technical Manager of Exxon U.S.A.'s
Bayway, New Jersey Refinery in August 1975 and was named Operations Manager
in August 1977. Dr. Sprow joined Exxon Research and Engineering in March 1979
and was General Manager of Petroleum R&D Programs. In January 1980, he was
promoted to Vice President, Synthetic Fuels Research, where he was responsible for
development and management of Exxon's research efforts on the conversion of coal
and shale to liquid and gaseous products.
Dr. Sprow is a member of the AIChE and the Society of Automotive Engineers.
He is active in Exxon's university relationships programs and has served on various
college advisory boards.
STATEMENT OF DR. FRANK B. SPROW, VICE PRESIDENT, EXXON
RESEARCH & ENGINEERING CO., ANNANDALE, NJ
Dr. SPROW. Thank you, Mr. Chairman.
It is a pleasure to have the opportunity to offer an industry per-
spective regarding the research infrastructure at the university.
I am quite concerned about the condition of our university re-
search facilities. Frequently, when I visit a university lab, I see ob-
solete instruments, crowded and marginally safe facilities, and the
move to shared computing and electronically-linked research appa-
ratus has passed many schools by.
At the same time the health of the university research system is
critical to industry. We need trained graduates in our own labora-
tories and fundamental work is carried out on the universities
which is too speculative for profit-making firms to engage in.
This problem needs more than money as a cure. If we continue
with current methods of funding university research, not enough
money could be printed to really solve the infrastructure problem
on a continuing basis, especially if the United States wants to
retain its technological edge.
As severe as this problem is, in my view it could well be much
worse but for the 1981 Tax Act which provides an incentive for cor-
porate donations of research and development equipment to univer-
sities. The fruits of this program are obvious, most particularly in
the electronics and computing disciplines. The coming consider-
ation of tax reform proposals should certainly include this discus-
sion of this important area.
Let me back up and say that in my experience an effective re-
search and development program has five requirements:
First, creative people working independently and in teams.
PAGENO="0192"
186
Next, state-of-th&art facilities and tools.
Next, establishment of realistic research objectives, including
how the work will be used if it succeeds.
Next, sharing of resources to save money.
Finally, but very importantly, stewarding the results of the re-
search to insure that we have learned from the experience, positive
or negative. Did we get what we paid for? If we did, fine. If not,
why not?
The current system of individual grants to university researchers
has been successful in the first of these, attracting creative people,
but contributes relatively little to the other four. An alternate ap-
proach that would lend itself to greater utilization of business prin-
ciples for managing our research resources would be the adoption
of supplemental institutional grants to encourage the establish-
ment of a centralized facility. Such centers would be collaborative-
ly managed by the institutions using them. As envisioned here,
they would facilitate the acquisition, maintenance, and sharing of
instrumentation. Flexible guidelines could enable the aggregation
of funds for the purchase of expensive instruments.
Second, a reasonable level and continuity of funding could allow
a long-term commitment to provide adequate maintenance support
and operating personnel.
Third, the scale of the programs would make it possible to pro-
vide shared instrumentation and management in a cost-effective
manner.
The principal motivation behind establishing and funding cen-
tralized research facilities is an attempt to solve the dilemma cre-
ated by the combined increases in the need for and the cost of
modern research facilities.
At some cost threshhold, it is clear that centralized research fa-
cilities are necessary, because the infrastructure required to sup-
port research is simply too expensive to continue to exist under the
purview of the individual researcher, a single department, a single
university, or a single company.
The concept of shared research facilities is already established in
the field of physics where instrumentation at very high cost is re-
quired; for example, synchrotron light sources.
When instrumentation and facilities of such high capital and op-
erating costs are involved, there is no alternative to shared facili-
ties. There are several successful university, industry, and Govern-
ment cooperative arrangements in operations today. Under the di-
rection of Stanford University, an accelerator was constructed with
Federal funds. Usage of this instrument, while managed by Stan-
ford, is allocated on a proposal basis to industry, Government, and
other universities.
Industry has contributed significant resources to improve the ca-
pabilities of this facility. For example, in partnership with the
Lawrence Berkeley Laboratory and Stanford, we at Exxon have ex-
panded the facility to include the world's most powerful x-ray
source which is used for materials science research. A similar col-
laboration which we are involved in exists at Brookhaven Labora-
tory on Long Island where the National Synchrotron Light Source is
managed by an advisory committee of representatives from several
universities.
PAGENO="0193"
187
The participating research team concept enables industry as well
as university and Government labs to contribute funds and exper-
tise to enhance and upgrade the instrumentation in return for pri-
ority use.
Collaboration between universities and industry in centers or
through other vehicles provides an opportunity to take unique ad-
vantage of the different characteristics of each, the universities on
the one side, industry on the other.
Universities often have difficulty upgrading their facilities and
instrumentation. At the same time, labor costs are low at universi-
ties due to the involvement of graduate students in the research
program.
In industry, just the converse is true. Investment in equipment
presents no unusual hurdles. If it is justified, it is purchased. At
the same time, labor costs are quite high in industry due to exten-
sive overhead associated with recruiting, training, and other typi-
callycorporate costs. This suggests collaborations in such centers
where at the margin equipment is supplied by industry and staff-
ing from universities.
I also believe it is time that universities and the Government
give serious consideration to some of the management procedures
and techniques which have been used by industry to increase effi-
ciency and output. The principles have been around for a long
time: justification, objectives set, stewardship. These principles are
just as applicable to individual university administrations as they
are to shared instrumentation facilities.
The establishment of a formal justification procedure going
beyond initial procurement would help insure cost efficiency and
improve return on investment not only for the procurement of
equipment, but also its maintenance, upgrading, and eventual re-
placement based on expected obsolescence rates.
Proposals to acquire equipment should be required to address
questions of continuing maintenance, training needs, safety of oper-
ating personnel, planned use, availability of existing instruments
which might do the job, and included in that analysis of alterna-
tives to the proposal.
Setting objectives for what we expect to achieve would provide
benchmarks for measuring and controlling progress. Just what is it
that we need to measure, with what accuracy, how rapidly?
In industry, such objectives are crucial to good long-range plan-
ning, and the efficient rebuilding of our research infrastructure re-
quires just such a long-range view.
The establishment of a stewardship mechanism can help insure
maximum scientific results with the resources expended. In the ab-
sence of a direct economic and competitive focus, there is a need
for a mechanism to insure accountability. In industry we hold re-
searchers accountable for their investment decisions as well as the
quality and productivity of their research work. While we dare not*
breathe excessive conservatism into a research organization, an in-
telligently applied, continuing appraisal procesè is needed so that
we can allocate scarce funds to the most productive laboratories
and the most effective workers.
There is also a great opportunity for the Federal Government to
leverage its funds through collaborations with State governments
53-277 0 - 86 - 7
PAGENO="0194"
188
who have also begun to recognize the importance of a healthy re-
search infrastructure to their economic well being.
In my State, New Jersey, the Governor established a special com-
mission to examine ways of upgrading the State's research infra-
structure. The commission recommended the passage of a bond
issue to create four advanced technology research centers at key
New Jersey universities. The electorate approved the bond issue in
the November 1984 general election.
In addition to conducting research on new techniques, these cen-
ters will share information with other academic institutions, gov-
ernment, industry, and the public.
These are suggestions meant to stimulate discussion on solutions
to this critical problem. I have expanded on them in my submitted
testimony.
Research is becoming so capital-intensive that strong manage-
ment procedures must be used to insure that our country's techno-
logical investments yield maximum return. At the same time we
must recognize that a purely business approach will not fit. Uni-
versities are and should be different.
I do know that in encouraging our researchers and managers to
work with universities on this issue, industry has demonstrated a
willingness to help and that this help is needed.
Thank you.
[The prepared statement of Dr. Sprow follows:]
PAGENO="0195"
189
STATEMENT
before the
TA~ ~`ORCE ON SCIENCE POT~i~y
COMMITTEE ON SCIENCE AND TECHNOLoGY
U.S. HOUSE OE' REPRESENTATIVES
by
Dr. Frank 3. Sptow
Vice Pregjden~
EXXON RESEARCH AND ENGINEERING COMPANY
May 22, 1985
PAGENO="0196"
190
MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
MY NAME IS FRANK SPROW, AND I AM VICE PRESIDENT,
TECHNOLOGY SUPPORT, EXXON RESEARCH AND ENGINEERING
COMPANY. MY RESPONSIBILITIES INCLUDE PROVIDING BUSINESS
AND TECHNICAL SUPPORT TO THE COMPANY'S RESEARCH AND
DEVELOPMENT ACTIVITIES. I ALSO SERVE AS A MEMBER OF THE
GOVERNMENT RELATIONS COMMITTEE OF THE COUNCIL FOR CHEMICAL
RESEARCH, AND THE COMMITTEE OH SCIENCE, ENGINEERING AND
PUBLIC POLICY (COSEPP) OF THE AMERICAN ASSOCIATION FOR THE
ADVANCEMENT OF SCIENCE. BOTH OF THESE GROUPS ARE VERY
INTERESTED IN THE INSTRUMENTATION AND INFRASTRUCTURE
PROBLEMS FACING UNIVERSITY RESEARCHERS, AS WELL AS OTHER
MATTERS BEING CONSIDERED BY THE COMMITTEE.
I WELCOME THE OPPORTUNITY TO OFFER AN INDUSTRY
PERSPECTIVE TO THE MANAGEMENT CF CUR RESEARCH INFRASTRUC-
TORE. THE HEALTH OF UNIVERSITY RESEARCH AND TEACMING IS
CRITICAL TO THE U.S. INDUSTRIAL COMMUNITY FOR TWO PRIMARY
REASONS. FIRST, THE UNIVERSITY SYSTEM ?ROV~ES INOUSTRY
WITH A CONTINUING STREAM OF HIGHLY TRAINED TECHNICAL
PAGENO="0197"
191
PERSONNEt~. SECOND, IT P5RMITS THE EXPLORATION OF IDEAS
THAT PROMISE POTENTIALLY LARGE PAYOFFS FOR THE NATION, BUT
THAT ~ARE P.S YET TOO SPECULATIVE TO JUSTIFY SUBSTANTIAL
INVESTMENT BY A COMPANY SEEKING TO MAKE A PROFIT.
AMERICA'S ABILITY TO COMPETE INTERWATIONALE~Y IS FACING
UNPRECEDENTED CHALLENGE FROM ABROAD. MAINTAINING THE
HEALTH OF OUR RESEARCH EQUIPMENT AND FACILITIES IS
ESPECIALLY CRITICAL TO THIS COMPETITION. MOST INDUSTRIAL
RESEARCHERS AND ACADEMICS AGREE THAT THE RESEARCH INFRA-
STRUCTURE IS CURRENTLY IN A STATE OF SERIOUS DECLINE.
THE FEDERAL GOVERNMENT'S SUPPORT FOR RESEARCH
AND TEACHING LABORATORY EQUIPMENT AND FACILITIES GREW
RAPIDLY THROUGH THE SO'S AND 60'S, RESPONDING TO A PENT-UP
DEMAND FOR HIGHER EDUCATION, INCREASED ENROLLMENTS, AND AN
EXPLODNG BODY OF SCIENTIFIC AND TECHNOLOGICAL KNOWLEDGE.
THE NATIONAL SCIENCE FOUNDATION (NSF), THE DEPARTMENT OF
DEFENSE (DOD), AND NATIONAL INSTITUTES OF HEALrH (NIH)
ASSUMED THE PRINCIPAL RESPONSIBILITY FOR ALLOCATING
FEDERAL FUNDS. THE PRIMARY MECHANISM USED WAS A SYSTEM OF
GRANTS-IN-AID TO COMPETITIVELY PEER-REVIEWED PROJECTS.
THIS RESEARCH SYSTEM WAS SUCCESSFUL. IN ESTABt.iSH~G THE
U.S. A~ THE WORLD LEADER IN BASIC SCIENCE. WE RAVE
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192
ENCOURAGED INNOVATIVE ~EW TECHNOLOGIES AND BUILT A
RESEARCH BASE THAT REMAINS THE STRONGEST AND MOST PRO-
DUCT::VE IN THE WORLD.
HOWEVER, SINCE 1968 FEDERAL FUNDING FOR MAIN-
TAINING OUR RESEARCH INFRASTRUCTURE HAS REMAINED ESSEN-
TIALLY FLAT IN REAL DOLLARS. THE GOVERNMENT NOW PROVIDES
ABOUT OWE-SIXTH OF THE ESTIMATED $2.0 BILLION DOLLARS
SPENT PER YEAR BY UNIVERSITIES FOR EQUIPMENT AND FACILI-
TIES, AS COMPARED TO ONE-THIRD IN 1968. TO MY I(NOWLEDGE,
THERE IS NOW NO PLANNED EFFORr BY NSF OR ANY MISSION
AGENCY SPECIFICALLY DESIGNED TO HELP MAINTAIN AND REBUILD
UNIVERSITY RESEARCH FACILITIES. WE HAVE INSTEAD RELIED ON
THE RESEARCH FUNDING "SYSTEM" TO SEE TO THE STRENGTH OF
OUR RESEARCH INFRASTRUCTURE. THERE HAS BEEN NO EXPLICIT
DEFINITION OF THE RESPONSIBILITY OF THE FEDERAL GOVERN-
MEN'!'. AS A CONSEQUENCE, SEVERAL SCHOOLS HAVE LOBBIED
CONGRESS DIRECTLY FOR SUPPORT, BYPASSING THE TRADITIONAL
SCIENTIFIC PEER-REVIEW SYSTEM. THESE TACTICS HAVE
RESULTED IN FUNDS FOR FACILITIES BEING INSERTED IN
CONGRESSIONAL APPROPRIATIONS BILLS. HOWEVER DISCONCERTING
THIS MAY BE TO THE RESEARCH COMMUNITY, T HAS BEEN DRIVEN
BY REAL NEEDS AND THE INADEQUACY OF EXISTING MECHANISMS TO
MEET THEM.
PAGENO="0199"
193
ONE COULD ARGUE AT LENGTH OVER THE SIZE OF THE
PROBLEM. FOR EXAMPLE, THE DEPARTMENT OF DEFENSE (DOD) HAS
ESTIMATED THAT $1.5 to $2.0 BILLION WOULD BE REQUIRED TO
ELEVATE QUALIFIED ACADEMIC LABORATORIES TO `WORLD-CLASS"
STATUS IN INSTRUMENTATION. WHETHER THIS IS SOMEWHAT
EXAGG.ERATED, UNDERESTIMATED, OR RIGHT ON THE MARK DOESN'T
REALLY MATTER. THE PROBLEM IS A MA.0R ONE.
ANOTHER INDICATION OF THE EXTENT OF THE NEED IS
TO GAUGE DEMAND. FOR EXAMPLE, CONSIDER THE RESPONSE TO
THE RECENT NSF INITIATIVE TO CREATE SUPERCOMPrJTINC CENTERS
AT UNVERSITIES. THE INITIAL $20 MILLION PROGRAM DREW Si.
BILLION IN PROPOSALS. A FURTHER INDICATION OF NEED COMES
FROM THE RESPONSE TO A PROGRAM INITIATED BY DOD. IT PRO-
VIDES $30 MILLION ANNUALLY FOR SUPPORT OF INSTRUMENTATION
IN ACADEMIC SCIENCE AND ENGINEERING. THIS PROGRAM HAS
DRAWN PROPOSALS TOTALLING NEARLY $650 MILLION.
AS SEVERE AS THE PROBLEM IS, IN MY VIEW T COULD
WELL BE MUCH WORSE BUT FOR THE 1981 TAX ACT WHICH ~RCV!DES
AN INCENTIVE FOR CORPORATE DONATIONS OF R~SE7%P~H AND
DEVELOPMENT EQUIPMENT TO UNIVERSITIES. THE FRCITS CF THIS
PROGRAM ARE OBVIOUS, MOST PARTICULARLY IN THE EI.ZCT~CNtCS
PAGENO="0200"
194
AND COMPUTING DISCIPLINES. THE COMING CONSIDERATION OF
TAX REFORM PROPOSALS SHOULD INCLUDE DISCUSSION OF THIS
IMPORTANT AREA.
AS DIFFICULT AS THE SITUATION IS FOR XNSTRUMEN~-
TATION, REBUILDING CAMPUS LABORATORY FACILITIES IS PERHAPS
EVEN MORE CHALLENGING. MANY OF US IN INDUSTRY AR!
SHOCKED WHEN WE EXPERIENCE THE CURRENT STAT! OF MANY UNI-
VERSITY LABORATORIES. THE NEEDS FOR MODERNIZED FACILI-
TIES ARISE FROM CHANGES IN PROGRAMS AND TECHNOLOGIES,
PHYSICAL DETERIORATION, AND COMPLIANCE WITH GOVERNMENTAL
SAFETY AND ENVIRONMENTAL REGULATIONS. A RECENT NSF SURVEY
OF PLANNED CAPITAL EXPENDITURES AT 25 MAJOR RESEARCH
UNIVERSITIES--EXTRAPOLATED TO ALL RESEARCH UNIVERSITIES-
-ESTIMATES THAT $1.3 BILLION PER YEAR WOULD BE NEEDED TO
MEET FACILITY NEEDS. THE ESTIMATE OF FUNDS REQUIRED IS
NOT SURPRISING, MY OWN COMPANY RECENTLY COMPLETED CON-
STRUCTION OF A NEW LABORATORY IN CLINTON, NEW JERSEY, TO
PROVIDE STATE-OF-THE-ART FACILITIES FOR SEVERAL HUNDRED
SCIENTISTS. THE COST OF THIS FACILITY WAS OVER 5200
MILLION, CORRESPONDING TO OVER $300 PER SCUARE FOOT OZ
LAB SPACE. IN ADDITION TO MAKING THE FACZE~ITY ST~TZ-OF-
THE-ART, SAFETY AND ENVIRONMENTAL COMPLANC WERE O~ CON-
CERN, AND AR! INCREASINGLY COSTLY.
PAGENO="0201"
195
SOt~VING THE INFRASTRUCTURE PROBL~EM WILL HOT BE
EASY. SINCE THE INSTRUMENTATION AND FACIr.~ITY HORIZON IS
CONSTANTLY MOVING, ANY SOLUTIONS DEVISED WILL HAVE TO BE
SUSTAINED ONES, HOT ONE-SHOT EFFORTS. THE POLICIES AND
INSTITUTIONS THAT WORKED IN THE PAST WILL LIKELY HOT BE
APPROPRIATE FOR THE FUTURE BECAUSE OF RAPID CHANCES IN
TECHNOLOGY, AND.INTENSE COMPETITION FOR SCARCE FEDERAt~
RESOURCES.
THIS COMMITTEE HAS RECEIVED A GREAT DEAL OF
TESTIMONY RECOMMENDING APPROACHES TO PROVIDING INCREASED
SUPPORT FOR THE MAJOR PRE-REQUISITES--TRAINED PERSONNEL,
STATE-OF-THE-ART EQUIPMENT, AND MODERN FACILITIES--NECZS~
BAR! FOR SUCCESSFtJE. RESEARCH AND DEVELOPMENT. WHAT HAS
OFTEN BEEN OVERLOOKED IN THE DISCUSSION HAS BEEN THE HEED
FOR BETTER SYSTEMS FOR MANAGING, OPERATING, SHARING, AND
STEWAROING RESEARCH RESOURCES. MANAGEMENT ISSUES HAVE
LARGELY BEEN LEFT UNADORESSED, DUE PERHAPS TO OUR HIGHLY
DECENTRALIZED SYSTEM OF UNIVERSITY RESEARcH. IT :s TIME
THAT WE ADDRESS THEM BECAUSE THERE ARE ABUNDANT OP?OR-
TtJNITIES TO BOTH INCREASE RESEARCH OUTPUT AND ~FFic:ENcy,
THE FEDERAL GOVERNMENT CLEARLY HAS TO ASSUME
SOME DEGREE OF DIRECT RESPONSIBILITY, BUT IT CA:~NOT SOLVE
PAGENO="0202"
196
THE PROBLEM BY ITSELF, PARTICULARLY IN AN ERA OF LIMITED
RESOURCES. THE PROBLEM CAN BE EFFECTIVELY ADDRESSED BY AN
AMALGAM OF THE BEST MANAGEMENT TECHNIQUES OF UNIVERSITIES,
INDUSTRY, AND GOVERNMENT.
OUR RESEARCH INFRASTRUCTURE CAN BENEFIT SUBSTAN'-
TIALLY FROM THE APPLICATION OF MANAGEMENT PROCEDURES AND
TECHNIQUES DEVELOPED IN THE INDUSTRIAL RESEARCH SECTOR.
HOWEVER, THE USE OF THESE PROCEDURES WILL REQUIRE CONSID-
ERATION OF ALTERNATE MECHANISMS FOR ALLOCATING FEDERAL
RESEARCH FUNDS TO UNIVERSITIES AND INDIVIDUAL INVESTIGAT-
ORS. AT THE SAME TIME, WE SHOULD NOT OVER-CENTRALIZE AND
DESTROY THE AUTONOMY AND DIVERSITY NEEDED FOR GOOD RE-
SEARCH.
THE CURRENT PROJECT GRANT SYSTEM, WHICH HAS BEEN
SUCCESNEUL IN DIRECTING FEDERAL FUNDS INTO HIGH-QUALITY
RESEARCH, HAS IN SEVERAL WAYS ADVERSELY AFFECTED THE MAIN-
TENANCE OF OUR RESEARCH INFRASTRUCTURE, PART~ULARLY IN
THE AREA OF INSTRUMENTATION. THE INTENSE COMPETITION FCR
THE LI~'ITEC FUNDS AVAILABLE HAS AFFECTED THE FUNDING ALLO-
CATION DECISIONS Of PEER REVIEW COMMITTEES, OFTEN .EADING
TO SPECIFIC DENIAL OF FUNDS REQUESTED FOR INSTRUMENTATION.
PAGENO="0203"
197
IT HAS DISCOURAGED INVESTIGATORS FROM APPtJYI~G FOR SEEDED
INSTRUMENTATION OR DETERRED THEM FROM UNDERTAKING RESEARCH
REQUIRING IT. IT HAS LED SOME INVESTIGATORS TO DEFER
ACQUISITION O~ INSTRUMENTATION IN ORDER TO USE LIMITED
FUNDS TO PRESERVE SCIENTIFIC AND SUPPORT STAFF.
AN ALTERNATE APPROACH THAT WOULD LEND ITSEt~F TO
GREATER UTILIZATION OF BUSINESS PRINCIPLES FOR MANAGING
OUR RESEARCH RESOURCES WOULD BE THE CREATION OF A NEW SUP-
PLEMENTAE4 INSTITUTIONAl4 ~9IPMENT GRANT TO ENCOURAGE THE
ESTABLISHMENT OF CENTRALIZED FACILITIES, SUCH CENTERS
WOULD BE COLLABORATIVELY MANAGED BY THE INSTITUTIONS USING
THEM. AS ENVISIONED HERE, THEY WOULD FACILITATE THE
ACQUISITION, MAINTENANCE, AND SHARING OF INSTRUMENTATION,
FLEXIBLE GUIDELINES COULD ENABLE THE AGGREGATION OF FUNDS
FOR THE PURCHASE OP EXPENSIVE INSTRUMENTS. SECOND, A
REASON;~BLE LEVEL AND CONTINUITY Of' FUNDING COULD ALLOW A
LONG-TERM COMMITMENT TO PROVIDE ADEQUATE MAINTENANCE SUP-
PORT AND OPERATING PERSONNEL, AND THIRD, THE SCALE OF
PROGRAM.3 WOULD MAKE IT POSSIBLE TO PROVIDE SHARED INSTRU-
MENTATI)N AND MANAGEMENT IN A COST-EFFECTIVE MANNER.
PAGENO="0204"
198
THE PRINCIPAL MOTIVATION BEHIND ESTAB~SHING AND
FUNDING CENTRALIZED RESEARCH FACILITIES IS AN ATTEMPT TO
SOLVE THE DILEMMA CREATED BY THE COMBINED INCREASES ZN THE
NEED FOR AND COSTS OF MODERN RESEARCH FACILITIES. AT SOME
COST THRESHOLD, IT IS CLEAR THAT CENTRALIZED RESEARCH
FACILITIES ARE NECESSARY, BECAUSE THE INFRASTRUCTURE RE-.
QUIRED TO SUPPORT RESEARCH IS SIMPLY TOO EXPENSIVE TO
CONTINUE TO EXIST UNDER THE PURVIEW 0! THE INDIVIDUAL
RESEARCHER, A SINGLE DEPARTMENT, A SINGLE UNIVERSITY OR
COMPANY.
THE CONCEPT OF SHARED RESEARCH FACILITIES IS
ALREADY ESTABLISHED IN THE FIELD OF PHYSICS WHERE INSTRU-
MENTATION OF VERY HIGH COST IS REQUIRED, SUCH AS SYNCHRO-
TRON LIGHT SOURCES. WHEN INSTRUMENTATION AND FACILITIES
OF SUCH HIGH CAPITAL AND OPERATING COST ARE INVOLVED,
THERE IS NO ALTERNATIVE TO SHARED FACILITIES. THERE ARE
SEVERAL SUCCESSFUL UNIVERSITY, INDUSTRY, AND COVERNMENT
CO-OPERATIVE ARRANGEMENTS IN OPERATION TODAY. UNDER THE
DIRECTION OF STANFORD UNIVERSITY, AN ACCELERATOR WAS
CONSTRCCTED WITH FEDERAL FUNDS (DOE) - USACE OF THIS
INSTRUMENT, WHILE MANAGED BY STANFORD, IS ALLOCATED ON A
PROPOSAL BASIS TO INDUSTRY, GOVERNMENT AND OT!~R ~NIVZR-
SITIES. INDUSTRY HAS CONTRIBUTED SIGNIFICANT RESOURCES TO
PAGENO="0205"
199
IMPROVE THE CAPABILITIES OF THE FACILITY. FOR EXAMPLE, IN
PARTNERSHIP WITH LAWRENCE BERKEI3!Y LABORATORY AND
STANFORD, WE IN EXXON HAVE EXPANDED THE FACILITY TO IN~
CLUDE THE WORLD'S MOST POWERFUL X~RAY SOURCE (FOR
MATERIALS SCIENCE). A SIMILAR COLLABORATION EXISTS AT
BROOKHAVEN LABORATORY ON LONG ISLAND, WHERE THE NATIONAt~
SYNCHROTRON LIGHT SOURCE IS MANAGED 8? AN ADVISORY COM-
MITTEE OF REPRESENTATIVES FROM SEVERAL UNIVERSITIES. THE
PARTICIPATING RESEARCH TEAM CONCEPT ENABLES INDUSTRY, AS
WELL AS UNIVERSITY AND GOVERNMENT LABS, TO CONTRIBUTE
FUNDS AND EXPERTISE FOR ENHANCING AND UPGRADING THE
INSTRUMENTATION IN RETURN FOR PRIORITY USE. OTHER
CENTRALIZED FACILITIES USED B! MY COMPANY ARE THE INTENSE
PULSED NEUTRON SOURCE AT THE ARGONNE NATIONAL LABORATORY
IN CHICAGO, THE NATIONAL CENTER FOR SMALL ANGLE SCATTERING
RESEARCH AT OAK RIDGE, T!NN. AND THE NEUTRON SCATTERING
RESEA~CH FACILITY AT THE UNIVERSITY OF MISSOURI. PURCHASE
OF SUCH SOPHISTICAT~ INSTRUMENTATION BY INDUSTRIAL LAB-
ORATORIES CANNOT BE COST JUSTIFIED~. OUR EXPERIENCE HAS
SHOWN THAT PARTICIPATION IN COOPERATIVE RZE~1ENTS IS MORE
COST EFFICIENT AND WE ALSO BENEFIT FROM TONTACT WITH THE
COMMUNITY OF RESEARCHERS IN THESE CENTERS.
PAGENO="0206"
200
COLLABORATION BETWEEN UNIVERSITIES AND INDUSTRY
IN CENTERS OR THROUGH OTHER VEHICLES PROVIDES AN OPPOR-
TUNITY TO TAKE ADVANTAGE 0? THE DIFFERENT CHARACTERISTICS
OF EACH. UNIVERSITIES OFTEN HAVE DIFFICULT? UPGRADING
FACILITIES AND INSTRUMENTATION FOR THE REASONS ALREADY
OUTLINED. AT THE SAME TIME. LABOR COSTS ARE LOW DUE TO
THE INVOLVEMENT OF GRADUATE STUDENTS IN THE RESEARCH PRO-
GRAMS. IN INDUSTRY, THE CONVERSE IS TRUE. INVESTMENT IN
EQUIPMENT PRESENTS NO UNUSUAL. HURDLES--I? IT IS JUSTIFIED,
IT IS PURCHASED. AT THE SAME TIME, LABOR COSTS ARE HIGH
DUE TO EXTENSIVE OVERHEADS ASSOCIATED WITH RECRUITING,
TRAINING, AND OTHER TYPICAL.Z.Y tsCORPORATEn COSTS. THIS
SUGGESTS COLLABORATIONS WHERE -- AT THE MARGIN -- EQUIP-
MENT IS DISPROPORTIONATELY SUPPLIED BY INDUSTRY AND STAFF-
ING FROM UNIVERSITIES.
STATE GOVERNMENTS HAVE ALSO BEGUN TO RECOGNIZE
THE IMPORTANCE OF A HEALTHY RESEARCH INFRASTRCCTURE TO
THEIR ECONOMIC WELL-BEING. IN MY STATE, NEW ERSEY, THE
GOVERNCR ESTABLISHED A SPECIAL COMMISSION TO EXAMINE WAYS
OF UPGRADING THE STATE'S RESEARCH INFRASTRUCTURE. THE
CQMMIS3ION RECOMMENDED THE PASSAGE OF A B0N~ ISSUE TO
CREATE FOUR ADVANCED TECHNOLOGY RESEARCH CENTERS AT Z(EY
PAGENO="0207"
201
NEW JERSEY UNIVERSITIES. THE ELECTORATE APPROVED THE BCND
ISSUE IN THE NOVEMBER 1984 GENERAL EZ~ECTION. IN ADDITION
TO CONDUCTING RESEARCH ON NEW TECHNIQUES, THESE CENTERS
WILL SHARE INFORMATION WITH OTHER ACADEMIC INSTITUTIONS,
GOVERNMENT, INDUSTRY, AND THE PUBLIC. THE KEY POINT HERE,
AS REGARDS INFRASTRUCTURE, IS THAT THESE RESEARCH CENTERS
ARE BEING ESTABLISHED ZN AREAS WHERE THERE IS CLEAR
ECONOMIC AND INDUSTRIAL NEED AND WHERE SOME RESIDENT CAPA-
BILITY ALREADY EXISTS IN THE STATE. FURTHERMORE, IT IS
REQUIRED THAT THE ACADEMIC INSTITUTION HOUSING THE CENTERS
SHARE EQUIPMENT AND FACILITIES. ALL PARTICIPANTS WERE
MADE AWARE THAT RESOURCES WERE NOT SUFFICIENT TO ALLOW FOR
DUPLICATION. INDUSTRY IS BEING WELCOMED INTO THESE
ACTIVITIES.
EVEN WITHIN THE EXISTING FRAMEWORK OF OUR
NATIONAL LABORATORIES, THERE ARE OPPORTUNITIES FOR THE
APPLICATION OF SOME BASIC MANAGEMENT PRACTICES. SEVERAL
OF THESE PRACTICES WERE RECOMMENDED TO THE PRESIDENT AS A
RESULT OF A YEAR-LONG REVIEW OF THE NATION'S FEDERAL
LABORATORIES CONDUCTED 5Y THE WHITE HOUSE SCIENCE COUNCIL.
I ENDORSE THE SUGGESTIONS OFFERED BY THE STUDY PANEL
PAGENO="0208"
202
CHAIRED BY DAVID PACKARD, AIMED AT ELIMINATING DEFICIEN-
CIES THAT LIMIT BOTH THE QUALITY AND COST EFFECTIVENESS OF
THE RESEARCH PERFORMED AT OUR FEDERAL LABORATORIES. TO
IMPROVE MANAGEMENT, THE PANEL RECOMMENDED THE ESTABLISH-
MENT OF AN EXTERNAL OVERSIGHT COMMITTEE, INCLUDING UNI-
VERSITY AND INDUSTRY REPRESENTATIVES, TO EVALUATE PERFORM-
ANCE AND RESULTS. SECOND, THE PANEL RECOMMENDED THAT LAB
DIRECTORS BE HELD ACCOUNTABLE FOR THE QUALITY AND PRODUC-
TIVITY OF THEIR LABORATORIES. THE THIRD RECOMMENDATION
FOR IMPROVING MANAGEMENT DEALT WITH REDUCING THE DEGREE OF
DETAILED DIRECTION EXERCISED BY PARENT AGENCIES.
THERE IS AN URGENT WEED TO IMPROVE MANAGEMENT
CAPABILITIES FOR DEVELOPING AND MAINTAINING OUR RESEARCH
INFRASTRUCTURE. WITH THE ESTABLISHMENT OF NEW SHARED
RESEARCH CENTERS AND THE FUNDING MECHANISMS TO SUPPORT
THEM, THERE ARE SEVERAL ADDITIONAL APPROACHES THAT COULD
BE CONSIDERED FOR MANAGING FEDERAL AND UNIVERSITY INSTRU-
MENTS AND FACILITIES. AT THE RISK OF SOUNDING LIKE A
MANAGEMENT TEXTBOOK, THE PRINCIPLES HAVE 8EEN AROL~ND FOR A
LONG TIME: JUSTIFICATION, OBJECTIVE SETTING, AND STEWARD-
SHIP. INCIDENTALLY, TH~SE PRINCIPLES ARE A?PLIA3LE TO
INDIVIDUAL UNIVERSITY ADMINISTRATIONS AS WELL AS TO SHAREO
PAGENO="0209"
203
INSTRUMENTATION FACILITIES. THE ISSUE IS HOW TO CREATE AN
INCE~'rIVE FOR UNIVERSITIES TO APPLY THESE MANAGERIAL.
Tooi.s.
IN ANY CASE, THE ESTABLISHMENT OF A FORMAL.
~STIFICATION PROCEDURE GOING 3EYOND INITIAL PROCUREMENT
WOULD MEL.? ENSURE COST EFFICIENCY AND IMPROVE RETURN ON
INVESTMENT NOT ONLY FOR THE PROCUREMENT OF EQUIPMENT, BUT
ALSO ITS MAINTENANCE, UPGRADING, AND EVENTUAL REPLACEMENT
BASED ON EXPECTED OBSOLESCENCE RATES. PROPOSALS TO
ACQUIRE EQUIPMENT SHOULD BE REQUIRED TO ADDRESS QUESTIONS
OF CONTINUING MAINTENANCE, TRAINING AND SAFETY FOR OPERAT-
ING PERSONNEL, PLANNED USE, AVAILABILITY OF EXISTING
INSTRUMENTS, AND INCLUDE AN ANALYSIS OF ALTERNATIVES.
SETTING OBJECTIVES FOR WHAT WE EXPECT TO ACHIEVE
WOULD PROVIDE BENCHMARKS FOR MEASURING AND CONTROLLING
PROGRESS. JUST WHAT DO WE NEED TO MEASURE? WITH WHAT
ACCURACY? HOW RAPIDLY? IN INDUSTRY, OaECTIvES ARE
CRUCIAL TO GOOD LONG RANGE PLANNING, AND TM! EFFICIENT
REBUILDING OF OUR RESEARCH INFRASTRUCTURE RE~UIR!S JUST
SUCH A LONG-RANG! VIEW,
PAGENO="0210"
204
THE ESTABLISHMENT OFA STEWARDSHIP MECHANISM CAN
HELP ENSURE MAXIMUM SCIENTIFIC RESULTS FOR THE RESOURCES
EXPENDED. IN THE ABSENCE OF A DIRECT ECONOMIC AND COM'
PETI~'IVE FOCUS, THERE ISNEED FOR A MECHANISM TO ENSURE
ACCOtNTABIL.ITT. IN INDUSTRY, WE HOLD RESEARCHERS ACCOUNT-
ABLE FOR THEIR INVESTMENT DECISIONS, AS WELL AS THE QUALI-
TY AND PRODUCTIVITY OF THEIR WORK. WHILE WE DARE NOT
BREED EXCESSIVE CONSERVATISM IN A RESEARCH ORGANIZATION,
AN INTELLIGENTLY APPLIED CONTINUING APPRAISAL PROCESS IS
NEEDED TO ALLOCATE FUNDS TO THE MOST PRODUCTIVE LABORA-
TORIES AND WORKERS.
LET ME MAKE TWO ADDITIONAL POINTS. FEDERAL AND
STATE GOVERNMENTS DO NOT HEED TO BEAR THE FULL BURDEN OF
MODERNIZING INSTRUMENTS AND FACILITIES AT THE UNIVERSI-
TIES. ALTERNATIVE METMODSO FUNDt~G SHOULD BE EXPLORED.
ONE SUCH ALTERNATIVE, DEBT FINANCING, HAS BEEN USED SUC-
CESSFULLY FOR MORE THAN 10 YEARS AT COLORADO STATE UNI-
VERSITY.
SECOND, THE USE OF !~~TROWIC NETWORKS TO GATHER
AND COMMUNICATE INFORMATION AMONG RESEARCHERS IN A YIELD
COULD HAVE A SUBSTANTIAL IMPACT ON THE EFFtCIENT USE OF
PAGENO="0211"
205
INSTRUMENTATION AND DEVELOPMENT OF TECHNOLOGY. AS ONE
EXAMPLE, A NATIONAL ELECTRONIC INVENTORY OF AVAILABLE
INSTRUMENTS (POSSIBLY INCLUDING SOME INDtJSTRIAL EQUIPMENT)
MIGHT GO A LONG WA! TO REDUCE DUPLICATION AND MAXIMIZE
USAGE. FURTHER, SUCH A SYSTEM COULD HELP FACILITATE AN
ASSESSMENT OF THE MAGNITUDE OF EQUIPMENT AND FACILITIES
HEEDS.
THESE ARE SUGGESTIONS MEANT TO STIMULATE DIS-
CUSSION ON SOLUTIONS `to THE INFRASTRUCTURE PROBLEM. I
HOPE I HAVE IDENTIFIED SOME PRACTICES ROUTINELY USED BY
INDUSTRY THAT CAN BE ADAPTED FOR REBUILDING OUR RESEARCH
INFRASTRUcTURE. RESEARCH IS BECOMING SO CAPITAL-INTENSIVE
THAT THE USE OF PROVEN BUSINESS PROCEDURES AND TECHNIQUES
MUST BE USED TO ENSURE THAT OUR INVESTMENTS YIELD MAXIMUM
SCIENTIFIC AND TECHNOLOGICAL RETURN. AT THE SAME TIME, WE
MUST RECOGNIZE THAT INDUSTRIAL AND UNIVERS:TY RESEARCH ARE
NOT AND SHOULD NOT BE THE SAME. I DO KNOW THAT IN
ENCOURAGING OUR RESEARCHERS AND MANAGERS T~ WORK WITH
UNIVERSITIES ON THIS ISSUE, INDUSTRY HAS ~EMONSTRAT!D A
WILLINGNESS TO HELP -- AND THAT THIS HELP IS NEEDED.
PAGENO="0212"
206
Mr. FUQUA. Thank you very much, Dr. Sprow.
We are now very pleased to welcome back Dr. Donald Langen-
berg. He has been here many times before. He is currently the
chancellor of the University of Illinois at Chicago.
STATEMENT OF DR. DONALD N. LANGENBERG, CHANCELLOR,
UNIVERSITY OF ILLINOIS AT CHICAGO, CHICAGO, IL
Dr. LANGENBERG. Thank you, Mr. Chairman.
Let me say that it is a pleasure to be here before you again.
I am- here' today on behalf of five higher education associations:
~The Association of American Universities, the National Association
of State Universities and Land-Grant Colleges, the American Coun-
cil on Education, the Association of Graduate Schools, and the
Council of Graduate Schools in the United States. As this commit-
tee is well aware, universities comprising the membership of these
associations perform most of the academic research supported by
the National Science Foundation and by the mission agencies of
the Federal Government.
Mr. Chairman, I would like to begin by congratulating you on
behalf of those associations, you and your panel, for undertaking
this timely and thorough review of our science policy and for in-
cluding in your work an examination of the longer term capital
needs of research universities. We welcome this opportunity to dis-
cuss with you the universities' research facilities, capital deficit,
and to offer our suggestions on how we ought to meet our future
requirements.
In the interest of time, I am going to summarize my remarks, so
that we might have -some more time for questions.
When the National Science Foundation was established in 1950,
a concern for the research capital base became an early mission of
the Foundation. Beginning in 1959, the Foundation joined with the
National Institutes of Health, the U.S. Office of Education, NASA,
the Department of Defense, and other agencies in establishing re-
search facilities programs designed to expand and strengthen the
Nation's research capacity. NSF and NIH led the way, but the mis-
sion agencies, especially DOD and NASA, also played essential
roles.
On the NSF side, there was established the Graduate Science Fa-
cilities Program. Between fiscal 1960 and fiscal 1970, the Founda-
tion provided just under 1,000 grants totaling $188 million to assist
in the construction of laboratories and the acquisition of equip-
ment. As we face our present budget constraints, it is important to
remember that the Foundation did not pay the entire cost of the
facilities it helped to fund. Matching funds were required. In fact,
the Foundation's contributions had a very impressive leveraging
effect. The total value of the facilities and equipment acquired with
NSF assistance was about $500 million, and that is better than a
2-to-i leverage.
According to NSF, over the period 1957 to 1970, Federal grant
funds for graduate science facilities totaled about three-quarters of
a billion dollars. National investments from all these sources were
surely several times that. Then in 1970 all Federal funding for this
purpose ceased. Federal leadership receded. The linkage between
PAGENO="0213"
207
federally-funded research programs and the Federal contribution to
the capital facilities necessary to sustain them was broken. We re-
versed our commitment to stimulating capital investments in uni-
versity research facilities, and our present problems began to grow.
The topic of your hearing is infrastructure. Yesterday, Dr. Dale
Corson, in his testimony before this committee, defined the term
infrastructure to include the people, the facilities, the equipment,
the research libraries, and the institutional arrangements required
to do effective research. Dr. Corson is, as usual, correct. The term
"infrastructure" includes much more than the research facilities
which, however, are the focus of my remarks today.
Even the term "research facilities" requires some definition. The
Committee on Science, Engineering, and Public Policy of the Na-
tional Academy of Sciences has just published the fourth edition of
the report required by the National Science and Technology Policy
Organization Priorities Act of 1976. It is titled, The Outlook for
Science and Technology, 1985.
That report helpfully distinguishes among four classes of re-
search facilities: national facilities like the Fermi National Acceler-
ator Laboratory in Illinois; university-based research facilities, a
new or renovated chemistry or engineering building would be an
example; regional research facilities-for example, the Triangle
Universities Nuclear Laboratory in North Carolina; and technology
centers-as an example there, the Basic Industry Research Insti-
tute at Northwestern University.
All of these facilities are typically located at or in some associa-
tion with a university or group of universities. There are important
resource and policy questions surrounding each one of those class-
es. I would like to limit my remarks, however, to just one of them:
the need to modernize university campus-based research facilities
that are home to the Nation's competitive scientific and engineer-
ing research programs.
Now a few words about the dimensions of the problem: the prob-
lem, in its essentials, is quickly stated. Many of the Nation's lead-
ing universities are hampered by substantial and growing invento-
ries of obsolete laboratories. Present estimates of the capital deficit
are inadequate and they vary rather widely. We are pleased, there-
fore, incidentally, that this committee addressed the need for better
information and analysis of the problem by including in the FY
1985 NSF Authorization Act new authority for NSF to develop a
permanent analytical capability in this area. We hope the Founda-
tion will proceed rapidly to develop this essential data base.
Now although we don't know the dimensions of the problem with
any precision, there are estimates that can give us a general idea
of its magnitude. There are some present estimates that say that
one-half of the physical plant of all universities and colleges is
more than 25 years old, and that one-quarter of it was built prior
to World War II. In 1981, the AAU reported that universities were
able to meet only about half of their accumulating needs to re-
place, modernize, and renovate their research laboratories.
Our experience at the University of Illinois confirms these earli-
er findings. We have just completed an audit of the condition of all
university buildings excluding student auxiliary buildings-hous-
ing, unions-and also excluding our powerplants. We are talking
PAGENO="0214"
208
about academic and administrative space. The audited buildings
university-wide number more than 280 and they house nearly 10
million net assignable square feet, and they have an estimated re-
placement value exceeding $2 billion. Fifty-six percent of the build-
ings on the Urbana campus and 44 percent of the total on both
campuses are over 50 years old. The total cost to renovate the
better buildings and replace the worst is estimated at just under
$600 million; that is to say, nearly 30 percent of the total replace-
ment costs. A considerable portion of these facilities is research fa-
cilities. In summary, the University of Illinois has an immediate
research facilities deficit conservatively estimated to be several
hundred million dollars. Furthermore, these estimates do not in-
clude the projected requirements of new research programs. This
building condition audit was carried out in terms of continuing use
of these buildings for their present purposes. It does not include
the estimated cost of their adaptation to those special needs of new
kinds of research programs.
The Department of Defense has recently published a report that
I believe confirms that these audit results are not peculiar to the
University of Illinois. On April 29, the DOD, in response to an 1984
request by the House Committee on Armed Services, published a
report entitled, Selected University Laboratory Needs in Support of
National Security. I understand that copies of that report have been
provided to the committee. Significantly, this report does not present
information gathered from the university. Instead, it gives the DOD
perspective, in particular, a research program officer in the DOD
research support arm. We understand that only a small fraction of
the top 100 research universities were included in each review, and,
unlike our audit at the University of Illinois, which was university-
wide across all fields, the DOD estimates are confined to the needs of
relatively few institutions in just five disciplines which were judged
essential to the Department's mission: chemistry, electronics, engi-
neering, materials, and physics.
The services estimate that these key universities have priority
needs for equipment and facilities in just these five fields of almost
$700 million. The report recommends that the Department of De-
fense establish a 5-year, $300 million laboratory modernization pro-
gram and that other Federal agencies join DOD in a Government-
wide effort.
We are pleased to see that the House Committee on Armed Serv-
ices already is responding to the DOD's concerns. Last week the
committee increased from $25 to $200 million the funding request-
ed by the President for a new program named the "University Re-
search Initiative."
We hope that the members of the Committee on Science and
Technology will join with the House Committee on Armed Services
in securing an appropriation for this potentially important initia-
tive at the full authorized level.
A satisfactory solution to this problem lies beyond the capacity of
almost all institutions. There is required, we believe, a broader
effort that must come from a well-conceived and well-coordinated
national program, led by the Federal Government and again work-
ing through its six major research agencies: DOD, DOE, NASA,
NIH, NSF, and USDA.
PAGENO="0215"
209
We believe there are several basic principles that ought to guide
the development of a Government-wide reinvestment initiative. Let
me underline the word "reinvestment." The bit of historical back-
ground that I gave suggested that there was a period when the
Federal Government was investing heavily in the capital infra-
structure for research in the Nation's universities. Any renewed
program could be characterized as a reinvestment.
Among those are the following principles: university research
and training programs supported by Federal agencies are essential
to our security, our health, our economy, and our general well
being.
Research and education programs of many universities and col-
leges are hampered by inadequate research facilities and equip-
ment, and these institutions lack the ability to replace or modern-
ize their facilities without the assistance of the Federal research
agencies.
The capital deficit of universities is threatening the Nation's
competitive position in science, engineering, and technology; thus,
placing at risk our future national security, our health, and our
standing in the international marketplace.
A national program to secure the necessary reinvestment in the
capital base at universities is needed. Federal agencies, States, in-
dustry, and others all must participate because the Nation's needs
exceed the capacity of any one sector to address them alone.
The Federal research agencies must rebuild the linkages between
their research programs and the capital base by making capital in-
vestments in those academic fields and institutions that are essen-
tial to each agency's mission.
Facilities modernization programs ought to be established and
developed an integral parts of each agency's research program.
Proceeding from these guiding principles, we suggest that a suc-
cessful facilities reinvestment program will have at least the fol-
lowing characteristics:
It will provide for a sustained commitment for a period of at
least 8 to 10 years.
Each Federal dollar invested will be matched, thereby at least
doubling the leverage of each tax dollar.
Awards will be made competitively among qualified institutions
with primary but not necessarily sole emphasis given to the scien-
tific and technical quality of the research and training to be pro-
vided. State and local considerations will also be taken into ac-
count.
Finally, smaller, developing research universities and research-
oriented colleges will be guaranteed an opportunity to compete for
funds among comparable institutions, so as to provide them a rea-
sonable chance of success.
Mr. Chairman, we believe that we can no longer defer our recom-
mitment to the research enterprise and that we can no longer
afford to turn our backs on the eroding foundations of our universi-
ties. Difficult choices lie ahead, only because these are unusually
difficult times.
Some of our choices no doubt will require us to defer certain pri-
orities in order to get on with the necessary rebuilding effort.
PAGENO="0216"
210
Saying no is never easy, but it is absolutely essential that we begin
that priority-setting process.
I thank you for the opportunity to share these thoughts with
you. I would be pleased to respond to your questions.
[The prepared statement of Dr. Langenberg follows:]
PAGENO="0217"
211
STATEMENT OF
DR. DONALD N. LANGENBERG
CHANCELLOR
UNIVERSITY OF ILLINOIS AT CHICAGO
BEFORE THE
COMMITTEE ON SCIENCE AND TECHNOLOGy
TASK FORCE ON SCIENCE POLICY
U.S. HOUSE OF REPRESENTATIVES
IN BEHALF OF
ASSOCIATION OF AMERICAN UNIVERSITIES
NATIONAL ASSOCIATION OF STATE UNIVERSITIES AND LAND-GRANT
COLLEGES
AMERICAN COUNCIL ON EDUCATION
ASSOCIATION OF GRADUATE SCHOOLS
COUNCIL OF GRADUATE SCHOOLS IN THE UNITED STATES
MAY 22, 1985
PAGENO="0218"
212
Introduction
Mr. Chairman and members of the Science Policy Task Force, my
name is Donald Langenberg and I am Chancellor of the University
of Illinois at Chicago. Before assuming my present responsibili-
ties, I had the honor of serving for two and a half years as
Deputy Director of the National Science Foundation. I am pleased
to appear before you today on behalf of five higher education
associations: the Association of American Universities, the
National Association of State Universities and Land-Grant Col-
leges, the American Council on Education, the Association of
Graduate Schools and the Council of Graduate Schools in the
United States. As this Lommittee is well aware, the universities
comprising the membership of these associations perform most of
the academic research supported by the National Science Founda-
tion and by the mission agencies of the federal government.
Mr. Chairman, we congratulate you and the Panel for undertaking
this timely and thorough review of our science policy, and for
including in your work an~examination of the longer term capital
needs of research universities. We welcome this opportunity to
discuss with you the universities' research facilities capital
deficit, and to offer our suggestions on how we ought to meet our
future requirements.
PAGENO="0219"
213
Background
About forty years ago, inspired by Dr. Vannevar Bush and using
the lessons learned during World War II, we charted a new course
for our research universities in the nation's life. We saw these
institutions in a new perspective, and we chose to nurture their
unique research and training capabilities. We committed the
resources necessary to enhance our research base and to have
universities play central and indispensable roles in the nation's
long-term research and training effort. With the benefit of
hindsight, most now recognize the wisdom of those decisions. But
it is good to remember that they were farsighted and courageous
decisions in their time.
The National Science Foundation was created through a lengthy and
contentious process. - Many leaders of science and government
differed over the appropriate role of the federal government in
academic science. Some were concerned that a National Science
Foundation might interfere with, rather than nurture, the free
conduct of science. But, after several years of effort, the
necessary accommodations were achieved, and, to the nation's
benefit, the NSF was established in 1950.
A concern for the research capital base became an early mission
of the Foundation. Beginning in 1959 the Foundation joined with
the National Institutes of Health, the United States Office of
Education, NASA, the Department of Defense and other agencies in
PAGENO="0220"
214
establishing research facilities programs designed to expand and
strengthen the nation's research capacity. NSF and NIH led the
way, but the mission agencies, especially DOD and NASA, also
played essential roles.
NSF established the Graduate Science Facilities Program. Between
Fiscal Year 1960 and Fiscal Year 1970 the Foundation provided 977
grants totaling $188 million to assist in the construction of
laboratories and the acquisition of equipment. As we face our
present budget constraints, it is important to remember tnat the
Foundation did not pay the entire cost of the facilities it
helped to fund. Matching funds were required. In fact, the
Foundation's contributions had a very impressive leveraging ef-
fect. The total value of the facilities and equipment acquired
with NSF assistance was about $500 million, better than a two-to-
one leverage. The programs and funding mechanisms of the agen-
cies varied, but the policy objectives were the same--all of the
agencies sought to strengthen the universities' research ana
graduate training capabilities.
According to the NSF, federal grant funds for graduate science
facilities for fiscal years 1957-1970 totaled about $3/4 billion.
National investments from all sources surely were several times
that. Then, in 1970, all federal funding ceased. Federal lead-
ership receded. The linkage between federally funded researcri
programs and the federal contribution to the capital facilities
necessary to sustain them was broken. We reversed our commitment
PAGENO="0221"
215
to stimulating capital investments in university research facili-
ties, and our present problems began to grow.
The fruits of those original decisions confirn their wisdom. The
nation can take legitimate pride in the extraordinary accomplish-
ments of the past four decades. There is no need to recount the
history for this Committee. You provided indispensable leader-
~hip for this historic effort. It is sufficient to note how
those policy choices have transformed our health, our economy,
our educational system and our national security. As we look
ahead, we can glimpse our future as we contemplate the implica-
~gu~s 1. Total P.diral Grant Funda foe Graduate Science
FaiMdas by Ascal Years 1157.1170
PAGENO="0222"
216
tions of revolutionary developments in such promising fields as
biotechnology, advanced materials, microelectronics, and super-
computers. The question before us is whether we remain today
sufficiently wise, and courageous, to make the inescapable and
difficult choices before us.
The Meaning of Infrastructu~.~
The term infrastructure, though widely used to characterize our
concerns, is an imprecise guide to discussions of the problem and
policy choices. Yesterday Dr. Dale R. Corson, in his testimony
before the Committee, defined the term infrastructure to include
the people, the facilities, the equipment, the research libraries
and the institutional arrangements required to do effective re-
search. He is correct. The term includes much more than the
research facilities which are the focus of my remarks.
The term research facilities itself requires definition. The
Committee on Science, Engineering, and Public Policy of the
National Academy of Sciences has just published the fourth edi-
tion of the report required by the National Science and Techno-
logy Policy, Organization and Priorities Act of 1976 titled "The
Outlook for Science and Technology 1985." The report helpfully
distinguishes among four classes of research facilities:
1. national facilities, intended to serve a national,
often international, research community. The report
PAGENO="0223"
217
cites the Fermi National Accelerator Laboratory in
Illinois as an example of such a facility.
2. university-based research facilities; a new or. reno-
vated. chemistry or engineering building is an example.
3. regional research facilities usually based at a univer-
sity; the report cites the Triangle Universities
Nuclear laboratory in Durham, North Carolina, as one
example.
4. technology centers; these are usually located at or
affiliated with universities and are tied to local or
regional economies--for example, the Basic Industry
Research Institute at Northwestern University.
Important resource and policy questions surround each of these
four classes of facilities. I will limit my remarks, however, to
just one of them: the need to modernize university, campus-based
research facilities that are home to the nation's competitive
scientific and engineering research programs.
The Dimensions of the Problem
The problem, in its essentials, is quickly stated. Many of the
nation's leading universities are hampered by substantial and
growing inventories of obsolete laboratories. In a rea.i. sense we
PAGENO="0224"
218
have allowed the capital base of our research enterprise to
become a wasting asset. For many years, as we stimulated invest-
ment in research with striking success, we simultaneously forced
our institutions to consume their capital assets. When we
abruptly stopped investing in the capital base for our national
research programs, we effectively mortgaged our future, and that
mortgage has now come due in institutions and states across the
country.
The consequences are ominous for the researchers and students who
must work in inadequate buildings with obsolete equipment. Rich
opportunities to exploit new fields are being lost, many of the
most promising research questions are not being addressed, exces-
sive time is being consumed by the maintenance and repair of
outdated instruments and support equipment--often because labora-
tories lack the necessary technical support personnel, interac-
tions between academic and industrial researchers are being im-
poverished, commercially available devices for making advanced
measurements are not being applied to research questions and the
quality of training provided to advanced undergraduate and
graduate students is being compromised.
These conditions erode faculty morale at a steady pace, and they
make careers in industrial and national laboratories increasingly
attractive for our brightest students. Prospective graduate
students, especially highly talented U.S. citizens, now fre-
quently opt to pursue alternative careers rather than work in
PAGENO="0225"
219
inferior university environments. Half of the Ph.D. degrees
awarded by our engineering schools now go to foreign nationals,
many of whom return to their own countries. Our ability to
attract and retain highly qualified minorities and women. also is
being steadily reducea.
Obsolete research equipment is one important aspect of tne broad-
er problem now widely recognized by federal and state government,
by industry and, of course, by the universities themselves. Some
important steps already have been taken by federal agencies,
especially by NSF and DOD. But anyone who looks carefully at the
equipment problem will quickly see that these efforts are only a
beginning.
For example, a recent NSF survey of 43 universities found that 25
percent of equipment now in use is obsolete; only 16 percent is
state of the art; halt of ~t is at least six years old. More
than 90 percent of the department heads responding reported that
~important subject areasN of research could not be pert ormea in
their laboratories because they lack the necessary instrumenta-
tion. Almost half of them rated their equipment as insuff i-
cientR; only 8 percent said their equipment is Nexcellent.N
These findings are based on a survey of 22,300 items inventoried
in three key fields: computer science, physical science and
engineering. They ought.to interest any who are concerned about
our ability to develop new technologies, to create advanced
53-277 0 - 86 - 8
PAGENO="0226"
220
manufacturing processes and to shorten the time necessary to
transfer findings from the laboratory. to new applications.
Beyond the instrumentation problem lies the ill-defined but lar-
ger, and certainly more difficult, problem of replacing and
modernizing the research buildings which house our researchers,
their students and their research instruments. Present estimates
of the capital deficit are inadequate, and they vary widely. We
are pleased, therefore, that this committee addressed the need
for better information and analyses of the problem by including
in the FY 1985 NSF Authorization new authority for NSF to develop
a permanent analytical capability in this area. We hope the
Foundation will proceed rapidly to develop this essential data
base.
Some present estimates are that one-half of the physical plant of
all universities and colleges is more than twenty-five years old;
one-quarter of it was built prior to World War II. A 1980 report
by the Association of American Universities found that the median
age of research instruments in university laboratories surveyed
was twice that of commercial laboratories. In 1981 the AAU
reported that universities were able to meet only about half of
their accumulating needs to replace, modernize and renovate their
research laboratories. -
Our experience at the University of Illinois confirms these
earlier findings. We have just completed an audit of the condi-
PAGENO="0227"
221
tion of all university buildings, except student auxiliary build-
ings and our power plants. The audited buildings number more
than 280, house nearly 10 million assignable square feet and have
an estimated replacement value exceeding $2 billion. Fifty-six
percent of the buildings on the Urbana campus and 44 percent of
the total on both campuses are over 50 years old. The total cost
to renovate the better buildings and to replace the worst is
estimated at just under $600 million; i.e., nearly 30 percent of
the total replacement cost. A considerable portion of these
facilities are research facilities. In summary, the University
of Illinois has an immediate research facilities deficit conser-
vatively estimated to be several hundred million dollars. And.
these estimates do not include the projected requirements of new
research programs. Furthermore, this building condition audit
was carried out in terms of continuing use of these buildings for
their present purposes; it does not include estimated costs of
their adaptation to the special needs of new kinds of research
programs.
A report just published by the Department of Defense confirms
that our audit results are not peculiar to the University of
Illinois. On April 29 the DOD, in response to a 1984 request by
the House Committee on Armed Services, published a report titled,
"Selected University Laboratory Needs in Support of National
Security." I understand that copies of the report have been
provided to the Committee.
PAGENO="0228"
222
This new report increases our understarding of the research
capital deficit. Significantly it doeE~ not present information
gathered from the universities. Instead it gives the DOD per-
spective of the problem. It provides Estimates prepared by
research program officers of the Office of Naval Research (ONR),
the Army Research Office (ARO), the Air Force Office of Scienti-
fic Research (AFOSR) and the Defense Acvanced Research Projects
Agency (DARPA). The Division Directora of the Services assessed
the priority research laboratory needs of the key universities in
which they fund research. (We understand that only a small
fraction of the top 100 research universities were included in
each review.) Unlike the Illinois audit, which was university-
wide across all fields, the DOD estimates are confined to the
needs of relatively few institutions in just five disciplines
essential to the Department's mission: chemistry, electronics,
engineering, materials and physics.
The following table, ~IV-1 Summary of Selected Laboratory Needs
of Major University Performers of Defense Research,~ presents the
results of the study. The Services estimate that the key univer-
sities have priority needs for equipment and facilities in these
five fields of almost $700 million. The report recommends that
the Department of Defense establish a five-year $300 million
laboratory modernization program, and that other federal agencies
join DOD in a governmentwioe effort.
Data prepared by the National Science Foundation help to place
PAGENO="0229"
130,000 49,000 33,000 82,000
296,500 36,200 39,000 75,200
55,000 62,100 117,100
15,800 9,300 25,100
~ ~: ~j'
161,000 15?,~00 318,4oo
!!!L~!! 259,11001' 373 700*1
275,300 ~t6,800" 6~jj~ji.
Table IV-1. &sary of selected laboratory needa of Jor univ.ralty
per(orra of defense renearcb.
Building
Discipline Priority kequirements (gross ft2) Fecilities Eq4~nt Total Coats
Chemistry 1 35,000 5,000 111,000 19,000
2 412000 `111700
Subtotals $T~öISO i?~~
Electronics
Subtotals
Engineering
Subtotals
Materials
Subtotals
Physics
Subtotals
2
2
2
2
22(10(0)
390,0011
I
80,000
Siaaary 1 761,500
2 783.300 ________
Totals 1,51111,800
*Nuaibers are rounded to the nearest $100 thousand.
"includes $150 million for astrophysics high angular resolution t~ger.
PAGENO="0230"
224
the DOD findings in context. Spending by universities on R&D
facilities and equipment, currently about $1 billion per year,
has been relatively flat since 1968 in current dollars, and in
constant dollars, declined some 60 percent during 1966-81. The
federal share of the total facilities effort, meanwhile, declined
from 32 percent in 1966-68 to 16 percent in 1981. In constant
dollars federal obligations for academic R&U plant decreased by
90 percent between 1966 and 1983. (See the following figure.)
Clearly a competitive industry would not so effectively decouple
investment in its capital base from its long-term objectives.
Federal Obligations for R&D PIWt to
Universities and Collages
Fiscal Years 1963-1985
(Dollars in Millions)
250f
0
L~. / `~
150\~/__~...._
100-- -\ ~..
a
.~
~
63646566675869707172737475767778 79808182838485
SOURCE: Division of Science Resources Studies. National Science Foundation.
Figures for 1984 and 1985 are estimates.
We are pleased to see that the House Committee on Armed Services
PAGENO="0231"
225
already is responding to the DOD's concerns. Last week the
Committee increased from $25 million to $200 million the funding
requested by the President for a new program named the University
Research Initiative (URI). Through this program the DOD. intends
to strengthen its investment both in people and in the capital
base. Graduate fellowships, faculty development programs, re-
search instrumentation and facilities programs are proposed. In
its report the Committee addressed the seriousness of the pro-
blem. The Committee's statement is attached to my testimony
(Attachment A). We hope that the members of the Committee on
Science and Technology will join with the House Committee on
Armed Services in securing an appropriation for this potentially
important initiative at the full authorized level.
A~Suggested Approach
In the absence of a cohesive national effort, universities are
attempting to address the capital deficit by a variety of means.
Debt is mounting in many institutions as they borrow funds, use
available bonding authorities, leverage available funds with
other private and state funds, and cost-share with other institu-
tions. Certainly the creative energies of universities must be
tapped to their capacity. I believe most already are stretching
their imaginations and resources to the prudent limit, and
sometimes beyond.
A satisfactory solution lies beyond the capacity of almost all
/
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226
institutions. That broader effort must come from a well-con-
ceived, well-coordinated national program led by the federai
government, again working through its six major research agen-
cies: Department of Defense, Department of Energy, National
Aeronautics and Space Administration, National Institutes of
Health, National Science Foundation, and United States Department
of Agriculture.
We believe that severs], basic principles ought to guide the
development of a governmentwide reinvestment initiative. Among
these are the following:
- University research and training programs supported by
federal agencies are essential to our security, our
health, our economy and our general well-being.
- The research and education programs of many universi-
ties and colleges are hampered by inadequate research
facilities and equipment, and these institutions lack
* the ability to replace or modernize their facilities
without the assistance of the federal research
agencies.
- The capital deficit of universities is threatening the
nation's competitive position in science, engineering
and technology, thus placing at risk our future nation-
al security, our health, and our standing in the
PAGENO="0233"
227
international marketplace.
- A national program to secure the necessary reinvest-
ments in the capital base of universities is needed;
federal agencies, states, industry and others all must
participate because the nation's needs exceed the capa-
city of any one sector to address them alone.
- The federal research agencies must rebuild the linkages
between their research programs and the capital base by
making capital investments in those academic fields and
institutions that are essential to each agency's mis-
sion; facilities modernization programs ought to be
established and developed as integral parts of each
agency's research program.
Proceeding from these guiding principles, we suggest that a
successful facilities reinvestment program will have at least the
following characteristics:
- it will provide for a sustained commitment for a period
of at least eight to ten years;
- each federal dollar invested will be matched, thereby
at least doubling the leverage of each tax dollar;
- awards will be made competitively among qualified in-
PAGENO="0234"
228
stitutions with primary but not necessary sole, empha-
sis given to the scientific and technical quality of
the research and training to be provided; state and
local considerations also will be taken into account;
and
- smaller, developing research universities and research-
oriented colleges will be guaranteed an opportunity to
compete for funds among comparable institutions so as
to provide them a reasonable chance of success.
Conclusion
Mr. Chairman, we believe that we no longer can defer our recom-
mitment to the research enterprise. We can no longer afford to
turn our backs on the eroding foundations of our universities.
Difficult choices lie ahead only because these are unusually
difficult times. Some of our choices no doubt will require us to
defer certain priorities in order to get on with the necessary
rebuilding effort. Saying no is never easy, but it is absolutely
essential that we begin that priority-setting process.
Thank you for the opportunity to share these thoughts with you.
I will be pleased to respond to your questions.
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PAGENO="0236"
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PANEL DISCUSSION
Mr. FUQUA. Thank you very much.
Let me thank all of you, and particularly, Dr. Langenberg, for
the comment about the University Research Initiative that the
Armed Services Committee has put forth. We have not had a
chance to discuss that with them and I am very pleased to see the
forward-looking attitude they have taken in this area and with con-
siderable increase over what had been recommended by the Presi-
dent.
You can rest assured of my personal support when that comes to
the floor for authorization as well as the appropriations process. I
think it is very important to support that program.
Dr. Hensley, in your opinion the growth in the number and the
cost of research support personnel-I think you included about one-
fourth research and about three-fourths support personnel-is that
attributed to the growth of government regulation and so forth?
Dr. HENSLEY. A portion would be, the accounting portion, but
very small. It is really the changing science structure that is
changing on the universities.
Mr. FUQUA. The management of the research and support per-
sonnel is principally a matter for the universities to manage them~
selves.
Dr. HENSLEY. That is correct.
Mr. FUQUA. Is there anything that the Federal Government can
do to try to reduce that escalating cost of research infrastructure?
Dr. HENSLEY. I don't think it is reducible. I think it is going to
continue to grow.
The accounting procedures and management procedures that are
currently in the universities are in need of a reassessment by insti-
tutions themselves. Some place along the way a system of prioriti-
zation, what they will do, and a way of looking at where they are
spending their money has to occur. Academics will have to resist
this, the same way they have resisted time and effort reporting. It
is very difficult to get a handle on exactly where money is going in
university research unless you do it on a project-by-project basis.
The infrastructure as a whole is not costed out to a project.
Infrastructure is supported at a departmental level usually or a
central facilities level without a system of chargebacks unless it is
for computers, so it becomes very difficult as an accountant to look
at it and find out where the money is going specifically. University
academics want the support but they also do not want to make the
effort as far as paperwork is concerned to give you some kind of
audit trail back to where those facilities are supporting a particu-
lar project or a particular piece of research.
Mr. FUQUA. What impact would it have for changing the ac-
counting procedures, particularly depreciation or amortization of
equipment and buildings as suggested to us yesterday by one of the
witnesses?
Dr. HENSLEY. I think it would have--
Mr. FUQUA. Some 50 years to 25 years more realistically.
Dr. HENSLEY. I think that would help. Again, in supporting sci-
ence and research that we will need it would mean changing our
PAGENO="0237"
231
models within our institutions about how we will do this. However,
it would be a step forward as far as I am concerned.
Dr. Langenberg may have a different opinion.
Dr. LANGENBERG. I think it would be a helpful recognition of the
realities of lifetimes of research laboratories and research instru-
mentation. I do not think it provides the solution to our present
problem.
Mr. FUQUA. Mr. Smith, you mentioned in the report you had pri-
vate support. How much of that is going for basic research versus
general education? Do you have a breakdown of that?
Mr. SMITH. No, Mr. Chairman, we do not have a breakdown fol-
lowing that particular line; 15 percent is what we show the institu-
tions reporting to us as support for research. That is the only clue
we have here.
The general categories that are recognized by both the account-
ing people and fund-raising people with whom we have contact cor-
respond to those various purposes we show.
Mr. FUQUA. What I am trying to get at is this: you indicated a
number of colleges and the amount of money they raise privately,
from corporations, nonalumni, et cetera. Of course, I have been in-
volved in that business somewhat, too, being an alumnus of a
school and serving on the foundation. Some of that goes for schol-
arships that may not be in basic research but other areas. Not all
of it is in what we call basic research. It may go into other func-
tions. Some of it also may go to support eminent scholars, Chairs,
and so on. I wondered whether there were some kind of breakdown
as to how much was going in each direction or whether those fig-
ures were available. I am not sure they are.
Mr. SMITH. They are not available in quite that form. We do
know about 70 percent of all the funds received by all colleges des-
ignated by a variety of things would be a general designation-
used by the college for student aid, any kind of student aid, gradu-
ate, undergraduate, minorities, it can be used for those students
who have particular financial needs, or a recognition for scholastic
excellence. It can be used in any way they want. Other funds can
be used for endowed Chairs. Some funds go directly to academic de-
partments.
Mr. FUQUA. That is right.
Mr. SMITH. They may be restricted as far as the university is
concerned to the chemistry department, engineering school, medi-
cal school, but unrestricted by the dean of that school. Undoubted-
ly, some of those funds that are likely funds designated for capital
purposes ultimately wind up used for research or research infra-
structure. There is no way to trace it down because these are not
clear-cut categories.
Mr. FUQUA. Dr. Sprow, you mentioned four or five things univer-
sities do in teaching-new knowledge, and so on.
Dr. SPROW. Correct.
Mr. FUQUA. The one thing I thought was missing which I
thought was very important was that of teaching. It is not neces-
sarily the genesis of it because it starts in the home, secondary and
elementary schools and graduate schools where you really have the
basic training mechanism for future scholars and researchers and
people who serve in Congress and whatever. I feel very strongly
PAGENO="0238"
232
about this and I made that point many times. That is where we
train people and these are the people we will need in society. Per-
haps that can be No. 6.
Dr. SPROW. That goes along with 1 through 5. The teaching is
critical from an industrial perspective. I think from my own obser-
vation this problem we are talking about, the equipment, instru-
mentation and infrastructure problem is at its most critical in
teaching facilities, particularly in the undergraduate activities in
the universities. It is the undergraduate engineering lab, under-
graduate chemistry lab where this situation we are talking about is
really critical.
Mr. FUQUA. You also mentioned using business management pro-
cedures and techniques developed in the industrial sector to im-
prove the effectiveness of infrastructures. Based on your own obser-
vations and experience, what has kept the universities from doing
that? Are there cases, institutions, or other situations where there
has been significant progress made in trying to apply these proce-
dures?
Dr. SPROW. The current system with the great majority of the
funding going to individual researchers just generally works
against the application of a great deal of management techniques.
University people, faculty members, and researchers are an inde-
pendent breed, are thankful they are, are not all conservative types
like us folks in industry. I think when you have a system that by
and large allocates sums to a group of independent people the
chances to apply management techniques in an across-the-board
way to maximize sharing and maximize planning or obsolescence
and looking at ways to tie together research activities electronical-
ly and through computing, it is sort of like pushing the wrong end
of the straw. It never will get through as long as that is the funda-
mental mechanism.
That mechanism has a place. It has produced some tremendous
research. The cost of the equipment has gotten to the megascale-
supercomputers, advanced physics equipment. That old mechanism
and independence which is inextricably a part of it I do not think
will solve the problem.
Mr. FUQUA. We discussed this yesterday briefly from the academ-
ic standpoint. One of the questions that comes to mind, and it has
been mentioned in some of the conversations we have had before
the task force, that back when we switched somewhat from the
block grants, larger grants, more individual oriented research pro-
grams, we tend then to remove long-range planning and so forth
for infrastructure. You mentioned 1970. There were some after
that time, I think. The National Science Foundation has centers of
excellence awards which worked very effectively. They were very
beneficial to all concerned.
Dr. LANGENBERG. That is correct.
Mr. FUQUA. Do you think that has contributed part of the prob-
lem?
Dr. SpRow. Now that I have the mike, on the centers, I think
there is a key philosophical decision which has to be made when
such centers are set up, and that is not to let the organization that
is geographically responsible for the center dominate the activities
in the center. If you set up a center at the University of Utah and
PAGENO="0239"
233
make it so difficult for researchers not at that university to partici-
pate at the university it is-I am not picking on Utah but picking
them out of the air-if you make it so difficult for people outside
that geographic area to participate, the center is of no use. You
have to work at that from the front end to be sure there is an advi-
sory board, active participation of proposals and research from out-
side the host university.
Dr. LANGENBERG. If I may, a couple general comments on the
management question. I think this is indeed a serious question.
Universities need to pay more attention than they have in the past
to the managing of universities. They are different from industry.
They are managed from the top down only to a degree. They are
managed to a substantial degree by the individual faculty and indi-
vidual researchers. A colleague of mine defines a faculty member
as someone who thinks otherwise. That is, I think, a very true defi-
nition.
As has been pointed out, when they are equipped with their own
funds from NSF, NIH, through a grant which they consider to be
their own, just like the fact the university is the grantee, it tends
to be very difficult to manage the process in any kind of a coherent
way. One has an individual group of entrepreneurs, if you will.
Nevertheless, because they are forced to do so, I think more and
more the universities, the leading universities, are beginning to de-
velop quite sophisticated management systems. They are not exact-
ly like those in industry. To some degree they might be said to rely
on some of the consensus development or collective management
techniques that we sometimes look at our Japanese colleagues and,
wonder whether they are using those better than we are in indus-
try. In some sense they are a bit like that. There are many univer-
sities with strong management systems.
I also believe that larger research systems, had they been cen-
ters, centers of excellence awards, had they been Materials Re-
search Laboratories, centers in which the funding depends on the
bringing together of many different faculty researchers, many fac-
ulty students, and post-doctorates, institutions requiring manage-
ment, they do tend to enhance and promote the notion that to a
degree even the research process at a university can be managed to
our advantage, financial and otherwise.
Dr. HENSLEY. I would like to address that issue, also. Universities
have developed centers. They have developed their own centers. If
you were to look at the directory for centers and institutions, you
would find there has been a large growth since 1960 from close to
1,800 up to 5,500 at this time.
There was a huge growth in centers and institutes during the
1960's and seventies at all institutions. These were not necessarily
funded or started by the Federal Government. They were started
by the institutions themselves. In some cases material science cen-
ters were started by the National Science Foundation funds, but
other types of centers have been started because they have recog-
nized a disciplinary or regional need to establish that center at
that particular institution.
More moneys are coming in to these centers and they have
grown from an average size of about 18 people per center up to
PAGENO="0240"
234
where there are 63 on the average size of each center. Therefore,
the composition within institutions is changing.
If you look at the National Science Foundation statistics as to
where money is going, you will see more money is going to centers
percentagewise, an increasing amount of money into center and in-
stitute-type of development rather than individual areas. Institu-
tions are putting together management techniques that will meet
the changing needs of the society and they are doing it in their
own way in what they call their centers, and these things are rela-
tively small-100 people or so. That is the way they are handling
their response to better management.
Mr. FUQUA. Before I call on Mr. Bruce, we may have some addi-
tional questions. I will have to excuse myself. We may have addi-
tional questions to submit to you. We would appreciate your re-
sponding to those questions.
Mr. BRUCE. Welcome, Dr. Langenberg. I am glad to have you
here.
One of the things in your testimony you brought forward is that
there should be matching grants. You mentioned $700 million in
immediate needs and perhaps another $300 million over a 5-year
period.
Dr. Hensley, I noticed in this morning's paper that Texas col-
leges and universities are falling on to hard times because of the
lack of oil revenue. Could the universities in this country try to
come .up with matching dollars on a $1 billion research program?
Could you match that dollar for dollar?
Dr. LANGENBERG. I believe they could. There is almost no incen-
tive like money. If Federal money would flow only in response to a
match from another source, I think if you look for the public insti-
tutions that States support, prototypes of a kind of program that
could be looked to for possible matching funds for the public insti-
tutions, if you look at the very substantial numbers we have heard
about for private, particularly corporate, giving, yes, I think the
universities could come up with matching funds. They have in the
past and I think they could now from one source or another.
Dr. HENSLEY. I would concur with that opinion.
Mr. BRUCE. I came from another science and technology meeting.
We talked about transfer of information from research facilities.
There is a possibility we will have legislation pending to allow a 15-
percent royalty program, having researchers participate in patents
and licensing provisions. Down the road, would that work if these
research facilities were private individuals who would receive a
portion of the proceeds from licenses or patents?
Dr. LANGENBERG. That is presently the case in most places I
know of. Where there is an invention and where the university in
one way or another uses the patent, the faculty researcher normal-
ly participates in the proceeds.
Mr. BRUCE. Does the university realize itself anything?
Dr. LANGENBERG. Yes, it is shared and often shared among the
university and inventors, department or center and then the uni-
versity.
Mr. BRUCE. Our proposal is to do that with Federal laboratories.
Do you think that might be successful?
Dr. LANGENBERG. It might very well be successful, yes.
PAGENO="0241"
235
Mr. BRUCE. Thank you, gentlemen, for your testimony today.
The task force stands adjourned subject to the call of the Chair.
[Whereupon, at 12:10 p.m., the task force recessed, to reconvene
on Tuesday, June 10, 1985, at 9:30 a.m.]
[Questions and answers for the record follow:]
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236
ANSWERS TO QUESTIONS
FOR THE
TASK FORCE ON SCIENCE POLICY
COMMITTEE ON SCI ENCE AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
PREPARED BY
DR. FRANK B. SPROW
VICE PRESIDENT
EXXON RESEARCH AND ENGINEERING CO.
NOVEMBER 14, 1985
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237
1. Q. We have often been told that a general concern which
industry has about today's science and engineering graduates
is that they are trained on obsolete research equipment in
comparison with the more up-to-date equipment they will be
using in industry. How does industry manage to acquire and
make available to their research staff the most modern
equipment, and what lessons can government and the universi-
ties learn from industry in this area?
A. The principles employed by industry for purchasing
research instruments are the same as those used when consid-
ering other significant investments. To ensure that research
results are obtained in a timely and cost-efficient manner,
we make certain that all the alternatives to achieving
research results are evaluated prior to purchase. Government
and universities should consider separating equipment costs
from other costs when analyzing proposals, and require
investigators to offer alternatives to purchasing additional
new equipment for achieving research results. This should
help ensure that excessive equipment is not purchased, and
that the available funds are channeled to state-of-the-art
apparatus. `
2. Q. You have made the suggestion that in most areas of
research a threshold exists between when each researcher
should have his or her own instrument and when an instrument
should be used by a group of researchers. In the absence of
the recognition of such a threshold by the universities, can
and should the government science agencies develop and
establish such thresholds?
A. Yes. Factors that should be considered in establishing
such a threshold include the cost of the equipment, ease of
operation, calibration repeatability and expected time of
usage.
3. Q. You observed (page 7 of your prepared testimony) that, in
your' view, the "exact size of the instrumentation deficit
does not really matter. The problem is a major one." Would
you not agree, however, that for us in the Congress, where
the allocation of scarce resources and the matching of needs
to resources is an important function, there is a compelling
requirement to have estimates of the infrastructure needs
that are as accurate as possible?
A. Yes. A reasonably accurate assessment of the cost to
rebuild our research infrastructure is important for estab-
lishing priorities for the allocation of available resources.
However, before commissioning new studies, government should
review the already published data to be certain that it is
inadequate. My impression is that it is sufficient.
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4. Q. You noted (bottom of page 7 of your prepared testimony)
that competition for limited funds combined with the
decision-making system involving peer review has- often led to
the specific denial of funds requested for instrumentation.
Do you mean the denial of proposals specifically for instru-
mentation only, or do you mean the denial of instrumentation
funds when they are part of a research proposal?
A. The denial of instrumentation funds when they are part of
a research proposal. Researchers frequently have to request
equipment for two or three years before it is granted.
Routine but essential instrumentation is frequently cut from
research grant awards on the sometimes incorrect premise that
instruments are readily available from other sources. As a
consequence, researchers may be forced to use less effective,
obsolete equipment which slows the pace of their research.
Further, researchers may not request needed instruments in
their research proposals because they fear the funds
necessary will jeopardize approval of the basic proposal.
5. Q. You made the observation (page 11 of your prepared
testimony) -that "In industry. . . investment in equipment
presents no hurdles - if it is justified, it is purchased."
Why, in your opinion, have government agencies and the
universities not been able to do the same?
A. Research programs in the private sector are justified on
economic return, and programs surviving this selection
process are appropriately supported with manpower and equip-
ment. Government and universities appear to have difficulty
in making hard choices and narrowing programs down. For
example, the NSF and DOE have a history of opting to provide
low levels of funding for many investigators versus ade-
quately funding fewer projects. Industry's capital and
equipment investment tends to be high, while manpower is
tightly stewarded. The tendency within government and
universities seems to be to favor projects which employ large
numbers of researchers rather than equipment.
6. Q. Are there, to your knowledge, any instances where govern-
ment agencies or the universities themselves have successful-
ly established mechanisms for holding researchers accountable
for investment decisions, as is being done in industry (page
15 of your prepared testimony)?
A. Although research proposals are subject to extensive
review prior to approval, I know of no formal stewardship
mechanism for holding individual investigators accountable
for the quality and productivity of their work.
PAGENO="0245"
239
7. Q. The debt financing method has been explained in detail
before this Committee in previous hearings. What are the
reasons, in your experience, why that financing method has
not been more widely used in the universities?
A. University administrators tend to be concerned with the
risk involved with debt financing. Incurring debt for the
purchase of equipment is uncommon, and may in some cases be
prohibited by state law. Instrumentation is so closely tied
to the researcher that his or her leaving the institution
could render the equipment nonusable. The university could
be left with interest payments but no offsetting income
stream from a sponsoring agency, etc.
Federal regulations, as represented by 0MB Circular A-21,
do not allow interest payments as costs which will be funded
by government grants. Therefore, universities seek to avoid
interest costs, as the majority of their funding for research
comes from government sources. Additionally, universities
are nonprofit operations; consequently, the tax deduction
associated with interest costs does not provide the same tax
reduction incentive as in a prof it-oriented industrial
organization~ -~
8. Q. It has been suggested that the allowances under the
indirect cost system in 0MB Circular A-2l have too long
write-off times to realistically allow for the replacement of
buildings and equipment. For example, the use charge for
laboratories is now based on a 50-year life, whereas indus-
trial practice is said to be to write of f laboratories on a
20 to 25 year basis. What are, in general, the practices in
industry with respect to write-off periods for buildings and
equipment?
A. Industry typically follows tax depreciation schedules as
set forth by ACRS, namely 18 years for buildings and 3 years
for equipment.
9. Q. Certain tax provisions now are intended to encourage
industry to donate research equipment to the universities.
Do we have any data on how much such equipment is being
donated to the universities?
A. To the best of our knowledge no compilation has been made
of the aggregate. i am concerned that such donations do not
typically include funds to maintain the equipment, and this
can be a substantial burden to the receiving organization.
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240
10. Q. Is the incentive on industry to don~e research equipment
to universities having the effect that modern equipment is
being given to universities, or is it in fact obsolescent
equipment that reaches the universities when industry replac-
es its own equipment with more up-to-date instruments?
A. The 1981 Economic Recovery Tax Act (ERTA) contained a
provision encouraging corporate donations of instrumentation
to institutions of higher learning. This provision allowed a
deduction equal to cost plus one-half of the difference
between the market value and cost. We believe the ERTA
incentive has encouraged the donation of badly needed, modern
computer equipment to universities; however, it appears to
have had little impact on corporate donations of other types
of modern instruments.
We should point out that the ERTA provision provides an
incentive for equipment donations by manufacturers, but
offers no incentive for industry research organizations to
donate equipment, nor does it offer an inducement for manu-
facturers to provide funds for maintaining the equipment they
donate.
11. Q. How many scientists and support personnel will be housed
in the $200 million research facility which your company has
just completed? Is this facility paid for through charges to
the companyt s operating divisions, that is, through some form
of overhead payments, or through other means? To what extent
is justification for such a large facility based on forecasts
of specific benefits versus more general forecasts of the
expected but unpredictable benefits of scientific research
generally?
A. At present, about 800 scientists and support personnel
are housed in our Clinton, New Jersey, research facility.
Operating costs, including rental of the facility from its
owner, Exxon Capital Corporation, are borne by Exxon and its
affiliates. Justification for use of this new facility is
based on the realization of specific benefits, i.e., safety,
efficiencies of consolidating activities, upgrading of high
maintenance equipment, etc., as well as on intangible factors
associated with research productivity and growth potential.
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241
Questions f or Dr. Donald N. Langenberg
1. It now appears highly likely that the size of the pie from which all feder-
al research support must come will remain fixed in the foreseeable future,
or only expand slightly. If that is the case where, within that total re-
search budget, can we, in your opinion, make modest decreases in funding
levels in order to provide the resources for the needs of the infrastruc-
ture at the universities?
I. Under the assumption that total federal funding for University research
will remain essentially constant, I would support a general all-agency
increase of funding for infrastructure needs. This would obviously have
to occur, given the assumption, at the expense of other programs. Within
the resource pool available for non-infrastructure needs, I think it is
essential to continue to apply the criteria presently used by the R&D fund-
ing agencies, rather than target particular areas to assume the full cost of
intrastructure funding. The need is very real, in my opinion of the highest
priority, and broadly distributed across the science and engineering disci-
plines and the universities which foster them. The burden of meeting the
need should be spread correspondingly broadly.
2. In both cases of infrastructure need which have received special attention
in the last few years, instrumentation and buildings, the problem has been
presented in terms of crisis suddenly being upon us. How could this occur
without anyone in either the universities or the government science agen-
cies detecting that a gradual decline was taking place?
2. Neither the decline in instrumentation nor that in buildings escaped
detection by some in the universities and government science agencies. In
the case of instrumentation, the public alarms go back to NAS/NAE/NRC reports
in the early 1970s. It is, however, a common human characteristic to post-
pone going to the doctor until one has a severe pain. Or, in the words of a
maxim taught me by an old Washington hand: When the practitioners in a field
encounter real difficulties, it's possible there's a little problem. When
people in related areas begin to suffer the consequences, there probably
is a real problem. When the media and the politicians finally find out
about it, WE HAVE A NATIONAL CRISIS!!!! Neither the instrumentation nor
the buildings element of the infrastructure problem is what I could honest-
ly call a crisis in the sense that if they're not completely solved this
year ~he Nation will fall. Both are, however, very serious problems which
have taken many years to reach their present level, will surely get worse
in the absence of any serious attack, and will take years to solve with a
serious attack. Each has become a "crisis" simply by crossing a certain
threshold of general awareness. This effect, like so many in human be-
havior, is highly nonlinear.
PAGENO="0248"
242 ~
3. One approach to the federal role in providing support for research infra-
structure needs is to put in place individual, categorical programs in
response to the needs in each area. We already had special programs in
several government departments addressed to the instrumentation needs and
the supercomputer needs. Should we expect a proliferation of such cate-
gorical programs every few years, or has the time come to find a more com-
prehensive solution to all infrastructure needs?
3. It is always time to seek comprehensive generic solutions to problems.
In the case of the infrastructure problem, the possibility of finding such
a solution is certainly worthy of pursuit. Unfortunately, however, identi-
fication and adoption of such a solution would, in my view, require that
the federal government take an unprecedented step. It would have to em-
brace publicly and explicitly the notion that it has a long-term interest
in the health and vitality of the nation's research universities. That
would be a position radically different from the government's present stance
of turning to the research universities for research and other services
malnly on a selective case-by-case basis. Since I doubt the federal govern-
ment would be either willing or able to make such a radical shift of posi-
tion, I believe problem-oriented programs, i.e., categorical programs, are
the only practical solution. They're not ideal, they don't go to the root
of the matter, but they work, after a fashion, and they're better than
nothing.
4. Do you have any thoughts on the suggestion that use charges be based on
significantly shorter life times, for example, that Instead of basing
building use charges on a 50'-year life (equal to 2% per year), they be
based on, say, 25 years (4% per year use charge).
4. Yes, and it's a simple thought. The practical lifetime of a research
laboratory building doesn't remotely approach 50 years. Its steel frame
or its concrete floors may survive long, but as an environment for state-
of-the-art research it's not likely to go more than 20 years without need-
ing major changes. The government needn't rely upon an academic for such
a judgment. It need only consider what kind of research it was supporting
in 1935, and where it was being performed, and compare that past with the
present. Changing use charges to a shorter-life basis would be no more
than a recognition of reality.
5. A witness suggested recently that "For most of the decade of the 1970's and
Into the early 1980's the universities themselves behaved largely as depen-
dents of the government, abdicating their responsibility for infrastructure
and biding their time until Federal facilities programs were resumed." In
your view, can anything be done to bring about a change in this attitude on
the part of the universities?
5. Yes, but it won't be easy. This academic would be among the first
to concede that our research universities, with a few exceptions, have not
recognized and accepted the implications of their accession to research
university status and their consequent partial federalization. In my answer
to Question 3, I suggested that the federal government often behaves as though
it still thinks it's in the business of farming out research in micro- and
mini-projects to university job shops. Not surprisingly, in response the
universities behave as though they were job shops. The notion that both
the government and the universities are committed to a long-term partner-
ship seems to have scant acceptanceon either side. Attitudes on both sides
can be changed, but like any change in basic attitudes, it'll take a lot of
time and effort, backed by evidence of solid commitment on both sides.
PAGENO="0249"
243
6. We have occasionally had suggestions, from the GAO and others that all or
part of the indirect costs be paid to the university on the basis of a
fixed percentage of the direct costs rather than on the basis of detailed
audits and negotiations. In your opinion, what would be the advantages and
disadvantages of such a fixed percentage rate for the indirect cost cover-
age, and specifically, would it be helpful to the universities in giving
increased flexibility to the acquisition of the infrastructure items?
6. Whether an indirect cost rate "fixed" in whole or in part would have
any advantage would depend strongly on who fixed it and on what basis. In-
direct costs generally are real and necessary costs attendant on the con-
duct of research. The federal government's present policy of reimbursing
all research-related indirect costs is, in my view, just and fair. The
persistent problems associated with indirect costs result from the diffi-
culties of identifying and justifying research-related indirect costs in
the academic research environment where research is conducted in close re-
lationship with other functions. In such an environment, some elements of
research-related indirect costs are relatively easily isolated and accounted
for, and some are not. The most prominent example of the latter is the so-
called departmental administration cost. It is this element which has en-
gendered the debates over faculty effort reporting. I think it possible
that some accommodation might be reached between the federal government and
the research universities in which the departmental administration cost
element might be "fixed" by mutual agreement in exchange for the elimina-
tion of effort reporting and other forms of detailed accountability with
respect to this cost element. Where research-related indirect cost ele-
ments can be more simply identified, they should be so identified and re-
imbursed. We should resist the temptation to cut the Gordian knot by pick-
ing some overall indirect cost rate out of a hat and "fixing" it. Whether
that rate were high or low, it would be wrong for at least one partner in
the government-university partnership and give rise to continuing strains
in the relationship.
There is no necessary connection between a fixed indirect cost rate and
"increased flexibility to the acquisition of the infrastructure items."
If the government and the universities could agree on realistic infra-
structure use charges and on a mechanism for allocating them to future
infrastructure acquisitions, the indirect cost system could provide a long-
term solution for at least part of the infrastructure problem, as implied
by Question 3. However, such a mechanism would obviously increase indirect
cost rates significantly. A great deal of political groundwork would have
to be done both in the government and in the universities to make this
palatable.
7. Apart from the question of the effective life of buildings, laboratories,
and equipment, to what extent have the universities been setting aside the
use charges as reserves against future replacement needs?
7. In the absence of good information about the practices of universities
other than my own, I really can't answer this question adequately. However,
I doubt that a careful study would reveal that most universities have been
setting aside use charges in reserve against future infrastructure needs.
If that is the case, I would agree that this is a failing which ought to be
corrected in any future reform of the indirect cost system. I would assert,
however, that it is an understandable failing given the absence of any real
correspondence between presently allowable use charges and the real costs
of recurring infrastructure needs.
PAGENO="0250"
244
8. An estimate by the government auditors of indirect costs suggests, that over
the period 1972 - 1984 a total of just over $1 billion was provided in use
charges to the universities. To what extent can we account for the appl
cation of those funds to construct new buildings, and can we expect those
charges in the future to provide a significant fraction of the needed funds
for that purpose?
8. I suspect it would be very difficult to establish a one-to-one relation-
ship between use charges provided over the 1972-84 period and new building
construction during that period. As for the future, the following order-
of-magnitude estimate suggests, to me at least, that reimbursed use charges
at the rate estimated for the 1972-84 period would provide only a very
small fraction of the real needs. There are between 50 and 100 universi-
ties in this country with substantial levels of federally funded research.
At the 1972-84, rate that implies use charges in the neighborhood of $1-2
million per year per university. My experience in two universities suggests
that the annual recurring cost for maintenance, renovation, and replacement
of research facilities exceeds that level by a factor approaching ten!
9. You suggested that the funding of university Infrastructure needs be done
on the basis of matching funding by the Federal Government. What other
sources do the universities have to match the federal funds?
9. The other sources are state tax funds' (available in most cases only to
public universities), and gifts from private donors, either direct or via
endowment income resulting from prior gifts. In a properly designed use
charge system, it might be possible to derive matching funds from the sale
of bonds backed by the promise of future use charge income. The latter
would, of course, simply transfer most of the cost to the federal government,
spreading it over many years.
10. How can we, in your view, ensure that the financial contribution of the
Federal Government, if it is done a project funding, does not, in effect,
serve as a disincentive to the other partners, including industry, the
states, and private donors, to contribute financially?
10. There is really no way to ensure that; there are no absolute guarantees
in life. However, I would suggest that any federal fears on that score can
be allayed by looking at the actions of industry, the states, and private
donors in recent years. In the face of reasonably stable, if not munif i-
cent, federal support for university research, industry has been increasing
its support for university research at a faster rate than any other contribu-
tor. This has certainly happened in part because the universities, driven
by the need for more dollars than the federal government can provide, have
been pursuing industry support more aggressively. But I an convinced. that
it has also happened because both the universities and industry have become
more aware of the importance of stronger university-industry linkages, and
because the federal government has found ways to encourage these in many
of its own programs. Many states, in greater awareness of the connection
between their economic development and their research universities, have
initiated new research support programs. One example is the Benjamin
Franklin Partnership in Pennsylvania. Finally, gifts from private donors
`have been increasing at a substantial rate across the country. If the
federal government can avoid slaughtering these several golden geese in
the cousre of reforming it's tax law, I would anticipate no abatement in
these trends. In short, while I expect the federal government to continue
to provide the majority of the support for university research, absent
major course changes, I see no reason to fear that the other patrons of
university research will use the federal government's participation as an
excuse to abdicate their responsibilities.
PAGENO="0251"
THE FEDERAL GOVERNMENT AND THE
UNIVERSITY RESEARCH INFRASTRUCTURE
Financing and Managing University Research
Equipment
THURSDAY, SEPTEMBER 5, 1985
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SCIENCE AND TECHNOLOGY,
TASK FORCE ON SCIENCE POLICY,
Washington, DC.
The task force met, pursuant to call, at 9:30 a.m., in room 2318,
Rayburn House Office Building, Hon. George E. Brown, Jr., presid-
ing.
Mr. BROWN. If we may get underway here, we will be able to get
our business taken care of.
The chairman, Mr. Fuqua, regrets that for personal reasons, per-
sonal matters will keep him away from the hearing, at least for a
portion of the morning. He has asked me to substitute for him
briefly.
I would like to get you warmed up by making brief opening re-
marks, if I may.
In the late 1970's, the research community in this country
became aware that a gradual and apparently widespread deteriora-
tion in university research instrumentation was going to take
place. In spite of earlier assumptions that funds for such equip-
ment was routinely being provided as grant moneys, the instru-
mentation base was said to be in danger of becoming seriously out-
dated. In particular, it was noted that researchers in American in-
dustry were much better equipped and that in some cases industry
was unhappy with recent Ph.D. graduates that they hired from
many universities because they had received their training on obso-
lete research equipment.
At that time, about 5 or 6 years ago, very little in the way of
hard solid data was available about the current status and future
needs of research instrumentation. The Government agencies and
the committees of Congress were forced to respond based on scat-
tered anecdotal evidence, and there was no way of knowing how
good the situation actually was. Nor was there available any care-
ful analysis to the extent to which the Federal Government's re-
sponse was meeting 20 percent or 80 percent of the actual need for
new instrumentation.
(245)
PAGENO="0252"
246
Today we have before the task force the principal authors of the
first major comprehensive study of the research instrumentation
question. Jointly funded by a number of the affected Federal agen-
cies, it was conducted by three of the leading university associa-
tions: the Council on Governmental Relations, the National Asso-
ciation of State Universities and Land-Grant Colleges, and the As-
sociation of American Universities.
The strength of this study is its comprehensiveness and its basis
in data and data analysis. It's comprehensive in that it covers all
the sources of instrumentation funding, including not only the Fed-
eral Government but also State governments and private industry.
It also covers a wide variety of funding mechanisms, including vari-
ous forms of debt funding. Furthermore, it builds on previous, more
limited studies and includes, as well, data from a series of field
visits made by the members of the study team.
I will note, however, that the study may also suffer from some
weaknesses. It was conducted by the organizations and through
interviews with many individuals who themselves have a strong
and direct interest in research and research instrumentation. It's
also clear that the study raises a number of important questions to
which answers are not totally obvious. Nevertheless, we look for-
ward to today's testimony and discussion, and we welcome the dis-
tinguished panel members of the Task Force on Science Policy.
Mr. Lujan.
Mr. LUJAN. Thank you, Mr. Chairman.
I don't have an opening statement. I am pleased to be here this
morning to listen to those who were responsible for putting out this
excellent report. I do think it's excellent, and I look forward to
hearing from all of you. Thank you, Mr. Chairman.
Mr. BROWN. Thank you, Mr. Lujan.
Now, we will hear from the task force: Richard A. Zdanis, Ray C.
Hunt. Mr. Zdanis is vice provost of Johns Hopkins. Mr. Hunt is
vice president for business and finance at the University of Virgin-
ia, and Praveen Chaudari, vice president, science and director,
Physical Sciences Department of the IBM Corp., accompanied by
Mr. Milton Goldberg, executive director of the Council on Govern-
mental Relations, and Ms. Suzanne Woolsey, partner, Coopers &
Lybrand.
We are pleased to have you all here. You start first, Dr. Zdanis, I
believe.
STATEMENT OF DR. RICHARD A. ZDANIS, VICE PROVOST, THE
JOHNS HOPKINS UNIVERSITY, BALTIMORE, MD
Dr. ZDANIS. Thank you, Mr. Chairman.
I appreciate this opportunity to appear before you as chairman of
the steering committee that directed the newly published report
Financing and Managing University Research Equipment. My col-
leagues and I hope to outline for you the findings and recommenda-
tions of our study and, of course, we will be happy to answer
questions.
As you have noted, the events which brmg us here today began
in the early 1970's when the problem of maintaining and replacing
modern research equipment was noted in American universities,
PAGENO="0253"
247
and these problems are now acknowledged to be severe. Let me
quote a few statistics from the National Science Foundation's Na-
tional Survey of Academic Research Instruments. The Survey covers
the years 1982 and 1983, and it shows in part that 72 percent of the
academic department heads surveyed said that there was lack of
instruments which was preventing critical experiments. Twenty
percent of the universities' inventories of scientific equipment were
obsolete and are no longer useful for research purposes. Twenty-two
percent of the instrument systems in use in research were more than
10 years old. Only 52 percent of the instruments in use were reported
to be in excellent working condition. Forty-nine percent of the
department heads surveyed said that the instrument-support serv-
ices, such as machine electronic shops, were of poor quality or
nonexistent.
I think you will agree that these conditions are not what the
Nation must have. To some degree, this situation was created by
scientific and technical progress. Rapid gains in the productivity
and sensitivity of research instruments have been accompanied by
the higher costs of buying and operating and maintaining these
pieces of equipment. The cost of acquisition has outpaced inflation.
The same progress that brought us greater capability of instru-
ments has also shortened their useful lives. For 15 years, the funds
from all sources for research equipment has not met the needs cre-
ated by rising costs and more limited useful lives.
An Interagency Working Group on Research Instrumentation-
composed of several officials of the National Science Foundation,
the National Institutes of Health, the National Aeronautics and
Space Administration, the Departments of Agriculture, Defense
and Energy-was convened in the early 1980's to coordinate action
on this problem.
The States, industry and universities themselves launched vari-
ous initiatives. Of course, in times of limited budget in which we
are pleased to live, it's of utmost importance that the maximum
use be made of the funds available, and the Interagency Working
Group approached the Association for American Universities, the
National Association of State Universities and Land-Grant Col-
leges, and the Council on Governmental Regulations, and asked it
to-asked them to undertake a special effort to identify any bar-
riers which may prevent the most expeditious acquisition of equip-
ment and to document new and innovative financing mechanisms
which might exist for replacing and refurbishing the research
equipment.
The three associations undertook the study that we are reporting
on today, and it's important to note that funds for this study were
contributed by the six Federal agencies represented on that Inter-
agency Working Group as well as the research corporation. A
steering group of scientists and administrators from the academic
community and industry was established to direct the study, and
onsite interviews were conducted at university and industrial lab-
oratories as well as national laboratories and extensive interviews
on reviews of legislation at both Federal and State levels. The
report of the field research team by three experienced science ad-
ministrators reflected meetings with more than 500 individuals at
23 university, developmental, and industrial laboratories. The firm
PAGENO="0254"
248
of Coopers & Lybrand also did field work in addition to extensive
literature review in its report on debt financing and tax aspects.
These reports and other information developed by the three asso-
ciations were combined into our final report. In general, we exam-
ined the Federal and State regulations, practices, and management
practices within the universities, and the sources of funding mecha-
nisms for instruments. We have 26 recommendations directed at
each of these sectors. In addition, we reached the comprehensive
conclusion, and that I will quote from the summary of our report:
Many actions can be taken that clearly would enhance the efficiency in acquisi-
tion of, management, and use of research equipment by universities. . . . The over-
all problem is so large, however, that it can not be properly addressed without sub-
stantial, sustained investment by all sources-federal and state governments, uni-
versities, and the private sector.
Let me take a moment to emphasize "sustained investment." Be-
cause of the relatively short lifetime of adequate research equip-
ment these days, it's important that an investment strategy be de-
veloped which will be sustained over time to address this problem
and any solution must recognize this costly fact.
Let me turn to the role of the Federal Government. There are
five topical sections in our report, and the Government, as the task
force well knows, is the leading funder of academic research.
The potential impact of Federal regulations on efficiency in
buying and managing equipment is correspondingly large. We
looked at the Federal regulations and the two basic circulars which
undergird the purchase of equipment, A-21 and A-lb. In addition,
there are the Federal acquisition regulations, and each of these cir-
culations may be supplemented by agency regulations. Only certain
parts of those circulars apply to scientific equipment.
We find few barriers that contribute to the problems directly
within the language of the regulations; however, the difficulty is in
interpretation and application of those regulations by the Federal
agencies. Interpretations vary from agency to agency, from region
to region within the country, within the same agencies, and from
time period to time period. So that, in this swirl of uncertainty,
university management is forced to be very conservative, and it's
so conservative as to be inefficient at times, we believe.
So, therefore, we believe as a first step that the heads of the Fed-
eral agencies should issue internal policy statements designed to
reinforce their commitment to the overall goal of assuring the effi-
cient acquisition and maintenance of research equipment. Today
we discuss global goals. What is the acquisition of research equip-
ment throughout the Nation, throughout all of the Federal agen-
cies? However, on a daily basis, the management is done on a pro-
gram-by-program basis. The success, promotional performance and
evaluation is on a program-by program basis. It's not clear that the
sum of all those local optimizations of each program necessarily is
the same as the global optimizations of the acquisition of research
instrumentation across the Nation. It would help considerably to
have statements that would encourage action at the programmatic
level to adhere to global policies that we believe are proper for the
Nation.
This we are going to talk about-commingling of funds and use
of equipment by multiple projects, that is across agencies, across
PAGENO="0255"
249
particular tasks, and those are decisions that are difficult for pro-
gram administrators to take unless they have an overall guiding
statement that, yes, this is part of the action that we believe is de-
sirable for his agency by the agency head.
To be more specific, and addressing some other points of Federal
barriers, the costs of a full functioning piece of research equipment
are not always considered in an orderly manner. The full costs in-
clude space renovation, installation, service contracts, operation
and maintenance, and technical support. in addition to the initial
purchase price. Federal agencies should consider the full costs of
the equipment in research awards and insure they will be covered
either by the research award itself or by the recipient as a condi-
tion of that award. In programs that require university contribu-
tion for matching funds toward acquisition of instruments, we be-
lieve that the agencies should accept payment of costs such as in-
stallation and maintenance as matching funds.
Individual research awards, the backbone of the Federal basic re-
search support, usually are not large enough to accommodate
equipment of more than modest cost. Investigators often will have
more than one award but have difficulty combining funds from dif-
ferent awards to buy equipment. To ease this problem, we recom-
mend that Federal agencies encourage the sharing of support for
equipment across award and agency lines. We also recommend that
they adopt procedures that make it easier to spread the cost of the
equipment charged directly to research project awards over several
award years.
Many universities are unable to recover costs of non-federally
funded equipment used in conducting federally-sponsored research
on a timely basis. This famous circular, A-21, permits universities
to recover these costs through an annual use allowance of 6% per-
cent. At this rate, the full cost is not recovered for 15 years. Histori-
cally, that was not an unreasonable recovery rate because of the
then useful life of this research equipment. However, today, state-
of-the-art equipment may have a realistic life which is 5 years or
less. Circular A-21 also permits universities to recover the cost of
non-federally funded equipment by depreciating it over a realistic
lifetime, and it permits them to change from the use allowance to
the depreciation formula. However, when universities make the
switch, auditors of the Department of Health and Human Services
have permitted recovery as if the equipment has always been de-
preciated. For example, if a piece of equipment purchased with uni-
versity funds had a useful life of 5 years and was 3 years old when
the switch in accounting procedures took place, 20 percent of the
cost would have been recovered under use allowance; 40 percent
would be recovered under depreciation in future years. However,
the university would never recover 40 percent of the cost simply
because it had changed accounting procedures. This practice is a
major disincentive to universities to invest their own funds in re-
search equipment which will be used on federally-sponsored re-
search.
Less troublesome is the uncertainty surrounding recovery of in-
terest on money that universities borrow externally to finance
equipment. Circular A-~21 states that interest is an allowable
charge to Federal awards at the discretion of the funding agency.
PAGENO="0256"
250
Approval is required for each purchase, and there are instances
when even before the fact, agency acceptance in principle has been
obtained. When specific purchases have been asked to allow the
charge to be put into the indirect cost pooi, the approval has been
denied. We believe that universities should not be subject to this
flexibility of this decisionmaking, and 0MB should revise this cir-
cular to make it an allowable charge.
Policies regarding title to equipment vary among agencies. Those
who wish to combine university funds with Federal funds to buy an
instrument are uncertain about where the title will reside. It's es-
pecially true where research is funded by contracts rather than
grants, and we recommend that all Federal agencies invest title to
equipment in the universities upon acquisition.
The management of research equipment is also complicated by a
number of paper working rules that are embodied in Circulars A-
21 and A-lb. The thresholds at which documentation needs to be
retained are unrealistically low, and they are inconsistent between
these two circulars. We recommend that they be raised to a realis-
tic level, and that will prevent the abuses that might occur in mul-
tiple purchases of equipment. That may occur, but it will reduce
the paperwork considerably.
Circular A-hO, for instance, requires that the university inven-
tory be researched to prevent duplicative purchases at a $300
threshold-an unrealisticly low point. We recommend the screen-
ing levels be raised considerably. The screening levels have been
negotiated at a $10,000 level, but on a university-by-university
basis. This is again one of the uncertainties of dealing with the
multitude of agencies and actors within agencies where one univer-
sity may be allowed to keep an inventory and do the screening at a
$10,000 level when a neighbor or good institution is not given that
privelege.
We recommend that the Department of Defense discontinue its
requirement that the inventory of the Defense Industrial Plant
Equipment Center be screened for scientific equipment which is re-
quested by universitites before new equipment is purchased. We
found, in the course of our study, no piece of equipment that could
be identified which was acquired via this screening.
The last of our recommendations in the Federal area involves
the prior agency approvals for various actions under research
grants and contracts. These requirements can significantly delay
equipment transactions. Certain prior approval authorities are del-
egated to universities under the Institutional Prior Approval
System of the NIH and the Organizational Prior Approval System
of NSF. These two systems, among other benefits, reduce the turn-
around time on requests~ from weeks to days, and the savings can
permit the university to take advantage of timely purchase price
discounts and other special arrangements. We recommend that
these systems which have proved themselves in the field be adopt-
ed by other Federal agencies.
Thank you for this opportunity to present this material, and I
would now like to turn to Ray Hunt.
[The prepared statement of Dr. Zdanis follows:]
PAGENO="0257"
251
Mr. Chairman and members of the Task Force on Science Policy:
My name is Richard Zdanis, and I am Vice Provost of the
Johns Hopkins University. I appreciate this opportunity to
appear before you as chairman of the steering committee that
directed the newly published study "Financing and Managing
University Research Equipment." My colleagues and I will outline
for you the findings and recommendations of our study and will be
happy to answer questions. A summary of the study is attached to
my written testimony. We understand that the National Science
Foundation has distributed the full report to the Committee.
With me today are two other members of our steering commit-
tee, Praveen Chaudhari of IBM and Ray Hunt of the University of
Virginia. Also with me are Milton Goldberg of the Council on
Governmental Relations. Suzanne Woolsey of Coopers & Lybrand,
Patricia Warren, Project Manager, and John Crowley, Director of
Federal Relations for Science Research of the Association of
American Universities. The Council with the Association of
American Universities and the National Association of State
Universities and Land-Grant Colleges were the organizers of our
study, and Coopers & Lybrand helped us with the debt-financing
and tax-related aspects.
The events that bring us here began in the early 1970s, when
U.S. universities began to experience problems maintaining and
replacing modern research equipment. These problems are now
widely acknowledged as extremely severe. The situation threatens
the quality of our academic science as well as the quality of
education of new scientists and engineers. Let me cite just a
53-277 0 - 86 - 9
PAGENO="0258"
252
few statistics from the National Science Foundation's National
Survey of Academic Research Instruments. The survey covers the
years 1982 and 1983. It shows in part that:
o 72% of academic department heads surveyed said that
lack of equipment was preventing critical experimenta.
o 20% of universities' inventories of scientific equip-
ment was obsolete and is no longer useful for research.
o 22% of instrument systems in use in research were more
than 10 years old.
o Only 52% of instruments in use were reported to be in
excellent working condition.
o k9% of department heads surveyed said that instrument-
support services--such as machine and electronics
shops--were of poor quality or nonexistent.
I think you will agree that the condition of research
instrumentation available to universities is not what we must
have. To some degree, this situation was created by scientific
and technical progress. The rapid gains in the productivity and
sensitivity of research instruments has been accompanied by
higher costs for buying, operating. and maintaining them. The
costs of acquisition have well outpaced inflation. The same
progress that haa brought greater capability to instruments has
also shortened their useful lives. Instruments today may be
superseded by better ones in five years of less. Finally, for
more than 15 years, funds from all sources for research equipment
have not met the needs crested by rising costs and shrinking
useful lifetimes.
PAGENO="0259"
253
Major efforts to ease the universities' difficulties with
research equipment began in the early 1980s. An Interagency
Working Group on research instrumentation--composed of several
officials of the National Science Foundation, the National
Institutes of Health, the National Aeronautics and Space Admini-
stration, and the Departments of Agriculture, Defense, and
Energy--was convened to coordinate action on this problem. The
states, industry, and the universities themselves also launched
various initiatives. These developments have helped, but the
equipment problem has by no means been solved.
Federal and academic officials, of course, were well aware
that with limited budgets available it was of utmost importance
that these funds be used as efficiently as possible. In July
1982, the Interagency Working Group asked the Association of
American Universities, the National Association of State Univer-
sities and Land-Grant Colleges, and the Council on Governmental
Relations to undertake a special effort to identify any barriers
that may prevent the most expeditious acquisition of equipment and
to document new and effective financing and management techniques
for academic research equipment.
The three associations jointly undertook the study we're
reporting on today. Funds for the study were provided by the six
federal agencies represented on the Interagency Working Group as
well as the Research Corporation. A Steering Committee composed
of scientists and administrators from both the academic community
and industry was established to direct the study. On site
interviews were conducted at university and industrial labora-
tories as well as extensive reviews of legislation and regulation
PAGENO="0260"
254
at both the federal and state levels. The report prepared by a
field research team of three experienced science administrators
reflected meetings with more than 500 individuals and 23 univer-
aity, governmental and industrial laboratories. The firm of
Coopers and Lybrand also did field work in addition to an
extensive literature review for its report on debt financing and
tax aspects. These reports and other information developed by
the three associations were combined in our final report.
In general, we examined federal and state regulations and
practices, management practices in universities, and sources and
mechanisms of funding. We have 26 recommendations directed to
the federal and state governments, the universities, and the
private sector. In addition, we also reached one comprehensive
conclusion, and I will quote it from the summary of our report:
Many actiona can be taken that clearly would
enhance efficiency in the acquisition,
management, and use of research equipment by
universities...The overall problem is so
large, however, that it cannot be properly
addressed without substantial, sustained
investment by all sources--federal and
state governments, universities, and the
private sector.
I would like to emphasize the words "sustained investment."
Laboratories in most sciences must now be reequipped approxi-
mately every five years to remain competitive in research. Any
effective approach to maintenance of a competitive research
PAGENO="0261"
255
environment must recognize this costly fact.
Let me now turn to the role of the federal government, the
first of the five topical sections of our study. The government,
as the Task Force well knows, is the leading funder of academic
research. Federal agencies account for nearly two-thirds of the
funds spent annually to buy academic research equipment. The
potential impact of federal regulations on efficiency in buying
and managing equipment is correspondingly large.
The basic federal regulations that we assessed are Office of
Management and Budget Circulars A-21 and A-hO and the Federal
Acquisition Regulations. Circulars A-21 and A-hO apply to
research grants, and Circular A-21 and the FAR apply to research
contracts. These regulations may be supplemented by agency
rules. Only certain parts of them apply to scientific equipment.
We find that few of the basic federal regulations contribute
directly to problems with equipment. The difficulties arise
mainly from the interpretation and application of the regulations
by federal agencies. Interpretations vary from agency to agency
from region to region, and from time period to time period. This
inconsistency leads universities to adopt unnecessarily conserva-
tive management practices, which further complicate equipment
problems. We think changes can be made that would much improve
efficiency in dealing with equipment without going against the
purpose of the regulations_..insuring accountability for public
funds.
As a first step, we recommend that the heads of federal
agencies that support academic research issue Internal policy
statements designed to reinforce their commitment to the overall
PAGENO="0262"
256
goal of assuring the efficient acquisition and management of
research equipment. Today we are discussing global goals for the
nation and universities, but on a daily basis decisions are made
at the project level and performance appraisal is conducted on a
by-program basis. Some of the recommendations we make advocate
the comingling of runds and the use of equipment by multiple
projects. Agency statements that these actions are to be
encouraged would be a major help in providing guidance at the
program level. We also recommend actions aimed at certain
specific barriers.
One of these barriers is that federal agencies--and states
and universities as well--do not provide for the full costs of
functioning research equipment in an orderly manner. These full
coats may include space renovation, installation, service con-
tracts, operation and maintenance, and technical support in
addition to initial purchase price. Federal agencies should
consider the full costs of equipment in research awards and
insure that they will be covered either by the research award
itself or by the recipient as a condition of the award. In
programs that require the university to contribute matching funds
toward the acquisition of instruments, the agencies should accept
universities' payment of costs such as installation and main-
tenance as matching funds.
Individual research-project awards, the backbone of rederal
support for basic research, usually are not large enough to
accommodate equipment of more than modest cost. Investigators
often will have more than one award, but they have difficulty
PAGENO="0263"
257
combining funds from different awards to buy equipment. To ease
this problem we recommend that federal agencies encourage the
sharing of support for equipment across award and agency lines.
We also recommend that they adopt procedures that make it easier
to spread the cost of equipment charged directly to research-
project awards over several award years.
Many universities are unable to recover the cost of nonfed-
erally funded equipment used in conducting federal sponsored
research, on a timely basis. 0MB Circular A-21 permits universi-.
ties to recover these costs through an annual use allowance of 6
2/3 percent of acquisition cost. At this rate, full cost isn't
recovered for at least 15 years. Historically, this was not an
unreasonable recovery rate but today the realistic life of state-.
of-the-art equipment may be five years or less. Circular A-21
also permits universities to recover the cost of nonfederally
funded equipment by depreciating it over a realistic lifetime, and
it permits them to change from use allowance to depreciation.
But when universities make the switch, auditors of the Department
of Health and Human Services only permit recovery as if the
equipment had been depreciated. For example, if a piece of
equipment purchased with university funds had a useful life of 5
years, and was 3 years old when the switch in accounting took
place 20% of the cost of the equipment would have been recovered
under use allowance. 40% will be recovered under depreciation in
future years. The university will never recover 40% of the cost
simply because it changed accounting procedures. This practice
is a major disincentive to universities own investments in
research equipment used for federally sponsored research. We
PAGENO="0264"
258
have recommended that this practice be changed to permit full
recovery.
Also troublesome is the uncertainty surrounding recovery of
interest on money that universities borrow externally to finance
equipment. Circular A-21 states that the interest is an allow-.
able charge to federal awards, at the discretion of the funding
agency. Approval is required for each purchase and even w~ien
agencies have approved the concept in principle interest may not
be allowed on specific purchases. We believe 0MB should revise
Circular A-21 to make such interest unequivocally an allowable
cost. University officials who are uncertain about recovering
interest are reluctant to consider debt financing as a mechanism
for updating equipment.
Policies regarding title to equipment vary among agencies.
Investigators or administrators may wish to combine university
funds with federal funds to buy an instrument, but without
assurance of title they may be unable to do so. This is espe-
cially true where research is funded by contracts rather than
grants. We recommend that all federal agencies vest title to
equipment in the university upon acquisition.
Management of research equipment by universities is compli-
cated by certain provisions of 0MB Circulars A-21 and A-.110. The
Circulars prescribe capitalization thresholds that are unrealis-
tically low and also different--$500 in A-21 and $300 in A-hO.
Universities must maintain equipment inventories, and these would
be simpler to manage if the capitalization thresholds were raised
and made uniform. We recommend a threshold of $1000--this level
PAGENO="0265"
259
would likely halve the number of items in the typical university
inventory of capital equipment while retaining 80% o the combined
value.
Circular A-lb requires universities to avoid buying dupli-
cate equipment, which is interpreted to mean that they must
screen their inventories before purchase. We learned that the
$300 threshold requires a great deal of screening for equipment
that isn't economical to share. Higher screening levels have
been negotiated, and we recommend that 0MB set the minimum at
$10,000. At one university we visited, that level a~ccounted for
3.2% of the pieces of equipment in the inventory bought in 1983
and 50% of the dollar value.
We also recommend that the Department of Defense discontinue
its requirement that the inventory of the Defense Industrial
Plant Equipment Center (DIPEC) be screened for scientific equip-
ment requested by universities before new equipment is purchased.
We found no one in the course of our study who could identify any
research equipment acquired via DIPEC screening.
The last or our recommendations on federal regulations
involves the prior agency approvals required for various actions
under research grants and contracts. These requirements can
significantly delay equipment transactions. Certain prior-
approval authorities are delegated to universities under the
Institutional Prior Approval System (IPAS) of NIH and the
Organizational Prior Approval System (OPAS) of NSF. IPAS and
OPAS, among other benefits, reduce turnaround time on requests
from weeks to days. The saving can permit the university to take
advantage of timely price discounts or other special arrange-
ments. We recommend that these systems be adopted by other
federal agencies.
Again, I appreciate the opportunity to appear before you
today on this important matter. You will hear next from Ray Hunt
of our steering committee.
PAGENO="0266"
260
Mr. BROWN. Dr. Hunt.
STATEMENT OF DR. RAY C. HUNT, JR., VICE PRESIDENT FOR
BUSINESS AND FINANCE, UNIVERSITY OF VIRGINIA, CHAR-
LOTTESVILLE, VA
Dr. HUNT. Mr. Chairman, members of the task force, today I will
briefly give you the ideas that we have developed during the re-
search instrumentation project on the roles of States and universi-
ties relative to scientific equipment. I will also touch briefly on the
subject of debt financing.
The NSF study mentioned earlier found that States directly
funded 5 percent of the aggregate cost of instruments in use in the
academe in 1982 and 1983. States also pay for equipment indirectly
through tax benefits. On the other hand, the States often hamper
the purchase and use of equipment through regulations and restric-
tions on schools' financial flexibility. These activities apply mainly
to public universities. Private institutions rarely have access to
State funds, and they are virtually exempt from State controls on
equipment, except when they use State borrowing authority.
The States' broad roles as funder and regulator of scientific
equipment in public universities are inherently in conflict to some
degrees. Nevertheless, we think they could combine these roles
more rationally in ways that would help the schools with their
equipment problems.
The States are not going to replace the Federal Government as
the major funder of academic research equipment. But we do think
they should look carefully at their direct support for scientific
equipment in both the public and private institutions, relative to
support from other sources. Judicious and highly selective in-
creases in State funding could be most helpful to the scientific stat-
ure of the States and could also make Federal and industrial funds
more effective.
We also recommend that States give their universities more lati-
tude in handling funds. We think that institutions should be per-
mitted such actions as transferring funds among budget categories
and carrying funds forward from one fiscal period to the next. A
fiscal period typcially is 1 or 2 years. The added flexibility would
clearly make the universities better able to deal with problems of
research equipment. We also think greater flexibility would save
money in the purchasing process and permit academic administra-
tors to do their jobs more effectively.
Tax benefits specified in the Economic Recovery Tax Act of 1981
are available to equipment donors in 34 States simply because their
tax codes follow the Federal code. Relatively few States have adopt-
ed tax benefits designed to fit their particular circumstances. We
think the States should examine the use of their taxing powers to
foster both academic research and modernization of the equipment
it requires.
State procurement controls also need attention. In general, we
think they should be revised to suit the unusual nature of scientific
equipment. Such equipment should be exempt from purchasing re-
quirements designed for generic items like batteries and cleaning
materials, where brand-to-brand differences may be insignificant.
PAGENO="0267"
261
Each university should have the authority to buy scientific equip-
ment without having rules imposed beyond those of Federal agen-
cies.
We recommend that States consider revising their controls on
debt financing so as to help public universities acquire scientific
equipment. It would be helpful if debt financing could be used to
buy equipment independently of construction projects, which now
is not generally the case. It would also be helpful to recognize that
scientific equipment may need to be replaced in only a few years,
although acquired as part of a construction project financed for 30
years.
Finally, we think that schools ought to be permitted to lease re-
search equipment for periods longer than the 1- or 2-year state
budget period to which they are now often held. This restriction
limits the institutions' ability to arrange advantageous leases.
The universities themselves, public and private, funded about
one-third of major instrumentation systems in use in 1982 to 1983,
according to NSF. The schoOls deal with scientific equipment in
many ways in addition to the conduct of research. They fund equip-
ment from their own resources, from gifts they solicit, and from
various forms of debt financing; they handle the purchasing proc-
ess; they pay part or all of the costs of operation and repair; they
maintain equipment inventories; they help to optimize the sharing
of equipment by investigators; and they handle disposal of equip-
ment no longer needed or useful.
Given this degree of involvement, one would expect to find oppor-
tunities to improve efficiency, and we did. The measures we believe
would help suggest that universities individually ought to consider
a more centralized approach than is now common in their acquisi-
tion and management of research equipment. I might point out
that other pressures also appear to be pushing the schools toward a
more centralized approach in their operations in general. These
pressures include the growing interest in debt financing and joint
development efforts with State governments and industry.
We concluded that universities should plan their allocation of re-
sources more systematically to favor research and research equip-
ment in subject areas that offer them the best opportunities to
achieve distinction. In other words, we recommend that universi-
ties engage in more intense strategic planning with participation
by both administrators and faculty. Hard decisions may be re-
quired as a result of conscious strategic planning, but we think
they are needed to optimize the use of funds available.
We also recommend that universities budget more realistically
for the costs of operating and maintaining research equipment. As
you heard earlier, we think that Federal agencies can help to en-
courage realistic budgeting through practices associated with their
research-award procedures. Lack of operating and maintenance
costs are serious and pervasive problems at universities, and lack
of planning for the full costs of research equipment is much too
common. User charges are often assessed to cover maintenance and
the costs to support staff, but they can rarely be set at a high
enough level to recover full costs.
You also heard earlier that individual research awards cannot
usually accommodate costly equipment. We believe that Federal
PAGENO="0268"
262
agencies should make it easier to spread the costs of equipment
charged directly to awards over several award years. We also rec-
ommend that university administrators and investigators more ag-
gressively seek agency approval to do so.
Universities could facilitate timely acquisition of research equip-
ment at optimum cost by working to minimize delays and other
problems caused by procurement procedures. The purchasing proc-
ess, as I said earlier in regard to the role of the States, ought to be
adapted to the specialized nature of the research equipment. Spe-
cialized purchasing entities or individuals can help. We also recom-
mend formal programs to explain to purchasing personnel and in-
vestigators the needs and problems of each.
We believe that universities should also consider establishing in-
ventory systems that facilitate sharing of equipment by investiga-
tors. The inventory systems encountered by our field research team
were not generally useful for this purpose, with one exception-the
inventory set up by the Research Equipment Assistance Program
[REAP] at Iowa State University. The REAP inventory contains
only research equipment. The program may not be cost-effective
for all universities, but we think that most of them would find
parts of it useful.
Another point touched on earlier is the choice of use allowance
or depreciation to generate funds for replacing equipment. We rec-
ommend that depreciation be used because the funds in principle
can be generated over the useful life rather than the unrealistic 15
years required by the use allowance. This recommendation pre-
sumes that universities can negotiate realistic depreciation sched-
ules and dedicate the funds to purchase of equipment. You will
recall that costs can be recovered by use allowance or depreciation
only for non-federally funded equipment. I should also add that
both methods add to the indirect costs, which are always under
pressure to be reduced and are particularly contentious between
academic administrators and investigators.
We also recommend that universities look for better and more
systematic ways to facilitate internal transfer of equipment from
investigators and laboratories that no longer need it to those that
could use it. Faculty at most schools have no incentive to transfer
equipment, except for the need for space, and every incentive to
hang on to it, just in case there is a future need.
Universities, as you know, have long used tax-exempt debt to pay
for major facilities. In more recent time they have been using this
method to some extent to buy research equipment. We believe they
should explore greater use of tax-exempt debt for this purpose, so
long as proper attention is given to the long-term consequences of
debt. A basic requirement when assuming debt is a reliable stream
of income to pay it off. This commitment of funds cuts into the uni-
versity's flexibility in responding to new and unanticipated oppor-
tunities. Also, debt financing obviously increases the overall cost of
scientific equipment to both the universities and the external spon-
sors of research.
We recommend that universities develop their own expertise on
leasing and debt financing. Outside counsel will still be needed to
issue major debt, but institutions should be able to determine the
true costs of debt financing and make this expertise and related in-
PAGENO="0269"
263
formation readily accessible to research administrators and to prin-
cipal investigators. The increasing complexity and variety of debt
financing procedures and instruments-for any purpose-make it
essential that universities fully understand the marketplace.
I wish to thank you for your attention. The third member of our
steering committee here today is Praveen Chaudhari who will con-
clude our presentation on the research instrumentation project.
[The prepared statement of Dr. Hunt follows:]
PAGENO="0270"
264
Mr. Chairman and members of the Task Force:
I am Ray Hunt, and I am Vice President for Business and
Finance at the University of Virginia. Today I will briefly give
you the ideas we developed during the research instrumentation
project on the roles of states and universities relative to
scientific equipment. I will also touch on debt financing of
equipment.
The NSF study mentioned earlier found that the states
directly funded 5% of the aggregate cost of instruments in use in
academe in 1982-83. States also pay for equipment indirectly
through tax benefits. On the other hand, the states often hamper
the purchase and use of equipment through regulations and
restrictions on schools' financial flexibility. These activities
apply mainly to public universities. Private institutions rarely
have access to state funds, and they are virtually exempt from
state controls on equipment, except when they use state borrowing
authority.
The states' broad roles as tunder and regulator of scien-
tific equipment in public universities are inherently in conflict
to some degree. Nevertheless, we think they could combine these
roles more rationally in ways that would help the schools with
their equipment problems.
The states are not going to replace the federal government
as the major funder of academic research equipment. But we think
they should look carefully at their direct support for scientific
equipment in both public and private institutions, relative to
support from other sources. Judicious and highly selective
PAGENO="0271"
265
increases in state funding could be most helpful to the scien-
tific stature of the states and could also make federal and -
industrialfunds more effective. -
We also recommend that states give their universities more
latitude in handling funds. We think that institutions should be
permitted such actions as transferring funds among budget cate-
gories and carrying funds forward from one fiscal period to the
next. A fiscal period typically is one or two years. The added
flexibility would clearly make the universities better able to
deal with problems of research equipment. We also think greater
flexibility would aave money in the purchasing process and permit
academicadministrators to do their jobs more efficiently.
Tax benefits specified in the Economic Recovery Tax Act of
1981 are available, to equipment donors in 314 states whose tax
codes automatically follow the federal code. Relatively few
states have adopted tax benefits designed to fit their particular
circumstances. We think the states should examine the use of
their taxing powers to foster bothacademic research and.moderni-
zation of the equipment it requires.
State procurement controls also need attention. In general,
-we think they should be revised to suit the unusual nature of
scientific equipment. Such equipment should be exempt from
purchasing requirements designed for generic items like batteries
and cleaning materials, where brand-to-brand differences may be
insignificant. Each university should have the authority to buy
scientific equipment without having rules imposed beyond tbose of
federal agencies that fund equipment.
PAGENO="0272"
266
We recommend that states consider revising their controls on
debt financing so as to help public universities acquire scien-
tific equipment. It would be helpful if debt rinancing could be
used to buy equipment independently of construction projects,
which now is not generally the case. It would also be nelpful to
recognize that scientific equipment may need to be replaced in
only a rew years, although acquired as part of a construction
project financed by 30-year debt. Finally, we think that schools
ought to be permitted to lease research equipment for periods
longer than the one- or two-year state budget period to which
they are now often held. This restriction limits the institu-
tions' ability to irrange advantageous leases.
The universities themselves, public and private, funded
about one-third of major instrumentation systems in use in 1982-
83, according to NSF. The schools deal with scientific equipment
in many ways in addition to the conduct of research. They fund
equipment from their own resources, from gifts they solicit, and
from various forms of debt financing; they handle the purchasing
process; they pay part or all of the costs of operation and
repair; they maintain equipment inventories; they help to opti-
mize ~he sharing of equipment by investigators; and they handle
disposal of equipment no longer needed or useful.
Given this degree of involvement, one would expect to find
opportunities to improve efficiency, and we did. The measures we
believe would help suggest that universities individually ought
to consider a more centralized approach than is now common in
their acquisition and management of research equipment. I might
point out that other pressures also appear to be pushing the
PAGENO="0273"
267
schools toward a sore centralized approach in their operations in
general. These pressures include the growing interest in debt
financing and joint development efforts with state governments
and industry.
We concluded that universities should plan their allocation
of resources more systematically to favor research and research
equipment in subject areas that offer them the best opportunities
to achieve distinction. In other words, we recommend that
universities engage in sore intense strategic planning, with
participation by both administrators and faculty. Hard decisions
may be required as *a result of conscious strategic planning, but
we think they are needed to optimize the use of the funds
available.
We also recommend that universities budget more realisti-
cally for the costs of operating and maintaining research
equipment. As you heard earlier, we think that federal agencies
can help to encourage realistic budgeting through practices
associated with their research-award procedures. Lack of oper-
ating and maintenance~ costs are serious and pervasive problems at
universities, and lack of planning for the full costs of research
equipment is much too common. User charges are often assessed to
cover maintenance and the costs of support staff, but they can
rarely be set high enough to recover full costs.
You also heard- earlier that individual research awards
cannot usually accommodate costly equipment. While we believe
that federal agencies should make it easier to 3pread the costs
of equipment charged directly to awards over several award years,
PAGENO="0274"
268
we also recommend that university administrators and investiga-
.tors more aggressively seek agency approval to do so.
Universities could facilitate timely acquisition of research
equipment at optimum cost by working to minimize delays and other
problems caused by procurement procedures. The purchasing
process, as I said earlier in regard to the role of the states,
ought to be adapted to the specialized nature of the equipment.
Specialized purcbasing entities or individuals can help. We also
recommend formal programs to explain to purchasing personnel and
investigators the needs and problems of each.
We believe that universities also should consider establish-
ing inventory systems that facilitate sharing of equipment by
investigators. The inventory systems encountered by our field-
research team were not generally useful for this purpose, with
one exception--the inventory set up by the research equipment
assistance program (REAP) at Iowa State University. The REAP
inventory contains only research equipment. The program may not
be cost-effective for all universities, but we think that most of
them would find parts of it useful.
Another point touched on earlier is the choice of use
allowance or depreciation to generate funds for replacing equip-
ment. We recommend depreciation because thefunds in principle
can be generated over the useful life rather than the unrealistic
15 years required by the use allowance. This recommendation
presumes that the university can negotiate realistic depreciation
schedules and dedicate the funds to equipment. You will recall
that costs can be recovered by use allowance or depreciation only
for nonfederally funded equipment. I should add that both
PAGENO="0275"
269
methods add to indirect costs, which are always under pressure to
be reduced and are particularly contentious between academic
administrators and investigators.
We also recommend that universities look for better and more
systematic ways to facilitate internal transfer of equipment from
investigators and laboratories that no longer need it to those
that could use it. Faculty at most schools now have no incentive
to transfer equipment, except the need for space, and every
incentive to hang on to it, just in case.
Universities, as you know, have long used tax-exempt debt to
pay for major facilities. Lately, they have been using this
method to some extent to buy research equipment. We believe they
should explore greater use of tax-exempt debt for this purpose,
so long, as proper attention is given to the long-term conse-
quences. A basic requirement when assuming debt is a reliable
stream of income to pay it off. This commitment of funds cuts
into the unive.rsity's flexibility in responding to new and
unanticipated opportunities. Also, debt financing obviously
increases the overall cost of scientific equipment to both the
universities and the external sponsors of research.
We recommend that universities develop their own expertise
on leasing and debt financing equipment. Outside counsel will
still be needed to issue major debt, but institutions should be
able to determine the true costs of debt financing and make this
expertise and related information readily accessible to research
administrators and principal investigators. The increasing
complexity and variety of debt financing procedures and instru-
ments--for any purpose--make it essential that universities fully
understand the marketplace.
Thank you for your attention. The third' member of our
steering committee here today is Praveen Chaudhari, who will
conclude our presentation on the research instrumentation
project.
PAGENO="0276"
270
Mr. BROWN. Dr. Chaudhari, could we ask you to bear with us for
.a few moments while we go over and answer that rollcall, and then
we will come back and continue.
We will recess briefly, and I urge all the members to return
promptly.
[Recess.]
Mr. BROWN. The task force will resume.
We will call on Dr. Chaudhari to proceed with his portion of the
statement.
STATEMENT OF DR. PRAVEEN CHAUDHARI, VICE PRESIDENT,
SCIENCE, AND DIRECTOR, PHYSICAL SCIENCES DEPARTMENT,
IBM CORP., ARMONK, NY
Dr. CHAIJDHARI. Mr. Chairman and members of the task force,
my topic is private support for academic research. Private support
for higher education, as the data compiled by the Council for Fi-
nancial Aid to Education show, has more than tripled from 1966
through 1983 to $5.15 billion. Corporate support has been rising
faster than other private funding and in 1983 comprised 21.4 per-
cent of the total. It is more than twice as likely to be earmarked
for research as are contributions from other private sources. How-
ever, corporate sources accounted for only 4 percent of the total
dollar value of academic equipment in 1982-1983. In comparison,
the National Science Foundation's survey of equipment in use in
1982-1983 shows Federal funding accounts for 54 percent, universi-
ty funding for 32 percent, State governments and other private
support for 5 percent each, of the total of approximately $1.18 bil-
lion.
How can we increase private support for academic equipment?
Before answering this question and making a set of recommenda-
tions, I should like to describe to you what we have learned from
our own survey about the reasons cited for corporate support of
equipment, the limitations on such support, and how support is
provided.
Equipment is provided to universities by corporations on a chari-
table or discounted basis for several reasons: to help sustain the
quality of teaching and of research; to expose prospective custom-
ers to their products; to get feedback on the performance of their
products and on need for new equipment; and to maintain good re-
lations with faculty.
Universities are a major market for scientific equipment. They
are also a major source of research results needed by designers and
makers of such equipment. These companies clearly have an inter-
est in the academic world, but they also have an inherent conflict
between charitable contributions and profit making.
Donations of equipment usually do not cover the costs of renovat-
ing space and installing, operating, and maintaining the instru-
ment donated. These expenses can be a significant part of research.
Universities acquire equipment from companies in many ways.
These include cash gifts, contract research, discounts on equipment
sales, industrial affiliate programs, research consortia, informal
loans and sharing of equipment, and, of course, outright purchase.
Donations of equipment in recent years have been especially
PAGENO="0277"
271
common in computing, microelectronics, and engineering. Compa-
nies often use discounts and flexible payment schedules to help
universities get research equipment. One manufacturer visited by
the field research team used a two-for-one discount on purchase of
new equipment to generate goodwill and to start a series of infor-
mal exchanges between its scientists and investigators at the recip-
ient school.
We found that the tax benefits have several possible effects. The
tax situation seems to influence the size of contributions. Also, a
manufacturer may elect to sell costly equipment to a university at
a substantial discount rather than donating it outright. Companies
have taken this tack both before and after the Economic Recovery
Tax Act, ERTA, of 1981, but the added tax benefits under the act
clearly could affect the decision to sell or donate. In fact, a compa-
ny that wishes to help a university get qualified research equip-
ment but doesn't wish to donate it outright can still get tax bene-
fits under ERTA by means of a bargain sale-a sale for less than
fair market value.
The Economic Recovery Tax Act of 1981, as the task force knows,
was designed to spur technological development. The act provides
special charitable deductions for scientific equipment given to a
university by its manufacturer. It also provides tax credits for com-
pany spending on research and development conduct!ed inhouse or
by universities or other organizations. The R&D tax credit is sched-
uled to expire at the end of this year.
As you have heard, 34 States whose tax codes follow the Federal
code have adopted the provisions of ERTA. Also, as of the comple-
tion of our study, 7 States, including some of the 34, had adopted
various additional tax benefits designed to encourage support for
research and research equipment at universities.
It may not be possible to assess the impact of ERTA very accu-
rately, in terms of either the R&D tax credit or equipment dona-
tions. As you know, the results of extensive study presented during
hearings on the act in 1984 provided conflicting evidence of its
impact. Nevertheless, the consensus seems to be that ERTA, espe-
cially with certain modifications, should spur technological
progress as intended, partly by encouraging private support for
academic research and scientific equipment. We agree with this
view.
Let me return now to the question of how can we increase pri-
vate support for academic research and for equipment in particu-
lar. We recommend that universities seek donations of research
equipment more aggressively. Although our full report gives the
elements of a donation strategy in some detail, let me stress a par-
ticular point here. We believe that personal involvement of aca-
demic researchers with their counterparts in likely donor compa-
nies is essential to cultivating the relationships needed to get con-
tributions of research equipment. Quite apart from donation of
equipment, such interactions are desirable for exchange of techni-
cal information which, in turn, enhances technological progress.
We recommend several modifications to ERTA.
First, we propose that the range of equipment qualified for the
charitable donation deduction be expanded to include computer
software, equipment maintenance contracts and spare parts, equip-
PAGENO="0278"
272
ment in which parts not made by the donor cost more than 50 per-
cent of the donor's cost in the equipment, and used equipment less
than 3 years old. Our arguments for these changes are as follows.
Computers are incomplete without software. Maintenance con-
tracts are valuable because keeping equipment in repair costs so
much that universities have sometimes declined donations because
of the maintenance expense. Companies that develop and make sci-
entific equipment are selling primarily their technological knowl-
edge, not their ability to make parts. For this reason, we believe
the 50 percent limit on parts not made by the donor is unrealistic.
Next, we propose that the R&D tax credit be made permanent.
We also recommend that the credit be revised to create a special
incentive for companies to support research in: universities. As it
stands, ERTA gives companies the same incentive to contract for
research in academe as in other qualified organizations.
We propose further that the social and behavioral sciences be
made qualified fields of academic research in terms of both the
equipment donation deduction and the R&D tax credit. These sci-
ences contribute to the applications of other sciences and technolo-
gy, and social and behavioral scientists are increasingly using in-
struments in their research.
Our last pi~posal for ERTA is that research foundations that are
affiliated with universities, but remain separate entities, be made
qualified recipients of equipment donations and R&D funding.
That, Mr. Chairman, concludes our presentation and the results
of the research instrumentation project.
* On behalf of my colleagues, I should like to thank you once again
for your attention.
[The prepared statement of Dr. Chaudhari follows:]
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Mr. Chairman and gentlemen:
I am Praveen Chaudhari, and I am Vice President for Science
in the Research Division of IBM. My topic is private support for
academic research equipment.
Private support for higher education, as the data compiled
by the Council for Financial Aid to EducatIon show, has more than
tripled from 1966 through 1983 to $5.15 billion. Corporate
support has been rising faster than other private funding and in
1983 comprised 21.~4 per cent of the total. It is more than twice
as likely to be earmarked for research as are contributions from
other private sources. However, corporate sources accounted for
only 1 per cent of the total dollar value of academic equipment
in 1982-1983. In comparison, the National Science Foundation's
survey of equipment in use in 1982-1983 shows federal funding
accounts for 51~ per cent, university funding for 32 per cent,
state governments and other private support for 5 per cent each,
of the total of approximately $1.18 billion.
How can we increase private support for academic equipment?
Before answering this question and making a set of recommenda-
tions, I should like to describe to you what we have learned from
our own survey about the reasons cited for corporate support of
equipment, the limitations on such support, and how support is
provided.
Equipment is provided to universities by corporations on a
charitable or discounted basis for several reasons: to help
sustain the quality of teaching and of research, to expose
prospective customers to their products, to get feedback on the
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performance of their products and on need for new equipment, and
to maintain good relations with faculty.
Universities are a major market for scientific equipment.
They are also a major source of the research results needed by
designers and makers of such equipment. These companies clearly
have an interest in the academic~ world, but they also have an
inherent conflict between charitable contributions and profit
making.
Donations of equipment usually do not cover the coats of
renovating space and installing, operating, and maintaining the
instrument donated. These expenses can be significant.
Universities acquire equipment from companies in many ways.
These include cash gifts, contract research, discounts on equip-
ment sales, industrial affiliate programs, research consortia,
informal loans and sharing of equipment, and, of course, outright
purchase. Donations of equipment in recent years have been espe-
cially common in computing, microelectronics, and engineering.
Companies often use discounts and flexible payment schedules to
help universities get research equipment. One manufacturer
visited by the field research team used a two-for-one discount on
purchase of new equipment to generate goodwill and to start a
series of informal exchanges between its scientists and investi-
gators at the recipient school.
We found that tax benefits have several possible effects.
The tax situation seems to influence the size of contributions.
Also, a manufacturer may elect to sell costly equipment to a
universityat a substantial discount rather than donating it
PAGENO="0281"
275
outright. Companies have taken this tack both before and after
the Economic Recovery Tax Act (ERTA) of 1981, but the added tax
benefits under the Act clearly could affect the decision to sell
or donate. In fact, a company that wishes to help a university
get qualified research equipment but doesn't wish to donate it
outright can still get tax benefits under ERTA by means of a
bargain sale - a sale for less than fair market value.
The Economic Recovery Tax Act of 1981, as the Task Force
knows, was designed to spur technological development. The Act
provides special charitable deductions for scientific equipment
given to a university by its manufacturer. It also provides tax
credits for company spending on research and development con-
ducted in-house or by universities or other organizations. The
R&D tax credit is scheduled to expire at the end of this year.
As you have heard already, 31t states whose tax codes follow
the federal code have adopted the provisions of ERTA. Also, as
of the completion of our study, seven states, including some of
the 31k, had adopted various additional tax benefits designed to
encourage support for research and research equipment at univer-
sitiea.
It may not be possible to assess the impact of ERTA very
accurately, in terms of either the R&D tax credit or equipment
donations. The results of extensive study presented during
hearings on the Act in 1984 provided conflicting evidence of its
impact. Nevertheless, the consensus seems to be that ERTA,
especially with certain modifications, should spur technological
progress as intended, partly by encouraging private support for
academic research and scientific equipment. We agree with this
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view.
Let me return now to the question of how can we increase
private support for academic research and for equipment in
particular. We recommend that universities seek donations of
research equipment sore aggressively. Although our full report
gives the elements of a donation strategy in some detail, let me
stress a particular point here. We believe that personal
involvement of academic researchers with their counterparts in
likely donor companies is essential to cultivating the relation-.
shipaneeded to get contributions of research equipment. Quite
acart from donation of equipment, such interactions are desirable
for exchange of teqhnical information which, in turn, enhances
technological progress.
We recommend several modifications to ERTA.
First, we propose that the range of equipment qualified for
the charitable donation deduction be expanded to include computer
software, equipment maintenance contracts and spare parts,
equipment in which parts not made by the donor cost more than 50%
of the donor's cost in the equipment, and used equipment less
than three years old. Our arguments for these changes are as
follows. Computeraare incomplete without software. Maintenance
contracts are valuable because keeping equipment in repair costs
so much that universities have sometimes declined donations
because of the maintenance expense. Companies that develop and
make scientific equipment are selling primarily their technologi-
cal knowledge, not their ability to make parts. For this reason,
we believe the 50% limit on parts not made by the donor is
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unrealistic.
Next, we propose that the R&D tax credit be made permanent.
We also recommend that the credit be revised to create a special
incentive for companies to support research in universities. As
it stands, ERTA gives companies the same incentive to contract
for, research in academe as in other qualified organizations.
We propose further that the social and behavioral sciences
be made qualified fields of academic research in terms of both
the equipment donation deduction and the R&D tax credit. These
sciences contribute to the applications of other sciences and
technology, and social and behavioral scientists are increasingly
using instruments in thetr research.
Our last proposal for ERTA is that research foundations that
are affiliated with universities, but remain separate entities,
be made qualified recipients of equipment donations and R&D
funding.
That concludes our presentation of the results of the
research instrumentation project. On behalf of my colleagues, I
would like to thank you once again for your attention.
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PANEL DISCUSSION
Mr. BROWN. Do we have statements from Mr. Goldberg and Ms.
Woolsey?
Mr. GOLDBERG. There is none from us, no.
Mr. BROWN. Or are you here to correct the mistakes of the
others?
Ms. W00ISEY. No, thank you, Mr. Chairman.
Mr. BROWN. Mr. Lujan, do you have any questions?
Mr. LUJAN. Thank you, Mr. Chairman.
Two things occur to me as I listen to the testimony. One is to
give the university more power in making determinations. We face
that in the case of the problem we have in South Africa and Nica-
ragua and in El Salvador-the sharing of power. That is a very dif-
ficult thing to have somebody do, and I didn't realize we had that
problem at the universities as well.
The other conclusion that-at least the thought they have-is
that all of the testimony and the report talk about ways of the uni-
versities getting the money to buy the equipment, but it seems like
the study did not include the university responsibilities. I guess it's
just assumed that they will use the equipment intelligently if given
to them.
Did that part come up at all in your deliberations? I don't find it
in the report in any event.
Dr. ZDANIS. Certainly the backbone of the research support pro-
gram for the country has been the individual research project
which undergoes peer review, and we certainly have encouraged
the maintenance of that as the primary research funding mecha-
nism, and under peer review we assume that the best projects will,
in fact, continue to be funded, and the poorer projects will not be.
Mr. LUJAN. Peer review-just changing the subject a little bit-
has come under quite a little bit of discussion in the Science Policy
Task Force. It's the result of 10 or 20 universities getting all of the
money. Is that the same for instrumentation? Are the same 10 or
20 universities that get the top grant dollars also getting the top
moneys in equipment?
Dr. ZDANIS. Well, I would dispute the 10 or 20 institutions slight-
ly. The number of institutions that share in university research
dollars as supplied by the National Science Foundation, that set of
numbers, that certainly has institutions in the hundreds that are
sharing in the percentage.
Mr. LUJAN. But percentagewise, what is it? Something like 75
percent or something?
Mr. BROWN. I should interrupt the gentlemen to indicate to Dr.
Zdanis that some members of the task force are a little biased be-
cause of the small States that they come from, as you know.
Mr. LUJAN. Or because of the large States they come from.
Have tax credits-before that, let me ask this. You mentioned
the Iowa State University REAP Program which is a good example
of how things should be managed. Why don't the others do that if
that is a good way of doing it?
Dr. HUNT. I mentioned that, Mr. Lujan, I think the inventory
systems-most schools do have inventory systems and are required
to have them. What we found is that they have not been using
those systems other than for recordkeeping. They have not been
using them as a management tool, and with the exception, I think,
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of the-where we found in the REAP case where a system was
being used as a management tool for effective transfer of equip-
ment from one lab to another and to avoid duplication of equip-
ment. There is a good screening policy there.
Our recommendation is that institutions ought to make better
use of inventory systems and using REAP programs as an example.
Mr. LUJAN. Certainly sounds good.
What effect has the tax credit for private sector entities had on
giving to universities of both equipment and research credits? Has
it been good and substantial or what?
Dr. CHAUDHARI. Our survey found almost unanimously in a sense
that the Tax Act encouraged people to donate, but when corpora-
tions look to give equipment or donate equipment, they look at it
first from their own point of view, what it means to them, and
after they determine that, at that point they look at the donation
and tax benefit that accrues from that to decide how much to give
and whether to give it as a bargain sale or donate it outright. So, I
think it plays a substantial role once the decision has been made to
go ahead and donate equipment.
Mr. LUJAN. I think you are absolutely correct. One of the things
I ran into while I was at home is a large company making a sub-
stantial donation of equipment to one of our universities. And I
gathered that if they gave this big piece of equipment, then their
system would be the primary one in the university-rather than
the whole tax credit question. That is just a little icing on the cake.
Dr. CHAUDHARI. Yes, that has been our experience, yes.
Mr. LUJAN. One other question. What about joint use, like the
computer centers that we are establishing? Do you find that an ef-
fective way of equipment utilization? Give me your thoughts on
that.
Dr. CHAUDHARI. It's a little early to assess the supercomputer
centers. It's been our experience-I say "ours," I mean IBM's expe-
rience-with the Cornell Center where we made donations of equip-
ment and are working with them. We have people assigned there.
In fact, it's our intent to see how much we can use within IBM
that center for our own work, so we are interested in that center
for a variety of reasons quite apart from having a center available
to others. We would like to see how we can explore the use of that
for our own research.
Mr. LUJAN. Do you foresee a lot of university use of it-other
universities?
Dr. CHAUDHARL Yes, and other corporations also. For example, a
number of corporations have expressed interest in this, at least
from newspaper accounts, in joining the Cornell Center to use their
equipment.
Mr. LUJAN. Do you find that to be the case, that the equipment
is available at many laboratories that the Government owns all
over the country, that universitites have access to them?
Dr. CHAUDHARI. I think the university community is very di-
verse. The scope of research goes all the way from a one-man effort
to groups of efforts, and also the kinds of research we do is very,
very varied, and what you find is, as you talk to people, where
people have a need for a particular piece of equipment, and they
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don't have access to that equipment in their own university or it's
too expensive, they will make contact there as much as they can.
A good example of that is, of course, our National Synchrotron
Light Source. It's expensive, and it's centralized. A large university
faculty combined with university and industry can own a beam
line there to do research. I know of examples in our own corpora-
tion, and I know other corporations do the same.
So, you will find where there is a special piece of equipment
which is expensive and specialized, that industry, universities, and
national labs will get together, but is it as, you know, common as it
ought to be? That is hard to answer.
There are those who feel it isn't worth their while to go all the
way to a Government lab to do something that may be 700 miles
away, or they don't have a travel budget, or their are other restric-
tions on priorities and research results which they don't wish to
share.
Mr. LUJAN. From the standpoint of the laboratory, do you find it
readily accessible?
Dr. CHAUDHARI. The big industrial labs are accessible to the uni-
versities.
Mr. LUJAN. I am talking about the national labs. That is, the
ones we have control over.
Dr. CHAUDHARI. Yes, I see. At least our experience has been that
they are very open and receptive to ideas. If you have research you
would like to pursue, fine, and it's something they have available,
they are receptive.
Dr. ZDANIS. Certainly from the university point of view, they are
very accessible, yes. There are two types of research instrumenta-
tion, and I would like to draw the committee's attention to that
once more.
There are the instruments used mainly for service, making meas-
urements on a repetitive basis, et cetera. Those types of instru-
ments are very amenable to sharing. But there are other types of
instruments where you are trying to push back the boundaries of
what is measurable or to change the technique for measurement.
Those you have half apart most of the time. You are changing
things. It's not really feasible to share those types of instruments.
Yet, they may be equally expensive. So, some things are feasible to
share, others are not. The cost of sharing not only includes trans-
portation to remote sites, but it includes the removal of that par-
ticular expert from his home base and to some-the reason for an
expert to be at a university is to provide informatin to his col-
leagues, to teach the students who are there, and then he is off at
some remote sjte doing research. As good as that might be, he is
not available to his local community, and that is a real cost.
Mr. Lu~~uc. I was thinking mostly in terms of my home area
where, fortunately, we have superb national laboratories right at
our back door. But I understand.
Dr. ZDANI5. You are particularly advantaged.
Mr. LUJAN. Thank you.
Thank you, Mr. Chairman.
Mr. BROWN. Mr. Morrison.
Mr. MORRISON. Thank you, Mr. Chairman.
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I have questions in two areas. First of all, obviously some of us
do have our biases as to particular institutions, and I happen to
represent a rural area that has several smaller universities. I be-
lieve Chairman Fuqua has, in a bill that he has introduced, Mr.
Chairman, a provision that a set percentage of funding be made
available for smaller universities. Do you have any reaction as a
group to that sort of a concept?
Dr. ZDANIS. Perhaps we should ask the association members to
respond to that.
Mr. GOLDBERG. That is a particularly difficult question. One
would, at least I guess-I will express an opinion. I would prefer
that we deal in terms of good science and merit of the best science,
if you will, and that both grant funding and equipment programs
go where the best science is being performed.
I also worry about set-asides. No matter what position you take,
you have to wonder when you do that whether all of those funds
are being well spent. That doesn't mean that you will always make
the right decisions when you choose merit.
I don't know how else to answer that. I am not for set-asides, and
I am not against a set-aside, but I view that as a set-aside, and I
worry in some way that that money goes where it does the most
good.
Mr. MORRISON. We don't have the privilege that you have, both
for and against set-asides. I can certainly see your point. I guess a
concern I have is that we are included-and I look at your figures:
54 percent of the investment Federal, 32 percent State. Obviously
these are taxpayers' dollars, and we would like to buy the best sci-
ence with that investment. However, I think there will probably be
a tendency to say, "Let's see if we can spread this across the face of
the country a little more than to a selected group of institutions
who by their reputations have established outstanding records of
good science." Well, I guess we will return that particular decision
to the political arena, Mr. Chairman.
- The other question I had in just glancing through your report-I
didn't get into the details of the blue book which, of course, is the
complete report- I noticed, Dr. Hunt, in your comments you men-
tioned leasing twice, but only in two particular ways. One is that
there should be longer lease opportunities for State or institutions
that have only 1- or 2-year State budgets to work with, and the
other was to develop more expertise at the university level on leas-
ing than long-term debt structuring.
I wonder if your panel spent any amount of time, perhaps, on a
new innovative approach on leasing to encourage leasing of equip-
ment. It was mentioned that the tax incentives we have provided
have encouraged businesses to make equipment available on some
basis to university programs, but is there a possibility of going with
more leasing since the life of this equipment seems to be short and
maintenance is a problem? Should we devise at the Federal level
some mechanism using tax incentives, and perhaps other financial
rewards, or leasing programs in which the university would actual-
ly not acquire equipment, but in response to a research grant, that
equipment could be leased for the tenure of that particular grant?
Dr. HUNT. Certainly a lot of leasing is going on at the present
time. I think our review of the situation would indicate that, first
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of all, leasing is costly-is a more costly approach, and I think you
have to look first at whether it's financially advantageous to-
whether you should own the equipment or whether you should
lease. In other words, there may be a financial advantage to
owning equipment if it's not going to become technologically obso-
lete than a long-term lease where it would be a much more costly
approach. There are innovative ways, however, to structure leases
so you can obtain ownership at the end of the lease, and institu-
tions have used municipal leases where tax exempt rates are ob-
tained.
I think in the report we review a whole range of financing ap-
proaches, some of which result in-most of which result in owner-
ship of the equipment as opposed to simply leasing the equipment.
But the advantage of leasing, as I see it right now, is the ability to
spread the cost over a period of years as opposed to having to pay
for the equipment up front. Most grants do not, or a project-orient-
ed system does not provide sufficient funds to acquire or provide
for full cost of the equipment up front. But it has to be paid for,
and paying for it over time has pushed people into leasing as op-
posed to purchasing and has then pushed people into innovative
forms of leasing which result ultimately in ownership. I guess my
problem is that leasing tends to be at a higher cost.
Mr. MORRISON. The cost you don't write off as a tax advantage to
an institution because it's automatically exempt anyway.
Dr. HUNT. That is right. And we reviewed carefully, and with
our consultants, alternatives fmancially that are being used in the
marketplace today, various forms of tax exempt financing.
But again, the big problem is who will pay for it ultimately? In
other words, the debt has to be repaid, and the interest has to be
repaid, and that has been without an assured or a systematic and
rational basis of payment which, down the road, has sort of pre-
cluded people from institutions getting heavily into the debt financ-
ing arena.
Mr. MORRISON. Is it--
Dr. HUNT. I don't know that I have answered your question.
Mr. MORRISON. Well, you helped, and obviously you have given
the issue some thought, and that was my basic question. Is it of sig-
nificant importance that an institution, as a result of a research
grant, end up with the equipment? The equipment being there
means that somebody will do something with it, and it adds to the
ability of that university to attract other research efforts or to be
attractive from an academic point of view, at least.
Dr. HUNT. Yes, I think it is. Once you have ownership, too, you
have the ability to work hard towards transfer of that equipment
among laboratories so that it remains a useful piece of equipment,
and that you only pay for it once. That is why I think that just a
straight lease is not always the best approach.
Mr. MORRISON. Thank you.
Thank you very much, Mr. Chairman.
Mr. BROWN. Mrs. Meyers.
Mrs. MEYERS. Have we-I'm sorry I didn't get here for the earli-
er part of the presentation. I was at another meeting.
I presume that the equipment we are talking about is primarily
computers?
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Dr. ZDANIS. No, ma'am.
Mrs. MEYERS. Tell me what other kinds of equipment we are
talking about.
Dr. ZDANIS. Scanning electron microscopes, mechanisms to assess
surface phenomenon, materials handling equipment, materials con-
struction equipment, instrumentions to measure radiations, both
optical and nuclear, in order to assess all kinds of properties of ma-
terials. So, there are a whole range of important university re-
search equipment which are not computers at all. Many of them
are now incorporating computer components in order to help the
data analysis and data gathering components of that equipment,
but that is not the primary focus of the instrument itself.
Mrs. MEYERS. Has this problem always been with us or is this
something that has happened fairly recently just because of the
amount of equipment that has been developed and the fact that it's
outdated earlier?
Is this a new-I was on the 1202 commission at the State level,
and I don't recall that this was as much of a problem with our
State universities at the time. That was in the 1970's, however.
Dr. ZDANIS. The development of sophistication in equipment has
certainly escalated recently, so that the equipment becomes obso-
lete much more rapidly now than it did 4 or 5 years ago. The tech-
niques that are being used in various fields are also changing
rather rapidly. If I can take an example from the medical commu-
nity, there are PET scanners and CAT scanners and NMR devices,
none of which were really applying to those fields 5, 10, 15 years
ago, so the techniques are changing fast.
That is hurting. There is no natural law which says how equip-
ment needs to be used. The scale that we have to use for universi-
ties is what competition has out there, because the reason for the
universities to be in the research business is to be at the cutting
edge. The cutting edge is defined by whoever is doing the most ad-
vanced work, whether that be within the university community,
within the industrial community, or in the foreign countries. It's
that scale, that measure, that we are using to analyze the proper-
ties of the university state right now.
Mrs. MEYERS. When you talk about private support and that we
need more private support for the kinds of training equipment that
we need, I guess, in my experience, contributions to university re-
search have usually been dollars.
Dr. CHAUDHARI. That is correct.
Mrs. MEYERS. Do these private concerns, either corporate or
others, designate that they want this to go for scholarships or some
special thing? I don't know why these dollars are not being used
for equipment, I guess, is what I'm saying. Why is this a problem
always?
Dr. CHAUDHARI. I think two points are to be kept in mind. First,
the private contribution of equipment is a very small fraction of
the total needs of the Nation. Right now, it's about 9 percent. At
least in 1982-83, the National Science Foundation survey found
that private equipment contributions amounted to 9 percent of the
equipment the universities used.
Private support has increased substantially over the last decade,
most of it from corporations which tend to be more and more ear-
53-277 0 - 86 - 10
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marked for research and development. However, corporate support
comes in many forms. For example, if I am working for a company,
then if I donate $100 and the company will double that and will
give it to the university, I must specify I wish to give it for a gradu-
ate fellowship, or I may specify to just go to a department, and the
corporation will simply match that without specifying that, "No,
the $200 I gave should go somewhere else." So the support that
goes to universities comes in many different ways. Most of it is not
specifically earmarked that it should go for equipment. Should it
be so earmarked? That issue is complex because the amount of sup-
port and the way the support goes in can be very small or it can be
quite large. It would be a difficult thing to do.
Mrs. MEYERS. Thank you.
Dr. HUNT. I might add most donors do designate a program or an
activity they want their donation to support which is a restriction
that institutions obviously abide by, so that scholarships or endow-
ment shares is the way it has to be.
Mrs. MEYERS. Do you find the States are establishing consortia of
all of their universities and working together or do we need to do
more of that? I just think we are going to see fewer dollars being
available from the Federal level, and certainly while the States are
more solvent than the Federal Government, a lot of States have
problems too. And I think that unless we can pull more from the
private sector, the dollars just won't be there. And I don't know if
we can do that. So it looks almost like our emphasis should be in
trying to get people to work together or some other devices along
that line rather than just saying, "We need more money," because
obviously we do. And I wish it were there because I'm very sup-
portive of what you are saying.
Do you find that States are working together within their bor-
ders?
Dr. HUNT. The first thing we have to do, I think, is sell States on
the idea that they have a very important role in research. I think
that State funding has by and large been focused on the instruc-
tional aspect and missions of the institution and has not, except for
land-grant schools, I think, has not extensively supported research.
So, we have the first hurdle of getting a recognition at the State
level that-that is in our report-greater recognition at the State
level that they have a role to play and that increased funding is a
a part of that.
I think because the problem is so widespread and is getting a lot
of publicity, I think there is some recognition now at the State
level just beginning to emerge, so to speak. It's a time and activity,
now, to be expanded. States have not seen that as their role, neces-
sarily.
Mrs. MEYERS. It's beginning to happen, but maybe not-I think
it's beginning to happen for economic development reasons.
Dr. HUNT. That's correct.
Mrs. MEYERS. In some respects, States are saying we want some
high-tech center, and they know that to do that, they have to have
a really solid research institution in their State, and so they are
going to go that way.
I know that we have done several things. One of the things we
did in Kansas was to have State tax deductions for any contributed
PAGENO="0291"
285
computer equipment or any other equipment that could be useful
in research and a lot of tax deductions. I imagine a number of
States have gone that route, but in terms of economic development,
I think they are going to begin to see more emphasis there.
Dr. ZDANIS. I believe you are correct. For private donations to
universities, the ERTA tax law also was designed. One of the sec-
tions of it was designed to encourage that, and it has worked in a
number of cases. So, one of the reasons that you see some more of
the private sector donations being targeted to instrumentation is
because of the effect of that particular law.
Mrs. MEYERS. Thank you.
Mr. BROWN. Mr. Fawell.
Mr. FAWELL. Thank you.
Mr. BROWN. Could I ask Mr. Walgren if he would be kind enough
to chair?
Mr. WALGREN [acting chairman]. Yes, of course.
Mr. Fawell, you may proceed.
Mr. FAWELL. Thank you, Mr. Chairman. I apologize, too, for
being Johnny-come-lately, not only to this meeting but to the Com-
mittee on Science and Technology.
One question that I have that dovetails the previous question a
hit is I gather most of the Federal contribution is research, and the
equipment comes in as part of the research grant. Is that a fair
statement?
Dr. ZDANIS. A fair statement, yes.
Mr. FAWELL. What about separate programs which are geared
only to equipment purchases and, throwing in also matching fund-
ing that would be required, and-then I will stop there. I have a
question beyond that, but what about separate programs?
Dr. ZDANIS. There are a number of agencies now that are trying
that as an auxilliary emphasis. The Department of Defense, for ex-
ample, has run that program for 2 years now. The National Sci-
ence Foundation is starting that. Yes, that is a fine catchup mecha-
nism for addressing this particular program. It has done well. We
hope that other agencies will include that in their programs, too,
and that funding be allocated for that purpose.
Mr. FAWELL. Does that require you, usually, to have matching?
Dr. ZDANIS. It does usually require matching.
Mr. FAWELL. On what percentage is it, by and large?
Dr. ZDANIS. Fifty percent is not atypical. One of the difficulties
with matching is that it's not necessarily specified, and so there is
a lot of negotiation about what percentage that must be, and that
presents the universities with a great deal of internal deliberations
as to how to try to bid for this. If we are in a program where there
is only a probability of 10 percent that we will get one of these,
should we allow 10 investigators to go forth and take an average
that we will not have to provide the matching funds for all 10 in-
struments? We get to play Russian roulette to some degree.
Mr. FAWELL. One other point. Several weeks ago, I heard our
new Secretary of Education make the statement that some of our
more well endowed universities have indeed got tremendous in-
creases and really were not-could not be-classified as financially
needy at all. Have you considered the idea of a financial need
factor? This gets back to the question of some smaller universities
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286
and colleges that may indeed need more attention here, and some
of the very, very well endowed ones that may not be eligible. I'm
talking about a financial needs test, for instance. How would that
strike?
Dr. ZDANIS. One of the problems with establishing financial need
is "Compared to what?" If you compare it to aspirations, the needs
of some of the more well-endowed institutions may, in fact, be as
great as those of some smaller institutions.
Mr. FAWELL. Absolutely, yes.
Dr. ZDANIS. So, it's against that measuring stick that I have diffi-
culty even trying to respond to your question. I know that some of
the places where more research is currently done are probably the
places where some of the big step functions can occur and where
industrial communities may be willing to participate in joint ef-
forts where they may not be willing to participate in efforts at
other institutions. So, against that much larger need, they may be
financially deprived.
Mr. FAWELL. Do our agencies, at any time, though, take a look at
what funds indeed may be available by a given university and say,
"Well, look, you have a worthy project"-say Harvard or Yale-
"obviously there are programs there that would be more advanced
with greater aspirations," and all that. But you are very well-en-
dowed, and perhaps a much higher contribution factor ought to be
considered in reference to your project, lofty as they may be in the
interests of being able to have elementary-up service equipment for
a greater number of our universities.
Dr. ZDANIS. That negotiation takes place every day between the
program administrators and the principal investigators.
Mr. FAWELL. It does.
Dr. ZDANIS. And the program administrator will say, "Gee, that
is a great project. Why don't you go see your dean and see how
much more money you can get out of him?" By George, the princi-
pal investigator will be in the dean's office that afternoon.
Mr. FAWELL. Thank you.
Thank you, Mr. Chairman.
Mr. WALGREN. Thank you, Mr. Fawell.
Dr. Zdanis, you start out your testimony focusing us on the effi-
ciencies of procurement and so on, and yet, obviously, there is a big
dollar amount involved someplace. How much is it?
Those recommendations for changes in operation procedures
might make things work very well and critically better for an indi-
vidual project. On a percentage basis, how much of our problem do
you see as solvable by efficiencies and regulatory controls as op-
posed to the need for new funds?
Dr. ZDANIS. A very small percentage, very small percentage.
Mr. WALGREN. Certainly it's a high frustration factor.
Dr. ZDANIS. Very high frustration factor, and it produces nothing
of value for the country, and therefore we shouldn't be doing some
of these things.
The other thing that some of the barriers produce is a lack of
leverage of the Federal funds which are available to commingle
them and use them with other resources, so that even without ad-
ditional moneys, different sources of funding can be brought to
bear on the problem.
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287
We would like to remove those barriers.
Mr. WALGREN. In your explorations, did any problems with the
manufacturers of equipment, being in a position to be overreach-
ing, raise their-raise the specter of the funds being taken advan-
tage of by manufacturers of unique equipment? There are allega-
tions of goldplating of instruments that would not be necessary for
the experiment that would deliver more money to the manufactur-
er. Is that a problem in this area that we have to be on guard
against?
Dr. ZDANIS. We did not see any, I don't believe. I don't believe
that it's a problem. The type of instrumentation we are speaking
about has a fairly narrow market. It's like selling automobiles to
race car drivers who know everthing about automobiles.
These are the people who use, design, and to some extent, en-
hance the design of equipment that you are trying to sell the com-
mercial product to. You can't easily snooker them with additional
goldplated items.
Also, the limitation of funds is such that the principal investiga-
tor will be negotiating with the purveyor of the instrument to take
all of the things that may add to the cost, but don't provide the
fundamental focus of the instrument. In fact, that happens to a
detrimental extent to some degree. Some major pieces of data ac-
quisition equipment may be withdrawn from the purchase order in
order to get the price down that can be afforded, and so the instru-
ment doesn't produce the amount of data in a timely manner that
it could be doing if they only had the ability to have this extra
piece of equipment. So, I see the problem in exactly the reverse.
Mr. WALGREN. Instinctively, where there is a Government pocket
used to pay for the process or an effort, and the funding may be
understood to be forthcoming, the buyer of the equipment, under
those circumstances, would not necessarily be competitively sensi-
tive to holding costs down. I don't have any experience in that
area, but I'm just trying to dig through you people~ who have
looked at it and dealt with it somewhat, and see whether or not
there is. a substantial problem of overpayment for what are, admit-
tedly, unique items. If not, it would seem that we could be, per-
haps, less regulatory in our approach at 0MB and other places.
But if it's a problem, of course we have to be more on guard.
Dr. ZDANIS. I would like to give a quick response and turn to
Ray. I do not know a principal investigator who is funded at such a
level that he would not take every available dollar and use it for
another purpose if he could avail himself of those additional dol-
lars. So that the principal investigators, because they're trying to
get out more research, will be very, very prudent and have been
very prudent about spending those dollars in the most efficient
way.
Mr. WALGREN. Does the role of a principal investigator being
confronted with a sole source for something he needs put him in an
untenable position?
Dr. CHAUDHARI. There are very few pieces of equipment where
you have a sole source. It's a fairly competitive market.
~Dr. HUNT. The one comment I would like to make is we all do
have our own purchasing departments, not just a principal investi-
gator involved in this. There is also, in a major university, a cen-
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288
tral purchasing unit which is very much involved. It's sort of a
team approach in terms of the acquisition of equipment. As one
who comes from a State university, we have a State purchasing de-
partment that is also involved, and in fact, until recently, we were
very tightly controlled by State procurement regulations. That has
now, at the State level-one of the advantageous things that has
happened to us-the State now has delegated to the institution pro-
curement authority which has substantially enhanced, really, our
ability to meet the researchers' needs on the one hand, and still
have a central overall policy that would, I think, preclude the kind
of thing you are talking about. So, we have not experienced that in
our case.
Mr. WALGREN. Thank you.
Mr. Lewis.
Mr. LEWIS. Let me also apologize for not being here for your
presentation, but skimming through it, it looks very thorough.
On page 10 you have a recommendation that something be done
to make prior approval less cumbersome. Can you give me a sce-
nario of what you mean there, such as setting a $10,000 minimum
level for the universities' inventories?
Dr. ZDANIS. Right now, in order to abide by the regulations in*
A-21 and A-hO, in order to assure that we are not duplicating a~
piece of equipment within the university that is available for re-
search, when a principal investigator puts forth a purchase request
to the purchasing department in the institution, he has to screen
their inventory to see if that piece of equipment is available for use
within the institution. The screening now has to occur if that in-
strument is more than $300. We claim that that requires an awful
lot of additional paperwork and screening burden for a dollar level
which is really not prudent to share. You would capture, in that
case, capture a majority of the value of the inventory and cut down
a majority of the paperwork by raising the level at which that
threshold screening must occur to a reasonable level like $10,000.
Mr. LEWIS. I see. You also mentioned equipment sharing. Are
you speaking of within the university itself or with other universi-
ties in close proximity?
Dr. ZDANIS. Yes, both.
Mr. LEWIS. That is all I have, Mr. Chairman. Thank you.
Mr. WALGREN. Thank you, Mr. Lewis.
We have a vote on now, and if you have the time and could sus-
pend for 10 minutes, it would make sense, I think, to allow us to
vote.
Let me ask Mr. Volkmer if he wanted to ask questions at this
point.
Mr. VOLKMER. No questions.
Mr. WALGREN. I hate to keep you here for just a couple of things
that I might have from scanning your statement.
Can I ask when we say this problem is a problem that is so sub-
stantial it can't be solved except by a sustained investment pro-
gram, can we put a dollar figure on the problem? Laboratories
would have to roll over their equipment every 5 years, apparently.
Are you able, in this report, Dr. Zdanis, to put a dollar figure on
size of this problem?
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289
Dr. ZDANIS. No, we did not investigate that. We understand there
are additional efforts underway to try to establish what that level
is, but we did not within this report address that problem.
Mr. VOLKMER. Could I ask a question in that regard?
Mr. WALGREN. Mr. Volkmer.
Mr. VOLKMER. The university research community would be very
hesitant, I'm sure, to recommend that we increase funds for equip-
ment, research equipment, while we decrease funds proportionately
for actual research grants. Why not?
Dr. ZDANIS. That is certainly correct.
Mr. VOLKMER. See, the trouble we have with these deficits is
where do we find the extra money?
Dr. ZDANIS. I understand the problem.
Mr. VOLKMER. One thing is to take it out of the present amount
and earmark it for equipment, but the other is to add. Where do
we get the additional?
Dr. ZDANIS. I understand the problem.
Mr. VOLKMER. Do you have a situtation where we can find it?
Dr. ZDANIS. No, I do not. I don't have the global view that you do.
Mr. VOLKMER. I agree with you on that, but I think you under-
stand the problem.
Dr. ZDANIS. I understand the problem, yes.
Mr. WALGREN. As I understand it, a substantial amount-you in-
dicate a majority of support for equipment is obtained in the proc-
ess of competitive proposals, approval of competitive proposals. If a
substantial part of the equipment is obtained in that way, where
does the overall relationship of the equipment that is actually pro-
cured-where is that taken into account?
If one research project is particularly interesting to NSF that
doesn't mean that that equipment fits with any other more com-
prehensive approach towards the laboratory that is involved.
Dr. ZDANIS. Remember that before a proposal is allowed to go for-
ward to an agency, the university has signing procedures that it
goes through. At our institution, the sponsoring project office has
to sign it, the department chairman has to sign it, the dean has to
sign it. The institution undertakes an obligation also when it ac-
cepts a research proposal and, therefore, the proposals that they
allow to be submitted to the agency do, at some level, have an in-
stitutional goal.
Mr. WALGREN. I see. We have a vote here, and we should break.
If I could ask you to just suspend for a couple minutes, I will
come right back, and it will not be long.
Dr. ZDANIS. We would be privileged to.
Mr. WALGREN. The committee will recess for this vote.
[Recess.]
Mr. WALGREN. Gentlemen, I appreciate your staying on. I don't
know how much more we should explore for the record. I was a
little reluctant to simply stop because we had a time pressure of
the bells.
Doesn't the universities' interest, in a sense, run counter to peer
review interests of the agencies in selecting the most interesting
projects to them? When you say that we should be assured that
there will be some coordination of instrumentation because the
proposals, competitive proposals, are reviewed by the university,
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290
what might be of most interest to the National Science Foundation
might not fit with the university's equipment acquisition program.
Wouldn't that be not necessarily something we could rely on to co-
ordinate these matters?
Dr. ZDANIS. That is certainly true. There are, of course, the spe-
cialized equipment grants which are available to help us in that
regard, and there is the private sector that we call on periodically
for both instrumentation itself and the funds with which we can
purchase instrumentation.
From a coordination--
Mr. WALGREN. Four percent.
Dr. ZDANIS. Four percent. That is true. But to a considerable
degree, the kinds of things the university will be interested in fos-
tering are those things where the investigators are meritorious
enough to be able to get research grants.
We think that it enhances the viability of a proposal to have it
presented in a way which can be coordinated in efforts across the
institution. So, although they are not identical, they are certain-
ly-they are looking at the same problem, and they are not as dia-
metrically opposed as you may imagine.
Mr. WALGREN. I wonder if there is any way to have an instinct
for or general impression of the degree of instrumentation as pro-
vided by special instrumentation program for the Federal Govern-
ment?
As I understand it, the Defense Department has a particular pro-
gram that is instrumentation design. The National Science Founda-
tion tries to take it into account even though they-I don't know
that they are a line item in the National Science Foundation in-
strumentation account-but the point is that the Federal Govern-
ment provides 54 percent of all the instrument funds, and a portion
of that is coming under specific instrumentation programs coming
from the Federal Government. Do you have any instinct for the
matter of how large that proportion is? How much of our instru-
mentation is done indirectly, and how much of it is from the Feder-
al level-is being done directly with the purpose of providing the
instrument?
Dr. ZDANIS. I would turn to Milt.
Mr. GOLDBERG. I can't give a percentage answer. I only know
that the largest proportion is being provided by individual project
grants.
Mr. WALGREN. So, the larger amount would come through the in-
direct method, obviously?
Mr. GOLDBERG. I don't know if I would call it indirect, but cer-
tainly individual projects, at least.
Mr. WALGREN. You folks would advocate a separate program of
grants for equipment only? I gather the problem is large enough
that you would like to see the Federal Government involved in this
with a separate program for equipment only that presently does
not exist.
Dr. ZDANIS. Those have been very helpful where they have oc-
curred, and we would encourage other agencies to do likewise.
Mr. GOLDBERG. We would advocate a whole range of activities of
which that is one. As we suggested in the recommendations, there
are a number of changes that could be made in Federal regula-
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tions, and the universities could tidy up a little, but it takes a
range of those activities as well as direct Federal investment, and
as you say, indirect Federal investment and institutional invest-
ment, to really deal with the size of the problem.
Mr. WALGREN. Do you feel that there is a need for a mechanism
to coordinate the efforts that we are making to solve this problem?
Suppose you had a direct Federal instrumentation grant. Then you
have the competitive applications, then the private sector coming
in with 4 percent, the universities with 32 percent. If we are falling
short, obviously somehow we have to set priorities to fund some
areas and not others. Even if we are not falling short, it would
seem that there would have to be a constant monitoring and ad-
justment and an attempt to backfill where deficiencies are noted.
What do we have that we can hold out to the public that they
should be assured that that will happen effectively?
Dr. HUNT. Two things come to mind. One is that any program
should build in it, it seems to me, incentives that would enhance,
incentives that would enhance other sources of support such as in-
creases in State and industrial funding, so that you don't want to
create something that will cause them to withdraw or allow the
Federal-increase in this program to adversely affect funding from
other programs. So, I think that it should be a combination and
that the program should clearly create incentives maybe through
matching or some other mechanism that will cause other sources of
support to pick up as well. That is No. 1.
Two, it seems to me the project-oriented system-in a sense, you
are correct. It doesn't make for good, long-range planning. One of
the things that we have struggled with, I think, in our report is
how can we deal with this thing so that major items of equipment,
the cost of major items of equipment, could be spread over several
years ratiier than having to force it into an individual year. That
would lead to greater planning, I believe, certainly would lead to
more institutional involvement in the acquisition process, if there
was a spreading of the cost as opposed to forcing everything up
front as part of the individual grant itself. Now, that is difficult,
and I say we have struggled with it and have not come up with an
answer of how to do that, but I think that that would lend itself to
more institutional involvement, give you greater assurance that it
wasn't just the laboratory making the decision, but it was an insti-
tutional planning process that was in place.
Mr. WALGREN. To the degree you use debt financing, that tends
to bring that in.
Dr. HUNT. Tends to reinforce that, yes.
Mr. WALGREN. Ms. Woolsey, do you have any suggestions we
should focus on to encourage debt financing approaches in the uni-
versities?
Ms. WOOLSEY. One of the things that became clear to us when we
visited universities is that deciding to go into debt does force a
more centralized view of what the overall institutional future is
going to be. That is difficult, sometimes, to pull off on campuses be-
cause universities tend to be at least as decentralized as the execu-
tive branch of the Government.
I think that the ability to use more modern techniques of debt
financing and depreciation and deal with program officers in the
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agencies directly on what one's needs are-pregrant OK's for put-
ting in the order for the new NMR machine because it takes 8
months to get one once you decided which one you want, and that
means if you have to wait until the grant is awarded, you cannot
do the research for 8 months. Just minor administrative-what
seem to be minor administrative details, 1 think, would smooth the
way psychologically for the people on campus to do a considerably
more efficient job.
I spent 12 years in the executive branch before I joined the pri-
vate sector, and I found most of our time was spent fighting among
agencies. Coming back to this project, it became clear that a lot of
time is still spent fighting among agencies with the universities
and sometimes the clubs and that if one could-I realize this
wouldn't be possible-could impose more consistency among agen-
cies' interpretations and more coordination in terms of what is al-
lowed, what is encouraged, it would enable those very, now very
conservative central administration figures to become less conserv-
ative because they would not have to meet the most conservative
guidelines.
Mr. WALGREN. Thank you.
Let me recognize Mr. Slaughter.
Mr. SLAUGHTER. Thank you, Mr. Chairman.
I think my questions have been asked by now but what Dr. Hunt
was saying, and some problems are outlined in the report, if insti-
tutions could put aside so much money each year for use of depre-
ciation factors, it wouldn't be desirable but we in our case don't
have provision for that in State policy. I don't know whether other
universities are allowed to use depreciation allowance, I don't
know.
Dr. HUNT. I am speaking to my former director I want you to
know here, but in terms of State-appropriated funds, that is abso-
lutely correct. In the area of research grants and contracts where
indirect costs are retained by the institution, use allowances or de-
preciation are funded amounts that are retained by the institution
and can be applied to the purchase of equipment.
I think what we were struggling with was the question of wheth-
er-as opposed to doing it as an indirect-as recovery through the
indirect mechanism, of being able to charge the cost of equipment
to multiple years of a grant as a direct cost, or to leverage the
transaction through debt if you had the assurance that payments
would be made, funds would be available for that. That would help
to first bring the institution more into the picture and provide for
greater and more strategic planning, and greater institutional in-
volvement in the equipment area. And second, it would permit, I
think, acceleration of the-permit us to chip away at the backlog
or the deficiency that now exists.
Mr. SLAUGHTER. Thank you. I don't have any further questions.
Mr. WALGREN. Thank you.
Let me ask one other question.
In the immediate response to the shortages and deficiences, there
has been the thought, well, let's just pull the private industry in
here and they have up-to-date equipment and there are ways
that perhaps the universities could work with the private sector to
let their students have access to modern equipment. I suppose the
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293
correlary is that as governmental agencies we could sit back and
watch TV at that point.
After about a year of that, what I heard was that private indus-
try doesn't want students in there fooling around with their equip-
ment and that that was a very, very weak reed to hope for and
lean on. Could you give us any measure of the degree of availabil-
ity that the modern-the degree of availability of those modern in-
struments to the university population?
Dr. CHAUDHARI. Let me try to answer that with a slight editorial
comment if I may.
The universities do research in very, very broad areas and indus-
try in general will pick an area of research that is of interest to
them, and so if you add up all the research that goes on in indus-
try, you will find it is a small fraction of the total research going
on in the universities. I think that is important to keep in mind.
The only commonality is a small fraction of that. If you come
into that small fraction you can ask: "Would we allow a student to
come in and with all the rawness of a student coming in and play-
ing around with sophisticated equipment; would we be willing to
spend time on that?" Up to a point, yes, but it would very much
depend on the individual investigator. But nowhere near the kinds
of students you need to train in the university. So I don't think
that is a solution to the problem.
I think it is a suggestion, a gesture that allows you to build good
will with the university, helps the university, establishes contact
with researchers. That is just as important. To that extent, I think
it is very useful. I think we ought to encourage that, yes.
I think to solve-is sophisticated equipment available to universi-
ty researchers? The answer is yes, where there is commonality of
interest. That brings you back to the fact there is only a small frac-
tion of research that has commonality of interest. And where there
are labs where there is state-of-the-art equipment, that is a factor.
These are all steps to be taken, but they are small steps toward
solving a major problem.
Mr. WALGREN. I hear you saying that that would really apply to
the individual researcher who had a particularly interesting
project that was-and was able to establish the confidence of the
corporate counterpart and it would be a very individual relation-
ship.
Dr. CHAUDHARI. Yes, sir.
Mr. WALGREN. That certainly would be nonexistent, essentially,
with respect to training of multiple students university-wide, or
training aspects that the universities engage in, such as in engi-
neering and the like.
Dr. CHAUDHARI. Yes; the emphasis at the industrial lab would
not be on training. It would be more in research and the process of
doing research where the student would learn.
Mr. WALGREN. Well, if there is nothing further then--
Mr. SLAUGHTER. I have no more questions, Mr. Chairman.
Mr. WALGREN. We would really want to express our appreciation
for being a resource to our committee and our task force, and per-
haps we can develop some of these areas that have been touched on
by the members and some that have not been touched on, and we
will submit written questions for you to respond.
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294
With that, we would adjourn the task force until next Tuesday at
10 a.m. Thank you very much.
Mr. ZDANIS. Thank you very much for having us.
Mr. CHAUDHARI. Thank you.
[Whereupon, at 11:48 a.m., the task force was adjourned, to re-
convene at 10 a.m. on Tuesday, September 10, 1985.]
[Questions and answers for the record follow:]
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QUESTIONS FOR THE HEARING RECORD
FINANCING AND MANAGING UNIVERSITY RESEARCH EQUIPMENT
Task Force on Science Policy
September 5, 1985
1. This [testimony] seems to imply that funds have been available for
this special purpose, although in too small amounts, and it sug-
gests that the universities, the research agencies and the research
community in general somehow failed to ask for increases in this
special funding category. Is there not also a question of whether,
over these 15 years, the priorities within the total science
budgets, both within the individual institutions, and within the
state and the federal science budgets have failed to deal adequate-
ly with the long-term, emerging and important need?'
Answer
Funds for equipment have indeed been available, but not in adequate
amounts to support research instrumentation needs. Figure 3 on
page 18 of our report illustrates the dropoff in total funds
available and the decline of the federal portion in particular.
The variation is in inverse time progression to the costs of
instrumentation and the life cycle of state-of-the-art equipment.
The figure shows that the problem still exists and that the issue
has not been dealt with adequately.
2. "What is a `critical experiment' [in this context]?"
Answer
The National Survey of Academic Research Instruments and Instrumen
tation Needs quoted on page 20 of the report, was designed and
conducted by Westat, Inc. under the sponsorship and guidance of the
National Science Foundation. Westat did not include a definition
of "critical experiment" in its glossary of key terms. In the
absence of such a definition we suggest language which, to the best
of our knowledge, a faculty member might use in responding to the
question. Critical experiments are experiments at the forefront
(cutting edge) of the discipline, which the state of knowledge in
the area indicates are both: 1) necessary to advance our under-
standing and development of the field; and 2) now possible because
of current state-of-the-art technology.
3. "How large a percentage is today obtained through competitive
proposals prepared by individual faculty members? What are the
advantages and disadvantages of this way as compared with providing
equipment from sources separate from the research proposal such as
from university sources or government equipment grants?"
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Answer
The 1980 NSF report entitled The Scientific Instrumentation Needs
of Research Universities provides an overview of the variety of
support mechanisms available, given adequate funds. It discusses
the advantages and disadvantages of individual project grants,
special instrumentation grants, regional instrumentation centers
and other sources, and in the process, makes an eloquent case for
maintaining diversified funding options to respond to university
needs. Both the individual research grant and the equipment grant
mentioned in your question are competitive, as are most funding
sources available to universities. Data on the percentage of
research equipment obtained through competitive proposals has not
been formally collected. Dr. Eric Bloch, Director of the National
Science Foundation estimated recently that approximately 20 percent
of total NSF resources is allocated to acquisition of equipment.
It is unlikely, in his estimate, that the percentage can be in-
creased to 25 percent, although he considers this a desirable goal.
4. "It does not appear too far-fetched to suggest that the general
deterioration of important parts of the research infrastructure
such as instrumentation must be attributed, at least in part, to
these policies of little planning and a priority on personnel. Do
not universities, realizing the problem they have created for
themselves, have an obligation to think ahead and balance their
priorities better?"
Answer
Universities do indeed acknowledge their responsibility for strate-
gic planning and confirm their obligation to balance their pri-
orities effectively. These issues are addressed on page 74 of our
report. Universities feel vulnerable because uncertainties of
federal funding patterns make projections difficult and unexpected
cutbacks confound existing plans. University basic research works
best in long term cycles. Yet, in times of sudden budget shifts,
universities feel the obligation to protect their human resources,
as their most valuable asset. Once a research team is disbanded,
it is extremely difficult to regroup. Clearly, industry also
experiences constraints, but, operating largely in the procurement
mode, their constraints of planning and setting priorities are of a
different nature than those affecting universities.
5. "What explanation is there for the fact that most other univer-
sities have not done something like the Iowa State University
Equipment Inventory Program (REAP)?"
Answer
Our report makes the recommendation that universities consider
establishing inventory systems that facilitate sharing. One such
system is the basis of the research equipment assistance program
(REAP) at Iowa State University. REAP has many components in
addition to shared use. For instance: acquisition of used equip-
PAGENO="0303"
297
ment, screening, expert repair and calibration services, transfer,
scientific description of inventory. The total package works well
in the state of Iowa, given the research volume at Iowa State
University, its geographic location and research emphasis. Because
of its location, Iowa State University has generally greater
difficulty in securing equipment maintenance and repairs than do
universities in more populous areas of the United States. With
funds provided by the National Science Foundation, Iowa State
University made a sizeable investment in setting up the REAP
inventory. REAP includes only research equipment, in the science
and engineering area, selected to be of sufficient quality for
research use. This inventory now exists as a specialized system,
parallel with the much larger general accounting inventory. Other
universities which consider setting up comparable systems, are
acutely aware of the expense of start-up and maintenance, including
the substantial faculty participation that is required to set up
the expanded scientific descriptions on which the system is based.
The total REAP system may not be cost effective for all univer-
sities, but most will find elements of it useful.
6. `How does the situation today with respect to the current
state-of-the-art of instrumentation available to researchers
compare with what scientists faced in 1965 or even in 1935?" Or,
to put it in a different way, do scientists ever feel that they
have available the most up-to-date equipment?"
Answer
Science itself requires the continuous development of instruments
with greater sensitivity, precision and speed. Only by developing
and using improved instruments and techniques can investigators
push back the frontiers of knowledge. Our report concerns itself
with the inability of the scientific community to acquire the
state-of-the-art instruments that their colleagues in the indus-
trial sector and domestic and foreign competitors, are using in
their day to day research. It is in tne scientific enterprise
itself and in the international economic and technological arena
that the difference between 1985 and 1965 lies. Our technological
and economic competitiveness cannot be maintained without recogniz-
ing the continuous need to invest in advanced research instruments
and university laboratories.
7. "Why should it be the government's policy to pay the "full cost of
research?" How can we justify the gradual broadening of indirect
cost recovery on research grants into areas less and less connected
to research under the "full cost" doctrine?"
Answer
There seems to be a fundamental misunderstanding about the meaning
of the term "full costs of research." When the government funds
an individual university research project, it never pays the full
costs of that project. Federal funds help to house and conduct the
project in an already existing institutional environment. Federal
PAGENO="0304"
298
funds leverage institutional resources and may trigger other third
party support. Unlike industry, universities do not receive
independent research and development funds (IR&D). Universities
build their own capacity through independent research and instruc-
tion from which their research base is developed. The significance
of the larger institutional base that supports academic science
~must not be underestimated. Its value lies in the large group of
scientific expertise with complementing talent put together care-
fully over a number of years, where dialogue among disciplines has
been nurtured for decades. It allows you to bring to bear the
concentration of a small group on a particular project for a brief
period of time. Only the most direct "full cost" components are
charged to the sponsors of the research project. The recovery of
indirect costs is based on audited documentation of incurred
research expense, pursuant to rules established by the government.
8. "One way to reduce the need for the government to be heavily
involved in the detailed decision-making about moneys as they are
budgeted, spent and recovered for such things as instrumentation,
is block funding. In the long term, should federal science support
rely more on such block grants and other mechanisms in order to
decentralize decision-making to the universities themselves?"
Answer
Block funding, as exemplified by NSF's Materials Research Centers,
is an effective way to decentralize governmental decision-making
processes and to increase flexibility in granting prior approvals.
There are others. PHS and NSF have implemented a variety of other
mechanisms which delegate decision-making to the university level.
The NSF Organizational Prior Approval System was expanded to all
universities, after two phases of careful testing. It shifts the
locus of decision-making with regard to certain budget approvals
from the government to the universities. The PHS has recently
completed its experiment, the purpose of which was to evaluate the
effect of extending its existing prior approval list to univer-
sities by an additional ten items. We understand that PHS is
satisfied that it can rely on the universities to manage their
grants well. Target date for implementation of a comprehensive PHS
Institutional Prior Approval System is April 1986.
We hope that other federal agencies will in turn be open to explore
innovative ways to decentralize government decision-making. For
that reason, we welcome the plan to make the State of Florida
System the locus of a demonstration project on a government-wide
basis.
.9. "It now appears highly likely that the size of the pie from which
all federal research support must come will remain fixed in the
foreseeable future, or only expand slightly. If that is the case,
where within that total research budget can we, in your opinion,
make modest decreases in funding levels in order to provide the
resources for the needs for scientific equipment at the univer-
sities?"
PAGENO="0305"
299
Answer
It is vitally important that we do not mortgage our future by
failing, to allocate appropriate resources to university research,
including facilities and equipment. Even if the total R&D invest-
ment remains fixed, the health of the research enterprise can be
maintained by further reallocations of funds from the federal
development activities into long-term research. This general
policy objective has been supported by the President's Science
Advi sor.
10. "How could this [research equipment problem] occur without anyone
in either the universities or the government science agencies
detecting that a gradual decline was taking place?"
Answer
The present situation is not a sudden crisis. It has been the
focus of sustained attention. Pertinent studies referenced in our
report, span the period of the last decade. The State of Academic
Science, published in 1978, describes the status of federal support
for university research and development from 1945 and traces
changes through the mid 1970s. It speaks of the growing serious-
ness of the problem. The American Council on Education reviewed
expenditures for scientific research equipment at Ph.D granting
institutions for FY1978. In 1980, a report was published for NSF,
The Scientific Instrumentation Needs of Research Universities.
This was followed in 1981 by an update entitled, The Nation's
Deteriorating University Research Facilities, a survey of recent
expenditures and projected needs in fifteen universities. In 1982,
the National Academy of Sciences sponsored a workshop on "Revi-
talizing Laboratory Instrumentation." All these studies were
considered by the GAO for its review of equipment needs of U.S.
universities, published in April 1984. Later that year, the Westat
study, entitled Academic Research Equipment in the Physical and
Computer Sciences and Engineering was published.. The
AAU/COGR/NASULGC study, on which these hearings focus, is thus only
another in a long series of warnings sounded with increased urgen-
cy.
11. "For most of the decade of the l97Os and into the early 1980s the
universities themselves behaved largely as dependents of the
government, abdicating their responsibility for infrastructure and
biding their time until federal facilities programs were resumed.
In your view, can anything be done to bring about a change in this
attitude on the part of the universities?"
Answer
Universities have warned since the late 1970s, as the quoted
governmental witness acknowledges, that the research infrastructure
is troubled. In response, institutions have not taken a passive
position, far from it. Although government facilities investments
stopped in the mid 1960s, universities have been and will continue
PAGENO="0306"
300
to refurbish their facilities to the limits of their resources.
But absent federal participation, university effort in real dollar
terms has been eroded to the point that institutions generally are
able to meet less than half of their accumulated needs. Since
instruction and research require modern instruments and facilities,
universities are acutely aware that the quality of their instruc-
tional programs, the faculty they can attract, and the quality of
their research all depend on the facilities and support systems the
institution offers to faculty, staff and students. This awareness
requires competitive universities to adopt creative and activist
strategies. Passive postures in the present climate are
self-defeating.
12. `In your opinion, what would be the advantages and disadvantages of
[such] a fixed percentage rate for the indirect cost coverage, and
specifically, would it be helpful to the universities in giving
increased flexibility to the acquisition of research equipment?"
Answer
To replace the audited reimbursement of expenditures with an
arbitrary formula, in the sense of a uniform fixed percentage will
not result in a realistic or equitable determination of indirect
costs. It would not be based on the principle of cost reimburse-
ment, so it would be arbitrary and likely to be unsatisfactory to
both the universities and the government. Rates vary, depending on
the size of the university, its organization, its geographic
location, the nature of its research and the degree of support it
receives. In different university settings, it is logical to treat
the same kind of cost as indirect or direct. A statutory limit on
indirect cost, ignoring individual circumstances, would not lead to
a reduction in indirect cost, but at best to a redistribution,
which would not settle the matter to anyone's satisfaction. COGR
recently addressed this issue in greater length in response to the
question on the Task Force Agenda "Is it possible to replace the
present complex indirect cost system with a better system?"
13. "To what extent have the universities been setting aside the use
charges as reserves against future replacement of equipment needs?"
Answer
The government does not reimburse universities for use or depre-
ciation of government purchased equipment and facilities. However,
the government has agreed that indirect cost may include an amount
for depreciation or use allowance on research equipment and facil-
ities purchased with university funds and used on federally sup-
ported research. Government reimbursement of depreciation and use
allowance is committed to pay the bills for those prior university
purchases. If an institution were to use those funds as a "set
aside" to purchase new equipment and facilities, it could not pay
for previously purchased items. The problem is one of obtaining
funds for modern equipment, and one of the need for a systematic
means of repayment of university research equipment purchases.
PAGENO="0307"
301
14. How does industry manage to acquire and make available to their
research staff the most modern equipment and what lessons can
government and the universities learn from industry in this area?
Answer
Ihdustry clearly recognizes the need to invest in the latest
state-of-the-art equipment. A glance at the most progressive U.S.
corporations shows the benefits from these investments. Industry
of course is supported by a favorable tax structure which allows it
to use the accelerated cost recovery provisions of the 1981 Tax Act
as one of many business incentives. When these incentives were not
available industry was forced to be more conservative. To illus-
trate this point, it is interesting to contrast the effect of
depreciation rates on the resources of computer chip manufacturing
firms to those of regulated telecommunication companies, or the
steel industry. One industry, for example, had to work with
outdated switching gear because of a 50 year write-off restriction.
The universities to this day are still laboring under unrealistic
use allowance policies prescribed by the government. While indus-
try may depreciate research facilities over a seventeen year
period, i.t has only just been recommended that universities be
permitted to assess the average useful life of a research facility
at twenty years, rather than the presently mandated fifty years.
On a parallel basis, the concept of average useful life of fifteen
years for a piece of university research equipment, on which
current use allowance reimbursements are based, is inequitable and
unrealistic.
15. `The debt financing method has been explained in detail. What are
the reasons, in your experience, why that financing method has not
been more widely used in the universities?"
Answer
Our report discusses the constraints on debt financing in a special
chapter (see pages 56-58) and surveys instruments for debt financ-
ing in Appendix 1. Essentially, universities are reluctant to use
debt financing to a greater degree than they already do because
there is no systematic means to assure adequate repayment and
because debt limits future flexibility.
16. "Do we have any data on how much such [donated research] equipment
is being donated to the universities?"
Answer
Data on gifts of company products and other property is reported as
part of the 1983 - 1984 survey, Voluntary Support of Education,
prepared by the Council for Financial Aid to Education (CFAE). Out
of a total of $280 million, or 6 percent of total voluntary sup-
port, company products accounted for $116.8 million. Equipment
giving is likely to be adversely affected by the uncertainty in the
tax system, as well as market conditions and production schedules.
Finally, it would be beneficial to instructional programs if the
PAGENO="0308"
302
tax provisions were broadened to include donation of instructional
equi pment.
17. "Is the incentive on industry to donate research equipment to
universities having the effect that modern equipment is being given
to universities, or is it in fact obsolescent equipment that
reaches the universities when industry replaces its own equipment
with more up-to-date instruments?"
Answer
Under the old tax structure, only straight donations were attrac-
tive to industry. These donations were not linked to any stipu-
lations regarding age of the donated equipment, and as a result,
universities tended to receive older equipment. The Economic
Recovery Tax Act (ERTA) of 1981 changed this to require that
equipment be donated within twenty-four months from the date of
manufacture. Universities are receiving modern equipment.
18. "What is the best administrative process to foster increased use of
shared or pooled equipment within the institution or even among
neighboring institutions? Would further centralization help?"
Answer
According to the 1984 NSF (Westat) report, nearly half (45 percent)
of all in-use research equipment in the 1982 national stock was
located in shared-access facilities. High cost instruments are
routinely shared across department lines. As research instruments
become more costly to acquire, operate and maintain, economies of
scale operate to force naturally greater sharing, centralization
and remote access. Decisions to share instrument resources,
however, must be based on academic needs, expressed and directed by
research faculty, in compliance with the principles which initially
governed the acquisition of equipment. Administrative attempts to
force shared use artificially generally do not work.
19. "How successful have the NSF Regional Instrumentation Centers
been?" Is this a concept that should be substantially expanded, or
is it limited to certain types of equipment?"
Answer
The 1980 NSF report, The Scientific Instrumentation Needs of
Research Universities discusses Regional Instrumentation Centers at
an early stage in their development. We do not have more recent
assessments, but the number of these centers is not expanding.
20. "Do you see any merit in such an approach [grants for equipment]
(which would be similar to what the Fuqua bill would do for re-
search facilities)?"
PAGENO="0309"
303
Answer
There is substantial merit to instrumentation grant programs for
large equipment. The success of the Department of Defense, Univer-
sity Research Instrumentation Program is concrete evidence of that.
Similar programs have been introduced by NSF, DOE, and NIH. We
refer to Appendix C in our report for a comprehensive list of
available programs, and to the 1980 NSF report mentioned above, for
a substantive review. However, such programs should not be seen by
the investigators as a reduction in funds directly available to
conduct research. They should rather become part of a comprehen-
sive investment strategy that combines competitive grants for
large, costly equipment with awards for smaller projects including
instrumentation.
21. "Given that the federal government is estimated to have provided 54
percent of all instrument funds in 1982-83, how much is that
percentage today, in your judgment, as the result of those initia-
tives?"
Answer
Data are unavailable to answer this question.
PAGENO="0310"
PAGENO="0311"
305
APPENDIX 1
0
>~
F-
z
0
>
LL
0
0
0~
(I)
Iii
PAGENO="0312"
~qh1ights
Higher Education
U Total voluntary support rose $440 million in 1983-84 to an estimated $5.6 billion, up 8.5 peicent from
1982-83
* Corporate support rose 14.3 percent and provided a record 22.7 percent of all guts. Gifts from
nonaluooni/ae individuals edged past those from alumni/ac for the first time since t977-78.
Reports from Participating Institutions shosv that
* Gifts of property totaled $279.5 million, including $116.9 million in company products
U Corporate matching-gift grants totaled $78.8 million
* Alumni/ac gifts to the annual fund rose 5.4 percent; the average gift was a record $113.40 and a iecord
20.-I percent of alumiii/ae responded to annual-fund drives
Independent Secondarg and Elementarg Schools
Reports from the Independent Schools indicate that
* The 451 participants received $280 million in 1983-84 vecsus $276 million reported in 1982-83 by 480
schools
* Gifts from individuals accounted for 75.5 percent of all gifts
I A record 28 8 percent of alumni/ar gave a record average gift of $129.21 to the annual fund, a 6.8 percent
increase over 1982-83
Addiuiooal copies. $20.00 per copy prepaid. Council for Financial Aid to Education, 680 Fifths Avenue, Nesv York, NY 10019
PAGENO="0313"
Voluntanj Support of Education 1983-84
Preface 2
Higher Education Part I. National Estimates 3
Institutional Expenditures and Voluntary Support 4
Part II. Survey Results 6
The Recipients 7
The Donors 9
The Purposes ti
Details of Support by Participating Institutions t3
Independent Secondary and Elementary Schools 72
Institutions Reporting the Highest Totals 74
Appendix Table A. Voluntary Support, Colleges and Universities, 1983-84 75
Table B. Colleges and Universities Reporting in Both 1982-83 and t983-84 76
Table C. Voluntary Support, Independent Schools, 1983-84 77
Table D. Independent Schools Reporting in Both t982-83 and t983-84 77
Table E. Voluntary Support of Higher Education, by Source and by Purpose 78
Table N Estimated Total Voluntary Support of Higher Education, t949-50 to 1983-84 79
A grant from the Reader's Digest Foundation assisted CFAE in meeting the costs of producing this survey. August 1985
PAGENO="0314"
This twenty-fifth Survey of Voluntary Support of Educa-
tion has been jointly sponsored by the Council for Finan-
cial Aid to Education, the Council for Advancement and
Support of Education and the National Association of In-
dependent Schools, svith the cooperation of severalothec
national organizations. It is the latest in a series of studies
of educational philanthropy dating from 1954-55.
The survey was completely restructured in 1983-84 to
reflect the more precise aisd detailed definitions of
sources and purposes for reporting gift income as defined
in Management Reporting Standards for Educational
Institutions: Fund Raising and Related Activities, pub-
lished in January 1983 by the Council for Advancement
and Support of Education and the National Association of
College and University Business Officers. While the pri-
mary definitions are essentially the same as those used in
prior years, the more detailed breakdown of categories
resulted in this surveyvolleciingabouttsvicea.s muchdata
Voluntary support excludes income from endowment
and other invested funds as well as all support received
from federal, state and local governments and their agen-
cies; in editing the survey questionnaires, CFAE deleted
all income from these sources when so islentified by a
cepsetiug institution. Any enrollment figures not tsp-
pliedbytlie colleges and univccsitieswere takenfrom the
hep 1984 Higher Education Llirectorsj.
Most of the data supplied by the participating institu-
tions since 1965.66 have been stored on magnetic tape.
They are therefore availalsle for supplementary studies of
educational philanthropy.
A number of institutions that had participated in the
past were unable to revise their gift accounting and
reporting procedures in sufficient time to reply to this
year's rrstructnrrd survey. A number of other institutions
were not able to supply all of the data requested, but
provided as much as they could. We are grateful to all of
these iisstitntions fsr their efforts and expressions of
cooperation.
Scl,,nli Tstst
910 3,736
451 1,569
Invited
md varr,stirs
1,820
Cnllrgrs
1,006
3 8
to participate
Completed and tahnlatcd qncitisnnsires
Nut tabulated:
Unable to participate
582
3
136
2
Ns ssppsci
Reporting instate se in totals only
Tatat response
2
8
995
31
2
171
-
2
456
33
12
1,622
Response rate
54%
17%
50%
43%
Total amount tabsslatcd
Tmtate or in tstat only
$4,642,891,010
9 62,328,376
$35,246,422
9 353,679
$280,119,367
$ 1,319,799
$4,958,256,799
9 64,801,854
Total amount reported
$4,705,219,386
$35,600,101
$281,439,100
$5,022,258,653
(Reporting Late or in Crand Total Only)
rocK-sEAts cou.rcrs & vNsvERsrriEs(3)
corn- scan corvrcrs & 5JNIVERSSTIE5 (8) Cratz Cal. (PA)
Benningtxn Cot. (VT) 0 2,105,548 Osteopathic Med. & Health Sci., Univ sf(IA)
Emporia St. Univ. (KS) 1,150,736 Regis Cot. (CN(
Free Wilt Rapt. Rible Cot. (TN) 754,207
Illinois St. Univ (IL) 1,198,211 TWO-YEAR COLLEGES (2)
North Carolina, Univ sf.Chapel lull (NC) 24,926,l5t Highland CC (IL)
Oklahoma, Univ of(OK) 13,300,000 Westchester CC (NY)
St. L,,sis Cans. & Orbs, for the Arts (MO) Ll93,523
Yeshiva Univ (NY) 17,700,800 IN0ErENDCNT eRECOLLEGE sCHOOLS (3)
Episcopal Day Och. (TN)
Tsro-YEAI5COLLCCE5 (2) Si. Certende HS (VA)
Lou Mocrii Cot. (TX) 329,479 Storm King Sch. (NY)
Nocihero Esies CC (MA) 24,200
!NDErENnENT PRECOLLEGE sCHOOLs (2)
Rreck Sch. (MN) 670,023
Procter Acad. (NH) 643,776
2~ Preface
Survtsv Partirissatims, 1083.84
lii all those who filled oat itse qnestionnaisr's. lathe iuttitstioni they represent, and to the cooperating
- . - .r ..s.....,:....,.~ ..,......,..,.a.. a"auc Cray ,,.,i Mats r,rre,, their ,`ratit,,,tc.
PAGENO="0315"
Higher Education
National Estimates
* Total contributions to higher education increased by
$440million in1983-8ttoanestimated$5.6billion. The
8.5 percent increase bettered the 6.2 percent rise in
1982-83 and was the ninth successive annual rise in
* voluntary support
* Corporate gifts rose 14.3 percent, a greater increase
than from any other donor group
* Gifts from nonalumni/ae individuals edged past those
from alumni/ac for the first time since 1977-78
* Gifts for current operations rose faster than those lbr
capital purposes, growing by 9.0 percent
Voluntary support of colleges and universities increased
in 1983-84 for the ninth year in a row. At $5.6 billion in
1983-84, voluntary support has more than doubled since
1974-75, the last year in which gifts declined.
The 8.5 percent rise in voluntary support was more
than double the inflation rate of 3.7 percent as measured
by the Consumer Price Index (CPI) andwas greater than
the 5.4 percent rise in the cost of goods and services
purchased by higher education institutions, as measured
by the Higher Education Price Isdex(HEPI) (Sce Charti
and Table 1).
By Source
Gifts from nonalumni/ae individuals, which topped those
from alumni/ac forthe first time since 1977-78, accounted
for 23.5 percent of total voluntary support. Corporate
support continued its meteoric rise, registering a 14.3
percent gain over the 1982-83 total and providing 22.7
percent of all gifts. This is the fifth consecutive year that
corporations have increased their support of colleges and
universities by double-digit percentages. Foundation
gifts comprised a slightly smaller share of total voluntary
support, having dropped from 23.9percent of all gifts ten
Chad 1. EstImated `kluntaty Suppodof Colleges and
UnIversItIes by MaJorSowces and In Total tmltltonnotdottarn)
Total Currentdollarn
AdJuntedforIItgherEduca~ton Prtcetndexll9fll=1005
5,000
4,000
3
74 78 78 80 82
Foundations
84 74 76 78 80 82 84
BustnssuCorporallons
1IL~~
3,500
3,000
2,500
2,000 -
1,500 -
1,000 -
500 -
0
1973. `75' `77' `79- `81'
`83-
74 78 78 80 82
84
1uflIHIhnlluIff~
1973- `75' `77' `79- `81' `83- 1973- `75- `77' 79- `81- `83-
74 76 78 80 82 84 74 76 78 80 82 84
PAGENO="0316"
Higher Education/National Estimates
4~
years ago to 19.3 percent in 1983-84.
Someofthe rise incorporate gifts resulted from asurge
in gifts of products manufactured by the corporations.
These gifts were encouraged by the Economic Recovery
Tax Act of 1981 (ERTA), which provided enhanced thu
deductions for products donated to colleges for use in
research and.tcainiog in research. In the 1983-84 survey
1,118 colleges reported receiving gifts of company prod-
ucts valued at $117 million, almost twice the $59 million
reported io 1982-83. Corporations also gave almost $43
million in other kinds of physical property, such as used
equipment, vehicles, land and other surplus items.
Gifts from alumni/ac resumed their upward climb with
a 5.4 percent increase after a small decline in 198283.
Religious organizations registered a 7.8 percent
decrease in support in 1983-84. The drop in the impor-
lance of gifts from religious organizations is consistent
with a trend seen in the last 25 years. Religious groups
provided 10.3 percent of all private gifts in 1958-59; they
provided 3.4 percent in 1983-84. Many of the private
colleges that were once either church related or church
controlled have since become independent and thus rely
lesson support from their religious affiliation than in the
recent past.
The one-year changes in giving between 1982-83 and
1983-84 are consistent with patterns seen is the last five
survey years. Corporate gifts have more than doubled;
gifts from nonalumni/ae individuals have grown at afastec
rate than gifts from both alumni/ar and foundations. Sup-
port from religious organizations has grown only slightly.
Gifts from alldonor groups escept religious organizations
have outpaced the rises in both the CPI and the FIEPI.
By Purpose
The questions on the survey about donor purposes were
changed considerably in 1983-84, so that the data enl-
Table L Fs6w,utsiI Vulnotarn Sasniort, by Snarer and Purpose (isilSusis nfdnllars)
ar~
978.79 982.83 tsss-54 v ixsa.83 1978.79 sib. to urn
`rov.sLvoLcNTAsus sus'rocr
$3,230
$5_lan
$5,600
+ 8.5
+ 73.4
+ 15.6
Al
Nonxtsmui Individuals
Bssiseis Corporations
Foundations
Religious Organizations
Other
Pnrpnses
9 785
736
556
701
161
291
$1,237
1,100
1,112
1,018
206
397
$1,305
1,316
1,271
1,081
100
437
+ 5.4
+ 10.6
+ 14.3
+ 6.2
- 7.8
+ 10.1
+ 66.2
+ 78.8
+ 128.6
+ 54.5
+ 18.0
+ 50.2
+ 10.8
+ 19.2
+52.7
+ 2.0
-21.6
-
Coereni Operations
Capital Porposes
Prier Indices (1067° 100)
$2,010
1,220
$3,125
2,035
$3,405
2,195
+ 8.0
+ 7.8
+ 69.4
+ 79.9
+12.0
+20.1
Consumer (CPI)
Higher Edseation (HEPI)
206.4
216.9
293.8
308.8
304.8
325.4
+ 3.7
+ 5.4
+ 47.7
+ 50.0
lected were not comparable with those collected in pee- funds public institutions raise ace for current npeialions
vious years. The only estimairs about donor purposes rathee than foe capital purposes.
possible in 1983-84 are for gifts for current operations and
for capital purposes. As more data are accumulated in
future surveys, detailed estimates about changes in the
purposes for which gifts are made will agaiii be possible.
Just over three fifths of voluntary support was desig-
nated for current operations in 1983-84. Prior to 1969-70
less than half of all private gifts were channeled uiutu
current operations. In the firsl half of the t970s, slightly
more than half of the gift dollars went to current opera-
tions; since then more than 60 percent of the fnisds raised
have been designated for cnirent operations. Increased
fund raising by publicly supported institutions is reSlO)ui-
sible for some of this reversal. More than two thirds of the
Institutional Expenditures and Voluntary Support
Vols~otary support is only one factor in the economic
situalion of colleges and universities. College adminis-
trators must be concerned with the impact of enrollment
changesand inflation on totalenpenditnres. Table2 exam-
ines these factnrs and presents some good news.
The long projected eniollment decliuues have not yet
occurred, so that the siudeni population has reeuained
fairly constant for the last ten years. Inflation, as meas-
ured by both the CPI and the HEPI, has slowed since
1980-81, thus lessening the pressures of the previous
PAGENO="0317"
311
E
z
a
E
2
a
-~
II
ill
PAGENO="0318"
6
Surveij Results
* The 1,118 respondents reported gifts of $4.68 billion
in 1983-84, an average of $4184 million per institu-
* The 928 institntions in both the 1982-83 and the
1983-84 snrveys reported an increase in total support
of 9.4 percent. Gifts to doctoral institntions grew by
l2.3percrnt, toallpnblicinstitutionsby 10.3percent
and to all private institotions by 9.0 percent. Corpo-
rate sopport rose 13.8 percent
~ Gifts of property totaled $279.5 million, inclnding
$116.87 million in company pmdncts, $42.96 million
in corporate gifts of other property and $119.67 mil-
lion of in-kind items from all other sources
* Corporate support from matching gifts declined by
2.Spercent to atotalof$78.8 million, but theaveeage
match reached a record $238.82
* Alumni/ac gifts to the annual fond grew by 5.4 per-
cent; the average gift wasarecord $113.40, and a
record 20.4 percent of all alumni/ac solicited gave
I Almost three fifths of all contributions svere madefor
current operations
* Three quarters of all gifts carried restrictions about
their use -
This section of the survey report uses the actual figures
reportrdby the participants toprovide twokinds of analy-
sis: 1) details of the support raised during the year by the
re5pondents-feom whom, by whom and foe what pur-
pose; and 2) changes from year to year and over longer
periods of time.
Analyzing results over time presents difficulties not
encountered in analyses of a single year's results. Many
institutions respond tu the questionnaire every year, but
some participate only sporadically. Meaningful compari-
sons between years require identical groups of respond-
ents-a"core" group ofinstitutions that reportforeach of
theyearscumpared. This group is always smallerthan the
total number of respondents in any single year
The 1983-84 surveyhas additionalcomplicatiuns. Itwas
restructured to reflect the sources and purposes for
reporting gift income undefined in Munugesnent Report-
ing StandurdnforEducationallnstitutions: Fund Raising
and Related Activities, published by the Council for
Advancementand Support of Education and the National
Association of College and University Business Officers.
The questionnaire therefore asked for almost twice as
many details about contributions as in the past; a dunor
group-parents-was added; and the donor purposes
were changed drastically to reflect more accurately fund-
raising activities and university accounting procedures.
These changes made comparison over time even more
difficult than in the past, but in the long run will provide
more useful data.
In addition, the participating institutions are now
grouped according to the National Center for Education
Statistics (NCES) classification structure. This system
placesinstitotionsintohomogeneous groupings, enabling
more meaningful comparisons than in the past. Also, the
data gathered in this survey can now he utilized in con-
nection with other data bases that use the NCES struc-
NCES defines five major categories of institutions:
1. Doctorate-granting institutions: Universities that
are very active at the doctoral level, grantinga mini-
mum of 30 doctorates in 3 or more doctoral-level
Higher Education
II
PAGENO="0319"
Higher Education/Survey Results `/
programs, including first-professional-level medical
degrees.
2. Comprehessice institutions: Colleges and soiver-
sities that have strong pasthacealaureate programs,
but not significant doctoral-level activity, granting a
minimum of 30 postbaccalaureate degrees (includ-
ing master's and some doctorate and first-profes-
sional degrees).
3. General baccalaureate institutions: Those whose
primary emphasis is on geoeralundergraduate, bac-
calaureate education. They grant baecalaisreate
degrees in 3 or more baccalaureate programs or in
interdisciplinary studies (with over 75 percent of
their degrees at the baccalaureate level or above)
and fewer than 30 postbaccalaureate degrees.
4. Professional and specializedinstitstioso: Those that
are baccalaureate and posthaccalasireate institutions
with aprugrammaticemphasis in one area, usually a
professional field such as business, engineering,
medicine, theology or art.
5. Two-yearinatitutions: Sclsoolsthatconfer morethan
75 percent of their degrees or awards for 2 years of
wurkandless than 25percent atthebaccalaureate or
posthacralanreate level. (Institutions with a two-
year sipper-division program do not fall in this cate-
gory, since they offer the Isaccalaureate.)
The institutions in each of these categories are furtlser
divided by their control-that is, private and indepen-
dent or publicly controlled by local, state or federal
governments.
The Recipients
A slightly smaller number of institutions participated in
the survey in 1983-84, perhaps because of the increased
diffirulfy in completing the questionnaire. The 1,118
respondents (20 fewer than io 1982-83) reported good
news, however, recordiog an overall increase of $306.6
million over total gifts in 1982-83 (see Table 3).
The two groups of doctoral institutions-public and
private-each received more than $1 billion in gifts. The
$2.8 billion recorded by these 150 doctoral institutions
represented 60.7 percent of the total gifts to all respond-
ents. Public institutions participated to a larger degree in
the 1983-84 survey than in aoy previous year. Twenty-
eight percent of the respondingfoor-year universities and
colleges were public, and they raised 32.4 percent of all
the hinds. Ten years a go 24 percent of the respondents
Table 3, Voluntary Support by Type of Institution (NCES classification) (000voaird)
1y~,1t,oa,vo, Na, Ao,,,,,t toaiiai,,a N,. A,,,o,,t
I,aiva:o,
ii Gouge
Tail S,ppoo
Na.
Private 57 $1,436,537 $25,202 50 51,595,294
$28,487
+ 13.0
+ 12.3
55
Psblie 90 1,124,748 12,497 94 1,243,743
13,231
+ 5.9
+12.3
83
Private 133 429,606 3,230 135 487,018
3,608
+ 11.7
+ 12.5
127
Public 117 125,039 1,069 124 118,085
852
-10.9
- 3.4
96
Private 434 872,084 2,069 411 861,649
2,096
+ 4.3
+ 2.8
374
Pablic 41 21,720 530 39 25,312
649
+22.4
+29.3
29
Private 119 213,617 1,795 105 194,874
1,856
+ 3.4
+ 1.6
79
Psbtie 20 109,512 5,476 18 116,906
6,485
+ 18.6
+ 2.9
16
743 $2,95t,845 9 3,973 707 $3,138,825
9 4,440
+ 11.8
+ 9.0
539
Public 268 1,381,020 5,153 275 1,504,056
5,469
+ 6.1
+ 10.4
224
Prv:te° 43 24,792 577 42 20,610
491
-14.9
+ 5.4
31
Potslic 84 13,841 165 94 14,637
156
- 5.4
+ 6.5
38
Alt Pcivatr 786 $2,976,637 9 3,787 749 $3,159,445
5 4,218
+ 11.4
+ 9.0
666
All Polslie 352 1,394,861 3,963 369 1,518,693
4,116
+ 3.9
+ 10.3
262
GRAND TOTAL 1,138 $4,371,488 9 3,841 1,118 $4,678,137
9 4,184
+ 8.9
+ 9.4
928
Table 3A, Voluntary Support by Type of Institution old CPAE classificatiss((ooo,oatr,1)
Private Uisiveesilies 73 $1,530,592 $29,967 71 $1,683,947 $23,719 + 13.1 + 12.4 71
Private MesS Colleges 9 20,438 2,271 6 16,147 2,691 + 18.4 + 2.4 6
Private Wows-u's Colleges 77 155,421 2,018 72 156,996 2,181 + 8.1 + 3.4 70
Private Cas-dscatiouat
Callrgv-s 496 1,079,199 2,176 472 1,095,201 2,320 + 6.6 + 4.3 429
Peefessiaoat&
Specialiced Schools 90 185,809 2,085 88 209,136 2,377 + 15.1 + 15.6 61
Total t'rivate Poor-Year 745 $2,971,458 8 3,989 709 $3,161,427 8 4,459 + 11.8 + 9.1 637
P01)1w PosvYear
2660* 1,362,355 5,122 273 1,481,464 5,427 + 6.0 + 10.2 222
Total P,:,ivYeac
1,011 $4,333,813 9 4,287 982 $4,642,891 9 4,728 + 10.3 + 9.4 859
Tss'a-Yrarlostitotiaos 127 37,685 297 136 35,239 261 -12.1 + 5.8 69
r,RANDTOrrAL 1,138 $4,371,498 5 3,841 1,118 $4,678,137 5 4,184 + 8.9 + 9.4 928
0Pigacrs stiffer slightly from those psblished hs Iso 1982-83 soevey report berasse afisstitstiooat eeelassifiratioss. l)etaih do oat
always add sits to totals Isrraose ofeosisdiog.
00Dilfers from the osimbre shasro is Table 3 breasse of dd$eeeot classifivatiso criteria is the two systems.
PAGENO="0320"
8 Higher Education/Survey Results
were public institutions, and they raised 22 percent of the
gifts.
Comparisons of the total amounts reported by all insti-
tutions in 1982-83 and 1983-84 can he misleading because
of differences in the number and characteristics of the
respondents each year. Calculating average support per
institution in each class partially corrects for these dis-
parities. The results are shown in Table 3.
In contrast tothe last several surveys, when support for
public institutions surged, it was the private institutions
in 1983-84 - notably the doctoral and comprehensive
colleges - that reported double-digit increases in aver-
age support per institution. The only groups of public
institutions reporting such increases in averagesupport in
this survey were the general baccalaureate and the spe-
cialized institutions, both of which are very small. Gener-
ally, average support for the private institutions ranged
between two and three times the average foe the public
institutions. The only exception was the public special-
ized institutions, many of which are medical and engi-
neering schools, which raised three times the average fur
the private specialized institutions.
The changes reported by the "core" institutions in
general follow the change patterns of the averages for the
total group of respondents. Analysis of the two groups that
differ the most - the public doctoral and the public
specialized - reveal some interesting factocs. A 22.1
percent increase in corporate support and a 19.2 percent
rise in giftsfrom noualnmni/ae individuals fueled the 12.3
percentinceease in suppuetforthepublicdoctoealinstitu'
ti005. An 8.2 percent decrease in gifts from nonalumni/ae
individuals, sogetherxvith minimal increases in corporate
and foundation support, were responsible for the suxall
growth in total support for the "core" public specialized
institutions. A doubling of gifts from nonalnmni/ae indi-
viduals, coupled with a 38.1 percent rise in foundation
support and a 30.9 percent growth in corporate grants,
produced the large increase in support of the public
baccalaureate institutions.
Comparison of the results in Table 3 with those shown
in Table 3A, which shows the responding institutions
Table 4, Peereotagc Changes in Average Voluntary Support per Institution by Sourer, 1982-8
3 to t9S3-S4
Aismui . ~ 9 ~
+5:
Nooatsimoi todividoals ~ + 10.4
+t3.l
Foaudatiosu + 7.3
948,5t5
+ 6.3
Corporationi ~
+ t4.6
+ t3.8
Religiousi Oegaoizatioui `~3~r° - 7.9
295,351 327,598
+ 8.2
Other
~ t0.9
$3,841,386 $4,194,381
+ 6.2
+ 9.4
928
GRAND TOTAL (1000) (100.0) + 8.9
tostitotizus
1,138 1,118
Reporting
(Figueci iu paeenthesoi ihosv peuceot of total in each colsimu.)
Table 5, Alnsnuilae Support of Colleges and Univeesitieu and the Annual Fund
t973-74 988 2,277,520 $t57,2t4,30t 9 69.03
1974-75 $86 2,371,331 165,955,732 69.98
1975-76 991 2,527,867 t85,436,65t 73.35
t976-77 t,006 2,659,3t3 2t0,t30,479 79.02
t977-78 t,065 2,695,689 223.633,074 82.96
t$78-79 972 2,763,t27 266,914,036 96.60
1979-80 1,019 3,0t5,052 299,247,120 99.25
1980-81 928 3,177,233 311,858,949 98.15
1981-82 1,101 3,582,677 373,184,415 104.16
1982.93 1,138 3,788,805 4t4,202,3t4 110.17°
1983.84 1,118 3,830,417 436,545,t79 113.40°
17.4%
17.4
17.6
17.5
17.6
17.9
t8.t
18.6
18.9
19.70
20.4°
9 396,865,269
377,376,344
46t,09$,585
509,125,585
552,621,466
620,347,430
725,540,650
821,135,159
1,051,897,044
1,047,173,983
1,089,575,049
°Size of average gift and solicitation cffvctis'coesi based only ou reopznseiczutainosg all data.
PAGENO="0321"
Higher Education/Survey Results 9
classified as in past sorvcys, illnstrates the advantages of
the NCES classification. According to the resnlts in Tolde
3A, for esatuitle. snpport for all the fonr-year pultlic insti-
tutions increased hy 6.0 percent in t983-84. Toble 3
reveals, however, that this single percentage masks wide
variations in the changes reported ity the canons groups
of ptIl)lic institistiutts, ranging from a decrease of 10.9
percent to increases of 5.9, 19.6 and 22.4 percent. Simi-
larly, tlte 12.1 ttercent decrease registered by all Iwo-year
instittitions results fnnn a nods larger decrease f(tr the
private than for the tuhlie institntions.
The Donors
As groscth in cor~t()~at~~ sts~)port has ontpacrd rises in
ststtpsrt from otiterdonur grnttps in the last fewyears, the
average corporate support per institution now more
nearly equals the averagr support from alutnni/ar and
umutt i/ar indis-iduals. Eacis of ttmese titrer major
donor gruu~ts provided (seer 22 percent of all voluntary
snpltort itt 1993-84, as can be seen in Table 4.
Average stmpp~rt iter imtstittmfkttm from nonalutttni/ae
ittslivimtimals surpassed acreage support from alusuni/ar in
1983-84 fir the first time since 1977-78. Private institu-
tiutts received over 70 ltercemmt of nonalumni/ae gifts and
tourr hams three quarters tsfalumnni/ae donations. Corpo-
rations, ott the mttlter hand, divided their grants altuost
ettually lsetsveen )stblic and Isrivate institutions, wills the
private colleges reeeivissg ttssly a slightly larger share in
1983-84. The divisiost (sfcm)rpstrate support betwerms pri-
vate atsd 1tublie institutions has elsanged sultstantially is
the bitt 25 years. Its 1958-59 77.3 percent of corporate
gramtts were tnade to private iststittttistns. The allocatiosm
has drtspped steadily since then, reaching the 52.8'per-
cent share reported its this survey. Fnssndatiosms, no the
other hansl, have oppssrtinned theirgcants eummsistently
over ilte years, chanttrling ahomst 70 percent In private
institsstisstss.
The wide variatiun in change patterns betw ceo average
gifts fr(ttn rehigiutms orgassizations for all respotsdrtmtn in
1982-83 and 1983-84 and fnr tIme "core" grtstsp stf institu-
tittns respmmndingin ltnth yearsvividly illustrates the prnb-
letns causeml Isydifferenees in the esperiettces and charac-
teristics sf survey participants in tlse Iwn sasuples.
Table 0. Am
mni/ae Sopp
net of Aonoat Food by Ty
pe uf tnstitntiuo, 198
2-83 ammd 1983-84
t%icase
27.9%
8165.98
28.5%
9178.38
+ 7.5
Psddic
14.9
88.11
15.7
63.17
- 5.3
C5i~icate
21.8
99.37
22.1
107.55
+ 8.2
Puldie
10.8
42.61
12.2
42.71
+ 0.2
Private
26.5
109.02
27.4
112.00
+ 2.8
Pslslie
18.5
56.26
19.4
62.12
+1(1.4
i'ricatss
21.8
95.54
21.5
1(11.62
+ 6.4
Psdslie
22.4
72.58
24.6
91.10
+25.5
-
Peicate
25.6%
8127.92
26.1%
$135.83
+ 6.2
i'uhlic
14.2
78,79 ,
15.2
75.2.1
4.4
Pricste
14.9
66.59
12,7
60.39
- 9.3
Psiblie
5.6
36.34
6.0
157.00°
°
Alt Pricate
25.4%
$127.20
25.6%
$135.06
+ 6.2
Alt Public
14.1
78.56
15.1
75.60
- 3.8
cnusn TtrrAL
19.7%
$110.17
20,4%
9113.40
+ 2.8
sOne isstitstissm eepssrtedasinglegiftef$250,000alougsvith srs'eralsthrrlaegegills, as paetsfavreyssccesshmleampaign. Euclodiug
these estrosedinary data, the ocerage gift would he $20.37 and the year-to-year change -43.9 percent.
Special Forms of Giving pie or even qssaslrstple tIme value of their emssployees' gifts
0-' d ` h d `d d `1 b to higher education. Gills of cnsnpuntj presductu, encour-
y1' wh hg ft w m d t th m Th if d g d hy th Ecu m R y T A I f 1981
has lsmmsglseen a technique for gaining alumni/ar support. utlerPhynse1properts~ are now popular sources of spe-
Beqtmeotu and various forms of deferred gifmu, such as 5 g gs. - 0 er is
charitaimle remnaiudertrsmsts, pooled income funds and gift A
annuities, ace estate plaooing methnds encouraged by 0 U
cttlleges and universities. More than 1,000 corporations Tuble 5 presents data about annnal funds since 1973-74.
have estalslished mutehing-gift progrumathat double, in- Allhough the number of institutions responding In the
PAGENO="0322"
10 Higher Education/Survey Results
Tahl~ 7.
sueveyhasvariedovertheyears, the numberofalumni/ae
donors totheannualfund, thetotalvalueoftheirgiftsand
the average gift have grown steadily each year. The 20.4
percentalumni/ae response rate recorded in 1983-84 isan
all-time high. The annual fund has garnered about 40
percent of all alumni/ac gifts consistently over the years.
Alumni/ac of various classes of institution respond dif-
ferently tosolicitations foe theannualfund, ascan be seen
in Table 6. Historically, private colleges and nniveesities
have relied more heavily on annual-fond drives than have
public institutions, and four-year institutions conduct
these drives more often than do the two-year institutions.
Theaveragegiftand the response rateofthealumni/aeaee
therefore generally larger at the private colleges than at
the public colleges.
Bequests and Deferred Gifts
Bequests and deferred gifts accounted for27.3 percent of
total support from all individuals in 1983-84. Prior to
1979-80 bequests and deferred gifts averaged about 35
percent of all gifts from individuals. Since then they have
averaged about 28 percent. They tend to be somewhat
"lumpy,"however, becauseofthe unpredictability of very
large bequests.
Matching Gifts
Corporate ftinds matching employee gifts to higher edu-
cation institutions havebeengeowingin importancetothe
colleges. In 1966-67, when this surrey started collecting
matching-gift data, grants from this source were 2.0 per-
cent of all corporate grants. They reached 8.6 percent in
1982-83andapparentlyretrrated slightly in 1983-84 to7.4
percent. This figure may not be completely representa-
tive, however, since a number of institutions which re-
ported matching gifts ofovee$3 million in t982-83did not
furnish matching-gift data in 1983-84. The importance of
matching-gift moniesvaeiescoonideeablyaceordingtothe
type of institution (see Table 7). As with the annual fund,
matched gifts aeq larger and generally a more important
source of funds for the private institutions than foe the
public institutions. Matched gifts also represent a much
targerprupoetion ofcorpoeate grants to the private liberal
arts colleges than to other types of institutions.
1$peaftnft(ofto,,
An,,unt
h~o,gt,
Mact,nt G50s
Sun ,,t
AmnOe
Mach
1Oat
Cu-~u,n)n
Soppoo
MacSing Gifts
a a Peon,) ot
T,,GtC,,,p,,,asn S,,p~,no
Private
Pnhtie
$24,107,009
15,599,400
$262.74
189.95
9 351,617,198
424,534,750
6.9
3.7
Private
Puhtie
tO,309,670
1,967,030
238.87
176.85
71,647,085
34,623,282
14.4
5.7
Private
Public
spr~Ai:ru
Public
21,498,560
334,360
3,411,884
1,182,415
282.63
269.83
193.34
176.22
93,286,5t9
6.024,t49
40,531,835
30,335,226
23.0
5.6
8.4
3.9
Private
Public
$59,327,123
19,083,205
$539.42
188.68
557,092,637
495,517,407
19.7
3.9
Private
Public
308,540
37,488
155.53
234.30
2,614,004
5,225,732
tt.8
0.7
Alt Private
Alt Public
$59,635,663
19,120,693
$258.54
188.76
$ 559,696,641
500,743,139
tO.7
3.8
GRAND TOTAL
$78,756,358'
$238.82
$1,880,439,780
7.4
1982.83 CRAND TOTALS
$50,882,184
$216.72
9 941,556,891
96
nThf s figure
1982.83, did not furnish
maynotbrromptetrty representative, sinceasumherofinstitotioos, which reported natchinggiftsofovee$3mittiou in
matching-gill data in 1983.84.
Company Products and Other Pcoperty some institutions 1)00k in-kind gifts at a nominal value of
$1 each.
Data on gifts of company products and otlsee propeety Reported gifts of company products almost donhled in
were sought for the lest time in the 2982-83 survey, and 1983-84, perhaps in part lw-cause of better institutional
more details were collected in the 1983-84 survey. The record keeping and reporting procedures. Timing could
results are presented in Table 8. Gifts-in-kind from all also account fssr wine of the increase. A grant commit-
sources amounted to almost $280 million, or6.0 percent nentsnavlwsnad.-inooeacath.-oacyear,trottheproprrty
of total voluutary support in 1983-84. They consisted of sot received and reported until the fohlosving academic
$116.87 million of company products, $42.96 million of year Rctvsrts about these gifts c-an therefore vary widely
other property from corporations and $119.67 soithioo of from \cisc )s)
in-kind items from all other sources. These totals do not Cilis of csonpany products, tssgether with gifts of other
represent the foIl value of all these gifts, however, since props-etc boos corporations, node up 15.1 percent of all
PAGENO="0323"
Higher Education/Survey Results iii
corporate support. The average size and importance of
such gifts to the colleges again varied according to the
type of institution. More than three qssarters of all corn-
panyproduct gifts assd two fifths of corporate gifts of other
property went to doctoral institn~tiuns. In several in-
stances larger amounts of property were given to public
institutions than to peivate institutions.
Colleges usually report product gifts at market value.
The tax deduction taken by the donor corporation, how-
evee, is less. It is either manufacturing cost or half the
difference beiween mannfactnringcost and marketvalue,
if the donated product is for research or training in re-
search. Consequently, college reports of company prod.
net gifts will be higher than corporate reports.
Gifts of property from noncorpoeate sources amounted
to3.2 percent of gifts from all sources other than coepuea-
tions. Theprivatecomprehensiveaud generalha~alas~ee-
ate institutions got more property gifts from noncorporate
sources than from corporate sources. The privatedoctoral
institutions received more property frons corporations
than from othersources. The publicdoctoralandcompee-
hensive institutions together received the lion's share of
property gifts to public institutions from other sources-
81 percent. Overall, donorgrosps otherthan corporations
split their property gifts almost evenly between public
and private institutions.
The Purposes
Gifts for current opeeations accounted for almost three
fifths of all voluntary support in 1983-84, and more than
two thirds of those gifts werechanneled into specificnses,
as shown in Table 8.
Respondents were asked to provide details about the
restricted uses for both current-fund and capitol gifts,
Table 10 presents the results foe those institutions that
could provide the data. The amounts eepotted represent
93.8 percent of all gifts for current operations and 87,1
percent nf all funds given for capital purposes, Both are
large enough shares In provide valuable insights tutu how
donors want their gifts used.
Research, particularly fur current operations, was the
mostpopulat:object of restricted gifts, with 2.5.3 percent.
Student aid was next, receiving just over one fifth of the
Table 8, Gifts of Property by Type of Institution, 1983-84
Crop,vy Pvd,,vt, Copv,,tk,o, .6110r1,oc So,,,,,
A,v,,,v5 Si,r vICA Anoot Si,o tfCi0 Aot,ot SAc ,,fCiS Taxi
$ 41,282,250 $ 88,619 9 2,228,891 $11,430 $ 26,049,248 8 3,208 $ 69,560,389
48,144,153 30,452 15,503,300 14,661 44,370,498 4,608 108,017,951
3,036,199 9,763 4,432,639 4,772 13,757,031 3,827 21,225,869
5,382,693 8,094 7,m5,513 8,348 9,074,068 4,222 22,362,274
4,435,571 5,508 6,675,518 11,111 14,569,400 1,938 2,5,680,579
1,102,661 5,807 1,200,282 6,374 2,864,082 4,566 5,167,025
5,744,547 29,459 2,600,903 13,270 1,377,014 2,387 9,722,46.1
4,699,032 142,395 631,069 16,181 660,763 4,437 5,990,864
Private
Public
Private
Pal,liv
Private
Psbtic
Private
Public
Public
Private
Public
All Private
All Public
1982-83
$ 54,498,567 8 29,969 $15,937,951 9 8,262 9 55,752,783 9 2,847 $126,189,301
59,328,539 24,059 25,240,164 11,618 56,969,411 4,535 141,538,114
135,525 2,606 74,299 1,327 5,391,155 3,848 5,600,979
2,905,060 10,927 1,707,198 7,066 1,561,268 2,036 6,173,526
$ 54,634,092 9 28,170 $16,012,290 9 9,062 9 61,143,938 9 2,855 $131,700,280
62,233,599 22,952 26,947,362 11,2.14 58,530,679 4,449 147,711,640
$116,867,691 $29,427 $42,959,612 9 9,770 $119,674,617 5 3,488 $279,001,920
$ 58,943,482 9 98,460,254 $157,403,736
TableS. Percentage changes in Average Voluntary Suppers per Institution by Purpose, 1982-83 to 1983.84
%Ctuugo
%Cha,,go
Unrestricted
Ressrieted
9 831,844
1,388,027
9 775,323
1,641,597
- 6.3
+ 18.3
- 3.5
+ 17.4
TOTAL
$2,219,871
$2,420,620
+ 9.1
+ 9.8
CAPITAL rcnrosns
$1,621,515
$1,763,458
+ 8.8
+ 8.8
GRAND TserAa,
No. Institutions Repoeting
$3,841,386
1,138
$4,164,381
1,118
+ 8.9
+ 9.4
928
PAGENO="0324"
12 Higher Education/Survey Results
restricted monies. Other restricted hut unspecified pur-
poses received almost a quarter of the restricted gifts.
The ways in which gifts were restricted in both public
and private institutions were remark0bly similar.
Size of Gifts
Another first in the 1983-84 survey was the collection of
data on gifts from individuals for current operations that
were under $5,000 or of $5,000 or more. Participants
provided these breakdowns for amounts equaling almost
threeftturthsofallgiftufmm individualuforcurrentopera-
tions. The results are presented in Tabk 11.
Gifts of $5,000 or more numbered just 0.4 percent of
thesegifts, butprovidedmoredollarsthandidthesmaller
gifts (twice as much moneytbrthe privatedoctoral institu-
tions). In all other groups except the public doctoral and
public two-year institutions, the smaller gifts provided
more total funds than the large gifts.
Table 10. Support with Restetetlons units Use for CurrentOperations and for Endowment,
for Institutions Reporting these Data, 1983-84
Do,,,, C,cootopnulom-Resxlctnfl5aenns Eodoenmt-tesuttedcesofhmne Cad
Pa,poses `acute PAblic Total POoste Public Total Total
Academic $146,653 $t3t,838 9 278,491 9 62,216 9 23,999 9 86,215 9 364,706
Divisions (16.4) (15.9) (16.2) (10.3) (11.3) (10.6) (14.4)
Faculty and 32,287 16,222 48,506 117,231 40,876 158,108 206,616
Staif Compensation (3.6) (2.0) (2.8) (19.4) (19.3) (19.4) (8.1)
263,852 329,557 593,408 24,499 23,805 48,304 641,712
ltesearc (29.5) (39.8) (34.5) (4.1) (11.2) (5.9) (25.3)
Ptablic Service 7,201 40,126 47,328 4,016 1,448 5,464 52,792
and Extension (0.8) (4.8) (2.7) (0.7) (0.7) (0.7) (2.1)
14,891 9,610 24,501 18,570 3,744 22,314 46,815
Lsbsuey (1.7) (1.2) (1.4) (3.1) (1.8) (2.7) (1.9)
Operation O5df 36,475 8,770 46,245 16,293 6,500 22,794 69,039
Masntenanceo (4.1) (1.2) (2.7) (2.7) (3.0) (2.8) (2.7)
Student 149,434 114,314 262,748 197,140 63,592 260,732 523,480
Financial Aid (16.6) (13.8) (15.3) (32.7) (30.0) (32.0) (20.6)
Other d 244,495 176,180 420,675 162,979 48,070 211,050 631,724
(27.3) (21.3) (24.4) (27.0) (22.7) (25.9) (24.9)
TOTAL $894,288 $827,616 $1,721,904 $082,944 $212,035 $814,979 $2,536,884
No. Institutions Reporting 626 308 934 562 223 785
Total as % of
Restnctedlopport Reported by ~ 93.2 93.8 86.8 88.2 87.1 91.6
(Figures in parentheses show percent of total in each column; dollars lo thousands; details da not always add up to totals
because of rounding.)
Table 11. Gifts from Individuals forCurrent Operations Under $5,tOO and $S,000or More, by Type of Institution, 1983.84
Gifts LJtdctSS,000 Gift, of$5,0000r Mote
A,u000t No. of Gifts Aooast No. of Gifts
Private 0 90,586,302 728,911 $205,420,713 4,701
Public 71,833,481 740,790 81,807,887 2,820
Private 49,237,993 461,296 32,581,345 1,565
Public 18,167,653 266,549 4,440,798 277
Private 102,483,053 879,439 62,229,586 4,755
Public 5,072,599 58,505 452,308 44
5s'E~~ED 21,158,246 187,931 8,976,316 569
Public 6,211,329 43,154 ~ O0~7 l7t
Private
Public
$263,465,594
101,285,062
2,257,577
1,108,908
9309,207,960
91,156,080
11,590
3,512
Pris'iate
Public
2,782,918
626,025
51,744
7,473
634,961
793,434
61
20
Alt Private
All Public
$266,248,512
101,911,087
2,389,321
1,116,471
9309,842,921
91,949,514
11,651
3,532
COAND TOTAl.
$368,159,599
3,425,792
$401,792,435
15,183
PAGENO="0325"
Details of Support b~ Participating Institutions 13
Doctoral Inntitntionn -Prinate
14
Doctoral Institutions- Public
16
Cumprehennite institutions - Prin'ate
18
Connprehensin.e Institutions - Pnblic
24
General Baccalanreate Institutionn -Pris'ate
28
General Baccalaureate Inntitotions - Public
44
Profennional and Specialized Isstitntionn - Prinate
46
Professional and Specialized Institutions - Public
Symbols
NA Not Atailable
* Book Value
Technical Notest
A. In thelisnlngon the follonnIng ages, Column 27does not shuocthe total opeeatiogeupendltaeenofthe
cc eting Institutions; it esolosles the o eatiog costs of ducoltocles, dlolog hahn, student stones, and
othee"auslhlseyenteepnlses' so sell as all outlaysofucapital notate.
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ounspusent professional schools of maine InstitutIons ate also listed sepsestely.
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13.002 51.302 2,199 1.736 9S6 233.971 406.913 NA 0 NA 05.094 2.616.929 6.742.100 222 CA THACOEN SCHOOL
2.000 2.175 3.043 6.S20 1,036 91.711 192,503 0 0 0 14.615 3.696.005 2.769.399 572 NA THAYOR ACAOE9T
3.029 3 4.567 4.061 551 63.017 103.357 0 5 0 2.667 1.012.000 2.030.000 24S NI TILTON SCHOOL
O 3 2.618 2.618 933 lo.293 162.460 0 5 NA 5,94~ 3.600.003 8.030.000 665 09 10699 HILL SCHOOL
3 0 96 0 0 0 0 0 0 2.363 0 931.004 7.528 199 96 TOWER SCHOOL
5#000 0 300 90 9 S83 91.943 0 0 NA 2.971 NA 0 530 NT TOSS SCHOOL
O 0 1.336 1.336 190 11.095 139.717 0 1.100 0 9.410 9.627.334 5.954,793 396 CA TOWN SCHOOL FOR NOES
O 0 HA NA 4 470 33.643 0 3 0 0 66 S 370 TO TRISITT EPISCOPAL SCHOOL
006.135 3 752 SSS NH 3.310 95.630 66 0 15.000 630 1.196.979 701.937 414 MI. TN OMIT? PREPARATORY SCHOOL
0 0 48 0 3 0 0 0 0 0 0 0 1.629.914 1.340.876 456 IX TRINOT9 SCHOOL OP MIOLANO
0 0 650 450 57 6.530 51.060 0 0 0 4 0.250 NA 226.S62 166 NT TUXEDO PANS SC600L
50.364 0 4.005 6.006 1.041 260.286 600.421 0 1.SOO 6.300 20 10.903 5.006.667 7.903.617 910 80 UNOIEMSITI LI6GETT SCHOOL
91.873 NA 4.065 3.930 1.739 366.903 651.460 0 4.050 21.500 47 37.780 6.666.423 5.413.000 769 09 0509965109 SCHOOL
$50,707 0 7.100 3.000 901 13S.930 299.852 0 0 0 20 10,038 3.792.256 4.660.000 71? Al OSAIVEESIT? SCHOOL OP MOLAAON SE
11.003 0 $80 590 175 16.925 63.433 0 0 0 6 1.320 932.020 359,080 176 NJ VAIL-O2AME SCHOOL
0 0 520 520 24 11,397 45.631 0 0 0 0 0 921.991 6.801.979 103 P6 HALLET SCHOOL OP L000$0E9
0 3 1.099 925 267 39.909 117.501 0 0 16.105 8 2.26S 1.224.059 170.000 112 AL 98909 OALLEI SCHOOL
2 3 NA 0 3 3 0 0 0 16.603 0 0 2.640.172 716.974 045 80 1688040 ACADEMY
1.003 0 2.330 0.089 964 139.630 041,300 0 0 96 44 04.171 1.937.066 2.822.762 2H6 VA VIRGINIA EPISCOPAL SCHOOL
O 0 123 129 39 491 46.065 0 0 0 0 0 703,38? 22,362 196 NC WALLACE O'N2AL DAT SCHOOL
6.300 0 3.279 3.275 303 43.306 299.801 10.196 0 18.436 18 20,560 3.021.659 2,190.996 299 60 LATLANO 6060889
200.500 40.767 2.043 0.543 798 122.109 160.203 0 0 0 0 6.600 1.607.250 1.700.000 249 TO 8868 SCHOOL
3 5 1.992 1.990 91 5.900 60.020 IA 120 NA 0 0 2,081,512 961e651 723 TN 4288 SCHOOL OP NAONHOLLE
0 1.300 1,500 199 20.840 66.991 0 0 0 10 2.090 NA 149.064 122 85 AEST NOTT 1009AM ACASEEY
0 0 3.36? 3.042 1.333 143,014 282,090 NA NA 90 85 19.713 4.117.552 17.758.420 365 01 A2STERN RESERVE ACADEMY
0 0 2,300 2.339 591 33.566 669,045 0 0 70.000 13 3.093 3,740.960 5SO,000 685 CAAESTLANE SCHOOL POE GIRLS
3 86 2,40? 2,370 802 133.060 099.05? 0 0 25.997 132 34.582 0.061.531 6.867.018 341 CT AESTNONSTEN S0000L
23.300 0 7,125 6.37? 2.383 200.304 53H,005 0 0 7,700 110 0,431 9.000.063 11.216.012 1.691 GA HRSTVINSOER SCHOOLS
731.340 0 0.933 2.I7S 1,573 292,317 370.341 0 0 34.490 30 20.007 2,069.326 S.269.56N 172 CT 69100899 SCHOOL
0 0 2.200 2.200 722 67,062 166.13$ 0 0 27 5.930 66 2,000,000 350 CA AESTROO6E SCHOOL
07.298 516,473 6.346 5,321 1.939 843.290 263.779 0 0 55 16.106 4,261,131 10.000.000 622 PA 4ESTTOAN SCHOOL
1.000 0 2.600 2.400 601 22,03? 125.943 0 6.000 13 T.64S 2,682.500 677.511 366 NO AHEELER SCHOOL
MA NA 301 073 23 3,760 20.6S5 NA 06 IA 06 46 73,503 200 #0 WHEELING COUSTNT OAT SCHOOL
2 0 410 250 7 070 63.383 0 6.000 10 5.920 925.101 63,111 240 CT AOOT8T SCHOOL
2.000 0 1,307 1.808 24? 14.635 ISS.?04 0 0 0 30 12.640 1.311.211 411.034 11 2NIA001HHDONTAON SCHOOL
0 0 26? 247 A? 0.571 105.671 0 0 0 HA 1.000 NA 0 70 COAIOT1HIA SC900L
0 0 330 310 176 9.518 122,966 0 0 0 4 H0O 475,260 54.927 71 80 UOITPIELO SCHOOL
74.079 NA 3.S1O 3.246 1.034 179.70? 250.392 0 #6 5 102 25.374 3,636.192 6.800.882 770 PA 800.0.069 PENN CHART16 SC000L
3 0 2.602 2,102 975 3.721 20,003 S.000 0 40.000 14 2.470 022.147 223.642 219 CT WILLIAMS SCHOOL
75.951 $5 2.52? 2.307 596 871.164 660.593 0 0 0 50 22,404 1.0S9.4S6 9.659,170 0 PA AILLOANSON P824 SCH. MMCI. 13.
260.194 0 7.000 6.800 1.666 191,168 310.917 5 0 0 02 27,144 4.356.590 4.787.197 101 EA AILLOSTON NORTHAMPTON 300.
5.563 0 2.000 0,792 916 56.331 141.630 0 0 3.310 26 2.486 3.096.521 2.220.322 647 OEAOLH ONGTOA PRIEHOS SCTOOL
0 0 NA 0 0 0 0 0 0 0 0 0 NA 0 178 80 AILSON SCHOOL
6.010 0 2.365 2,365 846 02.090 133.37? 5 0 956 26 6.821 2.443.423 1.34O.3SO4N7PAAOICOEST2N -THURSTON SC900L
374.45? 0 5.092 3,71? 2,265 434.110 708.513 0 0 0 97 33.139 6.961.730 97.606.148 364 HA L000NEREY FINEST SCHOOL
NA MA 2.205 1.900 701 18,789 123.086 0 0 0 11 3.075 NA 29,000 110 IL 0000LANOS ACAD. SACN2O HEART
90.903 0 1.643 1.310 563 53.010 135.S33 0 66 NA SN 12.397 1.020.077 338.444 201 CT WOOSTER SC000L
27.192 0 5.619 16224 1,129 93.201 141,024 0 24.608 0 47 6.403 3.429,413 1.370.171 405 NH WORCESTER ACAEHHH
0 0 650 610 156 46.463 165.76? 0 0 5 0 0 932.932 0 66 006169068 ROSE SCHOOL
66.303 NW 7.819 7.269 1.650 110.097 179.137 17.208 0 9.070 47 14.151 3.199.100 6.143.300 636 PA 9109164 3 EIINART
PAGENO="0384"
Independent Secondary and Elementary Schools
Surve~ Results
* The45lschools inthe surveyreceived$28Omilllonin
gifts in 1983-84, an increase over the $276 million
reported by 480 schools in 1982-83
* The 1983-84 average per school of $621,107 was a 7.9
percent increase over the 1982-83 average of
$575,462
U The year-to-year increase of the 371 schools In both
the1982-S3and the 1983-S4surveys was 6.6perceot,
which outpaced Inflation
* Gifts from individuals accounted for 75.5 percent of
all gifts. Over half of corporate support came from
matching gifts and gifts ofcompany products orother
property
* A record 28.8 percent of alomnllae responded to
annual-fund drives and increased their overage gift
by 6.8 percent to a record $129.21
A total of 451 schools participated in the 1983-84 survey
and reported rereiving $280,119,367 in gifts, an increase
over the $276,221,734 received by the 480 schools in the
1982-83 survey. The overage of $621,107 per school in
1983-84 represented a 7.9 percent increase over the
$575,462 average in 1982-83.
The 1983-84 surveywas restructured in severalways. A
new donor group-parents-was added; more details
about the nature of gifts were asked fur; and the donor
purposes, especially for capital gifts, were revised to
reflect more accurately the way funds are raised and
school accounts are kept.
For the first time the schools are being grouped with
their peers, using the following NAIS classifications:
Day elementary
Day elemestary/accondary
Day secondary
Day/boarding-are primarily day schools that enroll
some boarding students
Boarding and Boarding/day-enroll boarding stu-
dents only, in thefirstease, orenrollsomedaystudents
in the second
These five classifications are then further broken down
according to the sex of the students. This restructuring
will help development officers and school administrators
to evaluate theirartivities more effectively and also more
easily tocompare results with peers andwith otherschool
groupings. The first result of'this restructuring is the
analysis presented in Table 12.
The most successful schools in garnering voluntary
support were the eight reporting Boardingand Boarding'
day sclsoolsforgirls. Theseaveragedover$2millioneaeh.
Table 12, Total Voluntary nu~,,ss hyTypo of Indopendoss School, 1983-84
t~pe of Sohoot G/,IS BoyS
Cwi~,lo,st
Tout
- $ 1,404,789
Day Elementary (3)
5 11,039,925
(00)
9 12,444,714
(63)
Day Etementary/ 17,456,516 11,375,459
Secondary (34) (15)
67,570,043
(120)
96.402,018
(169)
3,347,389 10,577,754
Day Secondary (8) (16)
8,750,970
(30)
22,716,113
(54)
.
8,817,757 5,540,442
Day/BoardIng (10) (6)
17,317,398
(33)
31,675,597
(49)
Boarding md 16,750,196 18,044,837
BoardIng/Day (8) (18)
82,085,802
(80)
116,880,025
(116)
cssAxD ooma, $46,371,850 $46,043,281
$186,804,228
$280,119,367
(70) (58)
(323)
(451)
(Figures In parentheses show number of schools reyortlng.t
Table 13. Sources of Voluntary Sspport by'l('pe of Independent School, 1983.84
*
l,d/,ldoats
O,ga,tuttoo,
Other
1/.pcofSvhool Ahosni Poess t,dloldtals Fos,dattoss
Sot/gloss
Co,po,atlo,ts O,gmt,atloss
Other
Seer,,
Day Elementary $ 937,715 5 6,580,009 81,891,707 $ 1,614,892
$ 431,186 8 19,420
9 868,885
Day Elementary/Secondary 26,026,145 28,885,934 17,229,837 14,675,697
4,810,571 288,819
4,484,015
Day Secondary 5,066,544 6,144,381 5,562,719 2,882,353
1,837,084 882,628
1,140,404
Day/Boarding 11.465.885 8,ool,746 4,774.330 4,442,147
1,235,809 306,820
1,448.960
Boarding and BOarding/Day 58,361,675 17,829,577 12.719,823 21,740,282
4,134,663 609,516
1,406,089
GRAND TOTAL $101,857,964 $67,442,547 $42,277,816 $45,358,371
$11,048,313 $2,187,203
99,349.153
(Dollars in thousands)
The 18 boys schools and the 80 coed schools in this
category averaged $1 million each. Overall, the 58 boys
schools in allfive categories averagedover $000,000earh,
the 70 girls schools over $660,000 and the 323 coed
schools over $578,000 cads.
The examination of giving by schools its Table 13 also
benefits from the more precise analysis made possible by
the new survey classifications. Parents turn out to be the
most important single source ofgiftsforallthrer groups of
day schdols, although byonlyasmall margin overalumni/
ae for the Day elementary/secondary and Day secondary
schools. Alumni/ar, as expected, led all the ccxl in giving
to the boarding schools.
PAGENO="0385"
(Fig~~resi~~ parentheses shou 0-coot of total in each rotams.t
Meaningful comparisons between two years are diffi-
cult because of the different number and types of schools
in each survey. Calculatissg average amounts received by
each school compensates for the numerical differences
but masks differessees in characteristics. A group of
schools participating in two consecutive surveys is neces-
saryforrealcomparisons. Only thcse"core" schools, even
though a smaller groop ran provide concrete data on the
nature of the year-to-year changes in voluntary support.
A total of 371 schools served as the "core" group in this
survey(see AppendixTable D forcompleledetailsoftheir
reports). They recorded an increase of6.6percent in total
support in 1983-84 over 1982-83. This increase, greater
than the 3.7 percent inflation rate as measured by the
CPI, was good news for the schools. Gifts from alumni/ac
rose 12.6 percent and from other individuals 8.3 percent.
Foundations and corporations, on the other hand, both
decreased their support-by 2.4 percent and 5.8 per-
cent, respectively. Contributions for current operations
grew by 14.2 percent, while those for capital purposes
remained almost the same. Support for boys schools
surged by 18.9 percent; the coeducational and girls
schools each reported much smaller increases.
Alumni/ac gifts tothe annual fund have atsrays been
important to independent schools. to 1983-84 Ihey
totaled $36,679,678 and accounted for 36.0 percent of all
alums:i/ae contributions. More alusnni/ae-28.8 per-
cent-responded to the annual-fund drives in 1983-84
than in any previous year, and they increased their aver-
age gift by 6.8 percent to a record $129.21. Individuals
often use bequests and deferred gifts, such as trusts,
pooled income funds and gift annuilies, as part of their
estate plans to support independent schools. These gifts
increased in 1983.84, so that they provided 8.9 percent of
all contributions frosu individuals and 6.8 percent of total
contributions to the schools. Curporations contributed to
the independentschools through nuuching.giftprogranss
and hsy making grants of company products and other
physical property, aswellau through cash gifts. Corporate
f:iuds from matched gifts declined slightly in 1983-84 to
The Ten Boarding or Boarding/Day Schools
Reporting the Highest Totals of:
Alunsni/ae Contributions to the Annual Fund
Phillips Exeter Academy (NH) $1,397,166
Phillips Academy (MA) 1,378,960
* Deerfield Academy (MA) 1,057,313
The Hotchkiss School (C't') 908,112
The Lawrenceville School (NJ) 899,402
Choate Rosemary Hall (CT) 7t9,442
The Taft School (Cl') 660,616
The Hill School (PA) 629,615
- Northfletd Mount Hermon School (MA) 628,608
St. Paul's School (NH) 562,236
Gifts for Capital Purposes
The Culver Academies (IN) $3,448,901
St. Paul's School (NH) 3,230,011
Phillips Eseter Academy (NH) 2,882,053
The Lawrenceville School (NJ) 2,813,782
The Kishimiuetas Springs School (PA) 2,720,329
Phillips Academy (MA) . 2,766,734
The Hotchkiss School (CT) 2,277,582
Chuate Rosemary Hall (CT) 2,098,086
Emma Willard School (NY) 1,865,713
The Taft School (CT) 1,810,027
$4,227,369, but gifts of both company pruducts
($1,451,120) and other property ($566,463) increased
sharply. to 1983-84 matchinggifts and propertydonations
accounted for 53.6 percent of all corpucote support of
independent schools. `l'he share in 1982-83 was 44.3 per-
cent. An additional $3,360,715 in gifts of property from
sources other than corporations flowed to the schools.
Because of the differences in the categories for report-
ing donor purposes in the 1983.84 survey, esact compari-
sons with previous years are not feasible. Table 14, how-
ever, presents data about voluntary support for current
operations and capital purposes, by source of support.
Historically, alumni/ac and other individuals have pro-
vided about 70 percent of the private support of the
independent schools. Foundations have been other large
benefactors, donatingabo:st 18 percentofalhsupport. The
Independent Schools/Survey Results f 73
Tabtel4.
VutuntarySupportuflndeprsdentSuhmtsforCurrootoperatisusaedCapitatpm.09sesby$
uorce ufSupport, 1983.84
U - d
e
$ 30,190,611
(35.5)
$31,904,733
(47.4)
$12,206,286
(28.9)
$ 4,651,905
(10.3)
$ 5,221,666
(44.8)
$1,629,214
(74.5)
$2,736,340
(29.3)
B -
ci curt
5,163,060
(5.1)
5,156,549
(7.6)
3,436,209
(0.1)
5,392,240
1,334,051
365,194
2,785,711
TOTAL
41,353,677
(40.6)
$37,121,282
(55.0)
$15,842,495
(37.0)
(11.9)
$10,044,145
(22.2)
(11.5)
$ 6,555,717
(56.3)
(16.7)
$1,994,400
(91.2)
(29.8)
$5,522,051
(59.1)
Property, Buitdiugs
& Equipment
$22,308,232
(22.0)
$15,324,466
(22.7)
$12,171,576
(28.8)
$14,027,901
(30.9)
$ 3,027,266
- (26.0)
$ 70,009
(3.2)
$1,320,802
(14.1)
Enduscmeot-locome
Unrestricted
21,167,326
(20,8)
8,380,277
(12.4)
7,460,597
(17.7)
7,189,417
(15.9)
1,068,142
(0.2)
5,500
(0.3)
1,590,815
(17.0)
Eudsscmeut-Iocome
Restricted
16,361,937
(16.1)
6,402,477
(9.4)
6,924,395
(16.4)
12,958,683
(28.5)
943,773
(8.1)
117,286
(5.4)
854,562
(9.1)
Lo' F d
muns
606,772
( 0.6)
214,045
(0.3)
78,753
(0.2)
1,136,125
(2.5)
54,415
(0.4)
-
60,923
TOTAL
$ 60,504,287
(59.4)
030,321,265
(45.0)
$26,635,321
(/3.0)
$35,311,226
(77.8)
$ 5,093,506
(43.7)
$ 192,795
(8.8)
$3,827,102
(40.9)
GRAND TOTAL
$101,857,964
(100.0)
$67,442,547
(100.0)
$42,277,816
(180.0)
$45,355,371
(100.0)
$11,049,313
(100.0)
$2,187,263
(100.0)
$9,349,153
(100.0)
PAGENO="0386"
The Ten Day or Day/Boarding Schools Reporting
the Highest Totals ols
Alumni/ac Contributions to the Annual Fond
Regis High School (NY) $481,898
Milton Academy (MA) 426,861
University School (OH) 368,805
Pnnahou School (HI) 366,339
The Baylor School (TN) 322,964
The Kinkaid School (TX) 290,545
The Loomis Chalice Sclsuol(CT) 281,513
The McCallle School (TN) 279,267
St. Ignatius High School (OH) 244,953
University Liggett School (Ml) 242,286
Gifts For Capital Purposes
University School of Milwaukee (WI) $2,405,667
St. John's School (TX) 2,099,284
The Brearley School (NY) 2,021,665
The Hockad$y School (TX) 1,952,324
The Kinkaid School (TX) 1,782,311
The Pingry School (NJ) 1,447,515
Polytechynic School (CA) 1,382,728
Dana Hall School (MA) 1,364,759
Montgomery Bell Academy (TN) 1,296,984
University School (OH) 1,282,132
pattern in 1983.84 showed a slight variation. More than
three quarters of all support came from individuals, with
alumni/ac supplying the largest percentage (36.4), par.
cots the nest (24.1), and other individuals giving the rest
(15.1). Foundation and corporategiftsdeclined slightly, so
their shares of total support were also smaller (16.2 per-
cent for ftundations versus 18.6 percent in 1982-83 and
4.2percent versus last year's 4.5 percent forcorporations).
Traditionally, more than half of the gifts to the indepen'
dent schools have been made with no restrictions about
how they are to be used. Combining the totals lbr unre-
stricted corrent-operations gifts with those Ste endow'
ment with no restrictions on the use of its income pro-
duces an approximate measure of "unrestricted" gifts.
They totaled 50.5 percent of all support in 1983.84. Par-
cots and corporations preferred to make gifts without
- restrictionslbrcuerentoperatiotss, whilealumni/ae, other
individuals and foundations favored gifts for capital
purposes.
Furtherbreakdowns of donor purposeswillbe possible
Institutions Reporting the Highest Totals
Harvard University $125,201,403 California, University of-Los Angeles $30834214
Stanlbrd University 111,802,741 Stanlbrd University 29,234.748
Yale University 75,338,008 Massachusetts Institute n/Technology 27,913.654
Columbia University 75,234,748 Harvard University 25,580,322
Cornell University 72,818,654 Illinois, University of 20,957,647
California, University of-Los Angeles 64,076,015 California, University of-Berkeley 18,223,409
Massachusetts Institute of Technology 62,994,928 Wisconsin, University of-Madison 16,329,412
Pennsylvania, University of 60,036,447 Southern California, University of 15,153,481
Princeton University 58.163,839 MIchigan, University of 14,638,604
Southern California. University of 55,000,784 Cornell University 14,334,465
Chicago, University of 54,877,359 Columbia University 13,787,731
lIltuots, University of 53,203,384 Pennsylvania. University of 13,495.453
Wisconsin, University of-Madison 52,469,347 Texas A & M University 13,465,231
Michigan, University of 52,072.055 Minnesota, University of 13,035,510
Texas A & M University 48,147,936 Florida, University of 12,332,047
Minnesota, University of 47,351,681 GeorgIa, University of 12,239,221
Now York University 45,268,695 Carnegie-Mellon Ussiversity 11,107,772
Johns Hopkins University 42,322,416 Duke University 10,955,165
Washington, University of 41,255,381 Rensselaer Polytechnic Institute 10,802,682
Washington University 40,751,355 Missouri, University of 10,549,146
nN0t included are two systems, each °Not included are two systems, each
comprising multiple units: comprising multiple units:
Calit)srnia, University of-Summary 172,638,445 California, University of-Summary 71,614,783
Texas, University of-Summary 106,578,088 Texas, University of-Summary 23,905,491
The Ten Schools Reporting the The Ten Schools Reporting the
Most Voluntary Support: Most Corporate Support:
Phillips Academy (MA) $4,956,755 The Amencan School in Japan
Phillips Exeter Academy (NH) 4,612.826 The Blake Schools (MN)
The Culver Academies (IN) 4,471,808 The Leelanau School (MI)
St. Paul's School (NH) 4.348,128 Forsyth Country Day School (NC)
The Lawrenceville School (NJ) 4,145,777 Punahou School (HI)
The Hntchkiss School (CT) 3.623,430 Phillips Academy (MA)
Choate Rosemary Hall (CT) 3,505,226 Phillips Exeter Academy (NH)
\Voodherry For~xt School (VA) 3,155,056 The Culver Academies (IN)
The Kiskiminetas Springs School (PA) 2.888,888 Choate Rosemary hall (CT)
Deerfield Academy (MA) 2.813,669 Marine Military Academy (TX)
74 Independent Schools/Survey Results
The 20 Colleges and Univeruities
Reporting the Most Voluntary Support:'
The 20 Colleges and Universities
Reporting the Most Corporate Support:°
in the future, as more data are accumulated.
9803,739
417.441
313,444
303,121
283,272
256,169
238,332
187,313
186.267
179.077
PAGENO="0387"
(L6) U;Z ~ ;:~;:; :;:;~; ;:~~ x
::;~~~ ~:~` ~ ~ L9;'t9$ ~ I
62o~~s V9Y~9I$ ~~9DUU6'zU~
~ ~ CL) (C91) - ~ U-
s,,oc'Ls ~ ~ ~ ~ d
;;;;:;~;; ;;~;;;~; ;;;;;;; ;;~;;;;,-;;;;;~ f_I -
V
()p~~)~q) U)CLCfl~P ~ "1 ~LP~9J~ ~~d~iP~pi) -
~INLWOd3d S3WSII3PJNN 0NVS3031103 liv `t81~6I NI (13M333N 1~OddflS AIIVLNm~
~::::~, u::::, ~ ~ II:::::, ))9:))).)) C6:L::LLs~ ~.:L6::L: ~ ~!::::~: ~::~~: ~:::~: !!~::::::: ~:::~: *C~
~O) (C)) )90) (51) ()0) (Z0)
SNOWWISCI) 3fl~flJ
PAGENO="0388"
76 Table B INT~ $URVEYYEARS BY$OUR~ENID BY PURPOSE
(F~w~, ~ th~s~sa~ p h*~g~sffl 1983.84 s~p~~pd 1982-83;d~lIs~s th~s~ds)
(-17.5) (8.8) (66.0) (-25.3) (-13.4) (115.8) (-10.6)
C0(P0(6TIOOS (351. 239 (70.379 (49.0(1 (29.351 $540,060 $2,606 $34h654
PAGENO="0389"
Table C ~ Table D AUSE
(I di gp~~ bg IC&nd'lbtdi pa~ ~ d II~~i h ~d) (Fi. I ~ g g 198384
PAGENO="0390"
T ki IIOLLJNThRY SUPPORT OF HIGHER EDUCATION, BY SOURCE AND BY PURPOSE
~ (Including percentage of Grand Total in parentheses; dollar totals in thoosands)
1974-75 1975-76 1976-77 1977-70 1970-79 1979-no 1980-81 198102 1982-no 1983-94
NURSER OP INSTITUTIONS 986 991 1.006 1.065 972 1.019 928 1.101 1.137 1.110
ALU,NIIaE $377,376 8461.091 6514.201 5552.621 5620.347 8725.541 8821.135 61.051.897 nn 81.046,933 81.089.575
022.55) (24.40) (24.10) (23.81) (24.30) (23.78) 24.tSO (25.70) (24.00) (23.30)
NON-ALUMNI IN110IIuALS 8399.814 $447,045 8517.421 $509,914 9582.169 8677.997 9790.096 8916.511 81.007.200 81.094.443
023.90) (23.60) (24.20) (25.1)) (02.80) (22.28) (23.80) (22.60) (23.10) (23.40)
POaNOATIONS 8384.500 8630.656 8445.855 8400,800 8553,803 8739.759 8724.869 8840.3)7 8062.148 9909,666
(23.0)) (22.85) 020.8)) (23.5)) (21.70) (24.2)) (21.93) (20.60) (19.7)) (19.40)
88505855(5. CORPORATIONS 8275.905 8297.812 8357.433 8392.315 8438.678 8555.756 8611.734 $823,001 8941.557 81.060.440
(16.5)) (15.7)) (16.7)) (19.70) (1?.))) (18.21) (18.40) (20.10) (21.6)) (22.70)
88)081065 ORGANIZATIONS $87,694 $101,549 $109.90) $122.40) 8127.161 $124,249 8107.969 $146.03? 8174.433 8157.757
(5.2)) (5.4)) (5.10) (5.20) (5.01) (4.10) (3.3)) (3.60) (4.01) (3.41)
PUNS-RAISINS CONSORTIA 5108.716 $118,712 8160.195 8162.667 8180.033 0174.204 879.321 582.993 805.031 870.085
(6.51) (6.31) (6.91) (6.918 (7.01) (5.71) (2.68) (2.11) (2.0)) (1.48)
01888 SOORCES $40,540 033.967 946,615 847.123 853.824 $57,409 8152.941 $225,400 8250.069 $296,169
(2.41) (1.81) (2.21) (2.00$ (2.01) 11.9(3 (5.50) (5.53) (5.73) (6.30)
CURRENT OPERATIONS 81.21 0.741 81,113.204 81,245.612 81.349,311 81.512.699 81.703.391 51,915.158 82.200.898 82,524.446 82.706.589
(60.9)) (30.98) (58.20) (57.50) (59.21) (35.81) (57.71) (56.01) (57.81) (57.91)
CAPITAL PURPOSES $454,802 8777.628 8093.015 8098.616 81.043.296 81.351.662 81,402.906 81.799.306 01.843.725 81.971.546
(39.13) (61.11) (61.0)) (42.51) (40.01) (44.21) (42.31) (44.01) (42.21) (62.1))
GRAND TOTAL 81,614.563 51.890.832 82.138.027 02.347.925 82.335.995 03.055.053 83.318.064 84,006,206 84.368.171 84.670.135
**IsCludsO UOd $30.4 5011005 gift-b-hod (coo oocpocotioos for othor
PAGENO="0391"
T Li r ESTIMATEDTOTAL WLUKI*JW SUPPORTOF HIGHER EDUCATiON, BY MAJOR PURPOSE AND TYPE OF DONOR, 1849-SOlD 1983-84
~1UiC f (MillI~,
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386
APPENDIX 2
THE DEPARTMENT OF DEFENSE
REPORT ON
SELECTED UNIVERSITY
LABORATORY NEEDS
IN SUPPORT OF
NATIONAL SECURITY
PREPARED FOR THE SUBCOMMITTEE ON
RESEARCH AND DEVELOPMENT OF
THE COMMITTEE ON ARMED SERVICES OF
THE UNiTED STATES
HOUSE OF REPRESENTATIVES
29 APRIL 1985
PAGENO="0393"
387
THE DEPARTMENT OF DEFENSE
REPORT ON
SELECTED UNIVERSITY LABORATORY
NEEDS IN SUPPORT
OF NATIONAL SECURITY
PREPARED FOR THE SUBCOMMITTEE ON
RESEARCH AND DEVELOPMENT OF
THE COMMITTEE ON ARMED SERVICES OF
THE UNITED STATES HOUSE OF REPRESENTATIVES
29 APRIL 1985
PAGENO="0394"
388
TABLE OF CONTENTS
Page
Chapter I: INTRODUCTION 1
A. Rationale 1
B. Definitions 2
C. Research Disciplines and Thrust Areas 2
D. Information Acquisition 3
Chapter II: DOD SUPPORT FOR UNIVERSITY LABORATORIES 5
A. Introduction 5
B. Origins of DOD Support for University Laboratories 6
C. Present DOD Support for University Laboratories 7
C.1 Direct Funding of University Research 7
C.2 Instrumentation Progr~n 11
C.3 University Research Initiative 13
C.14 Coordination Activities 13
Chapter III: PREVIOUS STUDIES 114
chapter IV: SELECTIVE UNIVERSITY LABORATORY MODERNIZATION 23
A. Introduction 23
B. Disciplines 25
B.1 Chemistry 25
B.2 Electronics 27
B.3 Engineering 28
B.~4 Materials 29
B.5 Physics 31
C. Summaries 32
Chapter V: DISCUSSION AND REC~MMENDATIONS 55
A. Discussion 55
B. Recommendations 58
Appendix 59
PAGENO="0395"
389
CHAPTER I
INTRODUCTION
A. RATIONALE
The Report of the House Armed Services Committee on the 19814
Department of Defense Authorization Act contained the following request:
"Many of the university laboratories in which Department of Defense
research programs are conducted are obsolete and in need of major
modernization or replacement. The committee believes a study should be
undertaken on the need to modernize university laboratories in the
physical sciences, earth and ocean sciences, atmospheric sciences,
engineering, computer sciences and other fields essential to our long-term
national security. The survey should (1) doc~xnent the laboratory needs of
universities presently engaged in Department of Defense competitive
research programs, (2) assess priorities by academic field, (3) provide
estimates of costs to meet these needs, (14) provide specific
recommendations appropriate to the Department of Defense and others
designed to address the need, (5) state the consequences to our long-term
national security."
This report is a response to that request.
The science and technology (S&T) base has, as its cornerstone, basic
research which, in the U.S., tends to be concentrated at universities.
Approximately t~-thirds of basic research in science and engineering
(S&E) is carried out in academia. There is a concomitant integration of
basic research with graduate education. The nation reaps a double benefit
from this model in that it concurrently generates both research results
and future researchers. It is for this reason that the state of U. S.
university laboratory facilities is so important to the nation's long-
range economic and military competitiveness.
The evolution of science and technology tends to create a
requirement for more sophisticated research facilities. Failure to keep
pace with facilities' needs has a negative impact on researchers'
creativity. This in turn limits the scope of scientific endeavor in the
experimental disciplines. The consequences may include delays in the
realization of new discoveries and a trend for faculty and graduate
students to opt for theoretical studies rather than engage in experimental
research with inadequate facilities. A further consequence is the
difficulty of recruiting and retaining the most productive faculty in
experimental disciplines.
The foregoing points ~rk against university researchers undertaking
experimental investigations. When researchers do so in spite of
inadequate facilities, results of their endeavors can be compromised in a
variety of ways. These include:
o Inadequate environmental control resulting in
decreased quality of data
o Excessive down-time resulting in dijninished `productivity
PAGENO="0396"
390
o Outmoded equipment leading to imprecision in acquired
data
o Crowded laboratory space resulting in diminished access to
equipment for data gathering and maintenance purposes
o Contrived experimental set-ups representing safety
hazards
B. DEFINITIONS
The following definitions will be used throughout this report:
Laboratory Needs-Facilities and equipment which collectively
constitute vehicles for the generation of experimental data and other
information. It denotes more than a stand-alone instnznent (e.g.,
spectrometer, tensile tester, etc.) that can be operated in general
laboratory space typically found on a university canpus, but excludes
general purpose laboratory buildings. Examples include wind tunnels, high
voltage accelerator labs, clean rooms, wave tanks, etc., especially those
housed within existing older buildings. It may also include specially
designed structures required to house laboratory instrunentation and
experimental facilities.
Facilities-Laboratory structural enviroreient including hardware
required to maintain special conditions in laboratory space.
Equipnent-Instrunentation and devices directly supportive of
data acquisition and analysis.
C. RESEARCH DISCIPLINES AND THRUST AREAS
Selected research laboratory needs among universities active in
Department of Defense (DOD) competitive research programs are addressed in
this report for the following five disciplines and constituent thrust
areas:
CHB4ISTRY
- Laser Chemistry
- Polymeric Materials
ELECTRONICS
- Microelectronic Fabrication and Reliability
- System Robustness and Survivability
ENGINEERING
- Combustion
- Composite Structures
- Energetic Materials
- Fluid Mechanics and Acoustics
- Manufacturing, Design, and Reliability
- Soil Mechanics .
PAGENO="0397"
391
MATERIALS
- Optical and Magnetic Materials
- Silicon and Compound Semiconductor Growth
Structural Ceramics
- Structural Composites
PHYSICS
- Astrophysics
- Coherent Radiation Sources
- Directed Energy Devices
- Optical Communications and Spectroscopy
The foregoing disciplines do not represent the breadth of DOD
research. In particular, biological and biomedical sciences are not
included in anticipation of a comprehensive survey of laboratory needs by
the National Institutes of Health. Computer resources not dedicated to
experimental research facilities are also excluded on the basis that they
are the object of considerable study and/or aggressive enhancement
programs by the National Science Foundation and the Department of Energy.
D. INFORMATION ACQUISITION
Requisite information was initially assembled by research
administrators in the three Service research offices (OXRs): the Office
of Naval Research (ONR), Army Research Office (ARO), and the Air Force
Office of Scientific Research (AFOSR) and in the Defense Advanced Research
Projects Agency (DARPA). In particular, Division Directors in each
organization representing the foregoing five research disciplines supplied
data related to the sufficiency of research laboratory facilities. This
information was analyzed for the purpose of developing laboratory needs
representative of defense research priorities. Results are presented in
thapter IV in the form of prioritized laboratory needs (where they exist),
estimated costs of' desired enhancements, and assesaments of the
scientific/technological and national security implications of any
laboratory needs identified.
Within the framework of the foregoing information acquisition plan,
each of the three OXR5 identified key R&D performers for the various
research disciplines. These performers were then analyzed with reference
to the indicated questions. Criteria used in determining the performers
to be interrogated and/or analyzed for inclusion in the report involved
level of basic (6.1) competitive research funding, evaluations by OXR
research administrators, and, as appropriate, independent evaluations of
graduate programs corresponding to the various disciplines. In many
cases, the stated costs represent partial funding reflecting the
tendency of universities to seek multiple sponsors for major laboratory
improvements. l4hile the method of data collection does not embody the
statistical integrity of a rigorously implemented survey instrument, it is
nonetheless thought to be s~gestive of the dimensions of university
laboratory needs of greatest importance to DOD. Further, the study
differs from previous ones in that the cited laboratory needs reflect, in
part, the judgment of research sponsors (DOD scientific officers) rather
than exclusively the perceptions of research performers.
PAGENO="0398"
392
The primary DOD research performers encompassed by this report are,
of course, only a subset of the total university R&D community. The
extent to which their modernization and new facilities needs may be
extrapolated to all universities performing research for DOD, or to the
entire population of approximately ~OO research universities in the U.S.,
is an open issue. Such extrapolations beg the question, however, as to
appropriate means for assessing laboratory sufficiency from the DOD
perspective. This is a complex question that is under constant scrutiny
for each discipline and its constituent research areas. More generally,
it is an issue which demands continued vigilance at the national level.
Sustained deficiencies in any discipline/thrust area will inevitably cause
the corresponding sector of the U.S. science and technology base to erode,
thus blunting our competitive position in the national security and world
economic arenas.
PAGENO="0399"
393
CHAPTER II
DOD SUPPORT FOR UNIVERSITY LABORATORIES
A. INTRODUCTION
This chapter deals with the role that universities play in sustaining and
strengthening the U.S. science and technology base (Section A), the origins of
DOD support of university laboratories in that role (Section B), DOD prograils
that support university science laboratories (Section C.1), and further steps
that DOD has taken to upgrade these facilities (Section C.2). A new university
research initiative for FY 8. (Section C.3) and coordination activities
relevant to the upgrading of university research facilities are described
(Section C.'!).
Given the importance of university science laboratories to DOD, it is
also true that maintaining adequate university research facilities is a
national priority that has important economic as well as military signifi-
cance. Thus, DOD should not and cannot solve the problem alone. Solutions
must encompass all relevant goverrtnent agencies, private industry, and, of
course, the universities themselves. This chapter focuses, however, on the
relationship between DOD and the university camriunity.
American universities play an indispensable role in maintaining and
strengthening the nation's science and technology base. Not only are
universities the source of future scientists and engineers, but the research
contributions of academia to society are vast as well. Since World War II,
universities have performed most of the basic research that has produced the
technological innovations on which much of our economy and national defense are
based today. Universities contribute nearly three-quarters of the scholarly
papers published in the most noted science and technology journals. In
addition to generating the insight and knowledge upon which future
technological innovation is based, university research provides the envirooment
for the development of future scientists and engineers. The result is
enriclinent of the professional experience of faculty and graduate students
involved in training our nation' s technical manpower. Thus, support of
university research produces multiple benefits of enormous value to society as
a whole.
This report addresses selected needs of university laboratories involved
in DOD sponsored research. As much as $2 billion has been estimated as the
total sun needed to replace obsolete university research instrumentation.
Laboratory facilities, including the instrumentation required to conduct
research aimed at modernizing and expanding the U.S. technology base, are
becoming increasingly expensive. Establishing and maintaining such facilities
are very costly, especially those requiring advanced superccznputers, large
particle accelerators, various types of analytical instrumentation, imaging
devices, and automated design and manufacturing hardware. Nonetheless, such
equipment is crucial for the conduct of research in important areas of science
and engineering, and for educating students. DOD support for university
research equipment is described in the following sections.
PAGENO="0400"
394
B. ORIGINS OF DOD SUPPORT FOR UNIVERSITY LABORATORIES
The DOD has recognized that technological superiority is essential to
military superiority, and it has played an important role in maintaining the
strength of the U.S. science and technology base. Since DOD was among the
first federal agencies to recognize the essential role that the academic
comunity plays in the maintenance of U.S. technological leadership, it has
maintained a strong relationship with U.S. universities since before World War
II.
Very little involvement of universities with military technology
occurred during World War I, despite the existence of in-house Service
laboratories since the 1890s and the earlier creation of the National
Academy of Sciences, which was established as a war measure by President
Lincoln in 1863. The sudden expansion of experimental and laboratory
operations that characterized the outbreak of World War II greatly
overburdened the Service laboratories. Many civilian scientists and
engineers were added to the staffs of Aberdeen Proving Grounds, the Naval
Research Laboratory, the Naval Ordinance Laboratory, Taylor Model Basin,
Wright Field (Army Air Force), and Fort Monmouth (Signal Corps).
Contracting funds were also greatly increased in the effort to catch up to
an enemy that had scientific groups investigating improved weaponry since
the early 1920s.
The Office of Scientific Research and Developnent (OSRD) was
created, reporting directly to President Roosevelt, and receiving funds by
direct appropriation from the Congress. These funds were placed in
private and governmental laboratories. The National Research Council of
the National Academy of Sciences had been created during World War I and
was, by the time of World War II, well 1c~own to the military Services,
which expanded their use of it. These arrangements formed a close
coupling of the organized bodies of scientists and military leaders having
a common appreciation of the importance of science and engineering to
modern warfare. Major wartime expansion of facilities occurred at several
universities. The major contributors included MIT, Harvard, Cohxnbia, the
University of Ghicago, the University of California, the Johns Hopkins
University, and the California Institute of Technology. Radar, acoustics,
operations research, navigation, and atomic weapons were just a few of the
areas in which notable contributions were made.
Emerging from the wartime era were two lasting methodologies for
defense investment in university laboratory facilities. First, the
institute concept became well established, wherein non-profit university
affiliated laboratories conduct applied research, primarily under DOD
support. Products of this era which make major contributions today are
Lincoln Laboratories (MIT), the Johns Hopkins University Applied Physics
Laboratory, the Applied Physics Laboratory of the University of
Washington, the Applied Research Laboratories of the University of Texas,
the Applied Research Laboratory of Pennsylvania State University, and the
Marine Physical Laboratory, Scripps Institute of Oceanography, University
of California, San Diego. Second, the National Security Act of 19147, and
the amendment of 19148 which established the three military Departments and
the Office of the Secretary of Defense, provi~ed the framewerk that
operates today for support of research at universities through the Army
Research Office, the Office of Naval Research, the Air Force Office of
PAGENO="0401"
395
Scientific Research, and the Defense Advanced Research Projects Agency.
This partnership has been s~bstantial over the years; seventeen
institutions of higher education are anong the 595 contractors that
received awards of 10 million dollars or more from DOD in FY 83.
C. PRESENT DOD SUPPORT FOR UNIVERSITY LABORATORIES
C.1 DIRECT FUNDING OF UNIVERSITY RESEARCH
U.S. universities are a major factor in current DOD activities affecting
the U.S. technology base. Approximately half of all DOD basic research (6.1)
funds are expended at universities ($1105 million in contract dollars with
research budgets totaling ~8LlO million in FY 811), plus a smaller anount of
applied research (6.2) funds (approximately $115 million in FY 811). During the
past decade, DOD has made a major effort to reverse the effects of the relative
neglect of university research that occurred during the Vietnan war. Figure II-
1 shows the evolution of DOD funding for basic research (6.1) since 1962. The
corresponding funding history for "exploratory development" (6.2), some of
which equates to applied research, is shown in Figure 11-2.
These figures show that funding in current dollars for both components of
the technology base grew significantly during the late 1970s and early 198Os;
nevertheless, neither has returned to 1965 levels of support in constant dol-
lars. In fact, in real terms, the level of funding for exploratory development
has been virtually stable for over a decade. In a memorandl.xn to the Services
dated August 9, 19811, Secretary Weinberger noted this situation and indicated
that the Defense Guidance for the FY 1987-91 PaI would request 8 percent annual
real growth in both components of the technology base. DOD still takes that
position.
University research has been a major component of the growth in DOD
technology base activities during the past decade. Table Il-i shows DOD Basic
Research (6.1) funds spent (or projected to be spent) at universities by the
Army, Navy, Air Force, and the Defense Advanced Research Projects Agency
(DARPA) for the years F? 711-86. During the period FY 75 to FY 811, DOD spending
for 6.1 Basic Research at universities grew at a real annual rate of 9 percent-
far higher than the annual growth of DOD Research (6.1) funds as a whole.
Table 11-1 shows only the DOD Basic Research (6.1) funds going to
universities. It includes only contracts exceeding $25,000, and does not
reflect research grants. Thus total university funding is somewhat higher than
indicated. A similar break-out of the university component of DOD Exploratory
Development (6.2) funds is not available. To provide a basis for comparing 6.1
and 6.2 expenditures, in FY 83 a total of $102.3 million in DOD Exploratory
Development (6.2) contracts went to universities while $360 million was
provided for Research (6.1) contracts. An additional $50 million was awarded
to universities in the form of 6.1 research grants. DOD funding for
universities is not limited to Research and Exploratory Development. For
exanple, DOD RDT&E (6.1 through 6.6) contracts over $25,000 going to
educational institutions in F? 83 totaled $1113.6 million. Most of the $600
million in the higher categories (6.3, 6.14, 6.5, and 6.6) was for R&D in
university affiliated off-canpus laboratories and Federally Funded Research and
Development Centers (FFRDC5), or for vocational and technical training, and
tuition fees.
PAGENO="0402"
DOD SCIENCE AND TECHNOLOGY FUNDING TRENDS
CURRENT AND CONSTANT DOLLARS
RESEARCH (6.1)
1200 v'
i000F
L ~FV S5 CONSTANT DOLLARS
I ~ ____
CURRENT DOLLARS
200
100
0 I ~_I I I I
62 65 66 71 74 77 60 63 66
S(XflCE: Departitent of Defense FISCAL YEARS
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DOD SCIENCE AND T~CRNOLOGY FUNDING TRENDS
CURRENT AND CONSTANT DOLLARS
EXPLORATORY DEVELOPMENT (6.2)
4000t
35~Q FY15 CONSTANT DOLLARS
`4%
U,
z
S~Th~E: Departnent of Defense FISCAL YEARS
PAGENO="0404"
DEPARTMENT OF DEFENSE FUNDING FOR UNIVERSITY BASIC (6.1) CONTRACT RESEARCH, FISCAL YEARS 1974-85k
(In mIllIons of dollars)
FY74 FY75 FY76 FY77 FY78 FY19 FY8')
ServIce Qirrent Reel Qirrent Reel Qirrent Real Ojrrent Reel Qirrent Peel Qirrent Reel Current ~
ARMY 13.7 27.9 13.4 25.0 19.0 33.7 23.7 39.6 28.1 43.8 32.0 45.9 35.1 5').'
AIR FORCE 23.2 47.3 22.9 42.6 28.2 50.0 41.0 68.6 49.5 77.1 46.4 66.6 55.3 72.'
NAVY 45.5 92.7 47.0 89.2 64.2 113.8 62.7 p04.8 70.8 110.3 86.4 124.0 100.2 13'.'
DAIS'A 21.9 44.6 19.4 36.1 19.1 33.9 18.7 31.3 17.9 27.9 21.0 30.1 19.5 7'c.~
TOTS. 104.3 2!2.4 103.6 192.9 130.5 231.4 146.1 244.3 166.3 259.0 185.8 266.6 213.4 2~1.I
FY81 FY82 FY83 FY84 FY85 FY86 H
Serv~ Qirr.nt Re~ Qirrent Re& 0~rrent Re& Qirrent Re& Current Rea~ Current Realee
ARMY 46.5 55.9 56.1 63.5 71.4 77.7 80.6 84.6 83.8 83.8 87.9 83.8
AIR FORCE 63.4 76.2 71.5 81.0 90.3 *8.3 112.1 117.6 119.1 119.1 135.0 128.7
NAVY 115.0 138.2 142.3 161.2 152.2 165.6 158.1 165.9 176.1 176.1 198.8 189.5
DAPA 27.3 37.8 39.4 44.6 46.4 50.5 53.9 56.6 42.7 42.7 43.4 41.4
TOTS. 252.2 303.1 309.3 350.3 360.3 392.1 404.7 424.7 421.7+ 421.7 459.1 437.7
* ProjectIons
** Forecast for InflatIon Is based on COO projection
SOlACE: ~my Dsputy ChIef of Staff Research Develapsent and AcquisItIon, OffIce of Navel Research, AIr Force Office of SelentIfle
Research, Defense Advenced Research Projects Agency, (Qnstant 1985 Dol lers Calculated usIng GPP l~l Icit Pr Ice 0.? letor)
+Restricted to awards exceeding $25,000; grants are not included
00
PAGENO="0405"
399
DOD sponsors research and development at universities to ensure the
progress in fundanental knowledge that is necessary, in the long run, to
maintain U.S. technological superiority. The resulting university research
progr~ns also serve to benefit universities in a variety of ways. By providing
opportunities to perform basic research at the forefront of science and
engineering, research prograns at universities help to create an envirorinent
that can attract and retain faculty and students. Past studies suggest that,
on average, $1 million of funding for research provides full or partial
financial support for 10-15 graduate students. Using this measure, DOD
provided financial assistance for over Lt000 graduate students through its
university research prograns in FY 8~I. In addition, as will be noted below,
DOD-related research prograns also have significant effects on laboratory
instr~.xnentation.
C.2 INSTRUIENTATION PROGRAM
Instrirnentation is essential to modern research. Modern instrunents with
qualitatively superior capabilities for analysis and measurement often open new
fields of scientific inquiry. In some scientific areas, access to the most
advanced scientific instrumentation determines in large measure the extent to
which scientists can ~rk at the cutting edge of their field.
The Department of Defense, in concert with the scientific and university
community, state and other federal agencies, and the Congress, perceived that
the condition of research instrumentation in U.S. universities declined
significantly during the 1970s. The Association of American Universities
(AAU), in a report to the National Science Foundation (NSF) in June 1980 (see
thapter III), concluded that the equipment being used in the top ranked
universities has a median age twice that of the instrumentation available to
leading industrial research la~F~Eories, an additional factor in the
attraction of potential faculty to industry.
The instrumentation problem has been growing for more than a decade.
It reflects both economic factors and funding patterns:
o The cost of equipment has risen much faster than
inflation.
o The system of one to three year contracts in the
$50,000 to $100,000 per year range with individual
investigators is not conducive to obtaining equipment
that costs more than $50,000.
o Rapid technological advances are rendering research
equipment obsolete at an ever increasing rate.
* In response to the foregoing situation, DOD has encouraged researchers
to include more of their equipment needs in proposals and emphasized that DOD
does not set arbitrary limits on the anourit of money that may be requested for
instrumentation. This approach has been helpful for equipment needs in the
$50,000 range or less. However, new money was clearly needed for some of the
more expensive items required to modernize university laboratories. These
funds were provided in FY 83 through the DOD-University Research
Instrumentation Progran (URIP), which received Congressional approbation.
PAGENO="0406"
400
URIP provides $150 million over five years for university research
equipment. Each of the three Services is progranmed to spend $10 million per
year. So far, $90 million has been spent on 652 awards going to 152 institu-
tions in 147 states and Washington, D.C., Guam, and Puerto Rico. While URIP is
having a major impact on the equipment needs of researchers doing werk of
interest to DOD, it cannot solve the whole university instrlinentation problem.
In the first year of URIP, DOD received 2,500 proposals representing requests
for $6146 million werth of equipment. While some of these requests were for
equipment to support research in areas not usually funded by DOD, this response
is a significant and impressive measure of the needs of the universities.
URIP is the most visible, but not the sole, DOD response to the
university instruiientation problem. As noted previously, each of the Services
and DARPA have encouraged current and prospective contractors to make their
equipment needs known, in order that `many of the less expensive items could be
purchased as an integral part of research progran funding:
o Approximately 10 percent of Army, Navy, and Air Force research
contract funding is applied to equipment purchases, most of it well
under $50,000. Grants under the URIP progran provide an additional
comparable dollar amount for equipment costing more than $50,000.
o The portion of the Army Research Office (ARO) contract
progran devoted to instrument purchases has increased
steadily over the past decade; in FY 85, such purchases
will represent about $6 million of the ARO contract
research progran.
o University-related equipment purchases associated with
the Contract Research Progran of the Office of Naval
Research (ONR) increased from $11.2 million in 1979 to
$16.6 million in 19814.
o Between 1975 and 1985, vested equipment funding by the
Air Force Office of Scientific Research (AFOSR), during
the usual course of its sponsored research progran,
increased from $2 million to $8 million.
o Although DARPA does not participate in the URIP progran, 10 to 20
percent of its university program funds have been utilized for
equipment. In 1981, DARPA began a modernization program focused on
obsolete equipment and the need for greater computational power. From
1981 to 19814, equipment purchases by universities using DARPA funds
increased from $6.7 million to $16.8 million.
In certain cases where the equipment for major research efforts has been
especially costly, provisions have been made for extraordinary purchases.
Examples include the purchase of large main frame computers, semiconductor
processing lines, molecular beam epitaxy and analysis chambers, and ARPANET
computational and communication facilities by DARPA, and an ongoing ONR program
to refurbish selected research vessels.
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In FY p14, in addition to the $30 million per year of special URIP
purchases, the three Services and DARPA purchased over $145 million worth of
research instruments and -equipment for universities in connection with their
research contracting activities.
C.3 UNIVERSITY RESEARCH INITIATIVE
In FY 86, DOD plans to establish new research progran elements that will
be focused exclusively on the DOD/university relationship. Total proposed
funding for the new progran elements is $25 million in FY 86 and $50 million
in FY 87. Significant additional growth is expected after FY 87. Each of the
Services and DARPA will implement prograns within these progran elements to
meet the priorities of their own relationships with the academic ccznmunity.
Although the specific proportions will vary from Service to Service, graduate
fellowships, support for young investigators, purchase of research instrumenta-
tion, support of special research prograns, and prograas to improve the
interactions between DOD laboratory and university researchers, will be part of
the total DOD package.
C.LI COORDINATION ACTIVITIES
DOD has long recognized that the academic ccemnunity is an invaluable
source of expert advice. The Department draws on science and engineering
faculty as individual consultants and as members of DOD advisory caemittees.
To insure more effective ccznmunication with the academic camnunity, DOD
established the DOD/University Forum in December 1983. During its first year,
the Forum has provided a mechanism for dialogue between DOD and the academic
community on policy and other issues of mutual interest. one significant
outcome of its activities during the past year was the establishment of a new
DOD policy on the transfer of scientific information. It establishes an
appropriate balance between the conflicting imperatives of national security
and open scientific communications. The Forum Working Group on Science and
Engineering Education addressed many issues, including that of research
instrumentation.
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CHAPTER III
PREVIOUS STUDIES
More than a dozenstdies of university laboratory facilities have been
prepared since the late 1960s. For a comprehensive listing and summary of such
studies prepared by Linda S. Wilson of the University of Illinois at Urbana-
Champaign, see the Appendix. Many of these studies have concluded that a
problem exists with respect to inadequate and deteriorating university
laboratory research facilities. Some of the studies are qualitative and
generally recommend programs for the support of facilities renewal. Others are
quantitative and are based on surveys of the conditions of facilities, with
projections of the amount and cost of construction and renovation required to
meet future needs. The basic conclusion drawn is that renewal and replacement
of facilities are an important element in assuring a national technology base.
Some of the more relevant studies for the purposes of this report are discussed
below. An analysis of some of their findings in comparison to the present
study is given in Chapter V.
-- A report to the National Science Foundation (NSF) by the Association of
American Universities (AAU) in June, 1980, was devoted to "The Scientific
Instrumentation Needs of Research Universities." Numerical data for the study
were gathered from 14 universities and four commercial laboratories. The
report found that the median age of university equipment was twice that of the
commercial laboratories' instrumentatiofl. Concluding that "the quality of
research instrumentation in major univer\sity laboratories" has seriously
eroded, the AAU report recommended that:
"Federal policy for the support of research instrumentation should
provide for a basic three-part funding strategy:
o Strengthen instrumentation funding in the project system.
o Expand special instrumentation programs.
o Create in the National Science Foundation a new, supplemental
formula grant program to provide needed flexibility to meet diverse
institutional needs."
-- A 1981 study prepared for the Committee on Science and Research of the
AAU, entitled "The Nation's Deteriorating University Research Facilities,"
was based on a survey of recent expenditures and projected needs of fifteen
major U.S. universities in six disciplines. The principal findings of the
study were:
o A substantial backlog of research facilities and equipment
needs was accumulating.
o During the 1978-81 period, for the six fields surveyed, the
fifteen universities spent ~~4O0 million for facilities
and major equipment. In the next three years (1982-8~4),
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403
these universities expected to spend almost twice as much
(~765 million), just to produce the necessary research
facilities and special research equipment for current
faculty only.
o New construction to replace outmoded facilities accounted
for almost 60 percent of total projected funding
requirements across all fields.
o In addition, substantial needs for major research
equipment were identified in all six fields.
Table HI-i shows the expenditures and projected needs for those
disciplines included in the present report. Projected needs for both
facilities and equipment were far larger (by factors ranging from three to
almost ten) than actual expenditures for an equivalent period immediately
preceding the report. The extent to which these differences represented
realistic asses~nents of the pent-up facilities demand, and/or an effort on the
part of survey respondents to "make a statement," is open to question.
Among the recommendations of the AAU study was:
o Provided that a review by key government agencies corroborated the
assessnent of the survey, the "Department of Defense, Department of
Energy, the National Aeronautics and Space Administration, the
Department of Health and H~znan Services, and the Department of
Agriculture should establish research instriinentation and facilities
rehabilitation prograns targeted on the fields of science and
engineering of primary significance to their missions."
-- In 1982, Flad & Associates, a Wisconsin architectural and planning firm,
published their "capital Spending Study of Research and Development
Laboratories." Since the study focused exclusively on the spending plans
of private industrial firms, it provides a useful basis for comparison with
the plans of universities dealt with in the AAU studies described above.
The Flad study was based on a survey of some 5800 directors of
industrial research laboratories. About twelve percent of them responded
with detailed, confidential estimates of planned spending for plant and
equipment in the ensuing three years (1983-85). The firms surveyed
were considered more representative of large research laboratories (25-100
staff) than analler laboratories (less than 25).
Among the major findings of the Flad study were:
o Estimated spending on research and development plant
for 1983-85 by responding firms was $1.11 billion.
o Estimated spending on research and development
equipment for 1983-85 was $1.2 billion.
o Nearly 40 percent of the laboratories of responding
firms were built less than ten years before the survey;
of these, 50 percent had undergone additions or
renovations subsequent to initial construction.
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Table 111-1
Actual and Projected Expenditures for Research Facilities
(new construction/renovation) and Special Research Equipsent
for 15 Major Research Universities
(thousands of dollars)
FACILITIES SPECIAL RESEARCH EQUIPMENT
PROJECTED PROJECTED
NEEDS NEEDS
FIELD 1978-RD 1981 1982-84 1978-80 1981 19R2-R~4
Chemical Sciences 12,8~5 14,089 115,022 6,701 4,767 14,688
Engineering 19,539 18,476 183,106 16,101 10,957 33,222
Physics 11,700 5,818 74,725 4,603 1,092 22,590
Source: "The Nation's Deteriorating University Research Facilities',
Association of American Universities, 1981
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405
For the purposes of this report, the Flad study has some interesting
implications. If the study's findings are extrapolated onto the entire
sanple, total national private industry projected capital spending for
research and development ~uld be about $20 billion for 1983-85 (about $11
billion for plant and about $9.2 billion for equipment). This compares
with estimates of $1 billion for total average annual planned investments
in university science and education facilities. For industrial
laboratories whose annual research and development budgets were in the
range of 1 to 15 million dollars (145 percent of the responding firms), the
expenditure planned for was about 13 percent of their annual operating
budget each year for the three years beginning in 1983. The ratio of
planned expenditures for equipment and plant by private industry was about
the same (unity) as that shown for universities in Chapter IV below.
-- The NSF published a study of "Academic Research Equipment in the Physical
and Computer Sciences and Engineering" in December 1984. This study
surveyed 4. universities; respondents exhibited serious concern about the
adequacy of their current stock of research equipment. Among the findings
of the study were:
o About half of the department heads in physical and computer
sciences and engineering characterized research instrixnenta-
tion available to untenured and tenured faculty as "insuf-
ficient."
o 90 percent of the department heads surveyed reported that,
as a result of lack of needed equipment, their research
per'sonnel could not conduct critical experiments in
important subject areas.
o The top priority need was to upgrade and expand research
equipment in the $10,000 to $1,000,000 range.
o The estimated original purchase cost of the entire 1982
stock of all ~10,000 to ~1,000,000 academic research
equipment that had been accixnulated in the fields surveyed
was about $1 billion.
o (~ly 16 percent of those systems were classified as state-of-
the-art. Of the equipment that was not in the state-of-the-
art category, over half was in less than excellent
condition; about half of such equipment was the most
advanced to which researchers had access.
In addition to the studies and data surveyed above, the NSF has
released a variety of data that are of special interest for this
report. Table 111-2 gives seven-year trend data on capital expendi-
tures at all U.S. universities for both research and instructional
purposes. Unfortunately, there does not appear to be any systematic
way of extracting purely research facility expenditures from these
figures. The two research categories cited correspond roughly to the
five disciplines addressed in this report.
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406
TABLE 111-2
Research and Instructional Capital Expenditures
at Colleges and Universities*
(thousands of dollars)
FIELD 1976 1977 1979 1980 1981 1982 1983
Engineering 81,678 87,718 87,128 89,297 103,329 11411,990 1314,701
Physical Sciences ~ ~~j6 ~ ~ ~ ~
Total: 155,~l33 152,9311 151,813 166,1151 191,1112 227,352 221,7711
Source: National Science Foundation
* 1978 Data not available.
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407
Research equipment expenditures for U.S. colleges and universities
are sunmarized in Table 111-3 for 1982 and 1983. The data were obtained
from 85 percent of U.S. universities in response to an NSF questionnaire
concerning non-capitalized equipment expenditures. Engineering equipment
purchases averaged approximately $70 million for the two year period. The
category compares roughly to the combined engineering, electronics, and
materials categories of this report.
Table III-~4 lists 1982 estimated research equipment expendi-
tures for 157 of the largest research universities. These 157
institutions collectively accounted for 95 percent of all norinedical,
non-FFRDC R&D expenditures reported to NSF for FY 19RC) by all U.S.
colleges and universities. Thus, although the survey represented
only a small fraction of the nation's approximately 3,000 post-
secondary institutions, it encompassed most institutions with
significant capabilities for the kinds of advanced research that
require instrunentation in the M0,000÷ range. The quoted figures
are somewhat higher than those in Table III-~, since they include
capitalized equipment, whereas the data of Table 111-3 do not.
As in Table 111-3, the engineering category compares roughly to the
combined engineering, electronics, and materials categories of this
report.
Acquisition and replacenent costs as of 1982 for research
equipment in the physical sciences and engineering are given in Table
111-5. The total replacenent value in 1982 dollars for both fields
exceeded $1 billion. It is interesting to note that equipment
maintenance in both the physical sciences and engineering represented
5 percent of replacement costs.
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408
TABLE 111-3
Annual Expenditures for Research Equipment
at Colleges and Universities
(thousands of dollars)
FIELD
~82
1983
Engineering
65,861
75,171
Aero/Astro
2,28~4
2,837
Chemical
6,~4't2
6,172
Civil
5,16'4
6,086
Electrical
18,~45~~
20,685
Mechanical
7,390
10,008
Other
26,127
29,383
Chemistry
33,323
32,826
Physics and Astronomy
Totals:
111,373
118,530
Source: National Science Foundation
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409
TABLE 111-4
Instrumentation-related expenditures in academic departments and çacilities,
by field and type of university: National estimates, FY 1982
[Dollars in millionsi
FY
1982 expenditures
Principal field of research
in department/facility and
Purchase of Maintenance!
type of university
Total
I
~
Purchase of
research
equipaent2
research- repair of
related research
computer equipnent
services3
Total, selected fields
$375.6
$231.0
$8~4.7 $60.0
Field of research
Physical sciences, total 156.6 914.5 33.9 28.2
chemistry 73.7 39.6 23.3 10.8
Physics and astronomy 83.7 55.2 10.9 17.6
Engineering, total 1514.14 90.9 43.9 19.6
Electrical 52.9 36.2 11.5 5.2
Mechanical 23.0 8.7 10.8 3.5
Metallurgical/materials 9.14 7.4 0.8 1.2
chemical 15.8 7.8 5.7 2.3
Civil 16.4 9.6 5.14 1.4
Other, n.e.c. 36.7 21.3 9.5 5.9
1 Statistical estimates encompass all research departments and all
nondepartmental research facilities in the physical sciences, engineering
and computer science at the 157 largest R&D universities in the U.S.,
except: (a) departments with no research instrument systems costing
$10,000 or more and (b) research installations consisting of interrelated
components costing over $1 million (large observatories, reactors,
accelerators, etc.). Sample size 353 departments facilities. The
colums below do not add up to the indicated totals because computer
science and interdisciplinary have been omitted from this abbreviated
version of the original table.
2 Estimates refer to expenditures for nonexpendable, tangible property or
software having a useful life of more than two years and an acquisition
cost of $500 or more, used wholly or in part for scientific research.
3 Estimates refer to purchase of computer services at on-campus and off-
campus facilities but not to purchase of computer hardware or software.
Estimates encompass expenditures for service contracts, field service,
salaries of maintenance/repair personnel, and other direct costs of
supplies, equijxnent and facilities for servicing of research instrunents.
Source: "Academic Research Equipment in the Physical and Computer Sciences
and Engineering"; National Science Foundation, December, 19814.
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TABLE ItI-5
Number and aggregate cost/value of academic research instrument
systems in active research use, by field and type of university:
National estimates, 1982.1
[Dollars in millions]
Index of aggregate cost/value
Acquisition Repla~ement 1982 cost-
costa value equivalent5
410
Principal field of Number
research use and of ~Fcn4se
type of university systems cost
Total, selected
fields
17,586
$758.1
$703.2
$1,133.7
$1,162.8
Field of research
Physical sciences,
8,14214
373.6
353.2
529.3
610.2
total
Chemistry
14,791
210.14
201.1
295.0
331.7
Physics and
3,633
163.2
152.1
*
234.~
278.14
astronomy
Engineering, total
6,829
374.6
Electrical
1,650
89.0
Mechanical
1,363
66.9
Metallurgical!
998
60.9
materials
Chemical
682
23.3
22.8
28.6
32.3
Civil
397
14.1
13.9
22.4
21.6
Other, n.e.c.
1,739
65.7
55.3
109.0
104.0
259.4
232.4
66.4
56.0
50.9
47.8
39.0
36.6
413.3
92.2
95.5
65.2
1 Statistical estimates refer to research instrtxnent systems (including all
dedicated accessories and components) originally costing $1O,000-$1,000,000
in physical science, engineering, and computer science departments and
facilities at the 157 largest R&D colleges and universities in the U.S.
Estimates limited to systems used for research in 1982. Sanple size
2,582 systems. The coluizis below do not add up to the indicated total
because computer science, materials science, and interdisciplinary have
been omitted from this abbreviated version of the original table.
2 Manufacturer's list price at time of original purchase.
Actual cost to acquire instrument system at this university, including
transportation and construction/labor costs.
User estimate of 1982 cost of sane or functionally equivalent equipnent.
~ Original purchase cost converted to 1982 dollars using Machinery and
Equipment Index of the Bureau of Labor Statistics' Annual Producer Price
Index to adjust for inflation.
Source: "Acadimic Research Equipnent in the Physical and Computer Sciences
and Engineering"; National Science Foundation, December, 1984.
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411
CHAPTER IV
SELECTIVE UNIVERSITY LABORATORY MODERNIZATION
A. INTRODUCTION
This chapter addresses selected laboratory needs, i.e. facilities
and related equipment, for a segment of the research university
community representing key performers of DOD research for the
disciplines and thrust areas enumerated in Chapter I. These needs,
stratified by discipline and priority in Table TV-i, reflect the
judgment of university research performers and, in certain cases, of
administrators in the Service research offices (OXRs) and the Defense
Advanced Research Projects Agency (DARPA). It should be emphasized that
the cost figures in Table TV-i are estimates of university laboratory
upgrade and modernization initiatives designed to bring university
laboratories closer to sufficiency from the DOD perspective. As
previously indicated, they represent in many cases only partial funding
of the facilities in question through multiple sponsor arrangements.
They are not intended to encompass laboratory needs of the entire
university research community. The latter issue has been addressed in
the various studies cited in Chapter III. Facilities costs vary anong
and within disciplines, reflecting special requirements for the various
thrust areas. They encompass both floor space requirements and
laboratory accessories not falling within the instrumentation category.
Thus, not all expenditures classified as "facilities" represent
requirements for new or renovated buildings. The stated new floor space
requiremen~s are expressed in "gross" (as opposed to "net") square feet
at $120/ft . Laboratory renovation costs are calculated at $90/ft2.
The allocation of laboratory needs anong the five disciplines
required the exercise of judgment as to the appropriate division between
(a) the parent, pure science fields of Physics and Chemistry, and (b)
the applications-focused areas of Electronics, Engineering, and
Materials. Ultimately, such decisions are to an extent arbitrary.
Further, there are clearly a great number of ways to stratify facilities
and equipment needs in terms of disciplines and thrust areas. The
scheme presented in this report is thus only one of many possible
approaches.
Priority 1 facilities needs for the five subject disciplines,
pro-rated over a five-year expenditure period, are $32 million per
year. The expenditure level is equivalent to the URIP annual allocation
of $30 million. It is also of interest to note that priority 1 equip-
ment requirements are $31 million per year, i.e., almost identical to
the annual expenditure rate of the five-year $150 million URIP initi-
ative. Unquestionably, some portion of the $155 million Priority 1
equipment needs cited in this report will be addressed during the final
two years ($60 million) of the URIP progran.
53-277 0 - 86 - 14
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412
Table IV-1. Susinary of selected laboratory needs of major university
performers of defense research.
Cost ($ thousands)*
Building 2
Discipline Priority Requirements (gross ft ) Facilities Equipment Total Costs
Chemistry 1 35,000 5,000 14,000 19,000
2 412 000 1414 700 33 ~40O
Subtotals 14147,000 9,700 7, 00 97,100
Electronics 1 130,000 149,000 33,000 82,000
2 ~QQQ
Subtotals 155,000 55,000 41,000 96,000
Engineering 1 296,500 36,200 39,000 75,200
2 145300 8900 J.~J~QQ 27200
Subtotals ~!I4T~195 57,300
Materials 1 220,000 55,000 62,100 117,100
2 j~Q,~O 29 000 36 ~400 65 ~400
Subtotals 390,000
Physics 1 80,000 15,800 9,300 25,100
2 131 000 25 700 163,300** 189,000**
Subtotals 172,600** 214,100**
Summary 1 761,500 161,000 157,1400 318,1400
2 783,300 fl~,~QQ 259,1400~ 373,700**
Totals 1,51414,800 275,300 416,800** 692,100**
*Numbers are rounded to the nearest $100 thousand.
**Includes $150 million for astrophysics high angular resolution imager.
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413
B. DISCIPLINES
B.1. Chemistry
Large facilities are playing an increasingly important role in
chemical research. It has been an evolutionary process, starting with
opportunities provided by large instrumentation and moving to facilities
comprised of clusters of large integrated instrumentation/computational
facilities in regional spectroscopic facilities.
Ultra high vacuum chanbers with sophisticated analytical instrumenta-
tion using laser, electron, and ion cluster beans, together with various
spectrometers, are mandatory for leading edge research in many areas of
chemistry. Lasers have become important analytical tools to stuiy the
dynanics of chemical reactions and to photoinduce reactions. These
instruments are usually short wavelength visible or ultraviolet tunable
lasers that are themselves pushing the limits of laser technology and
hence require considerable expertise and expense to operate and maintain.
In addition, many research projects are concerned with the chemistry of
materials processing, such as integrated circuit fabrication, that demand
clean room facilities by their very nature.
In order to remain globally competitive, particularly in areas of
chemistry of importance to IX)D, it has been recently recognized that
traditional chemical research laboratory facilities at universities are in
serious need of upgrading and that shared centralized new facilities are
necessary due to the high costs of the instrumentation and envirorinental
control required. This evaluation applies to the two topical areas
identified by DOD research managers as candidates for facilities
upgrading, based on scientific opportunities and on laboratory needs.
These priority topics are laser chemistry and polymeric materials.
Lasers have become a valuable tool in many branches of chemistry.
Catalytic activity and selectivity can be st~ied by using laser Ranan
spectroscopy to determine the vibrational modes and polarization of
structures of molecules adsorbed on single crystal surfaces. High powered
photo-ionizing lasers can be used in conjunction with ion cyclotron
resonance spectroscopy to st~y the role of metal ions as selective
chemical ionization reagents. Laser induced fluorescence of metallic ions
and s~sequent transfer of energy to neutral ions may yield superior
detection limits, compared to well established analytical techniques that
employ fluorescence of neutral metal ions in flanes. Two step laser photo
dissociation of small molecules can be used to elucidate isotope
separation and enricfrnent processes. In this latter process, an intense
pulsed infrared laser vibrationally excites molecules containing the
chosen atomic isotope and a second ultraviolet laser photodissociates the
molecule, allowing the desired atomic isotope to be collected from the
photo fragments. These exanples indicate the utilitarian richness of
lasers in modern chemistry and illustrate that often they are used in
combination with other sophisticated analytical equi~inent. The facilities
investment described here would establish fifteen laser chemistry centers
PAGENO="0420"
414
where the operation and maintenance of the lasers would be accomplished by
support specialists to serve several research projects. On an even larger
scale of centralization, a single free electron laser facility would also
be established to provide a very intense and widely tunable source of
radiation.
Polymeric materials are found in most military equipment, because of
their excellent chemical stability, mechanical properties, and low cost.
The majority of the research support for improvements in these materials
comes from industry in pursuit of commercial applications, although DOD
does support some research specific to stringent military requirements.
However, the polymer research of greatest interest to DOD, and for which
university facilities upgrades are needed, concerns conducting polymers
and polymeric approaches to structural composites, ceraaics, and self-
reinforcing polymers. It is important to note that independent industrial
support of research in these areas is minimal or not aimed at DOD needs.
Conducting polymers that wauld combine the processability,
durability, and light weight of plastics with the electrical conductivity
of metal wauld find a wide range of applications in military systems
ranging from solar cells and batteries to integrated circuits and stealth
structures. Polyacetylene was the first organic polymer to exhibit
electrical conductivity that could range from that of glass to that of
metal, depending on the anount of dopants introduced. Doping methods have
expanded to include solution doping, ion implantation, and electrochemical
doping. Other new polymers have been made conducting, including
polypyrrole and polythiophene. Polymer processability and stability are
degraded by the doping methods currently used to induce conductivity.
Much research is directed at improved doping techniques and on
incorporating conducting polymers into nonconducting polymer matrices, as
well as fundanental studies to explain the mechanism of electroactivity.
Fiber reinforced composite structural materials are finding many
engineering applications, some of which are described under Materials and
Engineering. Exanples of the themistry research topics include
organometallic polymer precursors for producing the fibers and self-
reinforced or ordered polymers to attain the mechanical properties of
fiber-reinforced composites without the need for fiber reinforcement. The
most notable of the self-reinforced polymers developed under DOD
sponsorship is polybenzothiazole (PBT), which exhibits an extended rigid
chain aligrznent at the ultra-structural level. It offers low-cost
processing, by casting and extrusion, instead of the sequence of weaving
fibers, stacking of many thin plys, and curing at high temperature
required for conventional fiber-reinforced composites.
Other polymeric materials research includes biopolymers, such as the
polysaccarides for reduced hydrodynanic drag and non-linear electro-optic
polymers for optical signal processing applications. The facilities
investment described here would provide the polymer processing and
characterization facilities for several focused centers of university
research on electrical, optical, magnetic, and structural polymers.
PAGENO="0421"
415
B.2 Electronics
In addition to the traditional subject areas of electronic devices,
circuits, and systems, the Electronics research progran of DOD encompasses
elements of information processing, low energy laser physics, optics, and
material growth. For the purposes of this study, the facilities required
for the growth of electronic and optical materials are reported under
Materials and the low energy lasers, optical circuits, and vacu~xn tube
research facilities are reported under Physics. The information
processing research, being closely related to computer science, is not
discussed, since, as mentioned in the Introduction, the National Science
Foundation (NSF) and the Department of Energy (DOE) have major facilities
prograns in progress to provide scientific supercomputing access to
university researchers. DOD, through the modernization progran of the
Defense Advanced Research Projects Agency (DARPA), recently made a
significant upgrade in university computing facilities for symbolic
computing in anticipation of the thrust in strategic computing. The
Office of Naval Research is making available to its principal
investigators a significant portion of the time of the Naval Research
Laboratories' supercomputer at no cost to the existing research contracts.
A strong and clear consensus has emerged from this st~dy indicating
that the research managers of the Electronics progran within the DOD feel
that microcircuit fabrication at dimensions much smaller than those of the
Very High Speed Integrated Circuits (VHSIC) progran represents the
greatest opportunity and greatest research facility need within
Electronics. The feature sizes desired are 10 to 100 times smaller than
the one-micron regime currently being advanced under VHSIC. It is in this
regime that entirely new modes of operation of electronic, optical, and
magnetic devices occur, due to the quantkm effects produced by the limited
nunber of atoms contained within these small dimensions. These phenomena
present the possibility of creating devices whose performance can be
greatly superior to that predicted from the bulk characteristics of the
material from which they are fabricated. This has already been observed
for high speed field effect transistors (FETS), when the device dimensions
are reduced below one-tenth micron. It has also been observed that
dranatic increases in transmission properties of optical materials occur
when very thin layers of material are stacked in a multilayer sequence,
offering the possibility of improved photodetectors and lasers.
The fabrication of these novel devices requires very advanced and
expensive equipment for the deposition, lithography, and selective removal
of the deposited materials. In addition, sensitive analysis of the
surfaces and interfaces between dissimilar materials needs to be performed
during the fabrication process. This is in contrast to current commercial
practice (even for sophisticated microcircuits), where the analysis by
electron microscopes and spectrometers is accomplished after the circuits
are removed from the fabrication apparatus and before they are inserted
into the next apparatus in the fabrication sequence. This requirement for
in-situ analysis has greatly increased the minimun cost of doing research
on device fabrication.
The facilities in which this instr~nentation is housed require
extreme control over air purity, to avoid dust particle disruption of the
fabrication, and extreme control over vibration, to avoid rnisaligrinent of
PAGENO="0422"
416
the successive patterns employed in the fabrication sequence. The
reliability of these as yet undeveloped circuits is anticipated to be a
major concern that is best addressed early in their development, since the
failure phenomena are anticipated to be inextricably tied to the
fabrication process employed at the microscopic level.
For these reasons, the first priority in microcircuit fabrication
was given to the refurbishment and upgrading of up to six university
centers for microcircuit fabrication, with a second priority of augmenting
two university reliability research centers to work closely on this new
class of circuits.
In a separate, but related, research area, reliability at the
systems level is perceived to be threatened today by the susceptibility of
advanced solid state circuits to electromagnetic interference at
relatively modest power levels. Research into hardening weapons systems
against intentional enemy electromagnetic interference or inadvertent
disruption by radiation from nearby friendly systems is required. The
facilities for enabling university participation in this research include
anechoic chambers and electromagnetic measurement instrumentation as a
first priority, and dedicated computational facilities for modeling as a
second priority.
13.3. Engineering
Engineering encompasses the disciplines usually associated with
university departments of mechanical engineering, aeronautics and
astronautics, civil engineering, industrial engineering, and materials
engineering. The subject matter frequently overlaps that.of the other
disciplines, such as Materials or Chemistry, but is usually closer to a
specific end application or requirement. For example, composite
structures is a thrust area that has the same ultimate goal as Materials
research on structural composites, namely lighter weight and stronger
structures for building weapons platforms. The distinction is the focus
in Engineering on determining the performance of composites through
innovative design and analysis of structures using state-of-the-art
materials. Research results are fed back to materials scientists to
provide guidance to their endeavors. A base of knowledge about optimal
design methods is thereby developed for application to many problems.
Proceeding with this example, non-destructive evaluation (NDE) techniques
must be developed to enable the engineer to perform these measurements in
support of the analysis of composite structures. There is considerable
resultant interaction with the materials scientists who also need NDE
techniques to evaluate their progress in controlling the composition of
materials.
Similarly, the area of Energetic Materials and Combustion involves
considerable interaction with chemists to improve propellants, explosives,
and fuels. The facilities in these two areas are typically large and have
a significant element of concern for the safety of the personnel perform-
ing the research. The instrumentation is becoming dominated by lasers and
analytical tools similar to that needed in Materials science.
Fluid mechanics and acoustics are the classical, almost exclusive,
domain of Engineering, with slight involvement by molecular and chemical
PAGENO="0423"
417
physics. The facilities are typified by dedicated wind tunnels and water
tunnels. Instrumentation is dominated by automatic digital data
acquisition and digital computer modeling and simulation of the
phenomena. Laser probes and acoustic sensors with sophisticated signal
processing are also mainstays of instrumentation in this discipline.
Manufacturing, design, and reliability have increasingly been moving
toward a computer-dominated emphasis on graphics, design aids, expert
systems for process control, artificial intelligence to relieve pilot
tirkload in single seat helicopters, and self diagnosis and self repair of
machines and weapons systems. Classical industrial engineering, computer
science, and structural engineering are very much coming together in this
field. The facilities are replicas of factory workcells or simulators of
aircraft cockpits and the instrumentation is heavily computer net~.irked.
The Defense Advanced Research Projects Agency (DARPA) is making advanced
teleconferencing equipment available to several university centers in
robotics so they may test their algorithns for robot vision on the DARPA
autonomous land vehicle located at a contractor facility. They will also
plan to provide replicas of a fingered robot hand to many of these
university research centers. Non-destructive evaluation for manufacturing
process monitoring and control, as well as for inspection of finished
parts and fielded systems, requires a comprehensive research progran,
which would best be accomplished through a center of excellence in
non-destructive evaluation/characterization.
Soil mechanics is uniquely supportive of blast hardened silos,
construction, maintenance, and repair of runways, and priority command,
control, and communications centers. The facilities at universities are
presses, shock tubes, or high-G centrifuges.
B. 14. Materials
Materials research includes the growth of semiconductor, magnetic,
and optical materials, as well as processing and fabrication of structural
materials such as metal alloys, ceranics, and composites. The processing
of semiconductor materials into electronic and optical devices and
circuits is reported under Electronics, while the testing of structural
composite materials and non-destructive evaluation for both manufacturing
and in-process control of materials is reported under Engineering. This
traditional division of research responsibility has begun to blur in
recent years, and multidisciplinary research teems have been forming in
recognition of the strong interaction between material growth, component
fabrication, and ultimate system performance. In fact, for optirmxn
coordination, the facilities requirements reported in this section for
compound semiconductor growth should be co-located or closely adjacent to
the microelectronic fabrication and reliability facilities reported under
Electronics.
The greatest potential payoff and also the greatest investment costs
are perceived by DOD materials research managers to be associated with two
areas: the growth of compound semiconductors and the fabrication of
advanced structural composites. High priority at somewhat reduced
investment is given to facilities for optical and magnetic materials and
for research on structural ceranics.
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418
Compound semiconductor growth has received only a small fraction of
the scientific and technical attention that has been spent on silicon.
This has been entirely justified to date, since silicon possesses
excellent electrical, thermal, and chemical properties, especially with
its high quality native oxides and silicides. Being an elemental semi-
conductor, silicon is significantly simpler from a device processing
standpoint than the compound semiconductors, such as galli~in arsenide,
cadmiun telluride, and alloys, e.g. galliun aluninun arsenide and mercury
cadmiun telluride. The steady doubling of the capability of silicon
integrated circuits every two to four years for the past twenty years is
evidence of the wisdom of this research investment strategy. It is only
recently that the material property limitations of silicon have presented
a serious limit to device performance. Research attention is currently
turning to at least three ways to get around this limitation. ~e
approach is mentioned in the Electronics section, having to do with new
device physics associated with ultra small device dimensions. A second
approach, for information processing, is to use artificial intelligence to
make "smarter" rather than just "faster" computers. The third approach is
to turn significant resources toward the growth and characterization of
the compound semiconductors. The facilities investment that is detailed
here would permit four to seven university centers to advance the
technology of compound semiconductors for signal detection, signal
processing, millimeter waves, and communications, to name just a few DOD
priority applications.
Composites materials have similar exciting potential for structural
applications, ranging from high strength, lightweight airframes and large
space structures to lightweight armor for highly mobile combat vehicles.
These materials utilize high strength fibers embedded in polymeric,
metal, or ceramic matrices. The creation of the fiber itself and the
interaction between the fiber and the matrix during the processing largely
determine the performance and reliability of the composite when exposed to
harsh military environments over its service life. ~ily recently have
advances in analytical tools permitted the microscopic characterization of
these materials, both physically and chemically. These tools are both
elegant and expensive. The facilities investment detailed here would
establish, through new construction and refurbishment, six centers of
university research on structural composite materials.
Optical materials are beginning to emerge in communications and
signal processing applications. The advances that have been made in
optical waveguides using silica glass exemplify the success possible
through materials processing research. The combined stringent
requirements for low transmission loss and very high tensile strength were
achieved through research linking materials structure, properties, and
performance. Magnetic materials in bulk form are widely used in critical
electrical components, such as electromechanical switches and microwave
phased array transmitters and receivers. In thin film form, magnetic
materials are used for recording media and non-volatile memory. The
facilities investment described here would establish two university
centers in optical materials and would augment one existing university
center in magnetic materials.
Structural ceramics research of high quality is performed in a
number of small university laboratories that are in need of refurbishment
and expansion to apply modern microstructural analysis techniques to
PAGENO="0425"
419
processing of high temperature ceranics for hostile environments. Both
bulk ceraaic components, such as radanes for high velocity aircraft, and
ceramic coatings on turbine engine components would benefit from this
upgraded research capability.
Finally, it should be noted that a segment of the materials research
community is dependent upon support from very large research facilities,
such as synchrotron and neutron sources. None of these facilities are
included in this report. The predominant funding for these national
facilities comes from NSF and DOE, with only minor support from DOD. Any
decrease in support of these facilities by the other agencies would
severely affect the DOD Materials research progran.
B.5. Physics
Research on new and improved sources of electromagnetic radiation is
a major component of the Physics prograii of DOD. The free electron laser
is a direct result of high risk research funded by DOD. It has demonstra-
ted an entirely new mechanism for generating coherent radiation that is
freed from the usual constraints imposed by the need for a material
mediua. This device has already demonstrated that very wide tunable
bandwidth is possible; this has great implications for its utility as a
scientific research tool in the analysis of materials, and as a frequency
agile radiation source for potential military applications, si~h as
communications and target tracking. Recirculating the electron bean in
storage rings offers theoretically high efficiency and hence the potential
of high power free electron lasers for directed energy weapons
application. The facilities investment reported in this section under
coherent radiation sources would refurbish and upgrade three to four
existing laboratories performing research on these novel sources.
More conventional lasers for a variety of wavelengths are being
explored as tools for research on ultra small integrated circuits, optical
computing, catalysis, and molecular biology and for tactical warfare
applications such as target designation, optical jamming, and covert
communications. The first demonstration of the use of a finely focused
laser bean to deposit micron-sized metal connecting lines on semiconductor
surfaces occurred under DOD sponsorship in the last five years. It was
immediately picked up by the integrated circuit manufacturers as a tool
for repairing defects in expensive integrated circuits, and in the
photomasks used to produce the circuits. Prior to this breakthrough,
lasers had only been used to remove excess material from circuits by
vaporizing short circuits and trimming resistors to tolerance. This
research continues today under DOD sponsorship and is demonstrating novel
methods of doping circuits and of depositing insulators and conductors.
Other laser research projects are attempting to `eapfrog over the
limitation foreseen in silicon integrated circuits that results from the
fact that as much as three-quarters of the surface of these circuits is
devoted to metal interconnecting lines between the hundreds of thousands
of constituent transistors. The propagation delay of the signals moving
on these interconnects at the speed of light is becoming more important in
determining the circuit speed than is the switching speed of the
transistors. Optical computing chips afford the prospect of distributing
the signals by laser beans to many portions of the circuit simultaneously,
PAGENO="0426"
420
thereby avoiding the input-output bottleneck of electrical integrated
circuits. The facilities reported under optical communications and
spectroscopy in this section would establish a new center for optical
circuitry and weuld upgrade an existing laboratory for optical
communications.
Directed energy devices require large facilities for research. The
high voltages and currents required can only be stored and switched by
physically large components as dictated by the scaling laws of electrical
power engineering. To some extent this represents a departure from the
usual scale of university research funded by DOD, since "big physics" is
usually supported by NSF or DOE. ~D has funded university centers in
pulsed power, but this has represented only approximately 10 percent of
the physics budget. The facilities described under directed energy
devices ~uld expand the existing pulsed power centers and upgrade other
centers for research on accelerators and microwave and millimeterwave high
power sources. Bean propagation and the interaction of electromagnetic
energy with materials would also be studied at these centers.
Astrophysics research directly produces knowledge of the background
radiation against which space objects must be detected. Secondarily, the
advances in instrLrnentation (optics, infrared, and x-ray) needed to conduct
this research improve our military capability to detect and track space
objects and to detect nuclear events in space. The major facility upgrade in
this section, and indeed, the single highest cost itan in the entire report is
a $1 50M high angular resolution imager center whose goal is a hundred-fold
increase in image sharpness on celestial objects and space vehicles.
C. S1!IMARIES
Laboratory facilities and equi~xnent needs for thrust areas associated
with the foregoing disciplines are given in the following sunmaries. The
science and technology implications of laboratory enhancmnents, and their
national security consequences are also addressed.
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421
CH~11STRY
Thrust Area: Laser Chemistry
Laboratory Needs
&~ ilding Requirements Total Facility
Facilities: (gross ft2) Cost ($ thousands)
-- Priority 1 --
New construction
Renovation/expansion 20,000 3,000
-- Priority 2 --
New construction 7~,000 9,000
Renovation/expansion 150,000 13,500
Subtotal 2145,000 25,500
Equipaent: Linear accelerator and storage ring electron sources; upgrade
equipment for free electron laser facility to enhance short wave-length
bean power; arrays of six lasers (dye, argon ion), with diagnostic,
data processing, and bean direction equipment for each of 15 laser
chemistry centers.
Priority Cost, ($ thousands)
1 7,000
2 30,000
Subtotal ~7,000
Total Cost: $62,500,000
Technical Objectives and Opportunities:
-- Priority 1 --
An upgraded free electron laser laboratory would be established. It would
be a high power, high time resoktion facility essential to progress in
chemical reaction kinetics, surface physics and chemistry, hot carrier
electron transport investigations, and high resolution photo emission studies.
-- Priority 2 --
Fifteen laser chemistry centers ~uld be established. This ntxnber
represents a best estimate of university community requirements to ensure
that DOD-sponsored research in the field is conducted in an efficient, cost-
effective manner. Centralized laser resources would facilitate the sharing
of expensive instrunentation and permit a reduction of' maintenance costs
through the pooling of technicians and shop facilities. The centers
~uld include picosecond lasers which, especially in the ultraviolet
region, offer a new tool for studying the dynamics of chemical reactions.
National Security Copsequences: Fundamental knowledge of chemical reac-
tions is crucial to much of military technology, e.g., to the improvement of
propellants, explosives, fuels, lubricants, and high energy lasers.
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CHEMISTRY
Thrust Area: Polymeric Materials
Laboratory Needs
Building Requ~recnents Total Facility
Facilities: (gross ft) Cost ($ thousands)
-- Priority 1 --
Ne~z construction
Renovation/expansion 15,000 2,000
-- Priority 2 --
New construction 170,000 20,500
Renovation/expansion 17,000 1,700
Subtotals 202,000 2L~,200
Equi~nent: Polymer molding; film casting; film and fibers drawing!
orfcutation equipment; integrated scanning transmission electron
microscopes and x-ray detector systems; SQUID magnetometers; picosecond
spectroscopy systems; Fourier transform nuclear magnetic resonance units;
electrophoresis equi~ent; data processing and analysis instrui~entation;
dedicated computer resources.
Priority Cost ($ thousands)
1 7,000
2 3,350
Subtotal 1D7~U
Total Cost: $311,550,000
Technical Objectives and Opportunities:
-- Priority 1 --
Laboratory upgrades would provide significant capabilities for new polymer
research at the molecular level, heteroatom polymer synthesis and character-
ization, characterization of polymers for electronics, etc. Focused centers
would be established for the development of a) a new generation of polymers for
electronics, optical, and magnetic applications, and b) composite materials
with unprecedented toughness and high temperature capabilities.
-- Priority 2 --
The proposed expenditures would greatly enhance research in the areas of
composite materials, ordered Structural polymers, and polymer thin films for
electronics applications. This in turn would lead to the development of
improved dielectrics, capacitors, and electroactive polymers for uses such as
piezoelectric sensors.
National Security Consequences: Polymer materials are essential elements of
virtually all strategic and tactical weapons systems. High temperature metal
matrix and ceranic matrix composites for applications such as radiation-
hardened structures and gas turbine blades require high temperature fibers.
Other applic~tions include cheap, expendable acoustic detectors for sonic
buoys, and a variety of electronic microdevices. Improvements in polymeric
materials would enhance the performance, reliability, and maintainability of a
wide array of weapons systems and logistics equipment.
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ELECTRONICS
Thrust Area: Microelectronic Fabrication and Reliability for
Unique DOD-Critical Devices/Materials
Biilding Requi5ements
___________ (gross_ft_) __________________
-- Priority 1 --
New construction 60,000
Renovation/expansion 60,000
- Priority 2 --
New construction
Renovation/expansion 20,000 11,000
Subtotal: 1140,000 119,000
Equipment: Vacuizn and plasma deposition; electron bean and x-ray
lithography; plasma etching; wet chemical etching; impurity analysis
with electron and ion beans; ccmputational support for device modelling
and process simulation; environment simulators for temperature,
huiiidity, vibration, and synchrotron light source for surface diagnostics.
Priority Cost (~ thousands)
1 30,000
2 6,000
Subtotal: 36,000
Total Cost: $P5,000,000
Technical Objectives and Opp6rtunities:
-- Priority 1 --
Provide vibration-free facilities for extremely small feature-size (one
hundred angstrom) micro.-circuit fabrication of devices utilizing technology
beyond VHSIC. Electron-bean and x-ray lithographic equipment and plasma and
laser enhanced photo deposition apparatus are required. Electron and ion-
bean imaging systems for measurement analysis of ultra small structures are
necessary.
-- Priority 2 --
Establish research capability in reliability of micro-circuit devices,
especially with respect to temperature, huiiidity, and radiation hardness
of ultra small devices. Expand synchrotron analysis capability for analysis
of electrical contacts and other natural interfaces.
National Security Consequences: Integrated circuit fabrication is
pressing the limits of our knowledge of chemistry and physics, particularly
of interfaces between materials, and the utilization of unique materials for
DOD devices. Research to provide the knowledge required for further
advances in integrated circuits can only come if researchers in university
laboratories have access to state-cf-the-art fabrication equipment and
processes. Reliability of military systems using integrated circuits
depends to a large extent on the processes used to fabricate circuits and
their stability over time.
423
Laboratory Needs
Facilities:
Total Facility
Cost ($ thousands)
30,000
15,000
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424
ELECTRONICS
Thrust Area: System Robustness and Survivability
Laboratory Needs
aiilding Requi~ements Total Facility
Facilities: (gross ft ) Cost $ thousands)
-- Priority 1 --
New construction
Renovation/expansion 10,000 14,000
-- Priority 2 --
New construction
Renovation/expansion 5,000 2,000
Subtotal: ~
Equipnent: Electromagnetic generators; anechaic chanbers;
microwave measurement equipment; propagation ranges; computation
facilities for modelling and diagnostics.
Priority Cost (~ thousands)
1 3,000
2 2,000
Subtotal:
Total Cost: $11,000,000
Technical Objectives and Opportunities:
-- Priority 1 --
Expand existing facilities for the measurement of electromagnetic
propagation, measurement, and system network investigations.
-- Priority 2 --
Provide computational facilities to enhance modeling of electromagnetic
interference phenomena.
National Security Consequences: Sophisticated weapon systems are
potentially vulnerable to electro-magnetic interference, either consciously
induced by enemy forces or unintentionally introduced through radiation
from friendly force equipment. Subtle interactions between electronic
systems operating on the sane platform can degrade performance or completely
deny weapon systems availability. Fundanental scientific understanding of
means for minimizing these effects is required to supplement the current
engineering fixes being pursued.
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425
ENGINEERING
Thrust Area: Combustion
Laboratory Needs
Facilities: ~uilding Requi~ements Total Facility
(gross ft ) Cost ($ thousands)
-- Priority 1 --
New construction 57,500 9,250
Renovation/expansion 95,000 8,600
-- Priority 2 --
New construction
Renovation/expansion 9,300 1,250
Subtotal 161,800 19,100
Equi~nent: Variable high-pressure flow reactors; optical diagnostic
instrumentation; chemical analysis instrumentation; vector processors for
the simulation of turbulent multiphase processes; dedicated computer
diagnostic and analysis capabilities.
Priority Cost (~ thousands)
1 15,000
2 11,750
Subtotal 2b,750
Total Cost: $145,850,000
Technical Objectives and Opportunities:
-- Priority 1
Conduct research on improving the energy efficiency of turbine and internal
combustion engines, investigate the viability of alternate fuels (e.g.,
methanol), develop insights into high-pressure, high-temperature combustion
chemistry of present and future propulsion fuels, study multiphase
turbulent reacting fuels, and observe high altitude and high mach nunber
combustion processes.
-- Priority 2 --
Develop unique facility for studying combustion and plasma phenomena of
propulsion systems; anticipated benefits include increased understanding of
ranjet and rocket motor instabilities, fire propagation phenomena ignition
and flane propagation mechanians, and plaana/gas dynanic interactions.
Upgrade facility for quantitative flow field, imaging to advance
understanding of phenomena underlying energy conversion, aerodynanics, and
propulsion processes.
National Security Consequences: Improve the range, performance, and relia-
bility of aircraft, missile, sliip, and land vehicle propulsion systems; enhance
payloads, lower operating costs, reduce corrosion and detectable exhaust
signatures, increase fuel performance, and reduce engine development time.
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426
ENGINEERING
Thrust Area: Canposite Structures
Laboratory Needs
Building Requirements Total Facility
Facilities: (gross ft2) Cost ($ thousands)
-- Priority 1 --
New construction
Renovation/expansion 5,000 1,180
-- Priority 2 --
N/A
Subtotals TT~
Equipnent: Mechanical testing devices capable of multiaxial and variable
loading rates in high temperature environments; real-time non-destructive
ultrasonic, acoustic emission and x-ray radiography testing equip~ent;
high temperature test equipment with associated data processing and
dedicated computational capability.
Priority Cost (5 thousands)
1 3,1420
2
Subtotal
Total Cost: $14,600,000
Technical Objectives and Opportunities:
-- Priority 1 --
Composite materials have not been exploited to the degree possible, due to
a lack of detailed understanding of their response to complex loading
conditions, high strain rates, and hostile environments. The proposed
facility would likely engender major advances in the understanding of the
thermomechanical behavior and failure characteristics of composite
materials, with emphasis on high temperature conditions.
-- Priority 2 --
N/A
National Security Consequences: Military applications of composite
materials include engine hot sections, nozzles, missile nose cones,
aircraft surfaces, lightweight high-strength materials, etc. Improved
materials are key to enhancing the performance and maintainability of
weapons systems and logistics equi~nent.
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427
ENGINEERING
Thrust Area: Energetic Materials
Laboratory Needs
~ilding Requi~ements Total Facility
Facilities: (gross ft ) Cost (5 thousands)
-- Priority 1 --
New construction
Renovation/expansion 1 ,000
-- Priority 2 --
N/A
Subtotals
Equipment: Mechanical and x-ray diagnostic devices; time-resolved
optical spectrometer; electromagnetics effects sensor; gas guns; sample
preparation equipment; specialized machine shops.
Priority Cost ($ thousands)
1 7,000
2
Subtotal
Total Cost: $8,000,000
Technical Objectives and Opportunities:
-- Priority 1 --
A primary objective is the development of a broad class of high performance
propellants. A second priority objective is research on energetic
materials (explosives, propellants, etc.) which remain inert under shock
conditions. This involves theoretical and experimental investigations of
atomic and molecular processes in shocked condensed wave materials.
Experimental research would provide time-resolved optical, x-ray,
electrical, and mechanical diagnostics on materials stimulated by
mechanical impactors or lasers.
-- Priority 2 --
N/A
National Security Consequences: Inadvertent ignition of explosives and
propellants under mechanical shock and thermal stress is a significant
operational hazard, particularly under combat conditions. The development
of energetic materials which a) are relatively inert to those stresses, and
b) function optimally on command, would mitigate this problem.
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428
ENGINEERING
Thrust Area: Fluid Mechanics and Acoustics
Laboratory Needs
Facilities: ___________________
New construction
Renovation/expansion
New construction
Renovation/expansion
Subtotals
~iilding Requirements
(gross ft2)
-- Priority 1 --
7,000
-- Priority 2 --
Total Facility
Cost ($ thousands)
650
350
1,1Jtgy
Equipment: State-of-the-art instrumentation for physical acoustics
research including highly stabilized lasers, cryogenic equipment, and
digital processing gear for automating signal detection and data
processing; instrumentation and support equipment for wind and water
tunnel facilities for the upgrading of data acquistion and reduction
capabilities. For water tunnels, traverse mechanisms, non-linear wave
generators, current generators, and related measuring instruments are
needed. Wind tunnel requirements include a multi-axis, three-dimensional
laser doppler anemometer, and equipment for generating oscillatory flows.
Priority Cost ($ thousands)
3,600
2 3,350
Subtotal ~795~
Total Cost: $7,950,000
Technical Objectives and Opportunities:
-- Priority 1 --
-- Wind tunnels facilities - provide a national resource for studying
turbulent and unsteady flows in Reynolds number regimes typical of subsonic
flight, and a second facility devoted to the study of the physics of
separated flows and transitioning boundary layers. This research could
lead to the development of revolutionary concepts of, and predictive
methods for, flow management and control in the flight vehicle environment.
-- Water tunnel facility - upgrade an existing facility to greatly reduce
flow noise inherent in present tunnel configurations. This improvement
would facilitate research on reducing flow noise due to turbulent boundary
layer flow around ship hulls.
-- Priority 2 --
-- Wind tunnel facilities - modifications at two sites to facilitate a)
research on the prediction of the transition from laninar to turbulent flow
PAGENO="0435"
429
and its impact on vehicle drag, andb) low turbulence flow phenomena with
emphasis on associated viscous effects, leading to improvements in aircraft
design and control technology.
-- Studies of nonlinear surface wave mechanics to enhance understanding of
wave/wave/current interactions, ocean wave/ship wake interaction processes,
and associated underwater acoustics, leading to improvements in ship
designs, wake signature reduction, etc.
-- Integrated physical acoustics laboratory to facilitate research in sound
propagation and attenuation, molecular and chemical physics, and underwater
acoustics.
National Security Consequences: The proposed facilities enhancements
would support research critical to improved aircraft performance, range,
payload, and fuel efficiency. Defense applications of water tunnel
upgrades include improved range and performance of ships (surface and
submersible), reduction of noise signatures of submarines, and enhanced
performance of acoustic sensors through the reduction of host-sensor
interference.
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430
ENGINEERING
Thrust Area: Manufacturing, Design, and Reliability
Laboratory Needs
&dlding Requirements Total Facility
Facilities: (gross ft2) Cost (~ thousands)
-- Priority 1 -
New construction 77,000 9,250
Renovation/expansion 55,000 6,250
-- Priority 2 --
New construction 10,000 1,200
Reriovation/expaansion 20,Q00 J4,500
Subtotals 162,000 21,200
Equipment: Hardware and software for design of component inspectability
and manufacturing process control functions; integration of advanced non-
destructive testing capabilities with computer-aided mechanical design
methods; modernization of dynamic track facility including electronic
sensors and displays, simulators, and noise and vibration sensors; h~xnan
factors diagnostic equipment; avionics gear; combustion diagnostic
equipment.
Priority Cost (~ thousands)
1 10,000
2 3,000
Subtotal 13,000
Total Cost: $31~,2O0,000
Technical Objectives and Opportunities:
-- Priority 1 --
Advances in manufacturing methods having DOD-wide implications for reducing
weapons system life-cycle cost, and for enhancing systems reliability,
would be pursued. Ancillary objectives include reduced lead times and
product development costs, improved productivity and quality control, and
reduced inventory costs. A new, unique interdisciplinary manufacturing
technology facility emphasizing optimal materials utilization and product
reliability would be established. Emphasis would be placed on applications
of artificial intelligence concepts to the manufacturing cycle. A second
laboratory would be developed for studying the application of computers to
the design, manufacture, and control of complex systems, and for the
development of advanced composite materials.
Integrated, coordinated research into all aspects of rotorcraft design,
manufacturing, and performance at two laboratories is a second objective of
the proposed expenditures. Areas of concentration include computer-aided
design and manufacturing of rotorcraft components, the study of human
PAGENO="0437"
431
factors problems associated with the workload of single pilots in a high
performance rotorcraft, stability and control research, and combustion
studies aimed at enhancing engine performance.
-- Priority 2 --
Factory of the future concepts would be explored combining manufacturing
physics and artifical intelligence, with emphasis on the develo~ent of
unmanned, self-diagnostic, and self-repairing machines and robots.
Upgrades of two more rotorcraft laboratories addressing the technical
issues outlined for Priority 1 would be made possible, with emphasis on
rotcrcraft dynanics and avionics, respectively.
National Security Consequences: Procurement and maintenance cost-
containment are key considerations in the DOD budget. The proposed
facilities would support research directed toward these goals. Improved
quality control would enhance product reliability. Army mobility rests to
a great extent on rotorcraft (helicopter) performance capabilities,
including speed, lift capacity, payload, and crash-worthiness. The
proposed facility expenditures would address all of these factors in a
much more comprehensive manner than is now feasible.
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432
ENGINEERING
Thrust Area: Soil Mechanics
Laboratory Needs
Building Requ~ranents Total Facility
Facilities: (gross ft ) Cost ($ thousands)
-- Priority 1 --
N/A
-- Priority 2 --
New construction 6,000 1,600
Renovation/expansion
Subtotal 6,000 1,600
Equipi~ent: Four hundred C-ton centrif~e with support apparatus.
Priority Cost ($ thousands)
1 N/A
2 200
Subtotal
Total Cost: $1,800,000
Technical Objectives and Opportunities:
-- Priority 1 --
N/A
-- Priority 2 --
The centrifuge would permit the study of soil and structure phenomena in
realistic stress regimes not possible with present facilities. The
laboratory would be developed to study both static and dynamic loadings.
National Security Consequences: Research ~uld be applicable to the
development of improved structures for missile silos and hardened tactical
facilities.
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Thrust Area: Optical
and Magnetic Materials
Laboratcry Needs
Facilities:
New construction
Building Requirements
(gross ft2)
-- Priority 1 --
10,000
Total Facility
Cost ($ thousands)
3,000
Renovation/expansion 15,000
2,000
-- Priority 2 --
New construction
Renovation/expansion 10,000 2,000
Subtotal: 35,000 7,000
Equiçment: Preparation and handling facilities; high vacuun
furnaces; computer-controlled annealing ovens; fiber extrusion and
cladding apparatus; grinding and polishing equipaent; electron bean
microscopes; laser diagnostic facilities; secondary ion mass
spectrometers; electron spectrometers; Reman surface spectrometers;
high field magnets; casting/grinding/magnetic aligning/sintering
equiçznent operating in "oxygen-free" atmospheres.
Priority Cost ($ thousands)
1 2,300
2 1,000
Subtotal:
Total Cost: $10,300,000
Technical Objectives and Opportunities:
-- Priority 1 --
Establish two university centers of excellence in optical materials for both
fiber-optic applications and integrated optics circuits for signal
processing. Facilities should include material growth, device fabrication,
and evaluation capabilities. The centers would generate benefits in such
DOD high pay-off areas as durable low loss fibers, laser sources in the ultra-
violet and visible wavelength ranges, detectors in-the 8_i14 micron region,
~ proq ses-1-noiIi~r optical materials, etc.
-----~Priority 2 --
Expand existingcapability in magnetic materials for improvements in field
strength and in temperature operating range of rare earth magnet materials.
Research emphasis would be on materials characterization and structure
definition using Mossbauer, x-ray diffraction, scanning transmission electron
microscope, and neutron diffraction methods.
National Security Consequences: Optical materials are assuning greater -
significance to defense systems for surveillance, laser designation, and high
energy laser weaponry. In addition, optical signal processing may provide an
alternate to conventional integrated circuits for infOrmation processing.
Magnetic materials are currently used in microwave trananitting devices,
switching devices, and in non-volatile memory systems for crucial military
information processing and coriinunciation systems.
433
PAGENO="0440"
-- Priority 2 --
New construction
Renovation/expansion 140,000 10,000
Subtotal: 100,000 33,000
Equiçment: Molecular bean epitaxy; metal organic chemical vapor deposition
electron bean diagnostics; laser probe diagnostics; mass spectrometry.
Priority Cost ($ thousands)
1 30,000
2 10,000
Subtotal: ~40,000
Total Cost: $73,000,000
Technical Objectives and Opportunities:
-- Priority 1 --
Crystal growth facilities for low defect silicon and for device quality
gallium arsenide and gallium aluminum arsenide are required. Instrumentation
in this area combines growth with evaluation of materials within the same
deposition chanbers. By contrast, in commercial practice crystal growth of
bulk ingots is performed in an activity separate from the evaluation of the
gro~in material. These facilities are extremely expensive and are in the
laboratory apparatus phase currently, with few commerical instruments being
available.
-- Priority 2 --
Crystal growth facilities for advanced compound semi-conductors such as
mercury cadmium telluride are required for the improvement of optical as well
as electronic devices. Relatively little research has been done on the
application of modern growth techniques to these compounds, largely because of
the attention focused on silicon and gallium arsenide.
National Security Consequences: Integrated circuits are at the heart of
most modern military systems, from command and control to smart weapons. The
VHSIC progran has made a major advance in the capability of these devices, by
rediming the feature size down to the one micron regime. Future advances in
this circuitry will require greater fundanental understanding of the
functioning of conventional integrated circuits. For feature sizes even
smaller than this, quantum effects will introduce wholly new device phenomena,
presenting major opportunities for advancement in information processing
capabilty. Examples of technology applications include infra-red focal plane
array detectors, integrated optics, millimeter and microwave integrated
circuits, and optoelectronics.
434
MATERIALS
Thrust Area: Silicon and Compound Semiconductor Growth
Laboratory Needs
Building Requ~rements Total Facility
Facilities: (gross ft ) Cost ($ thousands)
-- Priority 1 --
New construction 20,000 15,000
Renovation/expansion 140,000 8,000
PAGENO="0441"
435
MATERIALS
Thrust Area: Structural Ceranics
Laboratory Needs
&iilding Requi~ements Total Facility
Facilities: (gross ft ) Cost ($ thousands)
-- Priority 1 --
New construction 20,000 3,000
Renovation/expansion 5,000 1,000
-- Priority 2 --
New construction 30,000 5,000
RenovatiorVexpansion 10,000 2,000
Subtotal: 65,000 11,000
Equipnent: Ball milling and mixing equiçznent; hot isostatic
presses; vacu~xn and controlled atmosphere furnaces; fume hoods;
surface analysis equi~nent; scanning electron microscopes;
secondary ion mass spectrometers; x-ray diffractometers;,
computational facilities for data acquisition and process
modelling.
Priority Cost ($ thousands)
1 9,800
2 5,1400
Subtotal:
Total Cost: $26,200,000
Technical Objectives and Opportunities:
-- Priority 1 --
Three university laboratories currently involved in ceranics research would be
upgraded. The primary benefits include enhanced understanding of the funda-
mental relationships between (a) ceranics constituents and processing
techniques, and (b~ material properties, reproducibility, and reliability.
Elucidation of these governing factors should greatly reduce the time required
to develop improved ceranic materials and composites. Principal research
benefits envisioned include develo~nent of non-destructive evaluation tech-
niques, methods for the deposition oc ceranic coatings using plasma techniques,
and developnent of materials which will tolerate severe thermal shock and
sustained high temperatures, and which have uniform, reproducible
microstructures.
-- Priority 2 --
Three additional laboratory facilities would be expanded in the
context of the above rationale.
National Security Consequences: In hostile enviromnents, metal
surfaces oxidize, corrode because of stress, fail because of fatigue,
exhibit effects from laser radiation and interfacial phenomena, and
are subjected to friction and wear. Ceramic materials are used in
extremely hostile enviroranents in turbine engines, rocket nozzles,
and electromagnetic windows of high velocity aircraft and missiles.
PAGENO="0442"
436
MATERIALS
Thrust Area: Structural Composites
Laboratory Needs
&dlding Requi~enents Total Facility
Facilities: (gross ft ) Cost ($ thousands)
-- Priority 1 --
New construction 50,000 15,000
Renovation/expansion 60,000 8,000
-- Priority 2 --
New construction
Renovation/expansion 80,000 10,000
Subtotal: 190,000 33,000
Equipment: Vapor deposition epitaxy reactors; filanent winders;
squeeze casting presses; injection molding presses; textile forming looms;
thermoforming presses; servo-hydraulic forming equipment; powder
processing and fiber growth equipment; special equipment for ceranics
processing; high temperature/high pressure autoclaves; process control
computers; diagnostic and modeling computers and graphics.
Priority Cost (5 thousands)
1 20,000
2 20,000
Subtotal: `tO,OOO
Total Cost: $73,000,000
Technical Objectives and Opportunities:
-- Priority 1 --
Establish four major university centers of excellence in the fabrication of
fiber and matrix materials, emphasizing polymer matrix and ceranic matrix
materials. Capabilities should include fabrication and layup of small
sanples and diagnostic materials for the analysis of thermophysical and
thermomechanical properties.
-- Priority 2 --
Supplement the above with three to four additional university centers
with similar missions.
National Security Consequences: Lightweight and high strength composite
materials are increasingly being used in aircraft and spacecraft. These
materials combine the high strength of ceranic fibers with the ductility of
polymeric or metallic matrices. Significant performance advantages have
already been obtained through the use of composite materials, including
ceranic matrix composites, and further performance advantages are foreseen,
particularly with regard to high temperature capability, laser hardness,
armor, and low observables.
PAGENO="0443"
437
PHYSICS
Thrust Area: Astrophysics
Laboratory Needs
~iilding Requi~ements Total Facility
Facilities: (gross ft ) Cost ($ thousands)
-- Priority 1 --
N/A
-- Priority 2 --
New construction 6,000 11,550
Renovation/expansion 35,000 5,100
Subtotal: 103,000 ~
Equipaent: Radio, optical, and x-ray astronomy equipaent; upgrade of
100 inch aperture telescope for active optics and interferometric imaging;
high angular resolution imager with one milliarcsecond resolution and
optical elements of 7 1/2 meters; 14-meter telescope for optical/infrared
imaging and spectroscopy.
Priority Cost ($ thousands)
1 N/A
2 152,065*
Subtotal: 152,065
Total Cost: $168,715,000
* Includes $150,000,000 for high angular resolution imager.
Technical Objectives and Opportunities:
-- Priority 1 --
N/A
-- Priority 2 --
- Expand laboratory capabilities in radio, optical, and x-ray astronomy to
study final stages of evolution of stars, formation of neutron stars and
black holes, the occurrence of supernova, and to elucidate recently
observed non-thermal radio sources.
- Extend existing capabilities in active optics, speckle imaging techniques,
and advanced detector prograns to existing telescope to produce
diffraction-limited imaging of astrophysical sources.
- Establish high angular resolution imager center which exploits advances in
optics, sensors, and computer technology to afford a hundred-fold increase
in image sharpness on celestial objects (quasar nuclei, stellar, and solar
system object surface features) and space vehicles.
- Develop new optical and infrared telescope/instrumentation for
astrophysics applications embodying improved precision pointing and
tracking, image quality optimization, advances in optical and infrared
technology, high speed two-dimensional photon detectors, etc.
PAGENO="0444"
438
National Security Consequences: Advances in astrophysics-related
imaging techniques have important applications for the detection and
identification of space and non-space objects of military significance. In
particular, the technological development of active optics in combination
with speckle imaging will make possible diffraction limited observations of
objects through the atmosphere. The enhancement of x-ray instrumentation
capabilities has application to the detection of nuclear events in space.
PAGENO="0445"
PHYSICS
Thrust Area: Coherent Radiation Sources
Laboratory Needs
Facilities: ___________________
New construction
Renovation/expansion 17,000 2,500
-- Priority 2 --
New construction
Renovation/expansion --- 14 ,000
Subtotal: 17,000 6,500
Equipment: Tunable two-beam two-stage free electron lasers;
millimeter range free electron laser; mode-locked laser and support
equipment; spectrographs for optical emission spectroscopy;
electronic processing equipment (lithographic, deposition,
etching); auxiliary interface and support equipment.
Priority Cost ($ thousands)
1 1,500
2 6,250
Subtotal:
Total Cost: $114,250,000
Technical Objectives and Opportunities:
-- Priority 1 --
Laser facilities are key assets for a variety of materials and directed
energy related research. The cited expenditures would substantially
enhance the capability of universities to~explore and expand technology
horizons in electronic materials, catalysis, corrosion, and molecular
biology, among others. Emphasis is on more broadly tunable lasers, which
generate coherent radiation over a wide range of energies. This greatly
enhances the flexibility available to researchers for analyzing material
properties, particular surfaces, and interfaces of importance to solid
state electronics and optoelectronics.
-- Priority 2 --
Laser-guided plamna and electron beam facility upgrades will allow the
university canmunity to explore more efficiently and comprehensively
heretofore unknown aspects of directed energy propagation concepts.
National Security Consequences: Coherent radiation research is critical
to a variety of DOD R&D missions, including the design of directed energy
weapons, propagation (e.g., "channeling") of charged particle beams,
improvement of high power radar technology and electronic countermeasures,
advances in ultra-mnall electronic devices, optical storage and switching
aspects of ultra-fast optical computers, etc. High average moderate power
tunable lasers are expected to have important implications for tactical
applications related to electronic warfare.
439
~ilding Requi~ements
(gross ft
-- Priority 1 -
Total Facility
Cost ($ thousands)
PAGENO="0446"
440
PHYSICS
Thrust Area: Directed Energy Devices
Laboratory Needs
&iilding Requir~nents Total Facility
Facilities: (gross ft2) Cost ($ thousands)
-- Priority 1 --
New construction
RenovatiorVexpansion 63,000 13,250
-- Priority 2 --
New construction
Renovation/expansion 20,000 14,000
Subtotal: 83,000 f77~
Equipaent: Hardware to enlarge accelerator power supplies and capacitor
banks; vacu~xn tube fabrication equipment; large electric discharge
chambers; pulsed power generator; high-power glass laser; dedicated data
acquisition and analysis computer facilities.
Priority Cost (~ thousands)
1 6,250
2 11,000
Subtotal: 1~~5
Total Cost: $27,500,000
Technical Objectives and Opportunities:
-- Priority 1 --
- Upgrade stellatron accelerator facility as a testbed for high current,
high energy accelerators, `including screen room and associated diagnostic
instr~rnentation. Facility would generate data of use in the developuent of'
compact, high performance accelerators in the non-linear beam interaction
regime.
- Establish center for research on thermionic sources of millimeter wave
radiation at megawatt power levels. The facility would provide under-
standing electron-electromagnetic field interactions leading to the
development of Rf sources in a regime extending to 30 THZ.
- Develop high repetition rate, high average power pulsed power
facilities to support studies in plasma beam propagation,
microwave power generation, and the interaction of electromagnetic
radiation with materials.
-- Priority 2 --
- Expand center for research on switches and power conditioners for
extr~aely high voltages and high currents. Research in this area
is heavily dependent on the existence of specialized facilities.
PAGENO="0447"
441
National Security Consequences: Compact high current, high energy
accelerators are key components in charged and neutral particle beam weapons
concepts. Thermionic radiation sources are essential components of and/or
have implications for fusion power sources, directed energy weapons, and
spacecraft vulnerability questions associated with ion clouds in space.
High voltage and high current switches, regulators, and storage devices are
required to operate directed energy weapons. The develo~nent of repetitive
and reliable opening switches would remove significant impediments to the
practical implementation of all directed energy devices.
PAGENO="0448"
442
PHYSICS
Thrust Area: Optical Communications and Spectroscopy
Laboratory Needs
Building Requirements Total Facility
Facilities: (gross ft2) Cost ($ thousands)
-- Priority 1 --
N/A
-- Priority 2 --
New Construction 8,000 1,000
Renovation/expansion
Subtotal: ~7~O
Equipiient: Lasers (stable argon ion, ring, picosecond CO
femtosecond dye and YAG, mode-locked glass); transient digitizers;
computational and digital signal processing capabilities; scanning
electron microscope; optical components with special coatings.
Priority Cost ($ thousands)
1 1,550
2 950
Subtotal:
Total Cost: $3,500,000
Technical Objectives and Opportunities:
-- Priority 1 --
Laboratory upgrade would facilitate research leading to a better under-
standing of the fundamental processes and interactions in semiconductors
and microstructures necessary for the developoent of ultra-fast
semiconductor electronic devices.
-- Priority 2 --
- Laboratory improvement would permit detection of weak signals which
arise in many photon statistic experiments. For example, the creation of
photon pairs through non-linear processes followed by subsequent
simultaneous detection (i.e. correlation experiments) generally produces
weak signals. Such phenomena could greatly expand communication
signal detection capabilities.
- A Center for Optical Circuitry would be established for optical
computing. It offers the possibility of great advances in computing
speed, capacity, and degree of paralleliam over electronic computing.
Dramatic new computer architectures are possible, e.g., three-
dimensional logic and storage.
National Security Consequences: A wide variety of defense-related
technology improvements are based on progress in the development of
extremely fast and compact electron devices for digital and analog appli-
cations. These include smart weapons and surveillance systems. In
addition, secure optical communications have important applications to
C3.
PAGENO="0449"
443
CHAPTER V
DISCUSSION AND RECf~1MENDATIONS
A. DISCUSSION
The laboratory needs cited in Chapter IV relate to universities
already heavily involved in conducting research for DOD. They represent a
small subset of the 157 colleges and universities addressed in Tables III-
14 and 5, and an even smaller segment of all research universities included
in Tables 111-2 and 3. The AAU study suamarized in Table 111-i equates
with this work most readily in terms of the nullber of institutions covered.
Summary comparisons follow between the prior laboratory as.sessments
cited in Chapter III and the present work given in Chapter IV. It should
be emphasized that these comparisons involve the DOD-specific laboratory
needs developed in this report as opposed to more general needs addressed
in prior studies. Nonetheless, they suggest that the cunulative expendi-
tures discussed in Chapter IV are of reasonable magnitude in the context
of general university laboratory needs identified in other studies.
o The AAU data shown in Table Ill-i relate to 15 universities, a
figure roughly equivalent to the average nuiiber of institutions
encompassed by defense-related laboratory needs for each of the
disciplines cited in Table TV-i. This probably accounts for the
fact that, for some disciplines, defense-related totals
substantially exceed the AAU report figures. Interpretations of
these comparisons must be tempered by the fact that the
discipline-specific university populations encompassed within the
present study differ markedly from the AAU sample population. A
Comparison of Tables Ill-i and IV-i indicates that the defense-
related facilities needs cited in this report constitute 143
percent of the AAU Chemical Sciences projections for the period
1982-84, over 100 percent for Engineering (encompassing the
Electronics, Engineering, and Materials categories of Table IV-
1), and 55 percent for Physics. For projected equipment needs,
those of this study exceed the AAU figures by factors of. roughly
three and six for Chemical Sciences and Engineering. The
nuabers are comparable for Physics, excluding the astrophysics
high resolution imager cited in the present study.
o According to NSF staff, an estimated 50 percent to 70 percent of
the $221 million cited in Table 111-2 for 1983 university capital
expenditures (research and instructional) was devoted to research
laboratory facilities. K~suming, for purposes of comparison, a
60 percent figure, 1983 research laboratory expenditures for all
universities in the engineering and physical science disciplines
total $133 million. To obtain a roughly comparable figure, one
can annualize the ~275 million of defense-related engineering and
physical sciences facilities needs (Table IV-1) over a five-year
period. This yields an annual expenditure rate of $55 million.
It represents slightly more than 40 percent of the estimated $133
million spent by all universities.
53-277 0 - 86 - 15
PAGENO="0450"
444
o Research equipment expenditures for all U.S. colleges and
universities are sumnarized in Table 111-3 for Engineering,
Chemistry, and Physics and Astronomy. Engineering expenditures
average approximately $70 million for the two-year period. The
NSF Engineering category compares roughly to the combined
Engineering, Electronics, and Materials categories of this
report, where priority 1 and 2 equipment needs shown in Table
Tv-i total almost $200 million. If the $200 million is
annualized over a five-year period, approximately .$~40 million in
FY 85 dollars would be spent for defense-related equipment
annually. This represents over 55 percent of the average 1982-83
engineering annual equipment expenditures for all higher
education institutions. Similar analyses for physics and
chemistry suggest that needs in these areas cited in Table IV-1
pro-rated over five years are approximately $35 million and $9.5
million, respectively. The projected annual physics expenditure
is roughly equal to the NSF 1982-83 average for all universities,
largely due to a $150 million high resolution imager for
astrophysics. Similarly, the projected chemistry annual
expenditures are 30 percent of the average for all U.S.
universities for the two-year period.
o Column two of Table 111_It lists 1982 research equipment
expenditures for the top 157 research universities. As in Table
111-3, the NSF Engineering category compares roughly to the
combined Engineering, Electronics, and Materials categories of
this report, whose equipment needs total approximately $200
million. Assuming again that expenditures for defense-related
laboratory equipment needs would be spread over a five-year
period, approximately $~40 million in FY 85 dollars would be
spent for this purpose annually. This represents roughly 145
percent of the 1982 expenditures for the 157 universities.
Similarly, the five year annual expenditure level for physics
from Table iv-i is over 60 percent of the 1982 equipment purchase
level, largely due to the inclusion of the aforementioned $150
million high resolution imager for astrophysics applications.
The five-year expenditure level implied for chemistry in Table Iv-
1 is $9.5 million, or approximately 25 percent of the stated 1982
expenditures by the 157 universities.
o The replacement value of "academic research instrument systems in
active research use" for the aforementioned 157 universities is
given in Table 111-3 in terms of 1982 dollars (Column ID. With
an inflation factor of 1.076 applied to the 1982 costs, Table v-i
gives priority 1 and 2 (total) defense-related equipment needs
from Table iv-i expressed as percentages of Table 111-5
replacement values. As before, the NSF Engineering category
encompasses the Electronics, Engineering, and Materials
categories of this report. For the Engineering and Physics and
Astronomy categories, stated defense-related needs are quite
substantial in comparison with the NSF equipment replacement
figures. The Chemistry percentage is substantially lower,
perhaps reflecting a proportionately lesser DOD involvement in
broad aspects of experimental chemistry.
PAGENO="0451"
445
Table V-I
Defense-related university laboratory equipment needs (Table IV-1) expressed as
percentages of replacement costs for all research equipment at 157 leading
research universities (Table 111-5)
Field of Research % of Replacement Value
Chemistry 15
Engineering
Physics and Astronomy 68
PAGENO="0452"
446
B. REC~1MENDAT10NS
A total of $300 million over a five (5) year period is proposed for
the upgrading of university laboratories.
1. The priority 1 laboratory facilities needs cited in Table IV-1
should be addressed with incremental funding of a five-year $150 million
initiative. The initiative should be a part of, and administered through,
the existing contract research programs of the OXRs and DARPA. It is
believed that this is the most efficient mechanism for targeting
facilities improvement funds toward the highest DOD research priorities.
This program would be of equal magnitude (i.e. $150 million expended at an
annual rate of $30 million) to the existing University Research
Instninentation Program. (URIP) pertaining to equipnent, but would be
allocated as facilities-earmarked increments to competitive research
awards. It would thus differ from URIP in that it would not require the
establishment of separate review and award mechanisms. It should be
stressed that, in the best interests of national security, neither
equipment nor facilities upgrade programs should be funded at the expense
of existing OXR and DARPA competitive research programs. Further erosion
of the latter would jeopardize the scientific basis for future
technological innovation on which our national security depends.
2. The existing URIP program should be extended by three
years at its present level of $30 million per year. This, combined with
the remaining two years ($60 million) of the present program, would
constitute the $150 million required to address priority 1 equipiment needs
(Table IV-1).
3. Priority 2 laboratory needs should be addressed as a
national issue with the involvement of other federal agencies having
an impact on the national science and technology base, i.e. the National
Science Foundation, NASA, Department of Energy, etc.
Ji. Very large items of equipnent and/or facility needs,
e.g. the $150 million astrophysics high resolution imager cited in this
report, should be addressed on their merits as individual appropriations
rather than as parts of broader, more general funding initiatives.
PAGENO="0453"
APPENDIX
STUDIES OF ACADEMIC FACIL1TIES*
Health Related Research
Facilities in the U.S. in
the Nonprofit Nonfederal
Sector"
Study by Westat Corporation
for National Institute of
Health (NiH)
(1969)
"Higher Education General
Information Survey" (REGIS)
Conducted by the National
Center for Educational
Statistics (NCES)
(1974)
"Health Research Facilities:
A Survey of Doctorate-Granting
institutions." Conducted by
American Council on Education
(ACE) with funding from National
Science Foundation (NSF) and NiH
(1976)
Description of ~
Survey study to gather data on the amount,
age and ownership of space in 1968, the
amount of space under or scheduled for
construction and the estimated space needed
to eliminate overcrowding by 1980
Survey of 3,200 colleges and universities
including data to estimate facilities
needs
Survey of 155 Ph.D. granting institutions
to gather data on status of academic health
research facilities, new construction in
progress, and plans for expansion in
succeeding five year period
10 m. of 42 a. sq. ft. in
unsatisfactory condition
-over 507, available space in
poor condition
-additional 55 a, square feet
of space needed by 1980,
with 17 m. square feet requiring
remodeling
-207. of facilities at surveyed
institutions in need of replace-
ment (2.3 billion square feet)
-$2. billion needed just for
remodeling of facilities
-29% of academic facilities for
health research in need of reno-
vation or replacement
(23 million square feet)
-cost estimates to meet needs:
$547 million for 1975;
$560 million for each of
succeeding five years
-167. institutions reported need
for replacement of facilities
-38% reported need for
remodeling of facilities
-477. reported need for
additional space
Study
Findij~g~
"National Survey of Laboratory Survey of 922 nonprofit NIH eligible
Animal Facilities and Resources" institutions gathering data to
Conducted by National Academy estimate facilities needs
of Sciences (NAS) (NIH Publication
No. 80-2091)
(1978)
*Source: Linda S. Wilson, "The Capital Facilities Dilemma:
Implications for Graduate Education and Research',
to be included in forthcoming Brookings Institution study,
Bruce L. R. Smith, editor, The State of Graduate Education, 1985.
PAGENO="0454"
STUDIES OF ACADEMIC FACILITIES
Report of Research Facilities
Branch of National Cancer
Institute on survey of facilities
needs in cancer research
Conducted at request of National
Cancer Advisory Board
(1979)
Description of Study
Survey of 106 institutions receiving
National Cancer Institute Support
gathering data to evaluate current and
future needs for upgrading of cancer
research facilities
FindinAs
Funding need of $149 million
for the period 1980-1985
estimated for cancer research
facilities
"A Program for Renewed
Partnership"
Prepared by the Sloan
Comeission on Higher
Education
(1980)
"The Nation's Deteriorating
Research Facilities: A Survey
of Recent Expenditures and
Projected Needs in Fifteen
Universities"
Conducted by the Association
of American Universities (MU)
(1981)
Comaission report on federal
government/untversity relations
(No data collected)
Survey of 15 leading universities
gathering data on expenditures for
research facilities and major equipment
and estimates of funding needs for
succeeding three year period for faculty
research only
-Recoimsendations for competitive
program I or facilities research
grants; $50 million annually for
five years, to be allocated by
NSF and NIH, to upgrade research
laboratories and equipment
-From 1972-1982, surveyed insti-
tutions spent $400 million for
facilities construction, repair,
and renovation
-$765 million needed for facil-
ities and equipment over
succeeding three year period
just to sustain faculty research
activities
00
PAGENO="0455"
STUDIES OF ACADEMIC FACILITIES
Report on academic facilities
survey (in 1980-81 Comparative
Cost and Staffing Report)
Conducted by Association of
Physical Plant Administrators
(APPA)
(1981)
"Adequacy of Academic Research
Facilities"
Conducted by Ad Hoc Interagency
Steering Comeittee on Academic
Research Facilities
(April, 1984) National Science
Foundation
Description of Study
Survey of 226 institutions with
454 million square feet of academic
space to gather data on facilities
conditions and projected needs
Pilot study of 25 major research insti-
tutions with major study planned to gather
data for detailed analysis of the condition
of facilities used for science and engineering
and medical research. Major study is estimate
future needs for construction, re~idc1ts~
and refurbishment of academic research
facilities
Findings
-$l.85-$2.OO/square foot re-
quired to eliminate most press-
ing needs
-deferred maintenance need per
institution of $9.5 million at
universi ties
$1.1 million at four year col-
leges
$.4 million at two year colleges
-Critical, growing need for
replacement of academic science
facilities and equipment
-recoimsends comprehensive pro-
gram for facilities construction
and development, acquisition,
maintenance and operation of
modern equipment
-Over succeeding 3 year period
all colleges and universities
would require about $1.3 billion
per year for research facilities
alone,
(Note: Present level of capital
facilities expenditures for aca-
demic research, development and
instruction is $1 billion per
year,)
"Strengthening the Government- Coemsittee report on federal governaent/
University Partnership in Science" university relations
Conducted by Ad Hoc Cowsittee of (no data gathered)
HAS, National Academy of Engineering
and Institute of Medicine
(1983)
PAGENO="0456"
STUDIES OF ACADEMIC FACiLITIES
Report of Department of
Defense (DOD) Working Group
on Engineering and Science
Education. Prepared by DOD-
University Forum
(1983)
"Report on NIH Experience
with Extramural Construction
Authority"
Prepared by Office of Program
Planning and Evaluation, NIH
(1983)
"University Research Facilities:
Report on a Survey Among National
Science Foundation Grantees"
Conducted by Division of Policy
Research and Analysis, NSF, for
lnfrastructure Task Group of
National Science Board (NSB)
(June, 1984)
Description of Study
Working group report on condition
and needs of academic science and
engineering
Historical comparison of legislative
authorities for construction of health
research facilities analyzing past
facilities funding experiences
Survey of 1983 NSF grant Principal
Investigators (248 investigators
randomly sampled) to determine condition
of existing facilities and the impact
of facilities on research
Deficiencies in research facil-.
ittes and equipment acute in
most universities
-Funding authorities mainly for
special, not general, use
-Al.ost all funds aide available
under grant mechanisms
-Recent authorities fail to
separate funds for construction
and research
-None of funding authorities
based on systematic analysis of
need
-70% facilities had. been reno-
vated in last 10 years using 7%
Federal $
-50% facilities slated for reno-
vation in next three years
-80% of P.l.c rated safety of
facilities as excellent
-60% reported having lost some
research time in past year due
to facilities-related failures;
40% reported graduate students
had spent 3 or more days fixing
problems created by facilities
over past year
Findings
Cu
PAGENO="0457"
STUDIES OF ACADEMIC FACILITIES
Study
Proposed study of cancer
research facilities
Conducted by President's
Cancer Panel and the
National Cancer Institute
(Proposed)
Facilities Needs in Chemical
Science and Engineering
Conducted under aegis of the
Board on Chemical Science and
Technology, National Research
Council
(In progress)
Description of Stu4y
Proposed survey study to gather
data to inventory the quality and
quantity of current research facilities
in cancer research
Survey to ascertain specific facilities data
for research and teaching in chemistry, bio-.
chemistry, and chemical engineering academic
departments
Findings
In progress
In progress
c.,1
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452
APPENDIX 3
Financing and Managing
University Research
Equipment
Association of American Universities
National Association of State Universities
and Land-Grant Colleges
Council on Governmental Relations
Washington, D. C. 1985
PAGENO="0459"
453
The work on which this report is based was performed pursuant to
Grant No. STI-82 19525 with the National Science Foundation.
Library of Congress Catalog Card Number 85-80838
Available from
Association of American Universities
One Dupont Circle, Suite 730
Washington, D.C. 20036
Printed in the United States of America
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454
Research Team
3. David Litster, Director
Center for Materials Science
and Engineering
Massachusetts Institute
of Technology
Robert M. Bock, Dean
The Graduate School
University of Wisconsin
3ulie T. Norris
Assistant Provost and
Director, Office of
Sponsored Programs
University of Houston
Project Manag~:
Patricia S. Warren
Association of American
Universities
Steering Committee
Chairman:
Richard A. Zdanis
Vice Provost
The. 3ohns Hopkins University
Praveen Chaudhari
Vice President, Science
and Director, Physical
Sciences Department
IBM Corporation
Ray C. Hunt, Jr.
Vice President for Business
and Finance
University of Virginia
W. Keith Kennedy
Provost Emeritus
Cornell University
Reuben H. Lorenz
Vice President and
Trust Officer Emeritus
University of Wisconsin
William C. Luth
Manager
Geosciences Department
Sandia National
Laboratories
Stephen A. Morange
Assistant Treasurer-
Finance
The Treasurer of the
Regents of the
University of
California
Association Representatives
Robert L. Clodius
President
National Association of State
Universities and Land-Grant
Colleges
Milton Goldberg
Executive Directqr
Council on Governmental
Relations
3ohn C. Crowley
Director of Federal Relations
for Science Research
Association of American Universities
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455
Contents
ACKNOWLEDGMENTS ix
SUMMARY AND RECOMMENDATIONS
ACADEMIC RESEARCH EQUIPMENT: THE FEDERAL
ROLE 14
Background and Trends, 14
Funding Mechanisms, 21
Federal Regulatory Issues, 31
Recommendations, 42
2 THE STATE ROLE IN THE ACQUISITION AND
MANAGEMENT OF RESEARCH EQUIPMENT 47
Introduction, 47
Modes of State Support, 52
Controls on Debt Financing, 56
Controls on Purchasing, 58
Controls on Use of Equipment, 61
Financial Flexibility, 61
Recommendations, 64
3 THE UNIVERSITIES' ROLE IN THE ACQUISITION
AND MANAGEMENT OF RESEARCH EQUIPMENT 67
Introduction, 67
Acquisition of Research Equipment, 68
Management of Research Equipment, 74
Optimization of Use, 86
Strategic Planning, 94
Recommendations, 94
V
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456
4 DEBT FINANCING 97
Introduction, 97
Implications and Analysis in Debt Financing, 98
Choosing the Appropriate Debt Instrument, 101
Short- to Medium-Term Debt Instruments, 101
Long-Term Debt Instruments, 111
Innovative Techniques, 114
Recommendations, 115
5 PRIVATE SUPPORT OF ACADEMIC RESEARCH
EQUIPMENT 117
Introduction, 117
Mechanisms of Corporate Support, 119
Other Private Support, 123
Tax Incentives, 123
State Tax Incentives, 130
R&D Limited Partnerships, 132
Leasing, 133
Developing a Donation Strategy, 134
Recommendations, 134
APPENDIXES
A R&D Expenditures at Universities and Colleges
by Year and Source of Funds: Fiscal Years
1953-1983 140
B Current Fund Expenditures for Research Equipment
at Universities and Colleges by Science/Engineer-
ing Field and Source of Funds: Fiscal Years
1982 and 1983 142
C Federal Instrumentation Programs 144
D Analysis of Loan Subsidy Programs 165
E Representative State Regulations 170
F Representative State Statutes Authorizing the Issuance
of Bonds to Fund Higher Education Facilities 181
G Iowa State University Research Equipment
Assistance Program 187
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457
H Examples of Debt Financing 192
I Debt Financing Ihstruments 210
~TJ Examples of Equipment Donations 226
TABLES
I Regulations Affecting Cost-Reimbursement
Contracts That Include Acquisition of
Research Equipment 33
2 Principal Regulations Affecting Grants That
Include Acquisition of Research Equipment 34
3 Sources of Funds for Acquisition of Academic
Research Equipment in Use in 1982-1983,
by Field 48
4 Acquisition of Research Instrument Systems in
Use in 1982-1983 by Source of Funds, Type of
University, and System Purchase Cost 50
5 Instrumentation-Related Expenditures in
Academic Departments and Facilities in 1982-
1983, by Field 79
6 Present Value Analysis 103
7 Means of Acquisition of Academic Research
Instrument Systems in Use in 1982-1983,
by Field 118
8 Effect of ERTA on Cost of Donating Equipment 125
9 Calculation of Gain and Charitable Deduction in Bargain
Sale 127
10 Calculation of R&D Tax Credit 129
D-l Amortization Table for $100 Million,
Five-Year Loan 167
D-2 Cost to the Government of a $100 Million,
Five-Year Loan Program with Interest Subsidy 168
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458
FIGURES
I Federal R&D Expenditures at Universities and
Colleges, Fiscal Years 1953-1983 16
2 Percentage of Total R&D Expenditures at
Universities and Colleges by Source:
1953, 1963, 1973, 1983 17
3 Capital Expenditures for Academic Scientific
and Engineering Facilities and Equipment for
Research, Development, and Instruction,
1964-1 983 18
4 Federal Obligations for R&D Plant to
Universities and Colleges, Fiscal Years
1963-1985 19
5 Average Project Grant Size 23
6 Department/Facility Assessment of Instrumenta-
tion Support Services, 1982-1983 77
7 Mean Number of Instrument System Users by
Purchase Cost, 1982-1983 87
8 Percentage of Academic Research Instrument
Systems Costing $75,000$l,000,000, Located
in Shared-Access Facilities, 1982-1983 88
9 National Estimates of Corporate Voluntary
Support of Colleges and Universities, Fiscal
Years 1975-1983 120
VIII
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459
Acknowledgments
Many people have assisted us in the course of this study and
have influenced our report. We are deeply indebted to the more
than 500 scientists, university administrators, governmental
officials, and industry leaders who met with us and provided
valuable insights and information about problems and practices in
financing and managing research equipment.
Special thanks are due to. the coordinators at the 23 univer-
sities and governmental and industrial laboratories we visited for
making arrangements, often on very short notice, and for their
forbearance in the face of our extensive demands. They are
Raymond Carter of Beckman Instruments Inc.; Angel iordan and
Sandra Rocco of Carnegie-Mellon University; Crauford Goodwin
and Lucy Knight of Duke University; Richard Benson of Dupont;
Thomas Stelson and Albert Sheppard of Georgia Institute of
Technology; Simone Reagor and Margaret Plympton of Harvard
University; Charles House of Hewlett-Packard; Robert Stokes of
Honeywell; Daniel Zaffarano of Iowa State University; Delbert
Sundberg of Los Alamos National Laboratory; Kenneth Smith of
the Massachusetts Institute of Technology; Donald Beilman of the
Microelectronics Center of North Carolina; Quentin Lindsey of
the North Carolina Board of Science and Technology; lohn
Margrave of Rice University; Charles Winter of Sandia National
Laboratories; Ron Gould of the Stanford Synchrotron Radiation
Laboratory; Bruce lones and Valerie Mallace of Stanford
University; Ruth Havemeyer of Syntex Research; Pieter Groot of
Texas A&M University; Robert Varrin of the University of
Delaware; Theodore Brown of the University of Illinois, Urbana;
Albert Linck of the University of Minnesota; and Joseph Scaletti
of the University of New Mexico.
Early drafts of material were prepared for the Steering
Committee's review and discussion by our research team,
consultants, and staff. Robert Bock, David Litster, and Julie
Norris drafted material on the universities' role in the acquisition
PAGENO="0466"
460
and management of research equipment. Milton Goldberg pre-
pared the analysis of federal regulatory issues. Michael Goldstein
of Dow, Lohnes, and Albertson drafted material on the state role
in acquiring and managing research equipment. The chapters on
debt financing and private support of academic research equip-
ment are based on a background paper prepared for the Steering
Committee by Coopers & Lybrand.
As our work progressed, members of the Steering Committee
critically reviewed drafts of the report chapters, all of which
were the'n discussed at committee meetings. We also benefited
from the thoughtful reviews and substantive contributions to the
report by Robert Clodius and John Crowley.
Gwendolyn McCutcheon provided expert administrative and
secretarial assistance throughout the study. She handled all
administrative details, helped arrange meetings, and was centrally
involved in preparing the manuscript for production. 3oyce
Madancy helped with many research tasks. The fine editorial
work of Kenneth Reese was invaluable in the final stages of
report preparation.
Richard A. Zdanis, Chairman
Steering Committee
Patricia Warren, Project Manager
x
PAGENO="0467"
461
Summary and Recommendations
Contemporary science and technology are inconceivable with-
out the array of instruments and other research equipment avail-
able today. Recent years, however, have seen steady erosion of
our universities' ability to acquire and maintain equipment that
qualifies as state of the art--the best generally available. With-
out this new equipment, advances in many scientific disciplines
cannot occur. The situation has reached the point where it
threatens the strength of the nation's research enterprise and the
quality of education of new scientists and engineers.
The project summarized here was designed to seek ways to
ensure that the funds available for scientific equipment in univer-
sities are used at maximum efficiency. We examined federal and
state regulations and practices, management practices in univer-
sities, and sources and mechanisms of funding. We reached the
following broad conclusions:
Many actions can be taken that clearly would enhance
efficiency in the acquisition, management, and use of research
equipment by universities, and they are specified in our recom-
mendations. The overall problem is so large, however, that it
cannot be properly addressed without substantial, sustained
investment by all sources-federal and state governments,
universities, and the private sector.
SOURCE OF THE PROBLEM
The situation has been documented in a succession of studies
dating from the early l970s. The most recent and most compre-
hensive study is the National Science Foundation's National
Survey of Academic Research Instruments, covering the years
1982-1983. Newly published results of the survey show in part
that:
PAGENO="0468"
462
* Of the university department heads surveyed, 72 percent
reported that lack of equipment was preventing critical
experiments.
* Universities' inventories of scientific equipment showed
that 20 percent was obsolete and no longer used in research.
* Of all instrument systems in use in research, 22 percent
were more than 10 years old.
* Only 52 percent of instruments in use were reported to be in
excellent working condition.
* Of university department heads surveyed, 49 percent rated
the quality of instrument-support services (machine shop,
electronics shop, etc.) as insufficient or nonexistent.
Contributory Trends
Such difficulties stem from several interrelated trends. As
scientific instruments have grown steadily more powerful and
productive, the~ initial costs have significantly outpaced the
general rate of inflation. One industrial laboratory, for example,
found that the cost of keeping its stock of research equipment at
the state of the art rose 16.4 percent per year during 1975-1981,
while the consumer price index rose 9.9 percent per year. The
growing capabilities of equipment also entail higher costs for
operation and maintenance. The rapid pace of development, more-
over, has shortened the technologically useful life of equipment;
instruments today may be superseded by more advanced models in
five years or less. And for more than 15 years, the funds avail-
able from all sources have failed consistently to reflect the rising
costs and declining useful lifetimes of academic research
equipment.
Research project grants, the leading source of academic
research equipment, have only slightly outpaced inflation in
recent years. Individual grants averaged about $94,000 at the
National Science Foundation (NSF) in 1985 and $133,000 at the
National Institutes of Health (NIH). Such grants can accommo-
date instruments of only modest cost. Benchtop equipment priced
at $50,000 or more is common, however, and research in a number
of fields is relying increasingly on equipment that costs from
$100,000 to $1 million.
Trends in funding of scientific equipment in universities have
long been dominated by federal spending, which accounted for 54
percent of the equipment in use in 1982-1983; the universities
themselves are the next most important source of support and
provided 32 percent of such funding. States directly funded 5
percent of the cost of the equipment in use in 1982-1983, mdi-
PAGENO="0469"
463
viduals and nonprofit organizations funded 5 percent, and industry
funded 4 percent. Federal funding of academic research--
including the associated equipment--grew at an average annual
rate of 15.7 percent, in constant dollars, during 1953-1967, but
the rate fell to 1.6 percent during 1968-1983.
Besides its role in support of research, the government was a
major contributor to the universities' massive capital expansion of
the 1950s and I 960s, which included substantial amounts of scien-
tific equipment. Again, however, the rate Of federal investment
turned downward. The government's annual spending on academic
R&D facilities and equipment, in constant dollars, fell some 78
percent during 1966-1983.
RESPONSES TO THE PROBLEM
Both academic and federal officials responded to essentially
level funding by supporting people over investment in capital
equipment. The fraction of research-project support allocated to
permanent university equipment by the National Institutes of
Health declined from 11.7 percent in 1966 to an estimated 3.1
percent in 1985. At the National Science Foundation the fraction
fell from 11.2 percent in 1966 to an average of 7.1 percent during
1969-1976. The federal mission agencies' support for research
equipment declined similarly, although exact data are not
available.
Efforts to ease the universities' serious difficulties ~ith scien-
tific equipment began to appear in the early l980s. NSF increased
its investment in academic equipment from II percent of its uni-
versity R&D budget in 1978 to an estimated 17.5 percent in 1985.
The Department of Defense launched a special five-year univer-
sity instrumentation program, totaling $150 million, which is
projected to run through 1987. The Department of Energy began
a special $30 million program scheduled to end in 1988. The fed-
eral and state governments adopted tax incentives designed to
encourage contributions of equipment by its manufacturers. State
governments began to increase their funding of equipment for
state colleges and universities and have initiated a range of devel-
opment activities designed in part to attract industrial support for
R&D in their universities.
The expanded federal investments were the result, in part, of
the efforts of the Interagency Working Group on University
Research Instrumentation, which was organized in mid-1981 to
focus high-level agency attention on the university instrumen-
tation problem. Its members were senior officials drawn from
each of the six major agencies supporting research in universities--
the National Science Foundation, the National Institutes of
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464
Health, the National Aeronautics and Space Administration, and
the Departments of Agriculture, Defense, and Energy.
BACKGROUND OF THE STUDY
Although these initiatives are welcome, they clearly are not
sufficient. Officials in academe and government agree that the
equipment problem is critical and steadily growing and that ways
to use existing resources more efficiently must be explored. In
July 1982 at the request of the Interagency Working Group, the
Association of American Universities, the National Association of
State Universities and Land-Grant Colleges, and the Council on
Governmental Relations convened an ad hoc planning committee
to consider whether a special effort was needed to address the
following questions:
* Could changes be made in federal or state laws, regula-
tions, or policies that would enhance the efficiency of acquisition,
management, and use of academic research equipment?
* What more can universities do to improve the way they
acquire, manage, and use research equipment?
* Does debt financing hold significant untapped potential for
universities as a means of acquiring new research equipment?
* Can present tax incentives for the donation of research
equipment to universities be revised to increase support from
industry?
* Are there alternative methods of direct federal funding of
research equipment that would yield a better return on the
federal investment?
The resulting analysis was carried out jointly by the three
associations with funding from the six federal agencies and the
Research Corporation. Substantive direction for the study was
provided by a seven-member Steering Committee chaired by
Richard Zdanis, Vice Provost of lohns Hopkins University. Much
of the field research was done by a three-member team: Robert
Bock, Dean of the Graduate School at the University of Wisconsin;
David Litster, Director of the Center for Materials Science and
Engineering at MIT; and Julie Norris, Assistant Provost of the
University of Houston. This team visited 23 universities and
governmental and industrial laboratories; they met with more
than 500 faculty investigators, department chairmen, research
and service center directors, deans and chief administrators, or
the functional equivalents in government and industry. (A list of
the places visited is appended to this summary.) The team and
the firm of Coopers & Lybrand each produced background reports
for the project.
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465
RECOMMENDATIONS
The actions recommended below, as we stated at the outset,
would clearly enhance efficiency in the acquisition, management,
and use of academic research equipment. We would like to empha-
size, however, that even if all these recommendations are acted
upon, the universities' equipment needs are so large that they
cannot be met without substantial increases in funding. Modern-
ization, moreover, cannot be a one-time effort. Continuing
investment will be required based on the recognition that labora-
tories in many fields of science have to be reequipped at intervals
of five years or less. The universities, the states, and industry
must share with the federal government the responsibility for
modernization and long-term maintenance of the quality of scien-
tific equipment at the nation's universities.
The recommendations that follow appear in the topical order
employed in the full report: the federal government, the states,
the universities, debt financing by universities, and private sup-
port for equipment.
The Federal Government
The federal government has been the major funder of research
equipment in universities during the past four decades. Current
federal funding mechanisms, however, do not comprise adequate
means of regularly replacing obsolete or worn-out equipment with
state-of-the-art equipment. Regulatory and procedural difficul-
ties complicate the problem.
We recommend...
I. That the heads of federal agencies supporting university
research issue policy statements aimed at removing barriers to
the efficient acquisition, management, and use of academic
research equipment. Few federal regulations, as written, con-
tribute directly to the equipment problem. Inconsistent interpre-
tation of regulations by federal officials, however, complicates
the purchase, management, and replacement of research equip-
ment and leads to unnecessarily conservative management
practices at universities. Desirable actions are summarized in the
recommendations below.
2. That federal agencies more adequately recognize and
provide for the full costs of equipment, including operation and
maintenance, space renovation, service contracts, and technical
support by...
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466
...providing these costs in project grants and contracts or
ensuring that recipients have provided them.
...accepting universities' payment of costs such as installation,
operation, and maintenance as matching funds on programs that
require matching contributions by universities.
3. That federal agencies adopt procedures that facilitate
spreading the cost of more expensive equipment charged directly
to research-project awards over several award-years and allow
the cost and use of equipment to be shared across award and
agency lines. Individual research-project grants and contracts
normally can accommodate equipment of only modest cost.
Investigators, moreover, have difficulty combining funds from
awards from the same or different agencies to buy equipment.
4. That federal auditors permit universities to recover the full
cost of nonfederally funded equipment from federal awards when
they convert from use allowance to depreciation. Office of
Management and Budget (0MB) Circular A-2 I permits such
conversion as well as recovery of full cost. Auditors of the
Department of Health and Human Services, however, permit
recovery only as if the equipment were being depreciated during
the time it was in fact covered by the use allowance. This prac-
tice, in effect, denies recovery of full cost.
5. That the Office of Management and Budget make interest
on equipment funds borrowed externally by universities unequivo-
cally an allowable cost by removing from 0MB Circular A-21 the
requirement that agencies must approve such charges. Interest on
externally borrowed funds has been a permissible cost since 1982
at the discretion of the funding agency, but agendes have shown
significant reluctance to permit it. The perception of inability to
recover interest costs may lead university officials to decide
against seeking debt financing for equipment.
6. That all federal agencies vest title to research equipment
in universities uniformly upon acquisition, whether under grants or
contracts. Federal regulations on title to equipment vary among
agencies, and such variability inhibits efficient acquisition, man-
agement, and use of equipment. Without assurance of title, for
example, investigators hesitate to combine university funds with
federal funds to acquire an instrument not affordable by a single
sponsor.
7. That the Office of Management and Budget make federal
regulations and practices governing management of equipment
less cumbersome by...
...setting at $10,000 the minimum level at which universities
must screen their inventories before buying new equipment and,
above that minimum, permitting universities and agencies to
negotiate different screening levels for different circumstances.
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487
...raising the capitalization level for research equipment to
$1,000 in 0MB Circulars A-2l (now at $500) and A-I 10 (now at
$300) and giving universities the option of capitalizing at differ-
ent levels.
8. That the Department of Defense eliminate its require-
ment that the inventory of the Defense Industrial Plant Equip-
ment Center (DIPEC) be screened for the availability of special-
ized scientific equipment requested by universities before new
equipment is purchased. The descriptions of equipment in the
DIPEC inventory do not permit a federal property officer to
determine whether a scientific instrument in the inventory is an
adequate substitute for the one requested. Hence, the require-
ment for screening is wasteful for both universities and the
government.
9. That other federal agencies adopt the NIH and NSF prior
approval systems. Purchases of equipment with federal funds
ordinarily must be approved in advance by the sponsoring agency.
Purchases can be approved by the university, however, under the
NIH Institutional Prior Approval System and the NSF Organiza-
tional Prior Approval System. These systems markedly improve
speed and flexibility in acquiring equipment.
The States
State governments act as both funder and regulator in regard
to academic research equipment, and conflict between these roles
is inherent to a degree in the relationship between the states and
their public universities. Still, we believe that in many cases the
states could combine these broad roles more rationally and could
otherwise help to ease the schools' difficulties with research
equipment.
We recommend...
I. That states assess the adequacy of their direct support for
scientific equipment in their public and private universities and
colleges relative to support from other sources and the stature of
their schools in the sciences and engineering. The states cannot
displace the federal government as the major funder of academic
research equipment, but judicious increases on a highly selective
basis could be extremely beneficial to the scientific stature of
states while simultaneously increasing the effectiveness of funds
available from federal and industrial sources.
2. That states grant their public universities and colleges
greater flexibility in handling funds. Desirable provisions would
permit schools to transfer funds among budget categories, for
example, and to carry funds forward from one fiscal period to the
PAGENO="0474"
468
next. Greater flexibility would not only improve the universities'
ability to deal with the problems of research equipment, it would
also be likely to provide direct savings in purchasing and would
free academic administrators to discharge their responsibilities
more efficiently.
3. That states examine the use of their taxing powers to
foster academic research and modernization of research equip-
ment. Tax benefits available under the federal Internal Revenue
Code are also available in 34 states whose tax codes automati-
cally follow the federal code. Relatively few states, however,
have adopted tax benefits designed to fit their particular
circumstances.
4. That states revise their controls on procurement to
recognize the unusual nature of scientific equipment and its
importance to the research capability of universities. Scientific
equipment often is highly specialized. Instruments that have the
same general specifications but are made by different vendors,
for example, may have significantly different capabilities. The
differences, furthermore, may be discernible only by experts in
the use of the equipment. Desirable revisions in state controls
would exempt research equipment from purchasing requirements
designed for generic equipment and supplies, such as batteries and
cleaning materials; would vest purchasing authority for research
equipment in individual colleges and universities; and would not
apply rules beyond those already mandated by the federal
government.
5. That states consider revising their controls on debt
financing of scientific equipment at public colleges and uni-
versities to permit debt financing of equipment not part of
construction projects, recognize the relatively short useful life of
scientific instruments, and relieve the one- and two-year limits on
the duration of leases.
The Universities
The universities' ability to acquire and manage research
equipment efficiently is affected by their individual circum-
stances, their traditionally decentralized authority, the individual
project-award system that funds much of the equipment, and
state and federal regulations. Within this context, however, we
have identified a number of management practices that warrant
more widespread use.
Our findings indicate that universities would benefit from
stronger efforts to improve their internal communications. More-
over, our recommendations on the whole imply a need for a more
centralized approach than is now the general practice in univer-
PAGENO="0475"
469
sities' management of research equipment. We note that other
developments, including the universities' growing interest in debt
financing and strategic planning, also point toward more central-
ized management.
We recommend...
I. That universities more systematically plan their allocation
of resources to favor research and equipment in areas that offer
the best opportunities to achieve distinction. Such strategic
planning should involve participation by both administrators and
faculty. The process may well call for hard decisions, but we
believe that they must be made to optimize the use of available
funds.
2. That universities budget realistically for the costs of
operating and maintaining research equipment. These costs
impose serious and pervasive problems, and failure to plan ade-
quately for full costs when buying equipment is widespread as
well. Full costs include not only operation and maintenance, but
space renovation, service contracts, technical support, and the
like. Maintenance is particularly troublesome. Hourly user
charges are commonly assessed to cover the salaries of support
personnel and the costs of maintenance, but are difficult to set
optimally and are rarely adequate.
3. That investigators and administrators at universities seek
agency approval to spread the cost of expensive equipment
charged directly to research-project awards over several award
years. As noted in Recommendation 3 under the Federal Govern-
ment, individual research grants and contracts cannot normally
accommodate costly equipment, and this problem would be eased
by spreading costs over several years.
4. That universities act to minimize delays and other prob-
lems resulting from procurement procedures associated with the
acquisition of research equipment. To be most effective, the
procurement process should be adapted to the specialized nature
of research equipment, as opposed to more generic products.
Similarly, specialized purchasing entities or individuals would
facilitate timely acquisition of equipment at optimum cost. Also
beneficial would be formal programs designed to inform purchas-
ing personnel and investigators of the needs and problems of each.
5. That universities consider establishing inventory systems
that facilitate sharing. One such system is the basis of the
research equipment assistance program (REAP) at Iowa State
University. The REAP inventory includes only research equip-
ment. REAP may not be cost effective for all universities, but
most should find elements of it useful.
6. That universities use depreciation rather than a use allow-
ance to generate funds for replacing equipment, providing that
PAGENO="0476"
470
they cannegotiate realistic depreciation schedules and dedicate
the funds recovered to equipment. Universities can use either
method, but rates of depreciation are potentially higher--and so
recover costs more rapidly--than the use allowance (6 2/3 percent
per year) because they can be based on the useful life of the
equipment. Both methods, however, add to indirect costs, and
neither can be used for equipment purchased with federal funds.
7. That universities seek better ways to facilitate the trans-
fer of research equipment from investigators or laboratories that
no longer need it to those that could use it. Faculty at most
schools have no incentive to transfer equipment, excepting the
need for space, and every incentive to keep it in case it might be
needed again. Some systematic mechanism for keeping faculty
well informed of needs and availability of equipment would be
useful.
Debt Financing of Research Equipment
Universities traditionally have used tax-exempt debt financing
to pay for major facilities and lately have been using the method
to some extent to buy research equipment. A number of financing
methods can be adapted to the special characteristics of such
equipment, but whatever the method, such financing competes
with other university needs for debt. Debt financing imposes risk
on the university as a whole, and so implies a shift from decen-
tralized toward centralized authority.
We recommend...
I. That universities explore greater use of debt financing as a
means of acquiring research equipment, but with careful regard
for the long-term consequences. Universities vary widely in their
use of debt financing, but a universal concern is the need for a
reliable stream of income to make the debt payments. It should
also be recognized that the necessary commitment of institutional
resources, regardless of the purpose of the debt financing, erodes
the university's control of its future, in part by reducing the flexi-
bility to pursue promising new opportunities as they arise. Debt
financing also increases the overall cost of research equipment to
both universities and sponsors of research.
2. That universities that have not done so develop expertise
on leasing and debt financing of equipment. This expertise should
include the ability to determine and communicate the true costs
of debt financing and should be readily accessible to research
administrators and principal investigators. The increasing
complexity of taxexempt debt financing, the many participants,
PAGENO="0477"
471
the necessary legal opinions, and the various political and/or
corporate entities associated with debt financing make it
essential that universities fully understand the marketplace.
Private Support
The effects of the Economic Recovery Tax Act (ERTA) of
1981 on corporate spending on R&D and corporate contributions
of research equipment to universities are not clear, for several
reasons: the act has been in effect only since August 1981, its
effects are entangled with other economic variables in a complex
manner, and the uncertain future of the R&D tax credit, which is
scheduled to expire at the end of 1985, may have skewed corpo~
rate response to it (the equipment donation provision is perma-
nent). Nevertheless, the consensus appears to be that ERTA,
suitably modified, should indeed spur technology, in part by
fostering support for academic research and scientific equip-
ment. We agree with this view.
We recommend...
1. That industry take greater advantage of the tax benefits
provided by the Economic Recovery Tax Act (ERTA)of 1981 for
companies that donate research equipment to universities and
fund academic research. Universities' experiences with industry
indicate that company officials may not be fully aware of the
benefits available, although company tax specialists generally are
well informed.
2. That universities seek donations of research equipment
more aggressively by developing strategies that rely in part on the
tax benefits available to donors. Sound strategies would stress
both federal and state tax benefits as well as other important
benefits to both donor and recipient.
3. That Congress modify ERTA so that...
...equipment qualified for the charitable donation deduction
include computer software, equipment maintenance contracts and
spare parts, equipment in which the cost of parts not made by the
donor exceeds 50 percent of the donor's costs in the equipment,
and used equipment that is less than three years old. Computers
are properly viewed as computing systems, which are incomplete
without software. Maintenance of scientific equipment is costly
to the point where universities have declined donations of equip-
ment because they could not ~f ford to maintain it. Makers of
sophisticated equipment rely primarily on their technological
knowledge, not their ability to make parts. Thus the limit on
parts from outside suppliers is unrealistic, provided that the
manufacturer is in fact in the business of developing and making
scientific equipment.
PAGENO="0478"
472
...the provisions on the R&D tax credit are made permanent,
with revision to create an additional incentive for companies to
support basic research in universities. Equipment acquired under
research contracts qualifies for the credit, but ERTA currently
provides the same incentive for companies to contract for re-
search in academe as for research by other qualified organizations.
...the social and behavioral sciences are made qualified fields
of academic research in terms of the equipment donation deduc-
tion and the R&D tax credit. The social and behavioral sciences
contribute to the application and utilization of science and tech-
nology, and they rely increasingly on research instrumentation.
* ..qualified recipients of equipment donations and R&D
funding, in terms of ERTA tax credits, include research
foundations that are affiliated with universities but remain
separate entities. Some state universities have established such
foundations to receive and dispose of donated equipment because
they cannot dispose of it themselves without legislative consent.
These actions, we are convinced, would yield material benefits
in the acquisition and management of research equipment by uni-
versities. The rationale for them here is necessarily brief. Much
fuller background will be found in the five chapters of the full
report, where these recommendations also appear.
PAGENO="0479"
473
Site Visits
UNIVERSITIES
Public: Colorado State University
Georgia Institute of Technology
Iowa State University
North Carolina State University
Texas A&M University
University of illinois, Urbana
University of Minnesota
University of New Mexico
University of North Carolina, Chapel Hill
University of Texas, Austin
University of Virginia
Private: Carnegie-.Mellon University
Columbia University
Duke University
Harvard University
Massachusetts Institute of Technology
Princeton University
Rice University
Stanford University
University of Chicago
University of Delaware
University of Pennsylvania
Washington University, St. Louis
CORPORATE LABS
Beckman Instruments, Inc. Microelectronics Center
Dupont of North Carolina
Hewlett-Packard Syntex Research
Honeywell
GOVERNMENT LABS
Los Alamos National Laboratory Stanford Synchrotron
Sandia National Laboratories Radiation Laboratory
STATE AGENCIES
North Carolina Board of Science and Technology
PAGENO="0480"
474
1
Academic Research Equipment:
The Federal Role
BACKGROUND AND TRENDS
The federal government has been the major funder of research
and development and the associated equipment in U.S. universities
during the four decades following World War II. The government
has always recognized the utility of science and technology, but,
except for agricultural rese~rch, funded relatively little research
in universities before 1940.' The massive postwar commitment
sprang from the success of science in the war effort and its conse-
quent promise for the well-being of the nation in peacetime.
Federal funding of academic research drew further impetus from
the launching of Sputnik I, the first earth-orbiting satellite, by
the Soviet Union in October 1957. The federal commitment is by
now well established, although the rate of increase of funding
declined sharply after the late l960s.
The government supports the acquisition and operation of
research equipment in universities in a number of ways. These
support mechanisms are implemented by federal regulations and
agency guidelines designed to ensure accountability for the public
funds expended and proper use of equipment. The regulations are
administered by the sponsoring agencies and the universities. The
universities' compliance with the regulations is monitored by the
Audit Agency of the Department of Health and Human Services,
which handles about 95 percent of all colleges and universities,
and the Defense Contract Audit Agency in the Department of
Defense. The regulatory structure in some measure inhibits the
universities' freedom of action, but the importance of federal
funds to research and graduate education causes both partners to
search for accommodations.
PAGENO="0481"
475
Funding Trends
Federal funding of academic research and development is the
best available indicator of trends in federal funding of academic
research equipment (trend data specific to equipment do not
exist). In constant 1972 dollars, federal funding grew at an aver-
age annual rate of 15.7 percent during 1953-1967 and 1.6 percent
during 1968-1983 (Figure 1 and Appendix A). Federal funding in
current dollars was $4.96 billion in 1983, when it comprised 64
percent of total spending for academic R&D (Figure 2); state and
local governments accounted for 7 percent, industry for 5 per-
cent, the universities themselves for 16 percent, and all other
sources for 8 percent.
Recent data on research equipment alone show a similar pat-
tern. The federal government accounted for 65 percent of total
spending for academic research equipment in 1982 and 63 percent
in 1983. Nonfederal sources of funding increased by 14.5 percent
between 1982 and 1983, while federal funding of academic
research equipment grew by only 2.4 percent (Appendix B).
A significant source of research equipment was the building
boom of the 1960s in academic R&D facilities. The institutions
had been expanding since the early l950s in response to a national
need to cope with the postwar growth in enrollments. The launch-
ing of Sputnik led the federal government to invest heavily in
expanding their capacity for graduate education and research in
the sciences and engineering. The boom tapered off in the late
1960s. Spending on academic R&D facilities and equipment,
currently about $1 billion per year, has been relatively flat since
1968 in current dollars and, in constant dollars, declined 78
percent during 1966-1983 (Figure 3). The federal share of the
total, meanwhile, declined from 32 percent in 1966-1968 to 12
percent in 1983. Federal obligations for academic R&D plant
have been relatively flat since 1973 in current dollars, averaging
about $38 million per year (Figure 4); in constant dollars the
obligations fell 93 percent during 1966-1983 and 64 percent during
1973-1983.
The Equipment Problem
The trends of the past 15 years or so in federal funding of
academic R&D and facilities are significant elements of the
universities' serious problem with research equipment. The prob-
lem is usually stated as a shortage of state-of-the-art equipment,
but the costs of operation and maintenance are serious difficulties
as well.
53-277 0 - 86 - 16
PAGENO="0482"
476
C,)
Zo
~
FIGURE 1
Federal R&D Expenditures at Universities and Colleges
Fiscal Years 1953-1983
Current
- Constant
5000
4500
4000
3500 ______
3000
2500
2OO~.
1500
1000
500
0
53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83
FISCAL YEAR
SOURCE: Appendix A.
PAGENO="0483"
477
FIGURE 2
Percentage of Total R&D Expenditures at Universities
and Colleges by Source
V/I/I/A Fcder:il
L~LLLLLJ Gverninciit
State a ad
Governments
Industr~
lirst it Ut otta I
Funds
1983
~:~`
1973
SOURCE: Appendix A.
PAGENO="0484"
478
FIGURE 3
Capital Expenditures for Academic Scientific and Engineering Facilities
and Equipment for Research, Development, and Instruction
Fiscal Years 1964-1983
1400
zc,)
-
~L)
1200
1000
800
600
400
200
L~J Other
-
-I
I
`Ii''''''
I-
~~uf
1
64 66 68 70 73 75 77 79 81 83
FISCAL YEAR
SOURCE: Division of Science Resources Studies, National Science Foundation.
PAGENO="0485"
250
100
50
0
479
FIGURE 4
Federal Obligations for R&D Plant to
Universities and Colleges
Fiscal Years 1963-1985
SOURCE: Division of Science Resources Studies, National Science Foundation.
NOTE: Figures for 1984 and 1985 are estimates.*
0
200
0
z
0
0
Current
Constant
63 65 67 69 71 73 75 77
FISCAL YEAR
79
81 83 85*
PAGENO="0486"
480
The ~ituation has been examined in studies that date back to
1971,2-a These studies give only crude estimates ~f the cost of
updating academic research equipment nationwide,' but the
reality of the problem is not in question. According to the
National Science Foundation (NSF) National Survey of Academic
Research Instruments, 72 percent of department heads reported in
1982-1983 that lack of equipment was preventing critical experi-
ments. NSF grantees in a second study were asked to rank six
factors foç importance in spending university money to improve
research.'° They ranked instrumentation first more often than
any other factor and facilities second. The other factors were
numbers of positions and pay for faculty and for graduate students.
The remarkable power of modern scientific instruments, iron i-
cally, is part of the problem--as equipment has grown steadily
more sophisticated, its cost has outrun the overall rate of infla-
tion. The most powerful versions of some kinds of equipment,
moreover, now cost so much that the government funds them only
for use in national or regional facilities as opposed to exclusive
use by one university or one investigator. The trend is evident in
a major industrial laboratory's comparison of the cost of sustain-
ing state of the art in equipment in 1975 and 1981.11 The study
was based on 126 items of equipment worth some $13.5 million in
1981. Costs were found to have climbed 16.4 percent per year
during 1975-1981; the consumer price index during the same period
rose 9.9 percent per year.
Start-Up Costs
The rapid evolution of equipment in power and cost has
especially affected start-up costs for faculty investigators. A
midwestern university, for example, equipped two new investi-
gators with comparable çxperience and interests in chemistry, one
in 1970 and one in 1979.12 The investigator equipped in 1970
needed dedicated equipment costing $8,000 and access to depart-
mental equipment costing $116,500. For the investigator equipped
in 1979, these figures had climbed to $43,850 and $741,000, equiv-
alent to an annual increase of 22 percent for laboratory instru-
ments and 23 percent for departmental instruments. Without the
costlier, more powerful equipment, however, the investigator
equipped in 1979 would not have realized his potential in contrib-
uting to his field of research.
The experience was typical of the l970s, and the costs have
continued to rise in the 1980s. Chemistry and other fields where
investigators traditionally work with personal, bench-top equip-
ment have become capital intensive. The cost of equipment and
PAGENO="0487"
481
facilities needed for a new faculty member today may easily
surpass the size of the endowment needed to pay his salary.'3
People Versus Equipment
During this period of rising costs for research equipment, fed-
eral funding agencies have displayed growing reluctance to pay
for it at the expense of the operating costs of research. The usual
preference is to fUnd people at the expense of equipment. The
fraction of research-project support allocated to permanent lab-
oratory equipment by the National Institutes of Health (NIH)
declined from 11.7 percent in 1966 to an estimated 3.1 percent in
1985. At NSF, the fraction fell from 11.2 percent in 1966 to an
average of 7.1 percent during 1969-1976. During the past few
years, however, the agencies have been paying more attention to
equipment (see below). NSF support, for example, is expected to
rise to an estimated 17.5 percent of total research-project
support for fiscal year 1985.
FUNDING MECHANISMS
Federal funds for academic research equipment for some years
have largely been built into the support for the work in which the
equipment is to be used. An investigator's research proposal, for
example, may request funds for new equipment needed as well as
for the research itself. Several agencies recently have started
direct funding programs specifically for equipment in response to
the universities' growing problem with it. Nevertheless, the
diverse array of traditional funding mechanisms remains the
leading source of federal support for academic research equip-
ment. These mechanisms have contributed immensely to the
strength of U.S. science. Some of their characteristics, and the
associated regulations, however, tend to complicate the acqui-
sition, operation, and maintenance of equipment.'4
Individual Research Projects
Almost half of federal support for research in universities
comprises grants or contracts for individual research projects to
be conducted by one or a few investigators. Awards are made on
the basis of proposals submitted by investigators and evaluated as
a rule by scientific and technical review. Proposals are judged
comparatively as well as on their own merits. This competitive
approach is designed to ensure that the available funds support
PAGENO="0488"
482
the most worthy research. Currently, a proposal has a 30 to 50
percent chance of succeeding.*
Research-project grants and contracts are awarded to the
investigator's university. The term `is rarely more than three
years, and the amount rarely exceeds $200,000 per year. Project
grants awarded by NIH in 1985, for example, averaged $133,000;
at NSF they averaged about $94,000 (Figure 5). The amounts of
the awards generally have kept up with inflation, but research
itself has become more capital intensive, and that capital expense
is often reflected in university investment in equipment and
facilities.'3
The strengths and weaknç~ses of the research-project system
have been studied at length.1~ The size of the awards, for
example, permits many investigators to be supported and many
agencies to fund research of interest to them. On the other hand,
the number and relatively short terms of awards create a heavy
administrative task for agencies, universities, and researchers.
Active scientists may need three or four grants to support their
programs and so devote much time to competing for funds from
federal and other sources.
As the costs of equipment have outpaced inflation, project
awards increasingly have accommodated equipment of only modest
cost. Funds generally cannot be carried forward or backward
between grant years to acquire equipment too costly to buy from
one year's funds. Further, individual scientists have difficulty
combining funds from more than one award to acquire equipment;
similarly, several scientists usually find it difficult to pool funds
from their awards for equipment to be shared. Also, the rising
costs of equipment have led agencies to increase their require-
ments for matching funds from universities (see further discussion
in regulatory section below).
A Major Barrier
The mismatch between the size of individual research grants
and the costs of much research equipment would be eased sig-
nificantly by permitting equipment to be purchased in the initial
grant-year with payment spread over the subsequent two to four
years as a direct charge. The lack of such a systematic approach
*In 1975, NIH received 12,160 grant applications; 46 percent were
actually funded. In 1983, appl~çations totaled 19,154, of which
only 33 percent were funded.'~
PAGENO="0489"
483
100.0
H
z
~ 80.0
H ~ 70.0
c_)
~ j 60.0
~ 50.0
~30.0
20.0
10.0
0.0
H
z
Hc~
OH
>
FIGURE 5
Average Project Grant Size
FISCAL YEAR
FISCAL YEAR
SOURCE: National Science Foundation, National Institutes of Health.
NOTE: Figures for 1984 and 1985~re estimates.*
81 82 83 84* 85*
- Constant Dollars
[ J Current Dollars
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
77 78 79 80 81 82 83
84* 85*
PAGENO="0490"
484
to acquiring equipment is a major barrier to acquisition. Our con-
versations with chief business officers of universities revealed
that most would be willing to finance or arrange for financing of
research equipment if repayment, including interest, could be
charged directly to grants over several years.
The indirect cost mechanism is not satisfactory to encourage
equipment acquisition, because indirect costs are seldom fully
recovered. Additionally, rising indirect cost rates are being
attacked by the government, the Congress, and university faculty
members. Increased indirect cost rates, even for equipment
purchases, receive little understanding or support.
This dilemma leaves many investigators searching for ways to
acquire equipment directly that entail "reasonable" financing
costs. Some such mechanisms are described in Chapter 4.
Experiments with Grants
A full critique of the research-project system is beyond the
scope of this report. We note, however, that the flaws in the
system affect not only equipment. The administrative burden was
cited above. More broadly, the emphasis on discrete tasks of
relatively short duration restricts the flexibility of universities
and their scientists in handling funds and pursuing research in
terms of long-range, coherent programs. Federal agencies are
struggling with such problems. NIH is experimenting with grants
of five years or more.'5 Such grants were common at one time,
but maximum award periods gradually shrank to the now-common
three years during the 1970s. One of the new NIH experimental
programs, the Outstanding Investigator Grant of the National
Cancer Institute, is a seven-year award that will permit funds to
be carried over from one year to the next.
Research Programs
Research programs funded by federal agencies involve broad,
coherent areas of investigation and more than one investigator.
Annual support generally exceeds $200,000. One example of a
research program is a Department of Energy (DOE) grant to a
university for research by a group of investigators in high-energy
particle physics. Although research programs are larger than
individual projects, the strengths and weaknesses of the two
mechanisms are similar.
PAGENO="0491"
485
Research Centers
Federal agencies also support research centers-academic
organizations that work in broad fields of research of interest to
the university and the sponsoring agency. Examples include the
NIH Categorical Disease Centers and the NSF Materials Research
Laboratories. Research centers receive block (core) funding, as
contrasted with individual project funding. Management of the
center and coordination of specific research projects into a coher-
ent program are delegated to the university. Proposals for specif-
ic research projects must be approved there, but may or may not
be reviewed and approved individually by the sponsoring agency.
Our study team visited four of the 14 Materials Research
Laboratories (MRLs) supported by NSF. The MRLs receive five-
year block grants that support multi-investigator research on
materials as well as central facilities with equipment costing in
the range of $100,000 to $1 million. Block funding unquestionably
eases equipment problems; the scientists we spoke with con-
sidered themselves relatively well equipped in relation to
colleagues at many other universities.
A thorough study of materials research conducted at MRLs
and at other unjversities with project-grant support was com-
pleted in 1978.16 The results showed in part that the MRL
core-grant mechanism was more efficient than project-grant
funding in terms of time and money expended by NSF and the
university in administering grants. The MRLs also were found to
be scientifically effective. In terms of both efficiency and
quality of research, however, core funding was r~ot found to be
clearly superior to other funding mechanisms examined. The
results did suggest that different funding mechanisms lead to
different ways of doing research and produce different kinds of
science 14
NSF currently is starting a major new program of block-
funded, multidisciplinary engineering research centers at
universities.'7 The invitation to submit proposals drew 142
responses involving 3,000 investigators at 107 universities. One of
the attractions of the program is the opportunity to obtain
state-of-the-art equipment. Eight universities have been selected
to start six of the centers in 1985. The six will receive $94.5
million from NSF over the next five years and are expected to
attract additional funds from industry. As many as 20 of the
centers may be established eventually. NSF plans also to spend
$200 million over the next five years to set up supercomputer
research centers at the University of California at San Diego, the
University of Illinois at Urbana-Champaign, Cornell University,
and the 3ohn Von Neumann Center near Princeton.'8
PAGENO="0492"
486
/ Large Facilities
Federal agencies support a number of national and regional
facilities based on equipment deemed too costly to be dedicated
to use at one university. These large facilities, like research
centers, receive block funding. They are designed to give aca-
demic scientists, on a national or regional basis, access to instru-
ments that would not otherwise be available to them. Examples
include the Stanford Synchrotron Radiation Laboratory (SSRL)
supported by DOE and the regional instrumentation centers sup-
ported by NSF.
Large facilities serving many users predictably face problems
peculiar to that mode of operation (see discussion of National and
Regional Facilities in Chapter 3). For example, instruments com-
mited to a broad range of users cannot also be modified to meet
highly specialized needs. Large centers can provide only limited
access to the instrumentation, causing delays in research. Costs
of travel and lodging are rising sharply, and centers are some-
times geographically isolated from universities. At national
facilities, with equipment costing millions of dollars, the only
realistic option is to find ways to minimize the problems. The
cost of equipment at regional facilities, on the other hand, may
not absolutely bar providing it for one university, providing that
the equipment is utilized fully and effectively. Resolution of such
issues requires an evaluation of costs versus scientific effective-
ness, such as the study of the NSF Materials Research Labora-
tories cited above.
General Research Support
Federal agencies provide general research support to univer-
sities to strengthen their research capabilities or for work in a
specified subject area. The recipient has considerable discretion
in the use of the funds. Such support is provided today only by the
U.S. Department of Agriculture (USDA), through funding of Agri-
cultural Experiment Stations under the Hatch Act and related
programs, and by NIH in its Biomedical Research Support Grants.
The experiment stations are attached to land-grant universities
and have a relatively free hand in deciding the specific research
to be undertaken so long as it is agricultural research.
The NIH Biomedical Research Support Grant(BRSG) provides
institutional support based on NIH-funded research at the univer-
sity. The grant is thus indirectly subject to scientific and tech-
nical review. The funding ceiling for the BRSG program is set by
statute at 15 percent of total NIH appropriations for research
grants. The percentage actually awarded declined from an
PAGENO="0493"
487
average of almost 8 percent in the late l960s to 1.5 percent in
fiscal year 1984. BRSG awards totaled $47.4 million in 1984 and
were distributed among 546 institutions.
We found that BRSG awards are highly regarded in academe
because of the local discretion permitted in the use of the funds.
Research equipment benefits markedly from these awards. A
recent assessment shows that 25 percent of the BRSG funds spent
at nine universities in 1979-1980 contributed to the purchase or
maintenance of central research facilities including equipment.'9
In fiscal year 1982, BRSG awards totaling about $44 million were
distributed among 516 institutions; of the total, $6.4 million, or
14.5 percent, was spent by universities on shared equipment or
instruments.
NSF had a similar program from 1961 to 1974. The Institu-
tional Grants for Science were based on all federal support for
scientific research received by a university except support from
the Public Health Service (mainly NIH). Obligations for these
grants peaked at $15.2 million in 1967. During the 14-year life of
the program, more than 50 percent of the funds awarded was used
to buy instrumentation.*20
Special Equipment Programs
Four federal agencies in recent years have been supporting
special programs that provide academic research equipment
separately from the normal research funding mechanisms. The
Department of Defense (DOD) has a five-year program scheduled
to run through 1987; DOE has a five-year program projected to
run through 1988. NIH and NSF have programs with no fixed
expiration dates. The four agencies' programs are designed to
respond to competitive proposals. They vary, however, in charac-
teristics and requirements; detailed descriptions are given in
Appendix C.
The magnitude of the universities' equipment problem is sug-
gested by experience with the DOD program, which is funded at
$30 million per year. For the first year of the program, fiscal
year 1983, the agency received 2,500 proposals for instrumenta-
*Jn the same period, NSF had two other general support pro-
grams--the University Science Development Program and the
Departmental Science Development Program. Both were designed
to expand capacity; they were eliminated in the early l970s when
that task was judged to be completed.'4
PAGENO="0494"
488
tion valued at a total of $645 million. Two hundred proposals
were funded. In Phase 2 (fiscal year 1984-1985) DOD received
1,870 proposals, totaling $370.1 million, and made 452 awards to
147 institutions.
An important characteristic of these special equipment pro-
grams is that generally they do not pay full costs (see Appendix
C). Renovation of facilities, operation and maintenance, and
similar necessities are not covered. Matching funds may be
required but sometimes are only encouraged. Matching contri-
butions often cannot include the costs of operation, maintenance,
and other elements of full cost. All of the universities we visited
report that these excluded costs and matching requirements are
serious practical concerns in decisions to compete for funding
from the special equipment programs.
Despite the differences in the programs, the agencies' general
approach can be illustrated by the DOE design. A level of match-
ing funds is not specified, but matching is a factor in evaluating
the applications. DOE will not pay for renovation and installa-
tion, operation and maintenance, service contracts, and technical
support. The matching contribution, however, can include the
costs of shipping, installation, and renovation and modification of
the space for the instrument. (In fiscal year 1984, the match also
could include the costs of operation and maintenance, and we are
concerned by the removal of this provision in view of the heavy
costs thus excluded from matching.) The university must estimate
the usable life of the instrument and demonstrate plans for
ensuring its continued availabiliy during the first five years.
Operations and Maintenance
Operations and maintenance are funding problems not only in
special equipment programs. These functions together, over the
service of life of equipment, may cost more than the purchase
price. Still, funding agencies often do not cover the costs of
maintenance and professional support staff for research equip-
ment. This situation has started to change, however. The
Chemistry Division at NSF, for example, now requires a university
to indicate in research proposals how it will maintain equipment.
We welcome this development as long as agencies recognize their
obligation to meet these costs as part of their support for
research.
When funding agencies' budgets are trimmed, operating and
maintenance funds are vulnerable. Astronomers at one university
we visited, for example, were given a computer developed several
years ago for image scanning. They have been funded by NSF to
adapt it to a facility for automated plate scanning but anticipate
PAGENO="0495"
489
trouble supporting it once it is operational, as NSF will not allow
user charges to the astronomy community. We learned of a simi-
lar circumstance at another university involving a gas-phase
sequencer funded by an NIH grant; the proposal had requested
funds for a supporting technician, but these were cut by the
agency.
Excess Property
The federal excess property program makes research (and
other) equipment available to universities under certain condi-
tions. Equipment made available through the excess property
program is usually useful to researchers, but is not state of the
art. It includes items such as machine tools, vehicles, trailers,
motors, pumps, cameras, and machine parts. These items reduce
the cost of performing research but add to the administrative
burden because of extensive recordkeeping requirements.2"22
The excess property program was modified in 1976 by Public
Law 94-5 19, implemented by regulations on October 20, 1977.23
Congress purposely placed restraints on the program because of
abuses by many local governments and other grantees. Public
Law 94-5 19 also liberalized the surplus property programs so that
surplus property became available to a wider group of nonprofit
organizations. It is important here to distinguish between excess
property and surplus property. Excess property is that which is no
longer needed by the agency that owns it and therefore is offered
by the General Services Administration to all other federal
agencies. If no agency needs it, it becomes surplus property.
Now that a larger audience has access to surplus property, some
universities are finding items heretofore easily obtained at state
agencies for surplus property to be first reserved for other
nonprofit entities.
The 1977 regulations that implement PL 94-519 appeared to be
a deliberate attempt to discourage agencies from giving excess
property to grantees. The discouragement took the form of
imposing on the agencies intricate and unreasonable requirements
for recordkeeping, reporting, and other paperwork. One example
is the requirement that "all nonfederal screeners shall be subject
to certification by federal authority." That is, a university re-
searcher must state qualifications to screen excess property.
Additionally, the researcher must submit a passport-style photo-
graph with signature.
Investigators inquire from time to time about the possibility of
reestablishing the excess property program as it was before 1976,
when excess property could be obtained with ease.
PAGENO="0496"
490
DOE is upgrading and enhancing its excess property program
to provide used instrumentation from DOE-supported national
laboratories to universities for use in energy-related research and
educational programs. Current DOE funding is not a prerequisite.
Lists of excess equipment are available at designated DOE sites
and are published monthly by the Government Printing Office.
Generally smaller instruments, such as microscopes, oscillo-
scopes, spectrometers, and chromatographs are made available on
a first-come basis. Universities with DOE research grants may
also gain access to the list of eligible equipment through DOE-
RECON, an interactive, computer-based system managed by the
agency's Office of Scientific and Technical Information at Oak
Ridge, Tennessee. For other investigators, the data base is being
put on a microcomputer for access by terminal and modem via
telephone in a pilot program scheduled for operation in 1985.
Federally Subsidized Loans
Four programs are authorized under the Higher Education Act
of 1965 (PL 89-329) to provide loans or interest subsidy grants on
loans from nonfederal sources. They would reduce borrowing
costs to universities for the construction, reconstruction, or
renovation of academic facilities, which could include research
equipment. The loan programs are unfunded, however, and the
interest subsidy program is funded only to pay interest subsidies
on prior loans. No equipment-specific federal loan program is
currently authorized.
We analyzed the potential usefulness of a loan subsidy program
by developing hypothetical models and comparing costs (see
Appendix D). We looked at three alternatives: loan guarantee,
loan guarantee with interest subsidy, and direct loan with low
interest. The loan guarantee appears to have no particular
advantage. Of the two remaining alternatives, the direct, low-
interest loan would be cheapest, given favorable rates of inter-
est. We have not assessed the potential effects of the loan
programs hypothesized in Appendix D on the overall distribution
of public funds for academic research and research equipment.
One question that would warrant attention is whether such pro-
grams would encourage expansion of the nation's total research
capacity, as opposed to upgrading or replacing equipment already
in place in research institutions. A broader issue would be the
effectiveness of loan programs, in terms of both economic and
scientific efficiency, relative to other federal options for funding
academic research equipment.
PAGENO="0497"
491
FEDERAL REGULATORY ISSUES
Federal regulations play an important role in the acquisition,
management, and use of equipment for federally supported
research at universities. Sometimes they create barriers to
acquisition, complicate management, and may discourage appro-
priate use of research equipment. Because regulations that deal
with research equipment are designed to control, rather than
facilitate, its acquisition, management, and use, they hamper
innovative approaches to more effective use of existing resources.
More precisely, federal regulations are usually framed in language
that permits both universities and the government to accommo-
date individual circumstances. It is the application or interpreta-
tion of the rules that appears in most instances to create barriers.
The most critical barriers are barriers to cost recovery, since
these are the ones most likely to influence the acquisition deci-
sion. Our approach to identifying barriers began with a regulatory
inventory in each area of acquisition, management, and use. It
also entailed a careful assessment of whether the actual rule or
its various interpretations were creating barriers.
Regulatory Framework
For grants, the principal governmentwide rules controlling the
acquisition, management, and use of federally supported research
equipment are contained in two Office of Management and Budget
(0MB) circulars: 0MB Circular A-2l (Principles for Determining
Costs Applicable to Grants, Contracts, and Other Agreements
with Educational Institutions) and 0MB Circular A-I 10 (Uniform
Administrative Requirements, Grants, and Agreements with
Institutions of Higher Education).
These circulars are often supplemented by agency issuances,
but those issuances are not supposed to be more restrictive than
the 0MB circulars. 0MB Circular A-.2l states, "Agencies are not
expected to place additional restrictions on individual items of
cost." 0MB Circular A-I 10 says, "the standards promulgated by
this Circular are applicable to all Federal agencies...exceptions
from the requirements of the Circular will be permitted only in
unusual cases. Agencies may apply more restrictive requirements
to a class of recipients when approved by the Office of Manage-
ment and Budget." Agency supplements, however, are not always
consistent with 0MB guidance. Between the foregoing principles
and their application in individual circumstances, a wide gap often
exists.
PAGENO="0498"
492
For contracts, the Federal Acquisition Regulation (FAR) and
0MB Circular A-21 are the principal governmentwide rules con-
trolling the acquisition, management, and use of federally sup-
ported research equipment. The basic FAR is further supple-
mented by agency issuances. The Department of Energy, for
example, supplements the FAR by its Department of Energy
Acquisition Regulations (DEAR). The Department of Defense
does the same with the Defense Federal Acquisition Regulation
Supplement (DFARS), and so on. All of this follows principally
from the basic grants statute, the Federal Grant and Cooperative
Agreement Act (PL 95-224) and three procurement statutes.24
Only specific parts of each of these circulars and/or grant or pro-
curement rules are concerned with the acquisition, management,
and use of research instrumentation.
Table I shows the principal contract rules that affect research
equipment. Table 2 shows the principal grant rules that affect
research equipment. An inventory was necessary because when-
ever instances of regulatory barriers were raised, it was essential
to identify which federal regulations created them.
Several terms warrant explanation. First, the terms equip-
ment, instrumentation, and personal property are synonymous as
used here. Second, equipment or property is defined in 0MB
Circular A-21 [Section 113.a(l)I as a tangible item having a use-
ful life of more than two years and an acquisition cost of $500 or
more. Third, the FAR governs procurement by all federal
agencies and applies to all contractors.
Barriers to Acquisition and Optimum Management and Use
The most troublesome barriers to acquisition and optimum
management and use of equipment, as mentioned earlier, are
those dealing with cost recovery. A notable exampleis the lack
of a regular mechanism that permits the cost of equipment to be
recovered directly from research grants by spreading the cost
over several grant-years (see previous discussion under Funding
Mechanisms). Other barriers we identified include uncertainty of
title to equipment, requirements for matching funds, restrictions
on combining funds, and the extensive reporting and approval
requirements for obtaining equipment. Equipment screening and
inventory requirements were cited as expensive and unnecessary
paperwork burdens.
The Uncertainty Barrier
The uneven application and inconsistent interpretation of the
rules occur at several points in the system owing to the practices
PAGENO="0499"
TABLE I Regulations Affecting Cost-Reimbursement Contracts
That Include Acquisition of Research Equipment
Acquisition
Agency and Title
Management
and Use
Records
and Reports
Cost
Recovery
Principal Regulations
DOD/GSA/NASA FAR 35.014
45.302-1 (Facil-
52.245-5 (e)-(l)
(Government
52.245-5(c)(4)
Alternate I
35.0l4(b)(4)
52.245-5(c)(4)
ities only)
Property only)
Alternate I
52.245-5(c)(4)
Alternate I
52.244-2
0MB Circular A-21 3.13.b.(2) and 3.38
3.9.e.
3.9 and 3.l7.e
(FAR 31.303) C.4.b.
Agency Acquisition
Management
and Use
Recor~ds
and Reports
Cost
Recovery
Supplemental Agency Regulations
DHHS: HHSAR
DOD: DFARS 235.0 14
.
Page 252.235-14
Page 252.235-15
(2 clauses)
270.601 (ADPE)
270.605 (ADPE)
NSF: NSFAR
.
DOE: DEAR 917.7108
917.7113 (SRC)
Article B-IX
917.7108-1(d)
917.7113 (SRC)
945.104-70
945.102-70
Article B-IX
935.014
945.5
952.245-5
945.505-14
952.245-5
USDA: AGAR
NASA: NASA FS 1835.014
1845.72
1845.505-670
1845.502-72
I 845.70
NOTE: FAR, Federal Acquisition Regulation; HHSAR, Health and Human Services Acquisition
Regulation; DFARS, Defense Federal Acquisition Regulation System; NSFAR, National Science
Foundation Acquisition Regulation; DEAR, Department of Energy Acquisition Regulation; AGAR,
Agriculture Acquisition Regulation; NASA FS, National Aeronautics and Space Administration
Acquisition Regulation.
PAGENO="0500"
TABLE 2 Principal Regulations Affecting Grants That Include
Acquisition of Research Equipment
Governmentwide
A cquisition Management
Agency and Title and Use
Records
and Reports
Cost
Recovery
0MB
Circular A-21 J.l3.b.(2), 3.38
J.9.e
3.9., 3.18.e
and C.4.b.
Circular A-I 10, para. 5 paras. 5 and 6
paras. 5 and 6
Attachment N
Circular A-I 10, paras. 3.b. and 3.c.
.
Attachment 0
Agency Provisions To Implement 0MB Circulars
HHS: PHS Grants Pages 32 and 35
Policy Statement (Addendum) 45, Pages 48-50, 81
Pages 32, 33
48-49,51,81
1)01): AFOSRa Page 14 Page 15
Page 15
Brochure
NSF: Grant GPM 512.3, 515 GPM 204.2, 332, 773
Policy Manual 524, 772.1
DOE/OER:b sec. 605.17(a)(l)
Proposed 10
CFRc Part 605
IJSDA: 7 CFR sec. 3015.164, sec. 3015.165-.170
Part 3015 sec. 3015.196
NASA: Grant para. 408 para. 408, para.
sec. 1509
and Cooperative 508(d), para. 509
Agreement
Handbook
a Air Force Office of Scientific Research.
h C)ff ice of Energy Research.
c Office of Code of Federal Regulations.
PAGENO="0501"
495
of agency program officers, contract/grant officers, and auditors.
Although federal regulations, as written, almost always give the
government and the universities sufficient latitude to accommo-
date individual circumstances, well-meaning government officials
interpret the regulations in ways that vary frOm region to region
and from agency to agency. These inconsistent interpretations
cause many university officials to behave cautiously, especially in
generating innovative debt instruments to secure costly, short-
lived, state-of-the-art research equipment. They already have
tough decisions to make on accumulating debt, without having to
worry that, sometime in the future, disallowances may be sus-
tained on the basis of circumstances then existing, rather than on
circumstances at the time of acquisition. Uncertainty is a
critical barrier.
Cost-Recovery Barriers
In addition to the inability to recover the cost of equipment
directly over several years, we identified three regulatory bar-
riers to acquisition, and all deal with restrictions on cost recov~
ery. They are (I) the inability to recover interest on borrowed
funds, (2) the unrealistically low allowance for equipment use, and
(3) the prohibition against setting an optimal price (user charge)
for equipment use and replacement.
Recovery of Interest The first barrier leaves recovery of the full
cost of a piece of equipment uncertain. 0MB Circular A-2l was
amended in August 1982 to give federal agencies the discretion to
approve interest on equipment financing as an allowable indirect
cost. This discretion was restricted to interest on externally bor-
rowed funds. Interest on a university's own funds used to finance
equipment is not an allowable cost. There are instances where
agencies have approved recovery of interest on external borrow-
ing, but we found several cases in which approval was denied. A
decision not to allow recovery of interest costs is often sufficient
disincentive to cause academic decision makers not to use debt
financing to acquire research instruments from either internal or
external sources.
Use Allowance/Depreciation The second barrier is the unrealis-
tically low allowance permitted for federal reimbursement of the
use of equipment purchased with nonfederal funds. This allow-
ance is called a "use allowance" and is computed at an annual rate
not to exceed 6 2/3 percent of acquisition cbst. The full cost is
PAGENO="0502"
496
thus recoverable in no less than 15 years, but the realistic life of
state-of-the-art research equipment is three to five years.
Recognizing the disadvantage of the use allowance method, some
universities wish to convert to a depreciation method of cost
recovery. 0MB Circular A-21 permits such conversion and
permits full recovery of the cost of an asset, notwithstanding a
university's previous decision to rely on the use allowance
method. The Department of Health and Human Services (DHHS)
does not object to the conversion, but will only permit recovery of
equipment costs as if the equipment were being depreciated dur-
ing the years it was actually covered by the use allowance. This
interpretation has the effect of denying full recovery of the cost
of equipment. As noted at the outset, DHHS audits 95 percent of
all colleges and universities.
Government rules permit depreciation or use allowance only
on equipment not purchased by the federal government. However,
63 percent of all academic research instruments purchased in
1983 was acquired with federal funds. These items cannot be
depreciated nor may a use charge be assigned to recover the
purchase price from federal awards.
A second problem in switching from use allowance to deprecia-
tion is that depreciation will usually result in more rapid cost
recoyery, which in turn raises indirect cost rates. Increases in
indirect cost rates are not acceptable to some investigators for
any reason.
User Charges The third cost-recovery barrier to acquisition is the
stricture on differential pricing of centralized service facilities
and provision for reasonable replacement cost of the equipment
involved if it is federally financed. These specialized service
centers contain instruments like central computer equipment or
electron microscopes. 0MB Circular A-21 (Section 3.38) says the
cost of using these facilities shall be charged directly to users
based on actual use and a schedule of rates that does not discrim-
inate between federal and nonfederal activities including use by
the university for internal purposes. But the circular also says,
"where it is in the best interest of the Government and the insti-
tution to establish alternative costing arrangements such arrange-
ments may be worked out wjth the cognizant Federal agency."
The cost of using large centralized and specialized pieces of
equipment often is set too high for optimal use by all investi-
gators. Where individual project grants are not funded well
enough to permit paying full costs, differential pricing would
encourage greater use of a facility but would necessarily mean
charging some users more than others. While the cognizant
agency has the authority to establish alternative arrangements,
PAGENO="0503"
497
we found no instances of differential pricing. It is unlikely that
such arrangements can actually be established, unless the univer-
sity offers its own money to subsidize the facility. Even if one
were able to recover full operating costs, there is no provision for
setting a fee for eventually replacing or modernizing the equip-
ment. The government argues that an allowance for replacement
is tantamount to paying for an instrument twice and, further, that
a set-aside for replacement is without benefit of scientific review.
Again, these ,uncertainties and inconsistencies mitigate against
acquisition and effective use of research equipment.
Matching Requirements
Federal agencies that award funds for research equipment may
expect or require universities to contribute funds toward the cost
of such equipment. Investigators argue that the required contribu-
tions, or matching funds, are usually too great and point out that
the university's payment of costs such as installation, operation,
and maintenance is not as a rule considered part of the match.
The governmentwide rules that apply to matching are contained in
0MB Circular A-I 10, Attachment E. The rules in Circular A-I 10
are not in themselves burdensome, but each federal agency uses
different criteria to decide what it considers an acceptable con-
tribution. It is the unspecified match, or the uncertainty of what
is acceptable, that creates a perception of inconsistency in
federal regulations on matching.
Actually, the amount and character of a university's matching
contribution are determined by the individual agency and usually
are consistent with its intent and program purpose. Program man-
agers are given broad latitude in setting matching requirements.
They argue that this latitude is needed to assure the best possible
use of federal money.
Matching, as the term is used here, differs from cost sharing,
which is the requirement that the university contribute to the
total cost of a research project, which may or may not involve
equipment.
Ownership of Equipment
Some federal agencies. dp not vest title to equipment in the
university receiving the support. In this instance, the problem is
found in both the letter and the interpretation of the regulations.
Without assurance of title, investigators hesitate to combine uni-
versity funds with federal funds to acquire an instrument--they
may find that it belongs entirely to the federal government.
PAGENO="0504"
498
To cite an example, the Public Health Service (PHS) vests title
to equipment purchased under its grants without obligation on the
part of the university.* This practice is consistent with the intent
of the Federal Grant and Cooperative Agreement Act, which
states,
The authority to make contracts, grants, and cooperative
agreements for the conduct of basic or applied scientific
research at nonprofit institutions of higher education, or
at nonprofit organizations whose primary purpose is the
conduct of scientific research shall include discretionary
authority, when it is deemed by the head of the executive
agency to be in furtherance of the objectives of the
agency, to vest in such institutions or organizations,
without further obligation to the Government, or on such
other terms a~:d conditions as deemed appropriate, title to
equipment or other tangible personal property purchased
with such funds.25
The Department of Energy, on the other hand, does not auto-
matically vest title to equipment purchased under its contracts.t
Such inconsistent practices among agencies inhibit efficient
acquisition, management, and use of equipment.
*Consistent with 0MB Circular A-I 10, the PHS reserves the right
to require transfer of title to equipment from one grantee to
another or to the federal government even though title was vested
in the university upon acquisition. This is known as "conditional"
title, but has created no reported problems. This option must be
exercised within 120 days after the end of PHS support for the
project. Other agencies that transfer title upon acquisition also
vest conditional title (Code of Federal Regulations 45, sec .74.136).
tThe Department of Energy does not now award many research
grants but relies rather on research contracts. Departmental
policy urges that equipment title be transferred to universities
upon acquisition, but investigators say that DOE ignores its own
policy. Recently the department announced that the Office of
Energy Research would be issuing a significant number of special
research grants. An announcement in the Federal Register to
facilitate those grants appeared on April 15, 1985 (50 FR 14856);
we understand that DOE operations offices will be encouraged to
vest title upon acquisition and may vest title to equipment
previously purchased on contracts.
PAGENO="0505"
499
Problems arise when investigators attempt to acquire an
instrument by combining funds from their own grants or contracts
from the same or different agencies, for example, or when two
investigators want to purchase an instrument jointly with funds
from the same or different agencies. Where title to the instru-
ment vests in the government, rather than the university, it is
easy to understand the reluctance of a university official to
arrange financing. The government may prove to be unable or
unwilling to continue support for the project at an appropriate
level, leaving the university to pay for a piece of equipment that.
belongs to the government.
Inconsistencies in Federal Contract Rules
The Federal Acquisition Regulation was described earlier as
the basic governmentwide set of rules governing all federal
procurement including the acquisition, management, and use of
federally supported research equipment under contracts. The
FAR is of recent origin (April 1984) and was developed to resolve
the inconsistencies of the old agency-by--agency procurement
regulations. The intent was admirable, but the agencies were
permitted to develop supplements that implement the FAR, and
these in some instances created new inconsistencies. In several
cases, there are inconsistencies among the agency supplements.
In other instances, the FAR itself is internally inconsistent.
For universities the FAR presents two problems.26 First,
definitions of equipment and facilities do not distinguish between
industrial facilities, plant equipment, and special tooling, on the
one hand, and research facilities and equipment on the other.
Because the definitions of equipment are not clear, universities
have long been subjected to unrealistic requirements, such as
screening requests for state-of-the-art equipment through the
Defense Industrial Plant Equipment Center (DIPEC) before the
equipment can be purchased with DOD funds.* Such screening is
required because research equipment is included in the definition
of the term "industrial plant facilities."
The universities we visited felt that the descriptions of equip-
ment in the DIPEC inventory do not suffice to permit a federal
property officer to determine whether an instrument in the inven-
tory is an adequate substitute for the one requested. We encoun-
*The National Aeronautics and Space Administration has a similar
screening system, the Equipment Visibility System (EVS).
PAGENO="0506"
500
tered no one who could identify scientific or technical equipment
acquired via DIPEC screening. Hence the required time-
consuming screening is wasteful for both the universities and the
government and serves no useful purpose for research equipment.
The DOD definitions of what constitutes equipment are so
oriented toward manufacturing and production as to mean little to
research contracts with universities.
The second difficulty is the inconsistency of the FAR contract
clauses governing vesting of title, which are not in accordance
with PL 95-224. This law contains the statutory authority for
vesting title to equipment. The policies on title to equipment
acquired by universities provide that the "contractor shall auto-
matically acquire and retain title to any item of equipment
costing less than $5,000" and "if purchased equipment costs $5,000
or more," the parties may agree that title vests in the contractor
on acquisition, or they may select among several other options.
The contract clause that implements this policy provides that
title ordinarily vests in the government, rather than with the
contractor. It also provides, however, that title to equipment
costing less than $1,000 may vest in the contractor on acquisition
but only if, before each acquisition, the contractor has obtained
agency approval.
Capital Equipment Thresholds and Inventory Requirements
0MB Circulars A-21 and A-lb specify cost thresholds for
capitalizing equipment that are inconsistent and unrealistically
low. The threshold is $500 in Circular A-2 I and $300 in Circular
A-lb.
0MB Circular A-21 defines equipment as "tangible personal
property having a useful life of more than two years, and an
acquisition cost of $500 or more per unit." 0MB Circular A-I 10
defines equipment as "tangible personal property having a useful
life of more than one year, and an acquisition cost of $300 or
more per unit."
0MB Circular A-2l addresses capitalization levels for pur-
poses of cost recovery and allowabibity; 0MB Circular A-I 10
addresses the management of equipment. Circular A-21 also
requires approval in advance of purchase of special-purpose
equipment costing $1,000 or more.
If colleges and universities wish to be reimbursed for depreci-
ation or use allowance on equipment, they must maintain property
records and conduct a physical inventory at least once every two
years. The university must ensure that the equipment is used and
needed. Colleges and universities that seek such reimbursement
keep property records and conduct inventories, but those inven-
PAGENO="0507"
501
tories are for purposes of cost reimbursement, rather than for
equipment management.
The difference in the two circulars' capitalization thresholds-
$500 versus $300--creates difficulty in equipment management.
The Circular A-I 10 definition requires keeping track of signif i-
cantly more items than does the Circular A-2 I definition. Man-
agement of the inventory would go more smoothly if both thresh-
olds were raised and made uniform.
Two universities we visited estimate that a threshold of $1,000
would halve the number of items in the typical university inven-
tory of capital equipment while retaining 80 percent of the com-
bined value of the equipment. At a third university, 80 percent of
the items in the inventory of equipment bought in 1983 accounted
for less than 20 percent of the dollar value of the inventory.
Circular A-I 10 requires that universities "assure the avoidance
of purchasing unnecessary or duplicative items." This requirement
is interpreted to mean that universities must screen their equip-
ment inventories prior to purchase. Faculty investigators generally
are willing to share to cut costs, but we were told that the $300
threshold requires considerable screening for items that are not
economically suited to sharing. Some universities have negotiated
higher screening thresholds with their auditors. The screening
level at one university we visited, for example, is $10,000. It
accounts for 3.2 percent of the items in the inventory of equip-
ment bought in 1983 and for 50 percent of the dollar value.
Prior Approval Systems
Purchases of equipment costing more than $1,000 and not
otherwise approved for acquisition with NIH and NSF project-
grant funds ordinarily can be approved by the university under the
NIH Institutional Prior Approval System (IPAS) and the NSF
Organizational Prior Approval System (OPAS). These systems
eliminate some of the postaward restrictions attached to the
project grant, such as the requirement for prior approval by the
agency to incur certain costs or to shift funds among budget
categories. IPAS and OPAS emphasize the grantee's flexibility to
allocate resources to achieve optimum research outputs and are
valued highly.. by investigators and administrators. They reduce
turnaround time on requests from six or more weeks to a few
days, thereby permitting the university to take advantage of
timely price discounts or other special arrangements.
Under IPAS and OPAS, the ufliversities are charged with adher-
ing to both the agencies' grant regulations as well as university
standards. Both individual transactions and the procedures them-
PAGENO="0508"
502
selves are subject to review by the agency and the auditor. The
universities must retain documentation of their IPAS/OPAS trans-
actions.
The NSF OPAS contains a provision that permits the university
to incur cost up to 90 days before a grant is awarded. This pro-
vision can reduce lags in start-up caused by delays in delivery of
equipment. It also gives the university ample opportunity to
obtain maximum benefit from negotiations, including taking
advantage of tax incentives to industry for donations and bargain
sales of equipment. The OPAS makes it easier to combine funds
from NSF grants when the grants are scientifically related.
Additionally, the university is authorized to rebudget grant funds
for renovations costing less than $10,000.
The Public Health Service is currently in the second phase of
an experiment with the IPAS. This experiment extends additional
approval authority to the university. It includes the ability to
make decisions on the purchase of general-purpose equipment to
be used for scientific applications. General-purpose equipment
includes items like cargo vehicles, computing equipment,
cameras, and refrigerators.
The Office of Naval Research (ONR) operates a system that,
among other functions, moves the locus of government decision
making closer to the campus. ONR resident representatives on or
near campuses around the country can approve purchases locally,
which considerably expedites the acquisition process. The resi-
dent representative is usually authorized to approve purchases on
behalf of agencies other than DOD. This system provides certain
benefits comparable to those of IPAS and OPAS, although it does
not constitute delegation of prior approval authority to the
universities.
RECOMMENDATIONS
Traditional federal funding mechanisms, although they account
for well over half of expenditures on academic research equip-
ment, do not on balance comprise adequate means of regularly
replacing obsolete or worn-out equipment. Current special equip-
ment programs, operated outside the traditional funding channels,
are extremely useful. Still, they were designed largely to respond
to an emergency and, at present levels, obviously are not a long-
term solution to the equipment problem.
Federal regulatory practices are an element of the problem.
Few federal regulations directly prevent the acquisition of
research equipment by universities or hamper its operation, main-
tenance, and replacement; however, the interpretation of regula-
PAGENO="0509"
503
tions does impede acquisition and especially complicates manage-
ment and replacement and modernization of research equipment.
We recommend...
1. That the heads of federal agencies supporting university
research issue policy statements aimed at removing barriers to
the efficient acquisition, management, and use of academic
research equipment. Few federal regulations, as written, con-
tribute directly to the equipment problem. Inconsistent interpre-
tation of regulations by federal officials, however, complicates
the purchase, management, and replacement of research equip-
ment and leads to unnecessarily conservative management prac-
tices at universities. Desirable actions are summarized in the
recommendations below.
2. That federal agencies more adequately recognize and
provide for the full costs of equipment, including operation and
maintenance, space renovation, service contracts, and technical
support by...
...providing these costs in project grants and contracts or
ensuring that recipients have adequately provided them.
..accepting universities' payment of costs such as installation,
operation, and maintenance as matching funds on programs that
require matching contributions by universities.
3. That federal agencies adopt procedures that facilitate
spreading the cost of more expensive equipment charged directly
to research-project awards over several award-years and allow
the cost and use of equipment to be shared across award and
agency lines. Individual research-project grants and contracts
normally can accommodate equipment of only modest cost.
Investigators, moreover, have difficulty combining funds from
awards from the same or different agencies to buy equipment.
4. That federal auditors permit universities to recover the full
cost of nonfederally funded equipment from federal awards when
they convert from use allowance to depreciation. Office of
Management and Budget (0MB) Circular A-2l permits such
conversion as well as recovery of full cost. Auditors of the
Department of Health and Human Services, however, permit
recovery only as if the equipment were being depreciated during
the time it was in fact covered by the use allowance. This
practice, in effect, denies recovery of full cost.
5. That the Office of Management and Budget make interest
on equipment funds borrowed externally by universities unequivo-
cally an allowable cost by removing from 0MB Circular A-2l the
requirement that agencies must approve such charges. Interest on
externally borrowed funds has been a permissible cost since 1982
at the discretion of the funding agency, but agencies have shown
significant reluctance to permit it. The perception of inability
PAGENO="0510"
504
to recover interest costs may lead university officials to decide
against seeking debt financing for equipment.
6. That all federal agencies vest title to research equipment
in universities uniformly upon acquisition, whether under grants or
contracts. Federal regulations on title to equipment vary among
agencies, and such variability inhibits efficient acquisition, man-
agement, and use of equipment. Without assurance of title, for
example, investigators hesitate to combine university funds with
federal funds to acquire an instrument not affordable by a single
sponsor.
7. That the Office of Management and Budget make federal
regulations and practices governing management of equipment
less cumbersome by...
..setting at ~l 0,000 the minimum level at which universities
must screen their inventories before buying new equipment and,
above that minimum, permitting universities and agencies to
negotiate different screening levels for different circumstances.
..raising the capitalization level for research equipment to
$1000 in 0MB Circulars A-2l (now at $500) and A-ll0 (now at
$300) and giving universities the option of capitalizing at
different levels.
8. That the Department of Defense eliminate its requirement
that the inventory of the Defense Industrial Plant Equipment
Center (DIPEC) be screened for the availability of specialized
scientific equipment requested by universities before new equip-
ment is purchased. The descriptions of equipment in the DIPEC
inventory do not permit a federal property officer to determine
whether a scientific instrument in the inventory is an adequate
substitute for the one requested. Hence, the requirement for
screening is wasteful for both universities and the government.
9. That other federal agencies adopt the NIH and NSF prior
approval systems. Purchases of equipment with federal funds
ordinarily must be approved in advance by the sponsoring agency.
Purchases can be approved by the university, however, under the
NIH Institutional Prior Approval System and the NSF Organiza-
tional Prior Approval System. These systems markedly improve
speed and flexibility in acquiring equipment.
REFERENCES
I. National Academy of Sciences, Strengthening the
Government-University Partnership in Science (Washington,
D.C.: National Academy Press, 1983).
2. National Academy of Sciences, An Assessment of the Needs
for Equipment, Instrumentation, and Facilities for University
Research and Engineering (Washington, D.C., 1971).
PAGENO="0511"
505
3. Task Group No. 5, National Science Foundation Advisory
Council, Equipment Needs and Utilization (Washington, D.C.,
1978).
4. Irene L. Gomberg and Frank 3. Atelsek, Expenditures for
Scientific Research Equipment at Ph.D.-GrantinR Instit u
;ions, FY 1978, Higher Education Panel Report, Number 47
U Washington, D.C.: American Council on Education, 1980J
5. Kirt 3. Veneer, Extramural Instrumentation Funding by the
National Institutes of Health (Washington, D.C.: National
Institutes of Health, 1981).
6. Association of American Universities, The Nation's Deterior..
ating University Research Facilities: A Survey of Recent
Expenditures and Projected Needs in Fifteen Universities
(Washington, D.C., 1981).
7. Association of American Universities, The Scientific
Instrumentation Needs of Research Universities (Washington,
D.C., 1980).
8. Bruce L. R. Smith and 3oseph 3. Karlesky, The State of
Academic Science: The Universities in the Nation's Research
Effort (New York, N.Y.: Change Magazine Press, 1977).
9. U.S. General Accounting Office, Studies of U.S. Universities'
Research Equipment Needs Inconclusive (Washington, D.C.,
1984).
10. Division of Policy Research and Analysis, National Science
Foundation, University Research Facilities: Report on a
Survey Among National Science Foundation Grantees -
(Washington, D.C.: National Science Board, 1984).
II. National Research Council, Revitalizing Laboratorj'
Instrumentation (Washingtoii, D.C.: National Academy Press,
1982).
12. Laurence Berlowitz, et a!., "Instrumentation Needs of
Research Universities," Science 211:1013 (March 6, 1981).
13. Donald Kennedy, "Government Policies and the Cost of Doing
Research," Science 227:480 (February 1, 1985).
14. National Commission on Research, Funding Mechanisms:
Balancing Objectives and Resources in University Research
(Washington, D.C., 1980).
15. National Institutes of Health, Division of Research Grants.
16. Mitre Corporation, Evaluative Study of the Materials
Research Laboratory Program (McLean, Va., 1979). -
17. Cohn, Norman, "NSF Readies New Engineering Program,"
Science 227:38 (3anuary 4, 1985); Cohn, Norman, "NSF
Names Engineering Centers," Science 228:305 (April 19, 1985).
18. National Science Foundation, "NSF Selects Four Institutions
to be National Advanced Scientific Computing Centers"
(February 25, 1985).
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506
19. James Bell, et al., Short-Term Evaluation of the Biomedical
Research Sypport Grant, NIH Evaluation Project No. DRR
82-30lB (Washington, D.C.: National Institutes of Health,
1984).
20. 1 G. Danek, "Institutional Management and Utilization of
National Science Foundation Institutional Grants for
Science," Dissertation Abstracts International (1976), P. 181.
21. Use of Government Excess Personal Property by Non-Federal
Entities, LC D-76-207 (Washington, D.C.: General
Accounting Office, Sept. 15, 1975).
22. Third Biennial Report on the Transfer of Excess and Surplus
Federal Personal Property to Nonfederal Organizations,
GGD-85-3 (Washington, D.C.: General Accounting Office,
Nov. 9, 1984).
23. Federal Register 42: 56000-56033.
24. Armed Services Procurement Act of 1947, 10 USC subsec-
tions 2301-2314, as amended; Federal Procurement and
Administrative Services Act of 1949, 10 USC subsections
251-260, as amended; Office of Federal Procurement Policy
Act of 1974 (PL 93-400), as amended. The most significant
amendments to all three statutes are contained in the
Competition in Contracting Act of 1984 (PL 98-369) and the
Small Business and Federal Procurement Enhancement Act of
1984 (PL 98-577).
25. 41 USC 506 or PL 95-224, Section 7(b).
26. Federal Acquisition Regulation, Part 45 and Part 52.
PAGENO="0513"
507
2
The State Role in the Acquisition and
Management of Research Equipment
INTRODUCTION
State governmentsplay significant but often conflicting roles
in regard to academic research equipment. On the one hand, they
provide important funding for such equipment both directly and,
by means of tax benefits, indirectly. On the other hand, states
often constrain the acquisition and management of research equip-
ment through regulatory controls and restrictions on public uni-
v ersities' general financial flexibility.
Data on state funding of research equipment in universities
are sparse, and trend data do not exist. The National Science
Foundation's (NSF's) National Survey of Academic Research
Instruments has developed figures on the amount, condition, and
cost of existing research equipment. The figures show that states
directly funded 5 percent of the aggregate acquisition cost of
major research instrumentation systems in use in academe in
1982-1983 (Table 3). This percentage is probably an underrepre-
sentation of state support for many public institutions, since the
self-reported university contribution may include general-purpose
state appropriations. State funds for research equipment are
rarely available to private universities; the NSF data show that
private schools received only 2 percent of direct state funding for
equipment covered by the survey, whereas public schools received
98 percent (Table 4).
States provide some funding for research and development at
colleges and universities, and an unknown fraction of these expen-
ditures goes for research equipment. State and local governments
accounted for 15 percent of total spending on academic R&D in
1953 and 7 percent in 1983 (Figure 2, Chapter 1). The decline
reflects the rise in federal funding during that period (Appendix
A). In constant dollars, state funding grew about 8.9 percent
annually during 1953-1967 and about 1.8 percent annually during
1967-1983. Federal funding of academic R&D, in real terms,
53-277 0 - 86 - 17
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508
TABLE 3 Sources of Funds for Acquisition of Academic Research
Federal
Total
Total, Selected Fields $1,178.0
100%
Agricultural Sciences 36.1
100%
Biological sciences, total 381.3
100%
Graduate schools 156.1
100%
Medical schools 225.2
100%
Environmental sciences 92.3
100%
351.9
100%
218.9
100%
46.9
100%
34.1
100%
16.6
100%
Total NSF NIH DOD
$640.3 $230.8 $176.5 $103.9
54% 20% 15% 9%
7.8 1.7 1.3 0
21% 5% 4% -
198.5 35.3 149.7 2.1
52% 9% 39% 1%
80.6 24.5 48.9 1.0
52% 16% 31% 1%
117.9 10.8 100.8 1.2
52% 5% 45% -
45.7 16.5 0.5 6.6
50% 18% - 7%
229.1 116.1 19.5 32.3
65% 33% 6% 9%
106.4 35.1 2.7 45.8
49% 16% 1% 21%
21.5 10.8 0.3 9.1
46% 23% 1% 19%
*24.3 13.5 0.7 5.4
71% 40% 2% 16%
7.0 1.8 1.9 2.4
42% 11% 11% 15%
Physical sciences
Engineering
Computer science
Materials science
Interdisciplinary, not
elsewhere classified
alndividuals and nonprofit organizations.
NOTE: Sum of percents may not equal 100 percent because of rounding.
SOURCE: National Science Foundation, National Survey of Academic
PAGENO="0515"
509
Equipment in Use in 1982-1983, by Field (Dollars in Millions)
Funding
Nonfederal Funding
Univ.
State
Busi-
DOE
NASA
USDA
Other
Funds
Govt.
ness
Othera
$63.1
$30.8
$5.0
$30.2
$371.5
$61.5
$43.2
$61.5
5%
3%
-
3%
32%
5%
4%
5%
0.3
0.3
2.7
1.5
17.8
6.7
1.8
2.1
1%
1%
7%
4%
49%
18%
5%
6%
3.5
0.4
1.9
5.5
131.2
18.6
6.5
26.5
1%
-
-
1%
34%
5%
2%
7%
0.7
0.4
1.7
3.5
48.2
13.0
4.3
10.0
-
-
1%
2%
31%
8%
3%
6%
2.9
0
0.2
2.1
83.0
5.5
2.3
16.4
1%
-
-
1%
37%
2%
1%
7%
8.2
5.4
0
8.5
27.5
7.2
8.4
3.5
9%
6%
-
9%
30%
8%
9%
4%
33.0
22.3
0.1
5.7
92.2
6.6
4.1
20.0
9%
6%
-
2%
26%
2%
1%
6%
14.4
2.2
0.3
5.8
78.5
13.5
13.1
7.4
7%
1%
-
3%
36%
6%
6%
3%
0.3
0
0
1.0
11.5
4.9
7.7
1.2
1%
-
-
2%
25%
10%
16%
3%
3.4
0
0
1.3
6.0
2.6
0.6
0.6
10%
0
-
0
-
0
4%
0.9
18%
6.8
8%
1.5
2%
0.9
2%
0.4
-
-
-
5%
41%
9%
6%
2%
Research Instruments and Instrumentation Needs.
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510
TABLE 4 Acquisition of Research Instrument Systems in Use in
Purchase Cost (Dollars in Millions)
Federal
Total Total NSF NIH DOD
Total $1,178 $640.3 $230.8 $176.5 $103.9
100% 100% 100% 100% 100%
Type of University
Private 429.9 268.3 102.8 74.7 53.1
36% 42% 45% 42% 51%
Public 748.1 372.0 128.0 101.8 50.8
64% 58% 55% 58% 49%
System Purchase Cost
$lO,000-$24,999 324.9 176.7 43.5 82.6 21.5
28% 28% 19% 47% 21%
$25,000-$74,999 372.6 194.2 68.9 53.2 37.4
32% 30% 30% 30% 36%
$75,000-$1,000,000 480.5 269.4 118.4 40.7 45.0
41% 42% 51% 23% 43%
aln dividuals and nonprofit organizations.
NOTE: Sum of percents may not equal 100 percent because of rounding.
SOURCE: National Science Foundation, National Survey of Academic
PAGENO="0517"
511
1982-1983 by Source of Funds, Type ol University, and System
Funding Nonfederal Funding
Univ. State Busi-
DOE NASA USDA Other Funds Govt. ness Othera
$63.1 $30.8 $5.0 $30.2 $371.5 $61.5 $43.2 $61.5
100% 100% 100% 100% 100% 100% 100% 100%
15.2 12.8 0.3 9.4 109.9 1.3 24.7 25.7
24% 42% 6% 31% 30% 2% 57% 42%
47.9 17.9 4.8 20.8 261.7 60.1 18.5 35.9
76% 58% 94% 69% 70% 98% 43% 58%
14.2 4.9 2.8 7.3 102.7 20.1 8.6 16.8
22% 16% 56% 24% 28% 33% 20% 27%
15.1 8.6 1.8 9.3 126.2 20.3 13.9 18.0
24% 28% 36% 31% 34% 33% 32% 29%
33.8 17.3 0.4 13.6 142.6 21.0 20.7 26.7
54% 56% 8% 45% 38% 34% 48% 43%
Research Instruments and Instrumentation Needs.
PAGENO="0518"
512
grew about 1.6 percent annually during 1967-1983 but from a base
more than eight times the base for state and local government.
The critical question is the degree to which state funds and
tax benefits intended specifically to aid academic research are
countered by constraints general to state government. State
procurement laws, for example, tend to be highly conservative,
and creative financing is viewed warily. States traditionally rely
on negative controls to assure fiscal integrity. Such controls do
not lend themselves readily to expeditious acquisition and upgrad-
ing of complex and costly research instrumentation or to alterna-
tive modes of financing. States typically do not have a regular
mechanism for replacing obsolete research equipment nor do they
recognize its rapid obsolescence when providing initial funding for
equipment purchases. Other constraints include bars to the use of
equipment by private entities and replacement policies inconsis-
tent with the unique nature and often quite short useful life of
research equipment. Finally, most states continue to treat the
acquisition of research equipment, almost without regard for its
cost, as an operating expense. Thus, the capital financing methods
common in business, and used increasingly by private universities,
remain the exception for state-funded equipment.
MODES OF STATE SUPPORT
The state and federal approaches to funding research equip-
ment differ in part on philosophical grounds. For example, states
sometimes do not consider research and graduate study among
their primary responsibilities; more specifically, they consider
basic research a federal responsibility. Some states, in fact,
budget only for instruction in their institutions of higher educa-
tion.
State support is usually institutional, with only limited consid-
eration of specific pieces of equipment; federal support, in con-
trast, is mainly project oriented and independent of the overall
financing of the institution. State funding is very likely to be in a
form that merges support for equipment into a general operating
base; a federal research grant is likely to anticipate the acquisi-
tion of specific equipment. State funding of scientific equipment
usually is associated with new buildings or major new programs.
Most state purchasing regulations draw no distinction between
research equipment and other equipment, whether for use by
universities or other state agencies. State allocations that cover
equipment, moreover, usually also cover diverse and undifferen-
tiated instructional, administrative, and maintenance needs.
Federal and state policies toward public and private univer-
sities also differ significantly. With only minor exceptions, the
PAGENO="0519"
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federal government treats public and private universities alike in
the award and management of funds for research and research
equipment. States, on the other hand, impose on public univer-
sities considerably more control, particularly fiscal control, than
they impose on private universities. Except for controls entailed
by their use of state borrowing authority, private universities are
exempt from virtually all state controls on the acquisition and
management of research equipment.
State support of colleges and universities is largely shaped by
the state appropriations process. Typically the process supplies
operating and capital funds for a budget period of one or two
years. The "base budget" reflects the costs of operating and
maintaining the institution at existing levels; generally it includes
allocations, often quite small, for buying and maintaining equip-
ment. The base budget may or may not reflect inflation, depend-
ing on state practice. At the end of the budget period, unexpend-
ed or uncommitted balances generally revert to the state's
general fund.
Proposals for new or expanded programs, and the associated
equipment, must include well-justified cost analyses and projec-
tions and must be submitted for legislative scrutiny during the
appropriations process. The economic health of the state and the
interests of its political leadership are critical factors in the
treatment of such budgetary proposals.
States are usually under heavy pressure to pay for current
operations, and very few are able to fund equipment replacement
reserves. State budget officers increasingly are requiring public
universities to include replacement reserves in their budget
presentations. Unfunded reserves, however, set up false
expectations, often exacerbated by useful-life tables that are too
long relative to the actual useful life of research equipment.
The regulations associated with state support (Appendix E)
generally apply to all state agencies and often promote good
management and provide checks and balances to ensure that funds
are spent appropriately. Still, restrictions on year-end carry over
of funds, overly restrictive state purchasing procedures, low
dollar values for capitalization of equipment, and state budgeting
processes all combine to impose burdens on state universities not
common to private universities. Except in unusual circumstances,
moreover, state regulations do not recognize the unique character
of scientific equipment or the difficulties of acquiring it In
addition to high costs and short technological lifetimes, instru-
ments with the same general specifications, for example, may
have different capabilities. Further, the differences may be
discernible only to experts in the field.
PAGENO="0520"
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Fresh Approaches
Many states are seeking ways to foster technological develop-
ment, and some legislatures have recognized that colleges and
universities need capital equipment to compete for federal fund-
ing of research and create an environment c9nducive to economic
development. In some states, for example, participants in the
budgeting process have had the foresight to provide not just the
salaries for new faculty, but also seed money and start-up funds
for their research. We visited several such state universities.
The University of New Mexico received $2 million per year for
five years (1980-1985) from the state for research equipment and
teaching apparatus; the money was part of $5 million per year
from a statewide appropriation, which was distributed to public
colleges and universities by formula.
The state of Georgia set aside 1 percent of the state's higher
education appropriation of $600 million for specific quality im-
provement programs at state schools. The $6 million allocated in
1984 was used to improve laboratory equipment. It was appor-
tioned according to need; Georgia Tech, for example, got $1
million. Officials anticipate that similar funds will be provided
each year, but the focus may change from year to year according
to current needs. These funds are used for one-time expenditures
without continuing budgetary commitments.
The New York State Foundation for Science and Technology
has established centers for advanced technology at seven public
and private universities within the state. Support for each of the
seven centers is $1 million per year for four years. In addition,
the state is supporting a research and development program in
engineering at Rensselaer Polytechnic Institute and a major
research facility for biotechnology at Cornell University.
The state of Virginia in 1984 appropriated more than $30
million for a Center for Innovative Technology to be operated by
a consortium of four universities. It is designed to support
research in four areas: genetic engineering, computer-aided
engineering, microelectronics, and image processing. The state
money is seed money; substantial industrial support is antici-
pated. The center will provide support for individual projects as
well as a central facility.
The North Carolina Board of Science and Technology, a
15-member board establishedby the governor, did a thorough
study of academic research equipment needs in the state. In
December 1983 the board recommended that the state appro-
priate $73 million over five years to universities in the North
Carolina system for one-time purchase of equipment and $1 0.9
million per year for maintenance of equipment.' It recom-
mended also that the state allocate $20 million over five years to
PAGENO="0521"
515
public and private colleges and universities for matching grants
for equipment. As of mid-1985, the North Carolina legislature
had not acted on these recommendations.
The North Carolina Board of Science and Technology is
designed in part to bring together the scientific and technological
resources of government, academe, and industry in the state.
One result of the board's activities is the Microelectronics Center
of North Carolina (MCNC).2 It is intended to help the state
develop high technology industry by enhancing the research and
educational abilities of five universities and a contract research
institute. The participants are Duke, Agricultural and Technical
College of North Carolina, North Carolina State, the University
of North Carolina at Chapel Hill, the University of North Carolina
at Charlotte, and the Research Triangle Institute. MCNC thus far
has been funded largely by the state and began occupying its own
facilities at Research Triangle Park in 1983. Center leaders see
great potential for supporting excellent research facilities in
integrated circuit technology.
Another technology-fostering device is the provision at some
schools of "incubation" facilities for small companies just starting
out. The immediate payoff for the university is not likely to be
large, but advantages could accrue in the longer term. The state
of Georgia in 1980 established such a facility, the Advanced
Technology Development.Center (ATDC) on the campus of
Georgia Tech. The center is~ designed to catalyze the growth of
high technology in the state, and university officials say it is "a
spectacular success." The center's location on campus gives
companies ready access to Georgia Tech's scientific and engi-
neering resources, both human and physical, and low-cost space
for developing, testing, and manufacturing new products is also
available on campus. ATDC also serves as a conduit to Georgia's
other major research universities--the University of Georgia and
Emory University. -
Finally, a few states are permitting their public institutions to
create structures that encourage public-private cooperation. In
1984, Connecticut authorized the University of Connecticut to
establish a Health Sciences Research and Development Corpora-
tion which would in turn own a controlling interest in a series of
research and development limited partnerships. Although imple-
mentation is just under way, this model promises to provide a
vehicle that encourages private sector participation in R&D
activities without the burdens imposed by direct state control.
Tax Benefits
States also support research and research equipment indirectly
through tax benefits. In 34 states wbose.Iax codes~fo11ow the
PAGENO="0522"
516
federal Internal Revenue Code, tax benefits are available as
specified in the Economic Recovery Tax Act of 1981 (see Chapter
5 for detailed discussion). These benefits cover contributions of
research equipment to colleges and universities as well as spend-
ing on research. In four other states, the tax codes include
comparable provisions but with certain variations. In addition,
seven states have adopted tax credits designed to foster research
and contributions to educational institutions.
CONTROLS ON DEBT FINANCING
Rising costs have led to steady growth in the universities' use
of debt financing and leasing to acquire research equipment (see
Chapter 4 for detailed discussion). State controls, however, have
generally limited public universities' use of these financial ye-
h ides.
Few state universities may directly incur debt except where
the debt-financed facility or equipment will generate its own
definable revenue stream. Even in such cases, debt financing is
usually limited to capital construction. General obligation bonds
and other forms of state debt commonly issued to finance build-
ings, highways, and other permanent improvements remain
unavailable for most equipment needs (Appendix F), although
research instruments may cost nearly as much and sometimes
even more than permanent structures. The distinction is based on
presumed useful life: financing equipment with a useful life of
perhaps 5 years by means of state debt that will be carried for 30
years has traditionally been considered imprudent.
An exception here is that most states permit the financing of
new (or substantially renovated) buildings to include the cost of
equipping them. Equipment has generally been taken to include
the instrumentation (fixed or movable) required in laboratories or
other research facilities in the new or renovated building. This
approach helps the university by permitting substantial equipment
costs to be financed on a capital basis. On the other hand, it
creates the impression that the initial instrumentation and the
surrounding building will have similar long-term useful lives.
State legislators and budget directors usually will accept the need
to replace the instruments before the building, but not the need to
replace them in only a few years. Thus, the inclusion of initial
equipment with buildings in long-term capital financing can
create reluctance to replace the equipment in a timely fashion.
New construction alone cannot meet the need for research
equipment in academe. At most state universities, however,
equipment that is not included in new construction cannot be
financed through the capital route, but must be paid for out of
PAGENO="0523"
517
regular appropriations. This requirement, in effect, pits needs for
equipment .against needs for faculty and other claims on operating
funds.
Exceptions to Current Funds Only
The current-funds-only rule is not universal. To buy equip-
ment that is expected to generate revenue, for example, nearly
all states allow issuance of revenue bonds that do not constitute
state debt. Interest and principal are paid from the earnings
produced by the equipment. This vehicle harbors risk, however.
If the revenue stream proves inadequate, the institution or the
state or both may be forced to service the debt out of general
funds, risk default, lose the equipment, or suffer other harm.
Another way to capitalize equipment, including research
instrumentation, is pooled debt financing, where the state does
not incur a general obligation. Although public as well as private
institutions technically have access to pooled equipment funds,
private universities have used this alternative the most. The
explanation seems to lie in the schools' budgeting processes and
the vagaries of state law. Private universities, at least in theory,
have relatively unrestricted use of their funds and can shift them
as needed to take part in pooled equipment financing. State
universities, on the other hand, often are constrained by line-item
or object-category budgets that lack the necessary flexibility.
Some state universities have solved this problem by classifying
outlays for pooled equipment funds as leases and within their
power to arrange. As will be seen, however, restrictions on
multiyear contracts can limit the utility of this approach.
Another exception to the current-funds-only practice is tele-
communications and data processing systems. A number of states
have set up debt financing programs to allow their agencies,
including public universities, to acquire equipment of both kinds
(see also Controls on Purchasing section below). This has been a
particularly attractive area fa- joint ventures, as in the case of a
technologically advanced teleport under development by Ohio
State University with a consortium of private interests. The tele-
port is a telecommunications center that has a combination of
several satellite-earth terminals, a switching center, and a data
processing center and is used as a regional focal point for the
reception and transmission of data for a number of users. In this
case, the state has stepped aside to allow for the creation of a
high-cost facility that would ordinarily be outside of the existing
public resource base.
Private as well as public universities have benefited from
state-authorized debt financing. Most states now permit private
PAGENO="0524"
518
institutions to participate in tax-exempt bond issues that impose
no general financial obligation on the state. Many state legisla-
tures have established financing authorities for higher education
facilities that are empowered to issue bonds to finance capital
projects at private universities. In a growing number of states the
proceeds may. be used to buy equipment not part of a construction
project. California is the primary example of a state that has
aggressively promoted pooled issues, the proceeds of which could
be used for equipment as well as facilities.
Financing research equipment through debt that is not a gen-
eral obligation of the state is an important development as more
and more states find themselves at or near the statutory or
constitutional limit on the money they may owe.
Leasing
Leasing equipment to spread its cost has become common
among research universities. Public universities in many states,
however, face statutory limits on the duration of contracts,
including leases. Such limits, often based on the appropriations
period (usually one or two years), restrict the schools' ability to
arrange advantageous leases. Even where a long-term lease can
be negotiated, it must by law be cancelable annually or biennially,
which increases the risk to the lessor and, therefore, the cost to
the lessee. Current exceptions that allow multiyear leases are
commonly limited to real property or special categories of fixed
equipment, particularly telecommunications.
CONTROLS ON PURCHASING
State controls on purchasing and procurement significantly
constrain the acquisition of research equipment. Nearly every
state requires its public universities to conform to at least some
of the standards and procedures for buying equipment that apply
to all state agencies. Such requirements include publication of
specifications, approved bidder lists, competitive procurement,
and the award of contracts to the lowest responsive bidder. Con-
trols on purchasing and procurement usually apply with equal
force whether the equipment is bought with current funds or
through capital financing.
State controls are frequently more restrictive than federal
regulations. They may, for example, require orders to be pro-
cessed and approved through a statewide purchasing agency, a
procedure that often delays acquisition and isolates investigators
from discretionary judgments that are essential to the purchasing
process.
PAGENO="0525"
519
State purchasing requirements tend to be designed to deal with
the acquisition of routine and general-purpose goods: automobile
tires, cleaning supplies, and the like. Although often not drafted
with the requirements of sophisticated scientific research instru-
mentation in mind, they often subsume those acquisitions as well.
This problem becomes particularly severe because procurements
are defined in generic terms in the case of many items required
in the functioning of state government, such a process is both
reasonable and indeed an efficient way to control expenditures.
With state-of-the-art scientific apparatus, however, the brand-to-
brand difference may be far from insignificant. Purchasing
officers are primarily interested in saving money, whereas the
scientist's main goal is to perform research. The scientist looks
for characteristics that might indicate that one product is supe-
rior to another; difficulty can arise when university or state pur-
chasing officers are not persuaded of, Or do not understand, these
subtle differences in instruments or other equipment. Addition-
ally, purchasing officers sometimes do not understand the time
constraints on scientific experiments. When purchasing officials
fail to see that buying scientific instruments or their components
is different from buying tires and batteries, misunderstandings
and a degree of conflict are inevitable. Such problems are not
confined to state colleges and universities, but they are less
common in private institutiOns.
Competitive bidding on scientific equipment may result in
substantial discounts or the inclusion of additional features, spare
parts, or expendable supplies, which is good for both the univer-
sity and the sponsor of the research. But while the Office of
Management and Budget Circular A-I 10 and the Federal Acquisi-
tion Regulation require competitive procurement where prac-
ticable, state law almost without exception mandates competitive
procurement by public universities. In some states, the procure-
ment procedures apply with full force to purchases by state uni-
versities even with nonstate funds.
Some states permit exceptions to normal procurement stan-
dards. Competitive procurement may not be required, for
example, below a specified dollar value and where the item is
available from only one source or is needed in an emergency.
Often, however, the threshold is so low ($100 in some states) that
little scientific equipment falls below it. One public university
must ask for bids on all equipment costing more than $700, even
when only one vendor can meet the specifications. While a
sole-source exemption is useful in principle, its value often is
limited se"erely by narrow definitions of the kinds of acquisitions
and the circumstances of their procurement that trigger such
treatment. The investigator's view that one of several possible
suppliers offers the best or most suitable device, for example, is
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rarely enough to invoke the exemption. The adequacy of the alter-
natives is usually determined by state purchasing authorities far
from the scene and with little or no scientific background.
Exceptions based on emergency need are likewise of limited
utility. State rules tend to define emergencies in terms of
protecting health and safety and public property. Thus, a con-
* tract to replace a storm-damaged roof may be let promptly and
noncompetitively, but a request to acquire equipment noncompeti-
tively to meet a research deadline is likely to be rebuffed. Strict
application of state puchasing controls in this manner is particu-
larly troublesome: opportunities for sponsored research often
come on relatively short notice, and the ability to pursue the work
on a timely basis may be critical to obtaining the grant or
contract.
State equivalents of "domestic content" laws also can present
problems. These laws give in-state vendors preference in the
award of contracts for equipment and services. Although a grow-
ing number of states exclude scientific equipment from home-
state preference rules, the exceptions generally remain narrow or
depend on approval by state purchasing officials.
Public universities have sought to ease the negative effects of
state purchasing controls in several ways. One is the use of a
university-controlled foundation as a conduit for acquiring
research equipment with nonstate funds. In a number of states,
however, the ability of such entities to operate outside the
framework of state control has been challenged. Some states
have subjected university foundations to the same purchasing and
procurement rules that apply to the universities, particularly
where the foundation is viewed as quasi-public. University foun-
dations not created by statute are less likely to be subject to
state control, but some jurisdictions have sought to require even
these foundations to adhere to state procurement policies. There
are indications that this policy is changing, as more and more
states recognize the competitive advantages of allowing their
public institutions to create nonpublic subsidiaries to conduct and
reap the benefits of scientific research.
State procurement requirements may even extend to private
universities that rely on funds from state-sponsored bond issues or
debt, direct grants, or contracts. In such cases, the acquisition of
equipment and services generally must conform to the state pur-
chasing act, although some states follow the federal example of
requiring general adherence to the principles of the procurement
rules, but not necessarily to every detail.
States frequently apply particularly strict purchasing controls
to data processing and telecommunications systems. These spe-
cial controls were imposed after many state agencies invested
considerable sums in systems that turned out to be incompatible
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or redundant. The imposition of uniform standards and selection
criteria has been reasonably successful but is not always suited to
computer and telecommunications systems for use in academic
research. In consequence, a number of states have exempted such
equipment from special restrictions, and many allow waivers of
uniformity standards.
CONTROLS ON USE OF EQUIPMENT
Public universities are commonly governed by "public pur-
poses" language in the state constitution or statutes that limit
their freedom to enter agreements with for-profit entities. In
terms of the acquisition and use of research equipment, such
restrictions place the public university at a disadvantage relative
to private universities.
This issue raises several complex questions. First, the very
concept of public purpose versus private use is not uniformly
defined. In some states the determining factor is the nature of
the use; in others it is the identity of the user. Sponsored
research is generally viewed as a public purpose. Where the
sponsor makes separate use of the equipment, however, or obtains
unique rights to results obtained with it, it has been asked
whether a private purpose has not overtaken the public one.
Questions about private use raise anticompetitive issues as well,
owing to the theory that use of state-funded property and equip-
ment for private purposes gives the user an unfair advantage over
private competitors.
As a result of these constitutional and statutory limitations,
some public universities have turned to the creation of structural
appendages that are technically nonpublic and may even be profit
making. Several states are actively encouraging this approach in
recognition of the need to free their institutions from the con-
straints imposed on other public agencies, so that they can corn-
pete more effectively in the high-technology marketplace. The
creation of the separate University of Connecticut Health
Sciences Research and Development Corporation was applauded
by the state as a means of strengthening the competitive position
of the university. Like the university foundations, however,
these appendages are not immune to the risk of encouraging the
state to assert jurisdiction over them.
FINANCIAL FLEXIBILITY
While state controls on financing, purchasing, and using
research equipment are important concerns, many public colleges
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and universities find that their ability to acquire and manage
equipment depends additionally on the degree of financial flexi-
bility granted them under state law and regulations. State uni-
versities, for example, may have difficulty transferring funds
between budget categories (e.g., personnel, capital, operations) to
take advantage of opportunities such as participation in pooled
equipment funds. They may be unable to carry over unexpended
funds from one budget period to the next. Many state universities
are not permitted to pay matching costs for equipment from tui-
tion income or patient fees and so draw on gift funds or advance
unrestricted funds.
Financial Control Practices
Financial control practices have been assessed3 in terms of
institutional autonomy and grouped into two models: the state
agency model and the corporate/free market model.
Key features of the state agency model are as follows:
* All funds (from federal and private sources as well as the
state) flow through the state treasury and must be reappropriated
by the legislature.
* All procurements are subject to standardized requirements
and centralized processing.
* Detailed spending requests focus on objects of expenditure.
Deviations from budgets must be approved in advance and
reported.
* Unexpended funds are returned to the state treasury.
* Changes with long-term fiscal impact are monitored.
* Purchasing, construction, and other costs of operations flow
through the state government.
* Oversight is focused on process (adherence to regulations) as
opposed to product (quality of research and education).
Other features may include state control of indirect cost
recoveries from the federal government and restrictions on the
disposition of state-owned surplus property. Indirect costs are
commonly collected by the state and reallocated to the schools to
a degree that varies by state. In many state universities, equip-
ment purchased with federal funds becomes state property after
title has been given to the university and is then subject to all of
the arcane regulations for state property.
Key features of the corporate/free market model are as
follows:
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* Institutions have complete control of funds, whatever the
source, including indirect cost recoveries.
* State appropriations are made in block form, and the
institution has unbridled authority to contract for goods and
services from outside sources.
* Oversight is focused on product as opposed to process.
* Auxiliary organizations and support activities are not
subjected to state controls.
A recent study4 examined the financial flexibility of 88
Ph.D.-granting public universities in 49 states in terms of the
characteristics of these models. The results showed no differ-
ences in administrative costs, salaries, or complexity that cor-
relate with the degree of state oversight. Differences were
associated rather with the size of the university, the presence of
a medical/hospital complex, graduate enrollment, unionization,
and level of state funding.
More importantly, public universities with greater degrees of
autonomy tend to depend less on state appropriations and to raise
more of their support from other sources, federal and private.
This finding suggests that relief from state regulations frees
faculty and administrators to turn their attention to more pro-
ductive work, including development and sponsored research
activities, investment strategies, and long-range financial
planning (fostered by biennial budgets and retention of unexpended
balances).5 Improvements in these areas can directly benefit the
capacity of public universities to acquire and manage scientific
equipment.
Deregulation in Kentucky
The state of Kentucky deregulated its institutions of higher
education in 1982, with significant benefits.6 Kentucky had been
a "strong governor" state with centralized accounting and
procurement for all of higher education. The state commissioned
an independent study that concluded in part that state regulation
was a significant barrier to effective management of the schools
because of frequent duplication of procedures. The study led to
the passage of the Universities Management Bill (H.B. 622). The
bill afforded changes in regulation of purchasing, capital construc-
tion, accounting and auditing, payroll, and affiliated corporations
and foundations. Each school was given the option of implement-
ing any or all of theprovisions of H.B. 622.
The primary effect of the bill was decentralization of the
administration of higher education, enabling the schools to man-
age their own affairs. The move has produced significant savings
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for both the universities and the state by eliminating duplication
and freeing administrators for more productive work.
The University of Kentucky, for example, estimates that it
will save S500,000 per year by handling the purchasing function
itself; $90,000 of the savings comes simply from being able to
avoid the state stores' 9 percent markup. By assuming the respon-
sibility for capital construction, the university sharply reduced
the time required to appoint architects and award contracts; it
awarded $7 million in contracts between JuIy 15, 1982, and March
1983 with an estimated saving of S44 5,000 resulting from the
streamlined procedures. Smaller public institutions that do not
havesufficient administrative staff and resources to exploit the
provisions of H.B. 622 on their own are forming consortia to do so.
Failure of schools to comply with the provisions of the act
once they elect to follow it, or lack of cooperation among schools,
could jeopardize the changes brought by H.B. 622. During the
first two years under the act, however, the results were very
favorable. Depending on local circumstances--the number and
size of public colleges and universities and the degree of cen-
tralization--deregulation as practiced in Kentucky could be
beneficial in other states.
RECOMMENDATIONS
The conflict in the roles played by state governments vis-a-vis
academic research equipment is inherent to a degree in the rela-
tionship between the states and their public colleges and univer-
sities. Nevertheless, we believe ti-rat in many cases the states
could combine their broad roles as funder and regulator more
rationally and could otherwise help to ease the schools' serious
problems with research equipment.
We recommend...
1. That states assess the adequacy of their direct support for
scientific equipment in their public and private universities and
colleges relative to support from other sources and the stature of
their schools in the sciences and engineering. The states cannot
displace the federal government as the major funder of academic
research equipment, but judicious increases, on a highly selective
basis, could be extremely beneficial to the scientific stature of
states while simultaneously increasing the effectiveness of funds
available from federal and industrial sources.
2. That states grant their public universities and colleges
greater flexibility in handling funds. Desirable provisions would
permit schools to transfer funds among budget categories, for
example, and to carry funds forward from one fiscal period to the
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next. Greater flexibility would not only improve the universities'
ability to deal with the problems of research equipment, it would
also be likely to provide direct savings in purchasing and would
free academic administrators to discharge their responsibilities
more efficiently.
3. That states examine the use of their taxing powers to
foster academic research and modernization of research equip-
ment. Tax benefits available under the federal Internal Revenue
Code are also available in 34 states whose tax codes automat 1-
cally follow the federal code. Relatively few states, however,
have adopted tax benefits designed to fit their particular circum-
stances.
4. That states revise their controls on procurement to recog-
nize the unusual nature of scientific equipment and its importance
to the research capability of universities. Scientific equipment
often is highly specialized. Instruments that have the same gen-
eral specifications but are made by different vendors, for example,
may have significantly different capabilities. The differences,
furthermore, may be discernible only by experts in the use of the
equipment. Desirable revisions in state controls would exempt
research equipment from purchasing requirements designed for
generic equipment and supplies, such as batteries and cleaning
materials; would vest purchasing authority for research equipment
in individual colleges and universities; and would not apply rules
beyond those already mandated by the federal government.
5. That states consider revising their controls on debt financ-
ing of scientific equipment at public colleges and universities to
permit debt financing of equipment not part of construction
projects, recognize the relatively short useful life of scientific
instruments, and relieve the one- and two-year limits on the
duration of leases.
REFERENCES
I. North Carolina Board of Science and Technology, "Recommen-
dations for Upgrading Scientific Equipment in North Carolina's
Institutions of Higher Education" (Raleigh, N.C.: Office of the
Governor, December 1983).
2. P. Calingaert, "The Microelectronics Center of North
Carolina--an Overview," Proceedings, 21st Southeast Region
ACM Conference, 1983 (New York, N.Y.: Association for
Computing Machinery, 1983).
3. Washington Council for Postsecondary Education, Washington,
D.C., private communication, 1982, and 3ames R. Mingle,
private communication, 1983 and 1984.
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4. 3. F. Volkwein, "State Financial Control Practices and Public
Universities: Results of a National Study," Paper presented to
the Association for the Study of Higher Education Chicago,
III., March 1984. (Revised March 25, 1984). See also James A.
Hyatt and Aurora A. Santiago, Incentives and Disincentives for
Effective Management (Washington, D.C.: National Associa-
tion of College and University Business Officers, 1984), and
James R. Mingle (ed.), Management Flexibility and State
Regulation in Higher Education (Atlanta, Georgia: Southern
Regional Education Board, 1983).
5. Volkwein, ibid., p. 10.
6. 3. C. Blanton, E. A. Carter, and 3. A. Hyatt, "Improving
Responsiveness to Fiscal Stress: The Kentucky Experience,"
Business Officer (June 1984), pp. 22-25.
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3
The Universities' Role in the Acquisition
and Management of Research Equipment
INTRODUCTION
The universities' involvement with scientific equipment entails
many activities in addition tO the conduct of research. Broadly,
universities provide the administrative and physical infrastructure
needed to support research that warrants the acquisition of instru-
ments and other equipment. More specifically, in varying degree,
the universities provide money for equipment from their own
resources, from gifts they solicit, and from various forms of debt
financing; handle the purchasing process; pay part or all of the
costs of operation and repair; maintain inventories; help to
optimize the sharing of equipment; and handle disposal of
equipment no longer useful or needed.
The universities' approach to these functions is conditioned by
characteristics unique to themselves. Usually they perceive that
their primary duty is to personnel--students and the faculty
needed to teach them. Also, authority in U.S. universities is
highly decentralized to foster the freedom of inquiry deemed
essential to first-rate research and teaching. The majority of
support for academic research and the associated equipment is
obtained through competitive proposals prepared by individual
faculty members or small teams of investigators. Systematic
programs planned well in advance are the exception, not the rule.
Much of this support comes from federal agencies, so universities
must use and account for equipment in accordance with federal
regulations. State universities in addition must comply with state
regulations.
These and other characteristics of universities and their
research call for procedures in acquiring and managing scientific
equipment that generally differ from practice in industry and
government. In this chapter we assess academic practice, identify
opportunities for improvement, and consider industrial and
governmental procedures that might be relevant to academe.
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ACQUISITION OF RESEARCH EQUIPMENT
Sources of Funds
Funds for academic research equipment come from the federal
government, from the universities themselves, from state govern-
ments, and from business and other private sources (state funds
are rarely available to private universities). The contributions of
each are indicated by the NSF National Survey of Academic
Research Instruments, which covers major instrumentation sys-
tems in use in 1982_1983.* The data show that federal agencies
funded 54 percent of the cost of acquiring these systems, univer-
sities 32 percent, state governments 5 percent, business 4 percent,
and other sources 5 percent (Table 3, Chapter 2). Other NSF data
show that nearly two-thirds (63 percent) of expenditures for aca-
demic research equipment in 1983 was funded by federal agencies
(Appendix B).
Funds supplied by universities may involve some form of debt
financing, which is covered in Chapter 4. Also, the Economic
Recovery Tax Act of 1981 permits companies to take special tax
deductions for scientific equipment they donate to universities;
Chapter 5 includes guidelines for universities that wish to develop
a strategy for obtaining such donations.
Competitive Proposals
Private and public universities alike rely principally on com-
petitive proposals, subject to some form of peer review, to obtain
funds for research equipment. The decision to compete for funds
is made by the scientist who wishes to do the research, and the
outcome of competition for federal funds cannot usually be pre-
dicted with confidence. A matching contribution toward equip-
ment may be expected from the university (see later discussion),
but usually it is insufficient without additional resources from a
grant, contract, or gift.
If the equipment costs more than can reasonably be expected
in a normal research-grant budget, scientists usually seek supple-
mental funds from the department, college, or university, from
other funding agencies, and from colleagues who have grant money
available and need access to the equipment.
*Systems in use in these years may have been purchased in earlier
years.
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Scientists with common interests join forces voluntarily to
seek funds for equipment at most of the universities we studied.
Such cooperative efforts may involve faculty in different depart-
ments and even in neighboring universities. Funding agencies sup-
port these joint efforts because of the quality of the collaborating
faculty; further, each collaborator has apparatus and techniques
that augment the shared equipment. This mode of operation is
common, for example, at the Materials Research Laboratories
supported by the National Science Foundation.
Several scientists with common interests and needs may be
able to obtain support for shared instrument facilities outside the
normal single-investigator research-grant process. NIH, NSF,
DOD, and DOE all have instrumentation programs that encourage
or require sharing by several qualified scientists. These programs
often encourage or mandate a university contribution to the cost
of the equipment (see Chapter 1).
The normal goal of a competitive instrument-acquisition effort
is to win sufficient funds to buy the basic instrument after univer-
sity contributions and vendor discounts have been exercised to the
limit. Desirable features missing from the basic instrument are
acquired through funding efforts in subsequent years. Often, how-
ever, buying the complete package is much more economical than
having components installed later in the field. If the saving is
obvious, the federal agency and the university may supplement
their funding awards to achieve the overall economy.
We found that scientists recognize these efforts to win grant
funds, pool resources with colleagues, and convince department
heads and deans of the value of a university contribution as normal
and necessary procedures for obtaining research equipment.
Start-Up Costs
The competitive grant system does not provide funds for
equipment that must be acquired for newly hired faculty mem-
bers. Most universities we contacted bear some such start-up
costs, and these costs for laboratory scientists can require major
financial commitments by universities. They may consume
reserves equal to the endowment needed to support a faculty
salary permanently.' Several universities queried estimated
instrumentation start-up costs at $25,000 to $250,000, depending
on the faculty member's discipline and academic level. Even
higher costs may be entailed by hiring faculty already established
as outstanding investigators. A major eastern university we
visited incurred initial costs of about $2 million when it hired an
established professor of chemistry.
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High initial costs of equipment have discouraged universities
from entering certain research areas, such as work involving
synchrotron radiation, which is now available only at national
shared facilities. Universities also have hesitated to enter fields
where equipment is too costly to obtain for one investigator and is
not readily shared because of problems such as contamination in
some kinds of analytical chemical apparatus.
A specific example of the exclusion of universities from
research by high start-up costs is molecular beam epitaxy (MBE),
a means of growing new types of materials that can be controlled
at the atomic scale. MBE is producing exciting new physics (e.g.,
the fractional quantum Hall effect) and promises to produce new
types of semiconductor devices and very high speed transistors. A
number of industrial laboratories are working with MBE, but the
cost of the equipment--up to $1 million--has barred all but a few
universities from research in this field.
Raising start-up funds typically involves departmental, college,
and universitywide administrators. Funds are drawn from operat-
ing budgets and augmented by endowments, gifts, and flexible
resources such as the NIH Biomedical Research Support Grant.
The American Chemical Society's Petroleum Research Fund, the
Sloan Foundation, EXXON's Centennial Engineering Education
Program, Atlantic Richfield's Aid to Education Grants, and the
recent NSF Presidential Young Investigator awards help cover
start-up costs in certain fields. The NIH Research Career
Development Award covers salary and thus helps with initial
costs, since salary, as well as the costs of laboratory facilities,
usually is the responsibility of the university.
Methods of allocating funds for faculty start-ups will vary
with the organization of the university, but faculty involvement
can help by supplying an understanding of the special needs of the
research community. At a midwestern university we visited, the
task is handled by a board of eight senior faculty members. The
board allocates about $2.5 million per year to faculty in research
support. (The university spent $96 million for separately budgeted
R&D in 1982.) A significant portion of this amount is used to
acquire equipment, and departments may apply to the board for
start-up funding for new faculty.
Matching Funds
Federal agencies that award funds for research equipment may
expect or require the university to make a matching contribution
toward the total cost (see Chapter 1). Such matching is distinct
from the cost-sharing arrangements in which universities pay part
of the operating costs of a research project. Matching funds play
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a supporting rather than a leadership role in decisions to compete
for grants, since the university makes the award only if the
scientist wins the competition.
Many state universities are not permitted to pay matching
costs from instructional monies. Instead, they draw on gift funds
or advance unrestricted funds. Gift funds are used also to pay
start-up costs for new faculty, and private donors may be willing
to give matching funds because of their added leverage.
Several universities told us they had raised matching funds
from donors and philanthropic trusts. The added leverage and the
appeal of some current technology help scientific equipment to
compete with other would-be beneficiaries, such as athletic
programs and hospitals. Several universities also cited the ef-
ficacy of fund drives for specific items of research equipment.
Decisions on providing matching funds are made differently
among universities. At some small universities that have little
flexibility in departmental or college operating budgets, the chief
executive officer makes decisions on matching (as well as start-up
funding). In other cases, the deans make such decisions and often
delegate budget planning to the departments so the decisions
reflect departmental priorities. At some universities, a faculty
committee allocates the available funds.
Attitudes toward matching also vary. Some universities vol-
untarily offer matching on all major instrument proposals in the
hope that it will improve their competitive stance. Other univer-
sities pursue more conservative practice by matching only when it
is a condition of receiving an award. We encountered some in-
stances where matching funds were so scarce that faculty did not
seek grants known to have a mandatory matching requirement.
From the faculty perspective, the major reason for an institu-
tion to provide matching funds is to acquire the equipment and
pursue the research described in the proposal. Faculty also per-
ceive that financial endorsement by the university may make a
proposal more competitive. As implied above, however, some
universities would rather use discretionary funds in other ways,
Also, universities often are not certain that matching funds are
necessary to obtain the grant; they see a need for greater clarity
in agencies' statements of their matching requirements.
Multiyear Payment
When the outright cost of a piece of equipment is more than
the funding agency can accommodate in one year, an investigator
may request an advance against the university's future-year
capital funds. We encountered a few instances where the sponsor-
ing agency had approved a proposal to buy an instrument with
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72
funds advanced by the university and recovered by charging annual
installments to the grant as direct costs. The interest foregone is
not recoverable by the university as a direct or indirect cost.
While the agency may agree to the principle of the plan, it does
not guarantee future-year funding. Thus the university subsidizes
the purchase and assumes significant risk. The burden of negoti-
ation is also substantial for everyone involved, and the method is
not widely used.
Another way to obtain equipment before the full purchase
price is in hand is to combine funds from two successive years.
With first-year funds secured and second-year funds promised, the
university may be able to deal with vendors so that payment can
be spread over several years without finance charges. We found
that scientists at some universities make such arrangements with-
out help from university officials. Faculty members said they
would like to be able to do so more formally by putting half the
cost of a piece of equipment in each of two years of a proposal.
We are not aware of prohibitions against combining funds from
successive grants, but the perception is that agency officials are
not sympathetic to such arrangements.
When vendor and scientist enjoy mutual trust and confidence,
some vendors have agreed to multiple-year payment plans without
formal leasing and without interest charges. This practice is
costly to the vendor, but it may help to consummate a sale.
Leasing
Leasing is a standard way to spread payment for equipment
over several years. We found, however, that principal investiga-
tors prefer to find ways of obtaining apparatus without resorting
to leasing because the ensuing costs reduce flexibility in future
years of research by obligating grant funds to cover lease costs.
Carrying charges are high (typically above prime rate), and the
vendor is less aggressive in discounting if a lease must be ar-
ranged. Further, leasing, like other kinds of debt financing, is
practical only when income is available to meet the payment (see
Chapter 4). Although universities commonly lease equipment such
as copying machines and computers, they lease only a very small
fraction of research instruments.
Lease payments, in contrast to equipment purchases, are
normally charged with indirect costs. This further increases the
costs of leasing to awards, relative to direct purchase, by a
percentage equal to the indirect cost rate. Some universities,
however, have dealt with this problem by not charging indirect
costs on leased equipment. Excluding such payments from the
indirect cost base requires negotiations with the auditors.
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Many states forbid multiyear leases unless a nonstate source
provides the payments; some state schools have created foun-
dations designed to overcome this and other regulatory barriers.
At Georgia Tech, for example, multiyear leases are handled by
the Georgia Tech Research Corporation (GTRC), a private,
not-for-profit entity. All external research funds at Georgia
Tech, except funds provided by law, are awarded to GTRC, which
also retains part of the indirect cost funds generated in research
projects. GTRC in part buys and leases equipment and provides it
to individual research programs. This procedure permits Tech to
get research equipment into the laboratory of the individual
faculty investigator more quickly, to return obsolete equipment
and replace it by newer models, and to spread equipment costs
over multiple years.
We cite two other examples of leasing that we encountered.
One involved a 500 MHz nuclear magnetic resonance (NMR) spec-
trometer acquired through a lease with an option to purchase
because the funding agency would provide only $138,000 per year
toward the acquisition of the equipment (an NMR of this kind
typically costs about $750,000 fully equipped). The second
example was a similar experience in the acquisition of a mass
spectrometer and an NMR spectrometer.
The corporate laboratories we visited preferred purchasing
over leasing because businesses receive tax benefits from research
investments and from depreciation allowances on purchased
equipment. They did lease some research equipment, such as
NMR and mass spectrometers and computer equipment when it
was being evaluated for long-term use.
One national laboratory indicated that lease to ownership is an
accepted approach when capital funds are unavailable. The pri-
mary consideration in selecting the financing method is the inter-
est charge. Another national laboratory did a lease versus pur-
chase analysis for a computer. With direct purchase defined as
1.0, the other cost ratios were as follows: lease 2.01, lease with
option to purchase 1.18, third-party lease to ownership 1.17, and
lease from vendor to ownership 1.40. Such analyses are valuable
and are done by many universities when they are considering
leasing equipment.
The Purchasing Process
Universities' purchasing procedures should help scientists
obtain reliable, quality equipment in a timely and economical
manner. For purchasing procedures to work most effectively,
purchasing agents and research faculty must understand each
others' needs. Misunderstanding can lead to delays in acquiring
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equipment, which can result in higher prices and can also severely
hamper research.
When buying federally funded equipment, universities must
comply with federal acquisition policies prescribed particularly by
0MB Circular A-I 10, Attachment 0, for grants, and the Federal
Acquisition Regulation for contracts (see Chapter 1). State uni-
versities additionally must comply with state purchasing regula-
tions (see Chapter 2). State regulations often are more restrictive
than the federal regulations, and private universities generally
enjoy substantially greater flexibility than public universities in
purchasing scientific equipment.
Purchasing agents can be extremely helpful in the acquisition
process. Creative and aggressive purchasing agents can negotiate
volume discounts and payment alternatives that provide substan-
tial savings on grants and contracts. We were told of universities
that have purchasing agents knowledgeable and concerned about
the issues involved in acquiring scientific equipment. Many fac-
ulty members at other schools, however, indicated that uninformed
purchasing agents are a significant problem. The North Carolina
Board of Science and Technology recommended in December 1983
that the state purchasing organization arrange continuing educa-
tion programs for state purchasing agents who handle scientific
equipment and assign an existing purchasing agent to specialize in
scientific equipment; the board recommended also that public
institutions make a special effort to educate faculty in purchasing
procedures for equipment.
MANAGEMENT OF RESEARCH EQUIPMENT
We examined academic management practice in budgeting and
planning for research equipment as well as in operation and main-
tenance, inventory systems, and replacement and disposition. The
nature of universities--their decentralized organization and unique
system of shared governance--doubtless impedes orderly manage-
ment in the corporate style. Still, we observed that some prac-
tices on campus clearly ease problems with equipment more effec-
tively than others, so greater attention to management would
seem to be in order. Our findings indicate that universities would
benefit from stronger efforts to improve their internal communi-
cations. Public universities are obliged by state regulations to
deal with equipment-management matters that do not normally
concern private universities; these additional complications are
covered in Chapter 2.
PAGENO="0541"
535
Budgeting and Planning
Budgeting and planning in industry and in universities differ
significantly. In industry, budgeting and planning often start sev-
era! months (or years) before the year in which expenditures are
to be made; industrial laboratories have reasonable control of
funding, planning, and scheduling, subject only to corporate strate-
gies and decisions. Universities are differently situated. Although
they routinely plan instructional programs in advance of the
academic year and capital building programs several years in
advance, most of their scientific equipment is funded from com-
petitive grants and so is not readily amenable to planning. While
the competition is deemed necessary to assure that the best
research is supported, barriers to planning are inherent in the
system of competitive proposals.
Usually the outcome of a grant proposal is not known until a
few weeks before the research is started. Some agencies, in fact,
are unable to meet grant renewal and award deadlines, and univer-
sities often take risks by carrying minimum costs to keep a re-
search team together while awaiting the final terms of an award.
The short term (seldom more than three years) of grants and
contracts also makes planning difficult. Further, the individual
researcher is always subject to congressional or agency decisions
on the continuation and level of funding of federal programs.
Investigators at several schools cited decisions by federal agen-
cies, as a result of congressional cuts, that required significant
changes in plans to acquire new equipment as well as in manage-
ment practices for existing equipment.
The larger block grants, such as NIH program project grants
and grants to NSF regional and national facilities, offer more
opportunity for planning (see Chapter 1). The involvement of
more scientists with a common purpose, a strong incentive for
sharing, and longer term (five year) awards all encourage plan-
ning. Several universities cited such core support grants as
particularly useful in providing stability, permitting some
mid-term planning, and addressing the equipment problem in an
orderly fashion.
Universities appear to be increasing their attempts to formal-
ize equipment funding processes with faculty involvement in al-
location of university resources. Two universities told us of
internal capital funding and resource allocation boards that
attempt to identify specific needs for capital equipment and plan
to meet them. No university, however, described a process as
long or as detailed as those in national laboratories or in industry.
One industrial department head described a model designed to
calculate the costs of equipping ~: typical engineer with capital
items. The mode! does not consider inflation or equipment
PAGENO="0542"
536
upgrade, but does provide for replacing equipment after three
years; it calculated start-up cost at $145,000 to $160,000 per
engineer. The model was described as having several advantages:
it eased the calculation of equipment requirements; once ac-
cepted, it made funding for capital equipment easier to obtain
from higher management; and it aided both morale and produc-
tivity. We found no university that can exercise similar control
over funding for research equipment. We feel that most
universities, however, can better organize their procedures for
supplying matching funds and establish clear criteria for
allocation of such funds.
Investment in People
Universities, if forced to choose, generally will use available
funds to retain faculty and graduate students in preference to
buying equipment. This attitude is in keeping with the schools'
dual mission--education and research--which emphasizes people
and requires the long view. To build, or to rebuild, a faculty takes
decades. Industrial laboratories tend to be more ready to lay off
personnel, despite the potential impact on their capabilities, and
will invest in automating research equipment. Automation is not
as essential in universities, where graduate students change
samples over nights and weekends. Universities report risking
funds to keep research teams together for a time between grants
in the hope that support for them will materialize; the funds so
invested are invariably for personnel, so equipment budgets may
be sacrificed to keep a team intact.
Operation and Maintenance of Research Equipment
Operation and maintenance of academic research equipment
are serious management issues at every university we visited.
Some universities do an excellent job of keeping research equip-
ment in good repair and have qualified staff to operate it when
appropriate; others leave much to be desired. All find the task a
strain on their resources.
The NSF instrument survey included a departmental/facility
assessment of instrumentation support services. Some 49 percent
said their services were inadequate or nonexistent, 39 percent
said they were adequate, while only Il percent said they were
excellent (Figure 6).
Another survey, submitted to the National Science Board,
indicated that 72 percent of the respondents relied primarily on
PAGENO="0543"
537
Excellent
Nonexistent
FIGURE 6
Department/Facility Assessment of
Instrumentation Support Services
1982-1983
(`V
Insufficient
Adequate
SOURCE: Division of Science Resources Studies, National Science Foundation.
PAGENO="0544"
538
departmental support services (computer and other electronic
repairs, glass shop, machine shop, mechanical shop, other general
repairs, etc.).2 The usage of support services was higher in public
than in private universities.
Over the service life of equipment, total operating and main-
tenance costs will frequently exceed the purchase costs. One of
the NSF Materials Research Laboratories has found over the years
that operation and maintenance of its central facilities cost about
1.5 times the amount it spends in the same year on new equipment.
NSF data on departments/facilities show that about 15 percent of
annual instrumentation-related expenditures in 1982-1983 were
devoted to maintenance and repair (Table 5).
We encountered many cases where universities had to decline
gifts of research equipment because they could not afford to
operate it. One university, for example, declined a gift of
computer-aided design equipment because it would have cost
$170,000 per year to operate.
Recognition of Costs
Not all university administrators appreciate the high costs of
maintaining and operating research equipment, nor do they budget
for them. One state university, for example, received $10 million
over five years from the state government to purchase equipment
(not all was used for research equipment; some went for teaching
apparatus). Adequate funds for maintenance and operation were
not available in the university's budget, even when the equipment
was used for teaching, nor was the faculty attracting sufficient
grant money to meet these costs. In consequence, much of the
equipment is not regularly available for use.
Technical Support Staff
Technical support staff is an important issue. Many academic
departments traditionally have not used research technicians;
rather, the practice has been for graduate and postdoctoral
students to work with faculty repairing equipment, often at
considerable expenditure of time. While some of this activity is
educational, a great deal of it is not and distracts effort from
research. In any event, as research equipment becomes more
sophisticated, more permanent technical support people become
necessary. It can be difficult, however, to attract competent
support people to universities. They are usually less well paid
than in industry and do not find the same attractions at a univer-
sity as the faculty do. Small numbers of faculty frequently
PAGENO="0545"
TABLE 5 Instrumentation-Related Expenditures in Academic Departments and Facilities in 1982-1983, by
Field (Dollars in Millions)
Purchase of
Research
Purchase of
Research-Related
Maintenance/
Repair of
Equipment
Computer
Research
Total
$500 or more
Services
Equipment~
Total, Selected Fields
$640.6 (100%)
$414.5 (65%)
$121.3 (19%)
$104.8 (16%)
Agricultural Sci.
Biological Sci., Total
40.6 (100%)
192.3 (100%)
28.4 (70%)
132.4 (69%)
7.3 (18%)
27.8 (14%)
5.0 (12%)
32.2 (17%)
Graduate Schools
79.0 (100%)
51.8 (66%)
13.2 (17%)
14.0 (18%)
Medical Schools
113.3 (100%)
80.5 (71%)
14.5 (13%)
18.3 (16%)
Environmental Sci.
49.6 (100%)
33.4 (67%)
6.9 (14%)
9.3 (19%)
Physical Sci.
151.3 (100%)
91.2 (60%)
31.9 (21%)
28.2 (19%)
Engineering
Computer Sci.
146.6 (100%)
29.7 (100%)
86.5 (59%)
19.7 (66%)
41.3 (28%)
3.6 (12%)
18.8 (13%)
6.4 (21%)
Materials Sci.
12.4 (100%)
9.6 (77%)
0.6 (4%)
2.3 (18%)
Interdisciplinary, not
17.8 (100%)
13.3 (75%)
1.9 (11%)
2.6 (14%)
elsewhere classified
~Estimates encompass expenditures for service contracts, field service, salaries of maintenance/repair
personnel, and other direct costs of supplies, equipment, and facilities for servicing of research instruments.
NOTE: Sum of percents may not equal 100 percent because of rounding.
SOURCE: National Science Foundation, National Survey of Academic Research Instruments and
Instrumentation Needs.
Ln
0
00
PAGENO="0546"
540
allocate the cost of a technician's salary among their grants, but
grant or contract funds are often so uncertain as to bar long-term
career stability for technicians. The block funding and central-
ized operations of the NSF Materials Research Laboratories are
an excellent solution to this problem for research that can be
funded in this mode.
User Charges
It is common practice to attempt to cover the salaries of
equipment-support personnel and the costs of operation and
maintenance through user charges. The amount of use is often
hard to predict, however--new facilities often require some time
to reach a full level of use--which makes it difficult to set appro-
priate rates. High user fees tend to reduce the use of equipment
and can actually reduce total income to the facility and make it
available only to the best funded potential users. We heard fre-
quently that user fees considered optimal by the people running
the facility do not cover the costs of operation. We rarely found
that user fees paid the operating costs of shared, central-facility
research equipment. The NSF-supported Materials Research
Laboratories have much experience with this type of operation;
typically, they find it necessary to subsidize 20 to 30 percent of
the operating and maintenance costs of their central facilities
from core grants.
Regulatory Issues
A general difficulty with user charges is that what is true at
one institution is not necessarily true at another, although both
are operating under the same federal regulations. The problem
lies in the inconsistent and often conservative interpretation of
the regulations by both federal and academic officials (see
Chapter 1).
Specifically, we encountered a faculty member at one univer-
sity who had been able to charge his various research grants in
advance for access to research equipment, and so knew at the
beginning of the operating period that the full operating costs
would be covered. When a similar prepayment or subscription
plan for instrument use was tried at another university, the
federal auditors would not allow it. Whether the difference was
due to a substantive difference of process (of which we are
unaware) or to the way the plan was explained to the auditors, we
were unable to ascertain.
PAGENO="0547"
541
0MB Circular A-2l prohibits providing use of equipment to
anyone at lower cost than to government grants or contracts.
This prohibition often interferes with maximum use of equipment--
it is not possible, for example, to provide low cost or free use of
research equipment for instructional purposes while billing federal
grants and contracts at a higher rate (low rates can be charged
during low-use periods, such as from midnight until 6 A.M., so
long as all users are treated equally). One university pointed out
a common solution to this problem for computing centers. Like
every other academic computer center we encountered, the one
at this school required a university subsidy to break even. The
university budgeted this subsidy as an allocation to users who
could not afford the full rates, rather than applying it to an
across-the--board reduction of rates.
Physical Infrastructure
The operation and maintenance of research equipment depend
on the physical infrastructure for research. The infrastructure
includes fume hoods, electrical supply and insulation, sound
isolation, air conditioning, numerous kinds of support equipment,
such as oscilloscopes, leak detectors, and machine tools (e.g.,
lathes and milling machines), service and maintenance facilities,
as well as the buildings that house research laboratories.
We saw many l950s vintage oscilloscopes at universities and
relatively few modern ones; most of the machine tools in uni-
versities were acquired well over 20 years ago, often as surplus,
and are at the point of needing replacement. When funds are
scarce, federal agencies tend to support equipment that will be
used directly in the research they fund; the less glamorous items
are essential, but not as easy to find support for. Federal agencies
once funded this kind of equipment but no longer support its inclu-
sion in project budgets. The universities might buy it and recover
a portion of the costs attributable to organized research through
the indirect cost pool, but universities are under intense pressure
to hold down indirect costs. Also, cost recovery takes 15 years at
the federal use allowance of 6 2/3 percent per year.
University Maintenance Facilities
None of the universities we visited had the service and
maintenance infrastructure found in most large government and
industrial laboratories. Many faculty expressed the desire for
some university facility to maintain research equipment, but we
found successful examples of such facilities to be rare. The one
PAGENO="0548"
542
universitywide facility that seems to work well is Iowa State's
REAP program (see discussion below under Optimization of Use).
We think there may be several reasons for this situation.
Where individual research grants pay most of the costs through
user charges, the uncertainty of income is a barrier. A university
is not typically a geographically focused enterprise, so a central
maintenance facility may be practical at some institutions and
not at others. Also, the increasing complexity and specialization
of research equipment means that service people must be cor-
respondingly specialized. The result is a greater tendency to rely
on manufacturers' service representatives. This solution may be
best in large urban areas; in more isolated areas, faculty may
have to service the equipment themselves or rely on university
resources. University-subsidized facilities can relieve individual
faculty and departments of financial responsibility they may have
difficulty meeting.
Service Contracts
Service contracts for most research equipment usually cost
about 10 percent of the purchase price per year. When equipment
is shared among a small number of faculty and research grants, it
is common practice to allocate the costs of a maintenance con-
tract. We learned at some universities, however, that investiga-
tors could not afford service contracts on equipment and were
gambling that costly service would not be needed. Some manufac-
turers will give discounts on service contracts if a university
issues a purchase order for servicing all its equipment on the
campus; we learned of discounts on the order of 20 percent.
Manufacturers also may give discounts for payment at the begin-
ning rather than the end of the service year; in one instance the
discount was 10 percent.
Inventory Systems
A reliable inventory of university-purchased research equip-
ment can be used to ensure proper recovery of indirect costs (see
Chapter 1). Many of the universities we studied had paid little
attention to inventory systems; most have just developed or are
still developing such systems. Several academic administrators
reported that their inventory systems were used to screen pur-
chase orders and avoid duplication, but it was not clear that this
application was useful. Only one university we visited, Iowa
State, routinely uses an inventory system to facilitate sharing of
equipment (see section below on Optimization of Use).
PAGENO="0549"
543
The REAP inventory includes only 3 percent of Iowa State's
general inventory. The other university inventory systems we
learned about included all equipment capitalized (commonly at
$500 or more) and were very expensive to implement. One
university, for example, has been working for two years to set up
a system at a cost of more than $200,000; the provost estimates a
steady state operating cost of $100,000 per year. A second
inventory system requires eight full-time employees in steady
state and is highly automated, with a bar-code label on all
property. When fringe benefits and overhead are added to
salaries, the cost is about $350,000 per year, plus computer.time.
A third institution estimates a cost of about $10,000 per month
just to maintain the data base and thinks it would be prohibitively
expensive to develop a system useful for facilitating sharing of
research equipment.
These inventory systems are compiled by nontechnical people
and do not contain the information scientists must have about
equipment to assess its utility. Except at Iowa State, all faculty
we asked had only negative comments about the use of inventories
to promote sharing.
National Laboratory Systems
The two national laboratories we queried have developed effec-
tive inventory systems that contain information on the capabil-
ities and current state of repair of equipment. Data are entered
by scientifically trained people. Staff scientists can call up the
inventories on their computer terminals, and they are useful in
promoting sharing of equipment. The labs also have used their
inventories to argue for the replacement of old equipment, and
managers felt this information was instrumental in persuading
Congress to fund the Department of Energy Utilities and Equip-
ment Restoration, Replacement, and Upgrade Program (see the
following section on Replacement and Disposition).
Replacement and Disposition of Research Equipment
Replacement of research equipment with state-of-the-art
models, and disposition of worn or unneeded equipment, also are
significant management problems in universities. Replacement is
extremely costly: data from the NSF instrument survey indicate
that equipment in use in 1982-1983 has areplacement cost today
that is about 50 percent greater than its original acquisition cost.
Further, inadequate disposition procedures can hamper optimum
use of equipment and entail costs that might be avoided.
PAGENO="0550"
544
Universities, as we have seen, do not plan their purchases of
research equipment in the same way that government or industry
does. They have no programs like the DOE Utilities and Equip-
ment Restoration, Replacement, and Upgrade Program, which has
been funding replacement of poor and inadequate equipment in
defense-related national laboratories since 1982. Sandia, Los
Alamos, and Lawrence Livermore national laboratories, for
example, will receive about $434.9 million through this program,
which is projected to end in 1988. Many industrial laboratories
also replace scientific equipment systematically. For reasons of
obsolescence and taxes, they depreciate equipment on an accel-
erated basis and often replace it as soon as it has been fully
depreciated, even if it is still useful.
Universities face difficulties in orderly replacement and
modernization of research equipment. They pay no taxes and so
gain no tax advantages by depreciating equipment. They can
collect a use allowance (6 2/3 percent per year), or depreciation
(at a higher, negotiated rate) over the useful life of the equip-
ment, as an indirect cost of research under 0MB Circular A-2 1,
but both faculty and funding agencies are exerting considerable
pressure to limit indirect costs. Depreciation or the more com-
mon use allowance, moreover, can be collected only for equipment
purchased with nonfederal funds and so plays no role in replacing
the majority of research equipment, which is purchased with fed-
eral grant or contract funds. Furthermore, DHHS auditors inter-
pret 0MB Circular A-2l so that universities that convert from use
allowance to depreciation part way through the life of equipment
must then value it as if they had used the same rate of deprecia-
tion, rather than the lower use allowance, since acquiring the
equipment. This requirement imposes a significant financial
penalty for conversion (see Chapter 1).
Assessing user charges to amortize the replacement of equip-
ment is rarely practical, and recovery of purchase costs is not
allowed for equipment bought with government funds. We found
no case where equipment purchase costs were fully recovered
through user charges. One problem is that the necessary charges
may be higher than most grants can support. Recovery of pur-
chase costs is being attempted in one electron microscope facility
we know of, where the user charge will be $75 an hour when the
debt-service costs are included. Other electron microscopes on
the campus, which recover only operating and maintenance costs,
charge $35 an hour.
A further bar to systematic replacement and modernization is
that investigators' needs can change rapidly as new research
opportunities arise. Additionally, when faced with tight budgets,
investigators tend to fund people and look for equipment in the
next review cycle.
PAGENO="0551"
545
The situation is different for centralized equipment with many
users and for service equipment in the university infrastructure
that needs to be kept up to date. When the task involves more
than the cooperative effort of a few investigators or a depart-
ment, then some universitywide planning is called for. Still, we
found no plans for systematic replacement of such equipment.
With the present strained budgets of most universities, the
problems are dealt with only when they become crises.
Disposition Issues
A mong important issues in disposition is the lack of incentive
to transfer equipment between investigators at the same or dif-
ferent universities. Some still-useful equipment is transferred
informally within universities by using barter payment. One
university, for example, circulates a newsletter advertising
equipment that is sought or available for barter payment. Under
the present system, however, faculty at most universities have no
incentive to transfer equipment other than the need for space
(which, like equipment, warrants careful management). Faculty
have every incentive to keep equipment in case it might someday
be needed again; only at Iowa State, among the schools we visited,
was much equipment relinquished. This lack of incentive to trans-
fer is a barrier to optimum use, since the equipment may be more
valuable to a laboratory other than the original recipient. Agen-
cies and academic administrators could do more to facilitate
transfer of equipment from one researcher to another by means of
incentives in the form of savings to the receiver and rewards to
the donor.
One might imagine the transfer of useful equipment at bargain
prices within or between universities. The main obstacle seems to
be that such sales could result in charging the government twice
for the same equipment. If allowed, the practice would yield
income for activities that support the original sponsor's mission.
Formalizing the procedure on a larger scale would encourage
more efficient use of many items of research equipment.
Disposal procedures at universities require attention. The
administrator of a large academic laboratory reported that
procedures for disposing of equipment that is not needed are
frequently time consuming and complicated. While questions of
title and disposal are being worked out, the lab must store the
equipment at a cost of ~l5 per square foot per year. The
administrator felt that the lab's operating funds could be better
spent. He cited inadequate administrative support for an
efficient disposal system as a significant contributor to the
problem. We learned of a case at another university where
PAGENO="0552"
546
excessive administrative delay by the surplus property office
prevented researchers from realizing a good price on sale of
equipment.
Many universities have an administrative entity assigned to
dispose of equipment that no one wants. In our investigations, it
was seldom praised. The major exception is the REAP organiza-
tion at Iowa State, which was highly praised for its efforts on
disposal and salvage of surplus equipment.
OPTIMIZATION OF USE
Sharing Equipment
Sharing of research equipment is a straightforward way to
ease equipment problems in universities and is commonly prac-
ticed. The degree of sharing that is required or is feasible, how-
ever, varies greatly among fields of research; important deter-
minants include the cost and nature of the equipment and the
characteristics of academic science.
The higher the costs of obtaining and operating a piece of
equipment, the higher are the pressures to share it. Thus sharing
by many users has long been characteristic of facilities in high-
energy and nuclear physics and in optical and radio astronomy.
The principle is evident in NSF data on academic facilities in use
in 1982-1983. The mean number of users was 27 for equipment
costing $75,000 to $1,000,000, 14 for equipment costing $25,000
to $74,999, and 12 for equipment costing $10,000 to $24,999
(Figure 7). The same data show that 60 percent of academic
instrument systems costing $75,000 to $1,000,000 were located in
shared-access facilities (Figure 8).
The nature of the research and the equipment sometimes works
against sharing. The research may require modifications to equip-U
ment that make sharing impossible, or it may simply require full-
time use of the equipment on one project. When apparatus is con~
taminated by samples, as occurs in molecular beam epitaxy
machines or certain chemical analytical apparatus, for example,
sharing is neither practical nor effective.
Further, the characteristics of academic science are not gen-
erally conducive to unlimited sharing of resources. While more
collaboration as well as more sharing of research equipment would
be desirable in some situations, emphasis on individual creativity
and scholarship is essential to the vitality of the university. Crea-
tive research is frequently a solitary activity, and it often requires
dedicated equipment. Professors are judged by their contributions
as individuals, which tends to discourage collaborative efforts.
PAGENO="0553"
547
H
rID
C
C)
rID
C-)
fl-4
H
rID
rID
FIGURE 7
Mean Number of Instrument System Users
by Purchase Cost
1982-1983
27.2
$75 ,000-$ 1,000,000
$25,000-$74,999
$1 0,000-$24,999
14.2
0 5 10 15 20 25 30
MEAN NUMBER OF USERS
SOURCE: Division of Science Resources Studies, National Science Foundation.
PAGENO="0554"
Materials Science
Computer Science
z
Engineering
0 Physical Sciences
~ Environmental Sciences
Biological Sciences
Agricultural Sciences
FIGURE 8
Percentage of Academic Research Instrument Systems
Costing $75 ,000-$ 1,000,000
Located in Shared-Access Facilities
1982-1983
Interdisciplinary
-.
:___~
-~- 59%
54%
-Ii 55%
-I-
.-
I
94%
90%
I I I
Total
~-
-
54%
01
63%
,__I
,`
-
I
I
I I
~I_~_
I
60%
0 10 20 30 40 50 60 70 80 90 100
PERCENT OF SYSTEMS
SOURCE: Division of Science Resources Studies, National Science Foundation.
PAGENO="0555"
549
Computers, if powerful enough, are easily shared and suff i-
ciently different from other types of research equipment that we
will not consider them here in depth. The increasing power and
decreasing cost of small computers act to reduce the number of
users who might share a machine, and we feel that computers
increasingly will be shared only by those who require the compu-
tational power of supercomputers. Methods of giving universities
access to supercomputers have been addressed by the NSF Ad-
visory Committee on Advanced Scientific Computing Re-
sources.3 NSF has since announced plans to fund supercomputer
research centers at four universities (see Chapter 1).
We found substantial sharing of research equipment at all of
the universities visited in the course of this study. The methods
of sharing ranged from informal lending and borrowing of smaller,
inexpensive items to operating larger items as centralized facil-
ities.
Small pieces of equipment are frequently shared within a geo-
graphical radius determined by their portability and knowledge of
their existence. Informal interaction among faculty and gradu-
ate students is the most common mechanism. It should be noted
that sharing usually offers educational benefits. Students learn to
use a wider variety of equipment to solve their problems and in
the process have the opportunity to exchange ideas with a wider
circle of people.
Sharing is very effective when the research requires limited
and routine use of commercially available service-type equipment
such as electron microscopes, surface analytical equipment (Auger
electron or x-ray photoemission spectroscopy), and high-field
nuclear magnetic resonance specirometers. (These items cost
between $100,000 and $1,000,000.) Sharing such equipment also
often permits a technician to be provided to maintain and operate
the equipment as well as to train students to use it.
The utility of centralized facilities is illustrated by the 14
Materials Research Laboratories currently supported by NSF
through block grants to major research universities. We visited
four of these labs. The grants support multi-investigator research
on materials as well as central facilities incorporating the kinds
of equipment noted above. We found that the Materials Research
Laboratories have been effective at operating central facilities on
a relatively large scale and providing an excellent educational
environment for students.
In many academic departments, especially chemistry depart-
ments, centralized equipment, such as infrared, visible, and
ultraviolet, NMR, EPR, and mass spectrometers, is used inter-
mittently by a large number of researchers. Departmental
laboratories at a medical school we visited were set up so that
centrifuges were conveniently located for use by several research
groups; we found this type of sharing in most universities.
PAGENO="0556"
550
We observed that shared instrument facilities work best when
supervised by a faculty member whose research depends on them
and who will insist on high-quality, up-to-date performance from
the equipment. Service and repair costs increase when equipment
is shared by many scientists, and a technician is usually necessary
to operate it and train users; in larger centralized facilities one
technician can often look after several related pieces of appa-
ratus.
Faculty generally wish to share equipment with their col-
leagues, but want sufficient control to ensure that the equipment
remains in optimum working order. Under these conditions,
investigators often share equipment, but commonly by means of
collaboration with another investigator on a problem both are
pursuing.
We learned that officials at some universities encourage
sharing by giving higher priority to allocation of funds for shared
equipment than for nonshared equipment. We found a similar
practice in industry, where equipment is frequently shared.
Laboratory management at a large chemical company we visited
encourages sharing by rewarding, in its research budget, a group
that finds it can avoid buying equipment by sharing with another
group.
The REAP Program
As noted earlier, an inventory system plays a significant role
in equipment sharing at only one school we visited, Iowa State
University. The university established its research equipment
assistance program (REAP) in l~74 with the help of an NSF grant
of $1 14,000. Its direct costs currently total about $123,000 per
year, including salaries, computer support, and other expenses.
REAP has evolved into an accepted, trusted, and helpful program
in support of researchers' needs for equipment. Its components
are an easily accessible, simplified, edited inventory; a diagnostic
service to help maintain equipment in good working order at low
cost; an apparatus stockroom that recycles, loans, and salvages
equipment; and a staff who are devoted, helpful, and interested,
but remain low key and nonobtrusive. A detailed report on the
program appears as Appendix G, and only a brief summary will be
given here.
The computerized inventory is focused on scientific instru-
mentation and includes only 3 percent of the university's general
inventory; in June 1984, it contained almost 10,000 items (each
costing at least $500 initially) having a total value of nearly $30
million. The inventory is used widely as a sharing tool; faculty
are encouraged to use it to learn if a piece of equipment on cam-
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pus might fit their needs. The REAP staff stands between the
holder and the seeker of the apparatus, and the holder is not
coerced into sharing. If the device is heavily scheduled, fragile,
time consuming to use, or modified so that it is not useful to
others, a "no" from the investigator is accepted without chal-
lenge. The general response, however, is an offer to share,
because REAP is liked by the researchers, actively helps the
faculty, and guarantees that borrowed equipment will be returned
in at least as good condition as when it was loaned.
REAP maintains a storeroom of unused equipment and parts,
and browsing is encouraged. The staff are knowledgeable trouble-
shooters and often can either repair equipment or point to the
repairs necessary to avoid expensive service contracts. They are
regularly~ sent to courses on equipment servicing to help them
keep up to date.
As universities develop inventory systems, we believe that
they might usefully consider the innovations found in REAP. It is
clear that REAP owes much of its success to a devoted and tech-
nically competent staff, a well-designed, specialized inventory,
and an academic community that takes pride in finding cost-
effective solutions to problems. When a university has limited
access to external repair facilities, is small enough to have
institutionwide cohesiveness, and is able to attract and retain an
interested and competent staff, an investment in a program like
REAP seems wise.
National, Regional, and Industrial Facilities
Academic scientists also share research equipment at national
and regional facilities funded by federal agencies (see Chapter 1).
To a considerably lesser extent, they have access to industrial
equipment.
National Facilities
National facilities involve equipment that is far too expen-
sive--in the range of tens to hundreds of millions of dollars--to be
provided exclusively to a single university. These facilities are
usually associated with and managed by a university or national
laboratory. Two that we visited were the Meson Physics Facility
(LAMPF) operated by Los Alamos National Laboratory and the
Stanford Synchrotron Radiation Laboratory (SSRL). Both are sup-
ported by DOE.
The chief management problem at national facilities is to
provide access and a suitable environment for exploratory
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research. Beam time at SSRL, for example, is oversubscribed;
time is assigned to investigators only after their requests are
subjected to rigorous review, and only about half of the worthy
proposals are awarded beam time. This limited beam time tends
to reduce opportunities for serendipitous discovery and high-risk
research. In an attempt to overcome this problem, SSRL has
recently adopted the Participating Research Team (PRT) mode.
A small number of consortia (with university participation in
combination with industrial or government labs) set up instrumen-
tation (which the consortium must pay for) on one of the SSRL
ports; the university part of the PRT has one-third of the beam
time to use as it wishes, the industry-government part has
one-third, and the remaining third is allocated to the larger user
community through the review process.
Regional Facilities
Regional facilities are designed to serve a smaller, local
community of users. They are funded by agencies that include
NSF, NIH, NASA, and DOE. While the equipment at these facil-
ities is expensive, it would not be out of the question to buy it
solely for one of the larger universities.
These facilitiçs provide regional service with varying degrees
of effectiveness.~ Our observations suggest that when problems
occur, they have two fundamental causes. First, the scientists
running the facility are usually more interested in doing research
than in providing service to users. Second, even given strenuous
efforts to be fair, scientists at the host institution have the
advantage of being there; thus a large community of local users
may dominate the facility. Where a large and scientifically
strong group of potential users is based at one institution, it may
be better to provide a facility dedicated to that institution,
instead of to regional services. In many cases, however, regional
facilities have served their communities well by providing access
to equipment for users who otherwise would not have such an
opportunity.
The laser "lending library" (operated by scientists at the
University of California-Berkeley and Stanford University) is a
regional facility praised by all users. The library places a laser in
an investigator's lab for a few months without charge; the spon-
soring agency (NSF) pays the maintenance costs and has found
them to be considerable. The regional laser facility at MIT is
more conventional; the lasers are housed there and users come to
them. It, too, has provided lasers to scientists who would not
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otherwise have had access to them. Neither of these facilities,
however, is useful to investigators whose work requires long and
nearly continuous access to a laser.
Industrial Facilities
Academic scientists can best gain access to state-of-the-art
equipment in industrial laboratories through collaboration with
industrial investigators. Such collaboration does occur frequently
in pursuit of common interests, and we encountered several
examples. Normally, however, industrial labs are not set up to
service outside users; barriers to academic use include considera-
tions of safety and liability and proprietary information, as well
as conflicting work schedules. Industry does provide equipment
for academe in other ways, sometimes involving state govern-
merits, and these mechanisms are covered in Chapters 2 and 5.
Remote Access to Research Equipment
Because research equipment increasingly is operated under
computer control, it may be possible to share it by means of
remote access. Such access might also reduce the time and
expense of travel to some regional or national facilities. In the
future, high data-rate transmission (at 52 Kbaud, for example)
from the instrument to the user via satellite down-link will be
inexpensive, as will high-resolution computer graphics. User-to-
instrument communication at 1,200 baud now exists, is compara-
tively cheap, and should be adequate for issuing most commands.
(Computing equipment--generally excluded from this discussion of
sharing--is widely used by remote access.)
One case that we encountered suggests the potential of remote
access. Some students and a professor in the chemistry depart-
ment at Duke University set up a link between a small microcom-
puter, their obsolete departmental nuclear magnetic resonance
(NMR) spectrometer, and a modern NMRat Research Triangle
Park, 15 miles away. A user at Duke was able to operate the
remote instrument as if seated at its console. This experimental
study began in 1981 and employs specially designed software. We
think the idea might be applicable to a limited number of other
instruments in situations where the investigator need not have
intimate contact with samples after they are prepared and they
could be delivered by messenger. As computer networking grows
and universities upgrade their telephone systems and install optical
fiber communications links, opportunities for remote access to
equipment, even on individual campuses, might expand
significantly.
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Remote control of telescopes is now a fact at large observa-
tories; and communications technology can extend the link
between telesc~pe and control room from tens of feet to thou-
sands of miles/ Kitt Peak National Observatory, for example, is
now scheduling remote observations. Within the limitations
imposed by the relatively slow telephone data rate (one acquisition
TV frame every 30 seconds, and one terminal graphics display
every 10 seconds), the observing runs thus far have proved quite
successful.
STRATEGIC PLANNING
The costs and complexities of acquiring and managing first-
rate academic research equipment are some of the several pres-
sures, mainlyfinancial, that appear to be moving universities
toward campuswide strategic planning.6'7 Such planning in part
leads to preferential allocation of resources to disciplines that
offer the university the best opportunities to achieve distinction.
A university might allocate minimal resources to some depart-
ments, or even close them, for example, in order to provide better
research facilities for others. We believe that more hard decisions
of this kind will have to be made, but keeping in mind that
universities work on a much longer time scale than most of our
society. Sound strategic planning must involve faculty par-
ticipation, but clearly requires more centralized decision making
than is now common in academe.
RECOMMENDATIONS
The universities' ability to acquire and manage research
equipment efficiently reflects factors that include individual
circumstances, decentralized authority, the project-grant system
that funds much of the equipment, and state and federal regu-
lations. Within this context, however, we have identified a
number of management practices that are effective and warrant
more widespread use. These practices form the basis of the
recommendations that follow.
The recommendations on the whole imply a need for univer-
sities individually to consider a more centralized approach than is
now the general practice in their management of research equip-
ment. We note that other developments, mainly the result of f i-
nancial pressures, point in the same direction. They include the
universities' growing interest in debt financing and in develop-
mental efforts involving close cooperation with state governments
and industry. Such activities generally call for centralized deci-
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sion making in the universities. More broadly, universities are
displaying growing interest in strategic planning, which clearly
depends on more centralized decision making.
We recommend...
1. That universities more systematically plan their allocation
of resources to favor research and equipment in areas that offer
the best opportunities to achieve distinction. Such strategic
planning should involve participation by both administrators and
faculty. The process may well call for hard decisions, but we
believe that they must be made to optimize the use of available
funds.
2. That universities budget realistically for the costs of
operating and maintaining research equipment. These costs
impose serious and pervasive problems, and failure to plan
adequately for full costs when buying equipment is widespread as
well. Full costs include not only operation and maintenance, but
space renovation, service contracts, technical support, and the
like. Maintenance is particularly troublesome. Hourly user
charges are commonly assessed to cover the salaries of support
personnel and the costs of maintenance, but are difficult to set
optimally and are rarely adequate.
3. That investigators and administrators at universities seek
agency approval to spread the cost of expensive equipment
charged directly to research-project awards over several award
years. As noted in Recommendation 3 under the Federal
Government, individual research grants and contracts cannot
normally accommodate costly equipment, and this problem would
be eased by spreading costs over several years.
4. That universities act to minimize delays and other prob-
lems resulting from procurement procedures associated with the
acquisition of research equipment. To be most effective, the
procurement process should be adapted to the specialized nature
of research equipment, as opposed to more generic products.
Similarly, specialized purchasing entities or individuals would
facilitate timely acquisition of equipment at optimum cost. Also
beneficial would be formal programs designed to inform purchas-
ing personnel and investigators of the needs and problems of each.
5. That universities consider establishing inventory systems
that facilitate sharing. One such system is the basis of the
research equipment assistance program (REAP) at Iowa State
University. The REAP inventory includes only research equip-
ment. REAP may not be cost effective for all universities, but
most should find elements of it useful.
6. That universities use depreciation rather than a use al-
lowance to generate funds for replacing equipment, providing
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that they can negotiate realistic depreciation schedules and dedi-
cate the funds recovered to equipment. Universities can use
either method, but rates of depreciation are potentially higher--
and so recover costs more rapidly--than the use allowance (6 2/3
percent per year) because they can be based on the useful life of
the equipment. Both methods, however, add to indirect costs, and
neither can be used for equipment purchased with federal funds.
7. That universities seek better ways to facilitate the trans-
fer of research equipment from investigators or laboratories that
no longer need it to those that could use it. Faculty at most
schools have no incentive to transfer equipment, excepting the
need for space, and every incentive to keep it in case it might be
needed again. Some systematic mechanism for keeping faculty
well informed of needs and availability of equipment would be
useful.
REFERENCES
I. Donald Kennedy, "Government Policies and the Cost of Doing
Research," Science 227:481 (February 1, 1985).
2. National Science Foundation, "University Research Facilities:
Report on a Survey Among National Science Foundation
Grantees" (Washington, D.C., June 1984).
3. Neal Lane, Physics Today (May 1984), p. 144.
4. Association of American Universities, The Scientific
Instrumentation Needs of Research Universities (Washington,
D.C., 3une 1980).
5. H. C. Ford, "Remote Operation of Telescopes: Long-Distance
Observing" (Department of Astronomy, University of
California at Los Angeles, ~January 1982).
6. Richard M. Cyert, "The Importance of Strategic Planning,"
Business Officer (October 1983), pp. 15-16.
7. "How Academia Is Taking a Lesson from Business," Business
Week (August 27, 1984), p. 58.
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4
Debt Financing
INTRODUCTION
Tax-exempt debt financing has long been used by universities
to fund large capital expenditures and in recent years has at-
tracted much attention as a means of funding research equip-
ment. The methods of debt financing employed range from long-
term instruments, such as revenue bonds, to short-term leases.
Regardless of the method, debt financing of research equipment
must compete with the university's other needs for debt. Univer-
sities frequently use the proceeds of long-term, low-interest
bonds to finance projects such as new buildings, new telephone
systems, and major remodeling. When the buildings include labor-
atories, most of the associated fixed equipment and some movable
scientific apparatus are purchased with the proceeds of the issue.
In the l950s and l960s much scientific apparatus came with new
buildings at expanding universities, but recent years have seen
little net expansion.
Concern About Payment
The amount of research equipment obtained by debt financing
varies widely among universities, but the central cOmputing facil-
ity at most schools we visited was either leased or financed by
borrowed funds. Universities normally use debt financing to
obtain equipment for a research project only if funds are not
available from other sources. The basic concern is the availabil-
ity of income to cover payments on the debt.
Some universities indicated that multi-investigator and block
grants are valuable in providing a stable income stream for
equipment acquired through debt financing. User fees and grant
or contract support, however, are the most common sources of
income for payments on equipment debt or leases. Many univer-
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sities are concerned that these sources are unpredictable and
unreliable and that they are likely to have to subsidize debt-
service costs. We learned of no central computing facility that
was leased or financed by borrowed funds, for example, that had
enough income to cover the total costs of the lease or debt; all
required a subsidy from the school's general funds. Institutions
are additionally concerned that recovery of such subsidies (i.e.,
the annual deficit in a specialized service center) can be very
difficult to negotiate as an element of indirect cost reimburse-
ment under 0MB Circular A-2l.
Because of limited opportunity to develop a reliable income
stream to retire debt, some universities use no debt financing for
research equipment. Some state universities are forbidden by
state law to incur debt. Other universities are very active in debt
financing, but generally require a fallback source of income, such
as college or departmental resources, to pay the principal and
interest on a debt if necessary. To obtain financing, backup
commitments from departmental or college operating budgets or
from a university-affiliated foundation are usually necessary.
Administrators at many universities with debt financing
available appear to be very selective in its use and to restrict it
to large purchases (more than $250,000) for which a repayment
process can be developed. One university we visited has formal
guidelines for use of a line of credit for research equipment
costing more than $50,000. At others, the faculty had not been
told that debt financing was a potential means of acquiring
equipment. At one major university we visited, senior academic
officers were unaware that a line of credit had been obtained by a
senior finance officer, partially to finance research equipment.
IMPLICATIONS AND ANALYSIS IN DEBT FINANCING
An important aspect of borrowing money to buy academic
research equipment is that, like assumption of debt for any pur-
pose, it shifts the locus of responsibility and decision making.
U.S. universities are decentralized in any event, and the heavy
reliance on individual, competitive research grants and contracts
ordinarily confers considerable authority on principal investiga-
tors. Borrowing to buy research equipment, however, imposes risk
on the university as a whole and so requires a shift from decentral-
ized to centralized planning and decision making by the school's
administration. Such shifts can contribute to greater use of
strategic planning by universities (see Chapter 3).
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Analytical Requirements
Sound borrowing decisions demand a painstaking analysis of
costs, risks, and potential impact. A thorough assessment of
needs is essential. One university research foundation reported
assuming a multimillion dollar debt to acquire a supercomputer
without securing positive commitments from projected users.
Plans to repay the debt through user charges were based on
estimates and verbal assurances from potential commercial users
that did not materialize. T1e institution was left with a very
large debt and insufficient revenue from user charges to repay it.
The parameters of a needs assessment will vary. The univer-
sity may wish, for example, to focus on particular types of equip-
ment, on replacing obsolete items, or on enabling faculty to estab-
lish new programs of research. Universities also have canvassed
potential external users, such as faculty at nearby institutions and
government and corporate scientists, when equipment was suit-
able for sharing.
A problem reported repeatedly by universities was failure to
plan for full costs when buying equipment. Full costs include
shipping, space renovation, operation and maintenance, service
contracts, technical support, insurance, utilities, and the like. As
a general rule, full costs should always be included in equipment
budgets and should be included, at least selectively, in calcula-
tions of how much to borrow, recognizing where appropriate the
possible use of other funds to pay these costs.
The analysis also should cover projected sources of repayment,
with the stress on known sources and reasonable expectations. If
user charges are expected to supply revenue for repayment, for
example, one cannot assume that they can be assessed at 100 per-
cent of acquisition and interest costs without making the equip-
ment too expensive for potential users. It may also be wise to
assess as accurately as possible the allowability of interest costs
under 0MB Circular A-2l, which requires prior agency approval to
charge interest to federal grants or contracts. One university
reported that its line of credit was approved for conformity with
0MB Circular A-21 by five federal agencies. In the one equip-
ment purchase thus far under this financing plan, one of the age n-
cies declined to allow interest charges, even though the money
was available in the grant through rebudgeting. The interest is
being paid from private gift funds.
Prospective borrowing for equipment is best examined in
terms of the university's total debt structure. This examination
focuses especially on sources and amounts of revenue projected to
repay all debts, repayment schedules, and overall levels of univer-
sity liability. This analysis requires the university to forecast how
it will meet its combined obligations and determine whether its
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projections are reasonable. It is important to develop at least an
outline of a contingency plan for repaying equipment debt in case
projected sources of repayment funds do not materialize.
Impact on Academic Programs
Evaluation of using debt for instrumentation should include the
impact on the university's capacity to sustain research and in-
struction, focusing particularly on the future. Too much debt
restricts the ability to respond to new challenges and oppor-
tunities in research and education. Some debt, judiciously
designed to fit the circumstances of the university, may be very
useful. In universities where faculty and administrators were
satisfied with the decision to borrow, we found that debt was
viewed as a supplement to other funds employed to sustain or
expand existing programs and help to initiate new ones.
The Limit of Debt
We have no formula to determine how much debt a university
can sustain. The appropriate level depends on many variables,
including the school's philosophical approach to financial manage-
ment. The National Association of College and University Busi-
ness Officers says of a particular ratio of debt service to revenue,
"No national standards for budget percentage dedicated to debt
service may be inferred from the median values. The willingness
and ability to commit revenues to debt service vary greatly among
institutions."
Among factors that have been identified2 as measures of the
debt capacity of a university are:
* Ratio of available assets to general liabilities (ordinarily
stipulated at 2:1 minimum).
* Ratio of debt service to unrestricted current fund revenues.
* Ratio of student matriculants to completed applications.
* Ratio of opening fall full-time enrollment this year to
opening fall full-time enrollment in base year.
A number of factors in addition to these ratios usually are
considered in assessing the debt capacity, or creditworthiness, of
universities.3
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CHOOSING THE APPROPRIATE DEBT INSTRUMENT
A number of forms of debt financing are available to univer-
sities, and each debt instrument has terms and conditions that can
be attractive in the right circumstances. Examples of the use of
debt financing by universities are described in Appendix H, and
representative debt instruments are summarized in Appendix I. It
should be noted that the types of instruments available, the
relevant tax laws and interpretations of them, and the conditions
of the debt market are always subject to change.* Thus the
selection of debt instruments by universities should be based on
current expert advice from investment, legal, and tax counsel.
The discussion of debt instruments in this chapter is intended to
be illustrative, not comprehensive.
Factors to be considered in selecting a debt instrument include
the amount to be borrowed and the equipment to be bought. One
supercomputer, for example, may call for a different debt instru-
ment than many devices each costing less than $100,000. The
urgency of the need may be a factor--a line of credit may be
arranged fairly quickly, while a bond issue is time consuming. The
single most important factor in selecting a debt instrument is the
correlation with use: short-term debt for short-term use, long-
term debt for long-term use. Also a factor is the impact of
different repayment schedules on the university's programs. In
addition, different types of debt instruments have different costs,
including the rate of interest, issuance costs, legal fees, and
printing charges.
SHORT- TO MEDIUM-TERM DEBT INSTRUMENTS
Short- to medium-term debt instruments include leases, munic-
ipal leases, lines or letters of credit, pooled revenue bonds, tax-
exempt variable rate demand bonds, and tax-exempt commercial
paper. Maturities vary from I to 10 years. Selection criteria may
include the following:
* Equipment is needed only for a specific period and may or
may not have to be permanently retained by the university.
* Leasing costs can be identified with a specific piece of
equipment, which can be readily identified with a grant or
contract for reimbursement.
*The material in this chapter was current as of October 1984.
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* A lease can be arranged to include a maintenance and
service contract.
* Short-term debt can be used temporarily until permanent
funding becomes available.
* Conditions in the bond market do not favor issuance of
long-term debt.
* The institution may not have the credit rating or sufficient
funding needs to issue long-term debt.
The Decision to Lease or Purchase
The decision to lease or purchase usually involves a present-
value analysis, in which the financing alternatives' net cash flows
over time are discounted back to present-day value (see Table 6).
The financing alternative with the lowest present-value cost
would be considered best on a cost basis. The final decision to
lease or buy depends on the prospective lessee's total financial
position and equipment need. The ease and the initial low cost of
entering into a lease agreement should not preclude performing
cost-benefit analyses of other debt alternatives. Over the long
term, high-priced, long-term equipment will most likely have a
higher net effective cost under a lease arrangement than under a
long-term debt instrument. For short-term, low-priced equipment,
the university might consider a line of credit as an alternative to
leasing.
General Uses of Leasing
Ordinary leasing takes two basic forms:
* Operating lease: an institution acquires the use of equip-
ment for a fraction of its useful life. Title is retained by the
lessor, and the lease contains no option to purchase the equip-
ment. The lessor may provide services in connection with
maintenance and insurance of property.
* Capital lease: a capital lease must meet one of the
following criteria:
- Title is transferred to lessee at the end of the lease.
- Lease contains a bargain purchase option.
- Lease term is at least 75 percent of the leased
property's estimated economic life.
- Present value of the minimum lease payments is equal
to 90 percent or more of the leased property's fair market value,
less related investment tax credit retained by the lessor.
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TABLE 6 Present Value Analysis
Yr. Outflow($)
Inflow($)
Net($)
PV
Factor*
Net Present
Value($)
~ption A
0 1,000,000
0
(1,000,000)
1.000
(1,000,000)
1 100,000
500,000
400,000
0.909
363,600
2 100,000
500,000
400,000
0.826
330,400
3 100,000
500,000
400,000
0.751
300,400
4 100,000
500,000
400,000
0.683
273,200
5 100,000
500,000
400,000
0.621
248,400
Net present value
516,000
~ption B
0 0
0
0
1.000
0
1 400,000
500,000
100,000
0.909
90,900
2 400,000
500,000
100,000
0.826
82,600
3 400,000
500,000
100,000
0.751
75,100
4 400,000
500,000
100,000
0.683
68,300
5 400,000
500,000
100,000
0.621
62,100
Net present value
379,000
DECISION: Option A, purchasing equipment with available cash.
Option A states that the acquisition of new laboratory equipment
will save the department $500,000 per year in contracting the
services from a private lab. Costs of about $100,000 per year are
directly attributable to the new equipment maintenance which
will reduce the potential annual savings to $400,000. The cost of
the equipment and its installation is $1.0 million. At the end of
five years, the equipment has zero salvage value. Option B states
that the leasing of new laboratory equipment will save the
department the same $500,000 as in Option A. The cost of lease
will be $300,000 per year for five years with an additional
$100,000 per year for maintenance. The department has no
purchase option at the end of the lease.
*PV factor assuming a 10 percent discount rate.
SOURCE: Coopers & Lybrand.
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The benefits commonly attributed to leasing are primarily
available in a tax-oriented lease in which the lessor retains and
claims the tax benefit of ownership. This type of lease is called a
true lease for tax purposes. Nearly all operating leases are con-
sidered true leases, but only some capital leases qualify as true
leases.
Not-for-profit organizations do not accrue tax benefits from
leasing capital equipment, benefits that are available to profit-
making organizations. With state universities, IRS regulations
prevent the lessor from benefiting from the investment tax credit
because the end property user is a government entity. Leases can
be structured, however, to pass on the tax benefits of ownership
to the lessor. These methods include a sale-leaseback and third-
party lessor, which may be an affiliated foundation (see Chapter
5). Such methods require careful review and professional counsel
to ensure that the transaction is structured to meet IRS regula-
tions and other federal requirements.
State universities have structured leases as a sale-leaseback
transaction in which the equipment is sold by the university to
purchaser/lessor and then leased back by the university. These
arrangements are considered operating leases, allowing the
purchaser/lessor to receive the tax benefits. In most cases,
however, the sale-leaseback is not the best method relative to
other forms of tax-exempt financing available to state univer-
sities (e.g., bank line of credit).
Private universities, for major projects that include both
buildings and equipment, can combine debt financing with leases.
This arrangement allows the university to match the economic
life of the asset with a comparable financing period. However,
the institution should consider tax-exempt financing (e.g., a line
of credit or industrial revenue bond) for major funding needs or
for aggregate university funding, because tax-exempt financing
could be a cheaper form of debt than leasing equipment on an
individual basis.
Foundations established as separate, incorporated entities can
provide additional financing flexibility to state universities. Such
foundations can offer a number of benefits by incurring debt and
arranging leasing on behalf of a university. An example is the
Georgia Tech Research Corporation mentioned in Chapter 3. A
state institution and the foundation will have an arm's-length
relationship that can provide needed financing while complying
with various state regulations.
Municipal Leases
Municipal leases require the lessee to be a state, city, or
government entity, and so do not apply to private universities.
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For tax and legal purposes, the municipal lease is considered a
conditional sales contract. Municipal leases usually include the
following provisions:
* The university receives title to the equipment for a nominal
fee at the end of the lease term.
* No down payment is required from the university.
* The university makes clearly defined payments of principal
and interest.
* The lessor receives none of the tax benefits of ownership,
but can treat the interest portion of the lease payments as tax-
exempt income.
* The lease term is generally on a fiscal year-to-year basis
with renewable options; the university's liability is limited to the
actual lease term (excluding renewable options), so it can cancel
the lease at the end of each year.
Through a municipal lease, a state university can enter into a
lease-purchase agreement and still meet state constitutional or
statutory constraints on multiyear debt. The cost of the lease
usually ranges from 70 to 90 percent of the prime interest rate;
the high cost reflects the lessor's risk that the lease can be can-
celled on a year-to-year basis. Interest, however, is the only
expense associated with the lease. Also, the ability to cancel on a
year-to-year basis provides some insurance against technological
obsolescence.
Municipal leases generally are used to acquire equipment
costing in the range of $100,000 to $1 million. They are also
useful for acquiring lower priced equipment: they can be arranged
quickly and normally are used to acquire small pieces of equip-
ment that depreciate quickly and have questionable salvage value.
Mechanics
In arranging a municipal lease, the university selects the equip-
ment and deals directly with the vendor on the sale terms and
price. When the terms are settled, the university negotiates the
lease with a third-party lessor. Municipal leases usually include a
fiscal funding clause to protect the lessee from any claims the
lessor may have against cancellation of the lease. The clause
makes the lease conditional on full appropriation of funds to pay
the lease in the next fiscal year. If the lease includes such a
clause, the lessor may require a nonsubstitution clause to protect
against the lessee's cancelling the initial lease on the basis of
nonappropriations and then leasing similar equipment from
another lessor.
PAGENO="0572"
566
Third-Party Lessors
An affiliated nonprofit organization or foundation could enter
into a municipal lease arrangement for a state university. The
foundation would act as a third-party lessor and could provide:
* Additional financial security to back the leasing
arrangement.
* Review of department heads' and principal investigators'
municipal-lease requests to ensure that revenue sources are
available to cover lease commitments.
* Management of the leased equipment.
* Support for collecting and paying lease payments.
Additionally, the foundation would not be subject to fiscal
appropriations and would be able to plan for the funding of
long-term lease contracts.
Line of Credit
A university that anticipates a near-future need for borrowed
funds but does not know its specific requirements can negotiate
with a bank for a line of credit. The line of credit represents an
assurance by the bank that funds will be made available to the
university as needed, based on the terms and conditions of the
initial agreement and barring any major changes in the financial
position of the university. Once a line of credit is negotiated, the
university can request funds from the bank. The bank reviews the
request(s) and extends the loans up to the stated limit of the line
of credit. Lines of credit usually are extended for one to five
years and for ceilings of $2 million to $15 million on outstanding
loans.
A line of credit gives the university a standby source of funds
that can be obtained without having to renegotiate terms and con-
ditions each time a loan is needed. By paying a fee on the unused
portion of the funds, the university can arrange a letter of credit
or a standby loan guarantee from the bank to ensure the funds'
availability.
Mechanics
A university with an established credit rating can most likely
negotiate with a number of banks before arranging a line of credit
with one of them. Depending on its financial strength, the univer-
PAGENO="0573"
567
sity may be able to arrange more than one line of credit. The
general terms of a line of credit specify:
* Interest rate will average 60 to 75 percent of the prime
interest rate because the line of credit is considered a tax-exempt
debt.
* Loan ceiling represents the total amount of credit that the
bank will extend to the university under the line of credit.
* Put and call provisions state the period in which the bank
can request repayment in full of all outstanding loans and the
period in which the university can prepay its loan.
* Fee represents the bank's compensation forextending the
line of credit; it can be expressed as a st~d amount or as a per-
centage of the unused line of credit.
* Conditions define specific terms of the line of credit, e.g.,
the bank may ask the university to maintain compensating bank
balances, depending on the underlying credit of the university and
the bank's loan pricing structure.
* Security defines the collateral the bank requires to support
the loan (e.g., the university's pledge of unrestricted endowment
funds or a lien on the purchased equipment).
Procedures for Use
Once a bank line of credit is obtained, the university should
establish procedures for using it. The line of credit could be
drawn upon, for example, to meet loan requests from department
heads and principal investigators. Each request would have to be
documented to justify the loan and demonstrate a source of reve-
nue to repay it. Internal administrative controls would have to be
established to review and process requests and ensure that the use
of the line of credit conforms to budgetary and research priorities.
If numerous small loans were made, additional administrative con-
trol would be required to monitor loan limits and debt service.
Pooled Revenue Bond
A pooled revenue bond is issued under a designated govern-
ment authority to meet the aggregate funding requirements of a
group of state or private institutions. Bond pools are of two
types: a blind pooi does not identify the participating universities
or the projects to be funded; a composite pool identifies both.
To ensure the marketability of the bond issue, the authority
will most likely purchase an insurance policy that guarantees
PAGENO="0574"
568
repayment in the event of default by any of the participating
universities. The authority may require a participating university
that does not have an established credit rating to obtain a letter
of credit to guarantee its loan or to pledge cash and securities as
collateral. Financially strong universities that can issue their own
debt may not gain cost advantages from participating in the pool.
The participation of universities with established credit ratings,
however, is important to ensure that the pooled revenue bond gets
a favorable rating and can be marketed to investors.
The pooled revenue bond meets the minimum requirements ($5
million to $10 million) for a marketable, cost-effective issue, and
the costs of issuance are shared by the participating institutions.
It works well when the participants need similar types of equip-
ment: investors are looking for some element of commonality--
such as the useful life of equipment--so that they can better
assess their risks. The mechanism permits a university to finance
equipment purchases that would not warrant issuance of a revenue
bond on its own.
Mechanics
After the bonds are issued, the authority enters into a loan
agreement with each participating institution. The agreement
specifies the term and amount of the loan, the repayment sched-
ule, and the interest rate. The periods of the participating
institutions' loans generally range from three to ten years, but no
loan can extend past the maturity date of the bnd issue. IRS
regulations give the authority three years to disburse the proceeds
of the bond. Within that period, the authority may invest the
proceeds at a higher rate than the tax-exempt rate of the bonds
to reduce the borrowing costs to the participants.
Tax-Exempt Variable Rate Demand Bond
Tax-exempt variable rate demand bonds (VRDBs) carry a
floating interest rate set periodically in one of three ways:
* Percentage of prime interest rate.
* Percentage of 90-day U.S. Treasury Bill rate or bond
equivalent basis.
* Indexed to tax-exempt notes.
The VRDB, nominally issued with a 25 to 30 year maturity,
gives the university access to long-term debt at short-term rates.
When issuing long-term debt is not feasible or is relatively expen-
PAGENO="0575"
569
sive, VRDBs permit the university to begin construction of build-
ings or procure equipment without funding delays; they permit the
issuance of permanent debt to be postponed until conditions in the
long-term bond market improve. The short-term feature of the
VRDB can offer quite favorable interest rates, which may range
three or more percentage points below fixed long-term bond rates.
VRDBs entail risks if the university plans eventually to convert
them to long-term debt. One such risk is the uncertainty in the
regulatory environment, which may restrict the university's
ability to issue long-term debt. One of the many varieties of
variable rate demand bonds is the adjustable rate option bond
described in Example G, Appendix H.
Mechanics
VRDBs are issued for the university by a designated state or
local authority. The bonds are sold to short-term investors,
normally tax-exempt money market funds that can only hold
securities with maturities of 90 days or less. The terms generally
give the investor the option of returning the bonds to the issuer
after giving a seven-day notice and give the issuer the option of
recalling the bonds from the investors upon a 30-day notice. (The
adjustable rate option bond in the example allows only annual
returns of the bonds for payment.) Because the investor can
return the bonds, the university must demonstrate its ability to
pay for them. If the bonds can be immediately resold, the univer-
sity can readily repay the investor. If new investors cannot be
found, however, the university needs some way to raise the neces-
sary capital. The most common way is a bank letter of credit.
Through a letter of credit agreement, the bank lends the
university the necessary funds at a specified rate of interest and
with a set repayment schedule. Borrowing under the terms of the
letter of credit can be costly, in that the interest rate is higher
than the university is paying on the VRDBs. Most universities will
have to use it, however, because the institution may have insuf-
ficient cash reserves to ensure repayment of the VRDBs. With
the letter of credit the bank may provide other services, including
placement of the initial bond offering and assistance in locating
new investors if initial investors return the VRDBs. (In many
cases, investment bankers provide the marketing and remarketing
service.) The university and its bank negotiate the terms of the
letter of credit, which generally costs from I to 1.5 percent of
the amount of the issue and ii~as a five-year term with cancel-
lation and renewal clauses.
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570
Tax-Exempt Commercial Paper
Tax-exempt commercial paper (TECP) consists of a program
or series of short-term obligations with maturities of 270 days or
less, issued by a designated authority for, a pool of universities.
TECP gives universities the flexibility and liquidity of short-term
borrowing at the lower interest rates offered on tax-exempt
securities. Issuance costs are shared by the participants. Add i-
tionally, the TECP is designed to be rolled over at maturity
without delays and added issuance cost, so the university is not
locked into long-term debt and can repay the loan at any time
without penalty.
Mechanics
The designated authority would issue the tax-exempt com-
mercial paper and provide the funds to participating institutions
that request loans to finance the construction or renovation of
buildings and the acquisition of equipment. The issued amount of
the TECP would reflect the aggregate amount of the participating
institutions' loan requests over the period of the program, say,
two or three years. The relatively high cost of setting up a tax-
exempt commercial paper program makes it necessary to aggre-
gate fairly large pools of money. The minimum for the pooi
commonly is $50 million.
The TECP would be a limited obligation of the authority and
would represent no obligation of the authorizing state or county.
The financial backing for the issue is the revenues and pledged
funds of the participating universities. Before a loan is made, the
authority must approve the creditworthiness of the participating
institutions. An institution that does not have an established
credit rating could obtain a letter of credit or pledge assets as
collateral. The authority would make a long-term loan to the
institution for a period not greater than the expected life of the
debt program, which could be as long as 10 years.
The university would repay its loan in equal monthly install-
ments that would reflect repayment of principal and the costs of
interest, administration, and issuance. The interest on the loan
would be determined monthly and reflect the average interest
rates of TECPs sold during the month. Repayment of the TECP is
based solely on participating institutions' loan payments to the
authority.
PAGENO="0577"
571
LONG-TERM DEBT INSTRUMENTS
Long-term financing commits a university to 10 to 30 years of
debt. Tax-exempt revenue bondsand general obligation bonds are
the major forms of long-term financing. Certificates of participa-
tion, industrial development bonds, and "on behalf of..." debt
instruments are specific forms of revenue bonds.
Types of Tax-Exempt Bonds
For state, local, and other municipal government entities and
authorities, municipal bonds are a major means of financing the
construction and maintenance of public facilities. Municipal
bonds are cost effective because the interest paid to the bond
holders is exempt from federal income tax and sometimes from
state or local income tax. The tax-exempt status permits issuers
of municipal bonds to pay lower interest rates than are paid on
corporate bonds.
Municipal bonds are differentiated by the type of funds that
secure payment. The bonds are of two general types:
* General obligation bonds are secured by the taxing power of
the state or local government. All sources of the specified
government unit's revenues will be used to pay off the debt,
unless specifically excluded. The bonds are backed by the "full
faith and credit" of the state or local government.
* Revenue bonds are issued to finance a specific revenue-
generating project. They are secured by the project's revenue and
are not backed by the "full faith and credit" of a state or local
government.
Long-term debt financing for universities generally involves
revenue bonds or industrial development bonds. The industrial
development bond is issued by a state, local, or other designated
government entity to finance the construction or purchase of
plant facilities or equipment to be leased and used by a private
entity. The bond is backed by the credit of the private entity and
not by the issuing government entity.
Revenue bonds do not burden the credit capacity of the munici-
pality nor require a referendum, as do most general obligation
bonds. The state or local government issues the revenue bonds or
empowers an authority, commission, special district, or other unit
to issue the bonds and constructand operate or lease the specified
building/equipment.
Revenue and industrial development bonds can be used by both
state and private institutions. The tax-exempt bond can be issued
53-277 0 - 86 - 19
PAGENO="0578"
572
as long as it fulfills a "public purpose" under state law in accor-
dance with Internal Revenue Code Section 103. State universities
enjoy tax-exempt status because they are considered subdivisions
of the state. A private university, however, must use a tax-
exempt conduit such as a county, industrial development author-
ity, educational facilities authority, or similar agency. Revenue
bonds issued by both state and private universities are backed by
the creditworthiness of the institution. If it does not have suf-
ficient collateral to attract investors, the issue would most likely
have to be underwritten by an insurance company to ensure its
marketability. Other forms of credit enhancement are available.
The university might obtain a letter of credit, for example, or,
where feasible, set aside a portion of endowments as collateral.
Such credit enhancements have the effect of lowering the interest
rate that must be paid to attract investors.
Mechanics
The tax-exempt bond is a legal promise by the backer-
municipality, political subdivision, designated public authority,
state university, or private university--to pay the investor a
specified amount of money on a specified date and to pay interest
at the stated period and rate. A bond issuance basically involves
four main parties or groups of individuals:
* The institution-in this case a state or private university,
responsible for paying principal and interest from its own
revenues.
* The issuer--a governmental entity or designated authority
that borrows money through sale of tax-exempt bonds.
* The dealers--securities firms or commercial banks that
underwrite, trade, and sell securities.
* The investors--tax-exempt bond funds, banks, casualty
insurers, and individuals.
The minimum feasible amount of a bond issue is normally $3
million because of the sizable costs of bringing the issue to mar-
ket. These costs would include legal, accounting, and brokerage
fees as well as incidental costs such as printing. Individual bonds
have a minimum face value of $5,000, but on average are issued in
$25,000 denominations.
Legal and tax counsel are essential to ensure that all report-
ing, tax, and disclosure requirements are met. Municipal security
issues do not have to follow the reporting requirements of the
Securities and Exchange Commission (SEC), but the Municipal
Securities Rulemaking Board, an independent, self-regulatory
PAGENO="0579"
573
organization of dealers, banks, and brokers, has established guide-
lines for the municipal securities industry. A potential issue would
be governed by the antifraud provisions of the Securities Acts and
SEC Rule l0b-5. Additionally, a tax-exempt bond must adhere to
Internal Revenue Code Section 103, which defines the types of
facilities that can be financed with tax-exempt bonds.
Certificates of Participation
Certificates of participation (CPs) are a relatively new debt
instrument that resulted from the need of public institutions to
lease high-priced facilities. This form of financing provides access
to the equivalent of long-term debt, but does not constitute direct
indebtedness. The legal structure of CPs is basically the same as
for a lease-purchase agreement. CPs, however, allow a university
to lease costly facilities and equipment with several investors
acting as the lessor. CPs represent a share in a lease--the certifi-
cate holder has an interest in the lease proportional to the per-
centage of the investment. The underwriting for CPs is complex
and lengthy; the efforts and cost are comparable to those of
issuing a revenue bond. CP investors will require some form of
security from the university to ensure that funds are available to
meet lease payments. In some cases, the university may have to
purchase a letter of credit or establish a debt reserve fund to
cover one year's debt service. The cost of placement requires
that the CPs be issued for at least $1 million.
"On Behalf of..." Financing
"On behalf of ..." financing is arranged by a third-party guar-
antor for a state or private institution. The financing could take
the form of either a revenue bond or a lease. Generally, "on
behalf of ..." financing is used for special equipment. A tax-
exempt foundation (third-party guarantor) issues a revenue bond
on behalf of the university to purchase the equipment. When the
equipment is acquired, the foundation leases it to the university.
The university makes lease payments to the foundation and
receives title to the property at the end of the lease. Although
the foundation is the guarantor of the "on behalf of ..." issue, the
bond or lease represents an indirect obligation of the institution.
"On behalf of ..." investors look to the university's revenue-
generating capability and creditworthiness to evaluate the
riskiness of the issue. *
An advantage of "on behalf of ..." financing is that the debt
does not appear on. the university's balance sheet. The financial
PAGENO="0580"
574
impact on the university is reflected as a contingent liability for
future lease payments. The leasing arrangement between the
foundation and the university is on a year-to-year basis with
annual renewal options. A state university would use "on behalf
of ..." financing only when revenue bonds could not be issued.
Some state governments have legislative authority over the state
university's ability to issue revenue bonds and can restrict the
purpose of the bond and the use of the funds. "On behalf of ..."
financing would be easier to issue than revenue bonds in these
states, but the cost of issuance is higher.
INNOVATIVE TECHNIQUES
A number of innovative financing techniques have been used
for state and private universities. One of these is to structure the
bond issue so that the institution's alumni may be investors, not
just contributors. The bonds are issued and purchased by alumni.
The proceeds are placed in an irrevocable charitable remainder
trust from which interest payments are made to the bond holders.
The alumni can claim the principal of the bond as a charitable
donation for tax purposes and also can treat the interest as
tax-exempt income. When the bonds mature, the trust is retired
and the principal goes to the university. The financial advantage
to the university is a substantial reduction in debt service. The
major disadvantage of this type of financing is that the institution
does not have use of the funds until the bonds are retired; for this
reason, the bonds should be issued with short-term maturity.
Grantor Trust
A mechanism proposed recently by an investment banking firm
involves a lease pool large enough to spread financing costs over
many leases with consequent economies of scale. The goal is to
finance acquisition of equipment from research awards over three
to seven years while avoiding the problems associated with pool-
ing funds from different award periods and possibly from different
awards.
The proposal envisions a grantor trust created to acquire
tax-exempt lease obligations of participating universities. (The
specific proposal involves a nonprofit corporation of some 55
universities--the Universities Space Research Association--
formed originally for other purposes.) The trust would offer
investors certificates of participation that provide tax-exempt
income and return of capital in three to seven years. An initial
offering on the order of $20 million is contemplated. Addition-
PAGENO="0581"
675
ally, corporate guarantees would be sought to cover up to 25
percent of the pool in case of defaults or failure to exercise
annual lease-renewal options. Advances made by corporations
under these guarantees would be structured as tax-deductible
contributions. The guarantees would be designed primarily to
make the certificates of participation more attractive to inves-
tors, and the grantor trust would not anticipate involving them.
RECOMMENDATIONS
Universities traditionally have used tax-exempt debt financing
to spread payments for costly facilities over periods of years and
lately have been using the method to some extent to buy research
equipment. A number of financing methods can be adapted to the
special characteristics of equipment, such as its relatively short
technologically useful life. A noteworthy aspect of debt financing
is its imposition of risk on the university as a whole, which re-
quires a shift from decentralized toward centralized authority.
We recommend...
I. That universities explore greater use of debt financing as a
means of acquiring research equipment, but with careful regard
for the long-term consequences. Universities vary widely in their
use of debt financing, but a universal concern is the need for a
reliable stream of income to make the debt payments. It should
also be recognized that the necessary commitment of institutional
resources, regardless of the purpose of the debt financing, erodes
the university's control of its future, in part by reducing the flexi-
bility to pursue promising new opportunities as they arise. Debt
financing also increases the overall cost of research equipment to
both universities and sponsors of research.
2. That universities that have not done so develop expertise
on leasing and debt financing of equipment. This expertise should
include the ability to determine and communicate the true costs
of debt financing and should be readily accessible to research
administrators and principal investigators. The increasing com-
plexity of tax-exempt debt financing, the many participants, the
necessary legal opinions, and the various political and/or cor-
porate entities associated with debt financing make it essential
that universities fully understand the marketplace.
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576
REFERENCES
I. National Association of College and University Business
Officers, "Financial Self-Assessment: A Workbook for
Colleges" (Washington, D.C., 1980).
2. Peat, Marwick, Mitchell & Co., Ratio Analysis in Higher
Education (Washington, D.C., 1982).
3. Hyman C. Grossman, "Higher Education Credit Rating
Criteria" (Presentation to a Symposium on Higher Education
Capital Finance, Morgan Guaranty Trust Company, New York,
November 2, 1984).
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577
5
Private Support of Academic Research
Equipment
INTRODUCTION
Higher education in this country has long enjoyed significant
support from private sources, including individuals, foundations,
and business and industry. Universities increasingly have been
seeking such support, and it has risen steadily in recent years.
Private assistance to academe takes various forms, and in some
measure is helping to address the need for research equipment.
An increase in private support for academic research equip-.
ment was one of the aims of the federal Economic Recovery Tax
Act (ERTA) of 1981 (PL 97-34). The act resulted from concern
over the nation's indu3trial strength and was designed in part to
spur research and development, both academic and industrial. It
permits special charitable deductions for scientific equipment
contributed by its manufacturers to colleges and universities. It
also provides tax credits for industrial spending on R&D con-
ducted both in-house and by other performers, including
universities. The act took effect in August 1981, and, unless
extended, certain provisions will expire December 31, 1985.
Extent of Private Support
Data on trends in funding of academic research equipment do
not exist. Data are available, however, from the NSF National
Survey of Academic Research Instruments on major instrumenta-
tion systems in use in 1982-1983. The data show that industry
funded 4 percent of the aggregate acquisition cost of such sys-
tems and that individuals and nonprofit organizations funded 5
percent (Table 3, Chapter 2)., The NSF data show also that about
2 percent of the instrumentation systems in use in 1982-1983 were
donated, as opposed to being purchased by the universities (Table
7).
PAGENO="0584"
TABLE 7 Means of Acquisition of Academic Research Instrument Systems in Use in 1982-1983,
by Field (Number and Percent of In-Use Systems)
I
Total
Pur-
chased
New
Locally
Built
Pur-
chased
Used
Donated -
New Used
Govt.
Surplus
Other
Total, Selected Fields
36,351
100%
32,409
89%
942
3%
1,342
4%
410
1%
317
1%
409
1%
522
1%
Agricultural Sciences
1,650
100%
1,575
95%
17
1%
39
2%
4
-
2
-
5
-
9
1%
biological Sciences, Total
15,043
100%
14,138
94%
71
-
475
3%
22
-
36
-
43
-
259
2%
Graduate Schools
6,358
100%
5,959
94%
40
1%
234
4%
4
-
13
-
10
-
98
2%
Medical Schools
8,685
8,179
31
241
17
24
32
162
100%
94%
-
3%
-
-
-
2%
Environmental Sciences
2,122
100%
1,756
83%
98
5%
103
5%
26
1%
31
1%
88
4%
19
1%
Physical Sciences
8,770
100%
7,502
86%
366
4%
428
5%
20
-
98
1%
196
2%
161
2%
Engineering
6,786
100%
5,613
83%
379
6%
209
3%
309
5%
126
2%
78
1%
72
1%
Computer Science
876
100%
766
87%
0
-
56
6%
30
3%
23
3%
0
-
0
-
Materials Science
650
100%
619
95%
7
1%
22
3%
0
-
0
-
0
-
2
-
Interdisciplinary, not
454
440
4
1 0
0
0
0
0
elsewhere classified
100%
97%
1%
2%
-
-
-
-
NOTE: Sum of percents may not equal 100 percent because of rounding.
SOURCE: National Science Foundation, National Survey of Academic Research Instruments and Instrumentation
Needs.
PAGENO="0585"
~579
Trends in funding of R&D presumably apply grossly to the
funding of the associated equipment. For example, in 1983 indus-
try funded about 5 percent of academic R&D. Industrial funding
of academic R&D, in constant dollars, grew at an average annual
rate of 6.7 percent during 1967-1983 (Appendix A). The compa-
rable growth rate for federal funding was 1.6 percent. Federal
funding of academic R&D in 1983, however, totaled $4.96 billion
(current dollars), or64 percent of total funding and more than 13
times the industrial contribution. A drop of 1 percent in the fed-
eral support of university research would require a 20 percent
increase in industry support to make up for it.'
In addition to the foregoing NSF data is information on cor-
porate support of academe compiled by the Council for Financial
Aid to Education (CFAE). The two sets of data partly overlap and
so cannot be combined to give totals. In any event, the CFAE data
show that voluntary private support of higher education, from all
sources, more than tripled during 1966-1983, to $5.15 billion.
Corporate support has been rising faster than other private fund-
ing and in 1983 comprised 21.4 percent of the total. Corporate
support also is more than twice as likely to be earmarked for
research as are contributions from other private sources; cor-
porate giving so earmarked in 1983 was 25 percent of the total, or
$274 million (Figure 9) The most dramatic change in corporate
giving between 1980 and 1982, CFAE's most recent survey years~
was in departmental and research grants, which almost doubled'
Gifts of equipment accounted for much of the gain. CFAE
believes that ERTA contributei significantly to corporate giving
of equipment.
MECHANISMS OF CORPORATE SUPPORT
Companies support acquisition of academic research equip-
ment by a variety of means in addition to donations of equipment
itself. These mechanisms include cash gifts, contract research,
discounts on equipment, industrial affiliate programs, research
centers and consortia, and informal loans and sharing.
Donations of equipment have been particularly common in
computing, microelectronics, and engineering, but less so in other
areas. Equipment offered for donation, however, may not be
state of the art, particularly in industries where the technology is
advancing rapidly. Also common are offers of instrumentation
that does not meet the research needs of the proposed recipient.
Further, donations of equipment generally do not provide for the
costs of renovating space and installing, operating, and maintain-
ing the equipment. These costs have prevented some universities
from accepting donations. In Chapter 3 we cited the university
PAGENO="0586"
C
0
0
0
0
c)
580
FIGURE 9
National Estimates of Corporate Voluntary
Support of Colleges and Universities
Fiscal Years 1975-1983 7"
1200
1000
800
600
400
200
0
75 76 77 78 79 80
FISCAL YEAR
81
82
83
SOURCE: Council for Financial Aid to Education.
PAGENO="0587"
581
visited by the study team that declined a gift of computer-aided
design equipment because it could not afford the $170,000 per
year required to operate it.
Cash gifts support a variety of research and instructional
needs, including research equipment. Some companies have set up
organizations to plan corporate philanthropy, including matching
of employees' contributions to colleges and universities. Com-
panies sometimes help to support the research of a particular
investigator or program. Unrestricted cash gifts often are applied
wholly or partly to the costs of acquiring and using instrumenta-
tion and sometimes are used to meet federal matching require-
ments for buying equipment.
Co mpanies generally fund contract research at universities on
a project-by-project basis, much as federal agencies support
contract research. Academic investigators and administrators,
however, report significant differences in the handling of indus-
trial and federal research contracts. Negotiations with industry
are not hampered by the problems associated with federal reg-
ulations identified in Chapter 1. Corporate negotiators, more-
over, recognize that state-of-the-art equipment and the costs of
operating and maintaining it are part of the price of effective
research. Contracts with industry, therefore, are more likely to
cover all of these costs than are federal contracts.
Companies frequently use discounts and flexible payment
schedules, often free of interest, to help universities obtain re-
search equipment. These mechanisms in the aggregate can pro-
vide substantial benefits to universities. One company visited by
the study team used a two-for-one discount on purchase of new
equipment to generate goodwill and to institute a series of infor-
mal exchanges between its scientists and investigators at the
recipient school.
Industrial Affiliates
Industrial affiliate programs (also called industrial liaison
programs) provide substantial support for departments and
programs at a number of universities. The companies involved
pay annual membership fees that vary with the arrangement, but
often are in the range of $30,000 to $50,000 per company. The
university in turn generally provides seminars conducted by
faculty, preprints of publications, copies of theses and disserta-
tions, and informal contact with faculty and students. Some
programs also provide a limited amount of consulting by faculty
at no charge. These industrial affiliate arrangements can provide
considerable discretionary funding, which could be used to pur-
chase research equipment.
PAGENO="0588"
582
An elaboration of the industrial affiliate concept is the r e-
search center or consortium.. These arrangements may be orga-
nized to pursue mission-oriented research. Centers for research
on very large-scale integration of electronics, for example, are
being established at MIT and Stanford. The corporate members of
the Stanford center initially contributed $750,000 each. Of the
$20 million thus raised, more than $4 million was used to acquire
state-of-the-art instrumentation. Annual corporate dues are
$100,000 per company and are expected to comprise one-sixth of
the center's sponsored research budget, with the remainder to
come from federal agencies. The privileges of membership in-
clude limited rights to certain aspects of the technology devel-
oped in the center's research programs.
A somewhat different approach is the Houston Area Research
Center (HARC). It was formed in 1982 by four universities--Rice,
Texas A&M, Houston, and Texas-Austin--to conduct research that
none of them could handle easily alone. HARC received private
funding initially, and now has begun to receive federal contract
funding. Projects under way in 1984 included raising funds for a
supercomputer for the four schools and surrounding industry,
development of geological testing techniques and large-scale
geological surveys and studies, and support for activities in
high-energy physics.
Another vehicle of corporate support is a nonprofit corpora-
tion, supported by contributions from companies, which funds
contract research at universities. The arm's-length sponsored
research agreements negotiated can provide significant funding
for research equipment. One example of such an arrangement is
the Center for Biotechnology Research, in San Francisco, Califor-
nia. It is supported by six companies and administered by a three-
member board of trustees.
Academic investigators occasionally benefit from informal
loans or sharing of company-owned equipment. Most often such
arrangements result from personal contacts between scientists.
Freedom of Inquiry
A critical issue in academic-corporate relationships is preser-
vation of the academic freedom that contributes so much to the
strength of research in our universities. The proprietary interests
of a corporate sponsor of research, for example, are inherently in
conflict with the academic practice of open and rapid dissemina-
tion of research results. Means of managing academic-industrial
relationships have been examined increasingly in recent years as
such arrangements have proliferated.3'4 The general issue is
beyond the scope of this report, but certainly must be considered
PAGENO="0589"
583
in arrangements to secure corporate funding of academic research
equipment.
OTHER PRIVATE SUPPORT
The NSF data cited earlier indicate that private individuals,
not-for-profit organizations, and foundations fund academic
research equipment at a level comparable to corporate support.
Philanthropic programs generally support instrumentation through
research grants and general program support. Universities have
raised matching funds for research equipmer~t from individual
private donors and philanthropic organizations. The added lever-
age of matching funds, plus the appeal of current sophisticated
technology, help scientific research to compete with efforts to
raise funds for other activities, such as athletic programs and
hospitals. Universities report that fund drives for specific items
of research equipment have proved effective.
Individuals also may help to fund academic research equipment
by investing in bonds issued to raise money for universities (see
Chapter 4) or in research and development limited partnerships
(see below).
TAX INCENTIVES
Corporate and other private entities traditionally have been
allowed tax deductions for donations of cash and property to col-
leges and universities. ERTA, however, in response to the need
for research equipment in academe, attached permanent special
tax benefits to donations of such equipment by its manufacturers.
Also, in accord with its basic goal of spurring technology, ERTA
created additional tax credits for industrial investment in re-
search and development, including academic R&D. (Unless
extended, the R&D tax credit will expire December 31, 1985.)
Further, most of the states in recent years have adopted tax
incentives identical or similar to the federal provisions relating to
contributions of scientific equipment. In addition to these federal
and state provisions, tax benefits are available to research and
development limited partnerships, which might provide some
support for academic research programs.
Contributions of Scientific Equipment
A company that donates equipment to a charitable (tax-
exempt) organization generally is allowed a tax deduction equal to
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584
the cost of the equipment to the company (production cost).
ERTA increased the deduction to production cost plus half of the
difference between cost and fair market value (normal selling
price) for equipment donated to institutions of higher education,
subject to certain provisos, among them:
* The donor must be the manufacturer of the equipment. The
cost of parts from outside suppliers may not exceed 50 percent of
the donor's cost in the equipment.
* The equipment must have been manufactured no more than
two years before donation, and the university must be the original
user.
* At least 80 percent of the use of the equipment must be for
research or research training in the physical or biological
sciences. Direct education of students in these fields is excluded,
and thc social and behavioral sciences are excluded altogether.
* The equipment must be used in the United States, and the
university may not transfer it to others for money, other property,
cr services. The university must verify in writing that it will
meet all use and disposition requirements.
* The deduction is limited to twice the production cost of the
equipment. If the cost of the equipment to the manufacturer is
$100, for example, the tax deduction is limited to $200, regard-
less of the normal selling price of the equipment.
In addition to increasing the deduction for such contributions,
ERTA raised the limit for corporate charitable deductions from 5
percent to 10 percent of taxable income. Although many corpor-
ate donors do not reach even the 5 percent limit, some do, and the
higher limit on deductions clearly could affect the level of cor-
porate contributions of equipment to academe.
The incentive provided by ERTA for donating qualified equip-
ment to colleges and universities can be assessed on two bases:
the direct cost of donation (production cost less tax benefit) and
the total cost of donation (production cost, plus net income fore-
gone by donating rather than selling, less tax benefit).5 These
relationships are shown in Table 8, using a production cost of $100
and selling prices of $100, $300, and $400. Note that the tax
deduction under ERTA plateaus at a selling price of $200 (twice
the production cost). At that point, ERTA confers its maximum
reduction, about 28 percent, in total cost of donation. Net in-
come foregone, however, continues to rise, so that, at a selling
price of $400, ERTA reduces the total cost of donation by about
21 percent. Even so, it would appear that ERTA offers a signif i-
cant incentive to donate qualified equipment to academe. If the
data of Table 8 are raised to more realistic levels--say, a pr~duc-
tion cost of $100,000 and a selling price of $300,000-the direct
PAGENO="0591"
585
TABLE 8 Effect of ERTA on Cost of Donating Equipment
(in Dollars)
ERTA/non-ERTA
Production cost 100/ 100 100/100 100/100
Selling price 100/100 300/300 400/400
Tax deduction 100/100 200/100 200/100
Tax benefit 46/46 92/46 92/46
(at 46 percent
tax rate)
Direct cost of 54/54 8/54 8/54
donating
(cost less
benefit)
Net income foregone 0/0 108/108 162/162
(price less cost
less tax on gross
profit)
Total costof 54/54 116/162 170/216
donating
(cost plus net
income foregone)
SOURCE: Eileen L. Collins, An Early Assessment of Three R&D
Tax Incentives Provided by the Economic Recovery Tax Act of
1981 (Washington, D.C.: National Science Foundation, April 1983).
PAGENO="0592"
586
cost of donating becomes $8,000 under ERTA and $54,000 without
ERTA. Similarly, the total cost of donating becomes $116,000
under ERTA and $162,000 without ERTA.
Bargain Sales
A company that wishes to provide qualified research equip-
ment to a university but is unwilling to donate it outright may
still obtain tax benefits under ERTA by means of a bargain sale.
A bargain sale is a sale for less than fair market value, often
entailing a larger than normal discount. The university gels the
equipment at a good price; the donor receives a tax deduction for
a charitable contribution, but also must recognize gain on the
transaction to the extent that the sales price exceeds the cost
basis apportioned to the sale. The calculation is illustrated in
Table 9. The university pays $750 for equipment that lists at
$1,500. The company receives a $250 after-tax profit under the
bargain sale provisions of ERTA, or 85 percent more than the
$135 it would have received without ERTA. It should be noted
also that the charitable deduction under ERTA is limited to twice
the cost basis of the equipment.
Company Considerations
Companies' decisions on how best to provide research equip-
ment to academe on a charitable basis depend on both tax and
nontax considerations. The two are necessarily intertwined, but
nontax benefits are the primary impetus for giving.
Makers of scientific equipment depend very much on academe
as a market for their products and as a source of the technically
trained manpower and research results essential to their bus i-
nesses. They, provide equipment on a charitable basis, therefore,
to sustain the quality of teaching and research, to familiarize
prospective users and employees with their products, to obtain
feedback on the performance of their equipment and on needs for
new products, and to maintain relations with faculty.
Although tax benefits are not the primary motivator, they do
appear to affect the contribution of equipment to universities. A
company may prefer, for example, to sell costly, high-profit
equipment to a university at a substantial discount, rather than
donating it, so as to ease the economic penalty of the contribu-
tion.6 This approach has been used both before and after ERTA,
but ERTA clearly could affect the decision to sell or donate. Tax
benefits also appear to affect the size of contributions, once the
decision to contribute has been made.
PAGENO="0593"
587
TABLE 9 Calculation of Gain and Charitable Deduction
in Bargain Sale
List price = $1500
Cost basis = 500
Bargain sale price = 750
Basis for sale = cost basis + (bargain sale price/list price)
$500 x ($750/$1500) = $250
Basis in gift = cost basis - basis for sale
$500 - $250 = $250
Company's gain = bargain sale price - basis for sale
$750 - $250 = $500
Charitable deduction = Basis in gift plus half of the gain
foregone by selling at less than
list price
$250 + ($750 $25o)/2 = $500
ERTA Pre-ERTA
Gain on sale $500 $500
Charitable deduction - 500 - 250
Taxable income 0 250
Cash received 750 750
Tax 0 -115
Total benefit 750 635
Equipment cost - 500 - 500
Net benefit
to company $ 250 $ 135
SOURCE: Coopers & Lybrand.
PAGENO="0594"
588
Some academic opinion holds that company officials who
decide whether and how to contribute equipment are not fully
abreast of the available tax benefits, even though company tax
specialists are well informed. In this respect, for example, it
appears that the bargain sale provisions of ERTA have been
largely ignored.
Research and Development Tax Credit
ERTA created a 25 percent tax credit for incremental spend-
ing by industry on "research and experimentation," both in-house
and under contract. The contract research, however, is restricted
to work related to the taxpayer's trade or business, or basic re-
search in colleges and universities. The credit is available for
expenses incurred after 3une 30, 1981, and before lanuary I,
1986, unless new legislation is passed to extend the credit or make
it permanent.* Money spent on scientific equipment under re-
search contracts in academe qualifies for the credit.
As with the ERTA deduction for equipment donations, the
research must be conducted in the United States and is restricted
to the physical and biological sciences. Money for basic research
may be paid either to the contracting universities or to a fund
that awards grants for academic research. The requirements of
the law preclude tax credits for research costs incurred by new
ventures before they actually engage in business.
The 25 percent tax credit is computed on qualified research
costs in excess of a floating average of research costs paid or
incurred during the prior three years. In-house research costs are
fully qualified, but only 65 percent of contract research costs is
qualified. The three-year floating average of research costs
cannot be less than 50 percent of current-year research costs.
Thus the maximum tax credit is 12.5 percent of qualified, current-
year research costs and 8.1 percent if only contract research
costs are incurred. The calculation is illustrated in Table 10.
Company/University Considerations
The R&D tax credit reduces a company's costs for contract
research at a university. Further, the costs qualified for in-house
*The President's Tax Proposal of May 1985 would extend the
credit for three years.
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589
TABLE 10 Calculation of R&D Tax Credit
Qualified research expenses, 1985
In-house $640,000
Contract, nonbasic
($200,000 x 0.65) $130,000
Contract, basic
($200,000 x 0.65) $130,000
Total $900,000
Less base-period research expenses
1982 $ 600,000
1983 $ 500,000
1984 _$]~0,00O
Total $1,800,000
Average $ 600,000 (600,000)
Excess qualified expenses $300,000
Rate 0.25
1985 Tax credit $ 75,000
SOURCE:' Coopers & Lybrand.
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590
research include only wages and supplies, while the full costs of
contract research are qualified. On the other hand, the tax credit
is based on 100 percent of qualified costs for in-house research
and only 65 percent of costs for contract research. Also, contract
work at universities is restricted to basic research, which gener-
ally is a long-term effort, whereas corporate interests tend to be
short term. The university and the company are both potential
beneficiaries of patents arising from the research.
Additional considerations are involved but, on balance, the
R&D tax credit does not appear to provide a special incentive for
companies to contract for research at universities, as opposed to
the qualified alternatives available. Exceptions would include
companies that are committed to supporting basic research in
academe, but might support more of it in light of the R&D tax
credit.
STATE TAX INCENTIVES
Most states in recent years have adopted tax provisions
designed to stimulate research at colleges and universities. The
state incentives include adoption of the federal deduction for
company contributions of scientific equipment to colleges or
universities, enactment of provisions comparable to the federal
deduction, allowance of the federal deduction and an additional
state deduction, and enactment of a credit against tax for con-
tributions of scientific property.
Adoption of the Federal Deduction
The federal deduction for contributions of scientific property
to colleges and universities has been adopted by 34 states:
Arizona Missouri
Arkansas Montana
Colorado Nebraska
Connecticut New Hampshire
Delaware New ~Jersey
Florida New Mexico
Hawaii New York
Idaho North Dakota
Illinois Oklahoma
Indiana Oregon
Iowa Pennsylvania
Kansas Rhode Island
PAGENO="0597"
591
Kentucky Tennessee
Maine Utah
Maryland Vermont
Massachusetts Virginia
Michigan West Virginia
Adoption of Deduction Other than Federal
California has adopted a provision essentially identical to the
federal deduction for donations of scientific equipment to aca-
deme. As under the federal law, a corporation can deduct its
basis in the contributed property plus half of the unrealized
appreciation with a limit of twice its basis in the property.
Montana allows the federal deduction or a deduction equal to
the fair market value of the property contributed, but not greater
than 30 percent of the corporate taxpayer's net income.
In New Hampshire, a business that contributes scientific
property may deduct, in lieu of the federal deduction, its basis in
the contributed property plus 50 percent of the unrealized appre-
ciation, or twice the basis of the property, whichever is less.
Massachusetts allows the federal deduction plus 25 percent of
that deduction.
Adoption of Credits
Seven states, including some that have adopted the federal
deduction for contributions of scientific equipment, in addition
provide various types of tax credits. Idaho, Indiana, and North
Dakota allow corporations a credit against tax as a means of
stimulating contributions of scientific equipment to colleges and
universities within the state. Louisiana allows corporations to
elect a credit in lieu of a charitable deduction. Iowa, Wisconsin,
and Minnesota allow a credit for increased research expenditures.
In determining expenditures that qualify for research credits,
Iowa, Minnesota, and Wisconsin follow the federal definition of
"qualified research expenses." The Iowa credit, which is effective
for years beginning on or after January 1, 1985, is 6.5 percent of
qualifying expenses incurred for research conducted within the
state. If the credit exceeds the corporation's tax liability, Iowa
refunds the excess with interest unless the corporation elects to
apply the credit to its liability for the following year. The Min-
nesota credit is 12.5 percent of the first $2 million (and 6.5 per-
cent of additional expenses) of the excess of qualified expenses
over base-period expenses incurred for research conducted within
the state. The Wisconsin credit is 5 percent of the corporation's
PAGENO="0598"
592
qualified expenses incurred by research conducted within the
state. Wisconsin also provides a 5 percent credit for the purchase
of research equipment or construction of facilities to house it.
Idaho allows a credit of 50 percent of the aggregate amount of
charitable contributions to institutions of higher education within
the state during the year, but not exceeding 10 percent of the
corporation's total Idaho tax liability or $500, whichever is less.
Indiana also allows a credit of 50 percent of the aggregate amount
of contributions during the year to institutions of higher education
within the state, but not exceeding the corporation's tax liability
minus all other credits, or 10 percent of the corporation's total
adjusted gross income, or ~l,000, whichever is less.
North Dakota allows a credit of 50 percent of charitable con-
tributions to nonprofit private institutions of higher education
within the state or to the North Dakota independent college fund,
but not exceeding 20 percent of the corporation's income tax, or
$2,500, whichever is less.
Louisiana allows corporations to elect a credit, in lieu of a
deduction, for contributions of computer equipment to educa-
tional institutions within the state. The credit is 40 percent of
the equipment's value or the corporation's total tax liability,
whichever is less.
R&D LIMITED PARTNERSHIPS
Research and development limited partnerships are a source of
risk capital that may permit individual investors to support aca-
demic research programs while sheltering some of their own
income.7 Investors can take current deductions for qualifying
research expenditures; subject to certain conditions, they can pay
tax at capital gains rates rather than ordinary income rates on
royalties or on the sale of patent rights or patentable property.
An R&D limited partnership may include a~artner (which
could be a university) that contributes ideas or potential products,
while other partners contribute capital to finance the necessary
research and development. The university need not become a
partner, but could license or assign inventions or know-how to the
partnership for lump-sum cash payments or royalties. The part-
nership could contract with the university to perform research
whether or not the university had previously provided anything to
the partnership.
The partners would share the income from the sale or licensing
of products or patents developed. Royalties or capital gains re-
ceived by the university would not be unrelated business income,
nor would fees paid to the university for research performed.
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R&D limited partnerships in which the university is a partner
potentially have several disadvantages:
* Much university research is more basic than is required for
a partnership making high-risk investments in the hope of
commercial return.
The law in this area is still unsettled in many respects,
including issues of potential liability.
* A limited partnership offering is a securities offering
governed by federal and state law and regulations. Legal fees,
brokerage commissions, and general partners' fees are substantial.
* R&D credits provided by ERTA for contract research are
not available to a partnership unless it is engaged in a trade or
business, intends to use the products developed in that trade or
business, and does not intend to transfer the products for license
or royalty payments. To be considered engaged in a tradeor
business, the partnership must be soliciting customers to purchase
a product or service, but most partnerships do not solicit cus-
tomers until after they have developed a product or service.
R&D limited partnerships have not been widely embraced by
the academic community, although they have attracted a good
deal of interest. The study team encountered no instances of
universities' having procured scientific equipment through R&D
limited partnerships.
LEASING
For-profit entities that lease equipment to colleges and
universities may be able to take advantage of the accelerated
depreciation (ACRS) provisions introduced by ERTA to shelter
from taxes a part of their income from leasing. (See Chapter 4
for detailed discussion of leasing.) Investment tax credits are not
available, however, to for-profit entities that lease to colleges
and universities, which is a strong disincentive for such arrange-
ments.
The Tax Reform Act of 1984 reduced the accelerated depre-
ciation benefits previously available to lessors by increasing the
number of years for depreciating equipment leased to colleges and
universities and by providing that the equipment be depreciated
using the straight-line method. The act excludes leasing arrange-
ments for specific types of e~quipment from the new constraints.
Certain high-technology equipment--including computers and
peripheral equipment, sophisticated telephone station equipment
installed on campus, and advanced medical equipment--can be
depreciated by the lessor using normal ACRS rules if the lease
PAGENO="0600"
594
period is five years or less. If the lease period is more than five
years, depreciation is on a straight-line basis over five years.
DEVELOPING A DONATION STRATEGY
Donation transactions examined during this study (Appendix J)
suggest a number of actions that could help colleges and univer-
sities to obtain donations of scientific equipment. In particular, it
appears that involvement of academic representatives (e.g., devel-
opment office people, department heads, and principal investiga-
tors) with their counterparts in prospective donor companies is
vital to building the relationships needed to obtain regular con-
tributions In addition, colleges and universities that wish to
develop donation strategies might consider the following
activities:
* Target the manufacturers of equipment most needed by the
institution.
* Prepare a description of the university's plans for using the
equipment for presentation to prospective donors. The
description should include information such as the research
planned and the number and background of studentsand faculty
who will be involved. In this respect, many companies expect to
receive a written proposal before donating equipment.
* Prepare a description of the mutual benefits of donating
equipment. These benefits include the long-range value of
strengthening the research and academic programs of the
university. More immediate benefits for prospective donors would
include:
-Research programs that are making scientific advances
in which the donor is interested.
-Introduction of the donor's products to potential buyers
-Students as potential employees
-Federal and state tax incentives that reduce the total
cost of donating equipment.
-Feedback from students and faculty as a source of
product improvement and development.
-Willingness of academic investigators to permit donors to
demonstrate to potential customers the use being made of their
equipment and the scientific advances being obtained with it.
RECOMMENDATIONS
The effects of ERTA have been studied extensively almost
since its passage, primarily with a view to deciding whether the
PAGENO="0601"
595
R&D tax credit should be extended beyond its statutory expiration
date, December 31, 1985, and in what form.5'8 Although many
believe that the tax credit has a positive effect, these studies
have not produced clear-cut answers for several reasons: the act
has been in effect only since August 1981; its effects are entan-
gled with other economic variables in a complex manner; and the
uncertain future of the act may have skewed its effects.
The examination of ERTA also has produced views on the
value of the equipment-donation deduction, which is permanent
under the act. The Council for Financial Aid to Education, as
noted earlier, believes that ERTA has contributed significantly to
corporate giving of scientific equipment to academe. Similarly,
the National Science Foundation has said that both the R&D tax
credit and the deduction for donations of equipment "apparently
have helped to stimulate the recent surge of industry support for
university science and engineering."9
The consensus appears to be that ERTA, suitably modified,
should indeed spur technology, in part by fostering support for
academic research and scientific equipment. We agree with this
view. We believe also that colleges and universities could seek
more aggressively to capitalize on available tax benefits, federal
and state, in soliciting donations of equipment.
We recommend...
1. That industry take greater advantage of the tax benefits
provided by the Economic Recovery Tax Act (ERTA) of 1981 for
companies that donate research equipment to universities and
fund academic research. Universities' experience with industry
indicates that company officials may not be fully aware of the
benefits available, although company tax specialists generally are
well informed.
2. That universities seek donations of research equipment
more aggressively by developing strategies that rely in part on the
tax benefits available to donors. Sound strategies would stress
both federal and state tax benefits as well as other important
benefits to both donor and recipient.
3. That Congress modify ERTA so that...
...equipment qualified for the charitable donation deduction
include computer software, equipment maintenance contracts and
spare parts, equipment in which the cost of parts not made by the
donor exceeds 50 percent of the donor's costs in the equipment,
and used equipment that is less than three years old. Computers
are properly viewed as computing systems, which are incomplete
without software. Maintenance of scientific equipment is costly
to the point where universities have declined donations of equip-
ment because they could not afford to maintain it. Makers of
sophisticated equipment rely primarily on their technological
PAGENO="0602"
596
knowledge, not their ability to make parts. Thus the limit on
parts from outside suppliers is unrealistic, provided that the
manufacturer is in fact in the business of developing and making
scientific equipment.
..the provisions on the R&D tax credit are made permanent,
with revision to create an additional incentive for companies to
support basic research in universities. Equipment acquired under
research contracts qualifies for the credit, but ERTA currently
provides the same incentive for companies to contract for re-
search in academe as for research by other qualified organizations.
..the social and behavioral sciences are made qualified fields
of academic research in terms of the equipment donation deduc-
tion and the R&D tax credit. The social and behavioral sciences
contribute to the application and utilization of science and tech-
nology, and they rely increasingly on research instrumentation.
...quailfied recipients of equipment donations and R&D fund-
ing, in terms of ERTA tax credits, indude research foundations
that are affiliated with universities but remain separate enti-
ties. Some state universities have established such foundations to
receive and dispose of donated equipment because they cannot
dispose of it themselves without legislative consent.
REFERENCES
1. Donald Kennedy, "Government Policies and the Cost of Doing
Research" Science 227: 482 (February 1, 1985).
2. Council for Financial Aid to Education, Inc., Corporate
Support of Education--l982 (New York, 3anuary 19841
3. National Science Board, University-Industry Research
Relationships (Washington, D.C.: National Science
Foundation, October 1982).
4. National Science Board, Industry-University Research
Relationships-Selected Studies (Washington, D.C.: National
Science Foundation, 1983).
5. Eileen L. Collins, An Early Assessment of Three R&D Tax
Incentives Provided by the Economic Recovery Tax Act of
1981 (Washington, D.C.: National Science Foundation, April
1983).
6. R.G. Anderson and R.F. Kane, "An Early Assessment of the
Increased Tax Deduction for R&D Equipment Donations to
Universities" (Washington, D.C.: Arthur Andersen & Co.,
August 1982, prepared for use by the National Science
Foundation).
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597
7. 1W. Bartlett and 1V. Siena, "Research and Development
Limited Partnerships as a Device to Exploit University Owned
Technology," 3ournal of College and University Law 10: 435
(1984).
8. American Enterprise Institute for Public Policy Research, The
R&D Tax Credit-Issues in Tax Policy and Industrial Innovation
cWashington, D.C., May 1983).
9. R.S. Nicholson, "Statement before the Subcommittee on
Oversight, Committee on Ways and Means, U.S. House of
Representatives," August 2, 1984.
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Appendixes
APPENDIX A: R&D EXPENDITURES AT UNIVERSITIES AND
1953-1983
Fed.
State/
Local
Indus-
Inst.
All
FY Total Govt.
Govts.
try
Funds
Other
Current Dollars in Millions
1953 255 138
1954 290 160
1955 312 169
1956 372 213
1957 410 229
1958 456 254
1959 526 306
1960 646 405
1961 763 500
1962 904 613
1978 4,625 3,059 414
1979 5,361 3,595 470
1980 6,060 4,094 494
1981 6,818 4,559 540
1982 7,261 4,749 586
1983 7,745 4,960 599
37
42
47
53
60
19
22
25
29
34
35
38
41
43
49
26
28
30
34
38
39
39
40
40
40
53
58
64
70
79
42
47
52
58
66
41
40
41
42
48
89
103
124
148
181
73
83
93
108
119
55
60
61
70
74
218
223
243
274
305
132
145
165
177
187
84
96
113
123
139
318
370
417
446
514
202
218
259
285
314
170
623
359
68
76
85
95
106
118
132
143
156
164
172
197
219
255
269
295
307
332
364
374
1963 1,081 760
1964 1,275 917
1965 1,474 1,073
1966 1,715 1,261
1967 1,921 1,409
1968 2,149 1,572
1969 2,225 1,600
1970 2,335 1,647
1971 2,500 1,724
1972 2,630 1,795
1973 2,884 1,985
1974 3,023 2,032
1975 3,409 2,288
1976 3,729 2,512
1977 4,067 2,726
193
730
374
236
829
409
288
983
448
326
1,098
503
70
1,231
585
PAGENO="0605"
599
COLLEGES BY YEAR AND SOURCE OF FUNDS: FISCAL YEARS
Constant Dollars in Millions
1953 427 231
1954 480 265
1955 509 276
1956 591 338
1957 628 351
62 32
70 36
77 41
84 46
92 52
1958 682 380 108
1959 772 449 112
1960 929 582 122
1961 1,084 711 135
1962 1,267 859 149
1963 1,490 1,047 163
1964 1,738 1,250 180
1965 1,967 1,431 191
1966 2,228 1,639 203
1967 2,418 1,774 206
1968 2,611 1,910 209
1969 2,582 1,857 229
1970 2,565 1,809 237
1971 2,615 1,803 267
1972 2,630 1,795 269
1973 2,761 1,900 282
1974 2,698 1,813 274
1975 2,767 1,856 269
1976 2,828 1,905 276
1977 2,889 1,937 266
1978 3,077 2,035 275
1979 3,280 2,199 288
1980 3,412 2,305 278
1981 3,490 2,334 276
1982 3,469 2,269 280
1983 3,559 2,279 275
58 79
57 85
57 92
57 99
56 111
67 265
70 259
67 267
73 287
74 305
80 304
86 330
92 338
93 338
99 365
44
46
49
54
58
63
69
75
82
92
160
168
181
185
187
193
195
210
216
223
Fed.
State/
Local
Indus-
Inst.
All
FY Total Govt.
Govts.
try
Funds
Other
59
63
67
68
75
57
123
101
56
140
113
55
165
124
55
192
140
60
228
150
113
414.~
239
118
447
229
133
467
230
147
503
229
156
525
240
170
566
269
SOURCE: National Science Foundation, Academic Science!
Engineering: R&D Funds Fiscal Year 1982 (Washington,
D.C., 1984); and preliminary data for 1983.
PAGENO="0606"
APPENDIX B: CURRENT FUND EXPENDITURES FOR RESEARCH EQUIPMENT AT UNIVERSITIES AND
COLLEGES BY SCIENCE/ENGINEERING FIELD AND SOURCE OF FUNDS: FISCAL YEARS 1982 AND 1983
(Dollars in Thousands)
Total
Field
Federally Financed
Nonfederal
Percent
Percent
1982 1983
1982 1983
Change
1982-1983
1982
1983
Change
1982-1983
Total 408,498 435,402 266,738 273,076 2.4 141,760 162,326 14.5
Engineering 65,861 75,171 43,220 48,837 13.0 22,641 26,334 16.3
Aeron. & Astron. 2,284 2,837 1,376 2,100 52.6 908 737 -18.8
Chemical 6,442 6,172 3,821 3,559 -6.9 2,621 2,613 -.3
Civil 5,164 6,086 2,823 3,422 21.2 2,341 2,664 13.8
Electrical 18,454 20,685 14,058 14,516 3.3 4,396 6,169 40.3
Mechanical 7,390 10,008 4,208 6,563 56.0 3,182 3,445 8.3
Other, NEC 26,127 29,383 16,934 18,677 10.3 9,193 10,706 16.5
Physical Sci. 78,126 79,153 62,642 62,137 -.8 15,484 17,016 9.9
Astronomy 5,127 4,243 3,941 3,465 -12.1 1,186 778 -34.4
Chemistry 33,323 32,826 24,927 23,632 -5.2 8,396 9,194 9.5
Physics 33,189 35,673 28,527 29,588 3.7 4,662 6,085 30.5
Other, NEC 6,487 6,411 5,247 5,452 3.9 1,240 959 -22.7
Environ. Sci. 28,321 31,123 18,423 19,643 6.6 9,898 11,480 16.0
Atmospheric 4,536 5,025 3,287 3,617 10.0 1,249 1,408 12.7
Earth Sci. 10,536 11,584 6,314 6,609 4.7 4,222 4,975 17.8
PAGENO="0607"
NEC, not elsewhere classified.
SOURCE: National Science Foundation, Academic Science/Engineering: R&D Funds Fiscal Year 1983 (In press),
Preliminary Table B-60.
10,928 6,000 6,837
3,586 2,822 2,580
18,177 9,832 11,705
2,668 1,617 1,476
15,509 8,215 10,229
8,879
4,370
15,228
2,556
12,672
199,574
38,921
75,889
78,809
5,955
Oceanography
Other, NEC
Math/Comp. Sd.
Mathematics
Comp. Sci.
Life Sciences
Agric. Sci.
Biol. Sci.
Medical Sci.
Other, NEC
Psychology
~Socia1 Sci.
Economics
~ Pout. Sci.
) Sociology
Other, NEC
2.~ther Sci. NEC
206,587
38,813
75,155
85,942
6,677
13.9
-8.6
19.1
-8.7
24.5
-2.4
-8.2
-4.0
.0
6.8
120,189
11,706
53,183
51,547
3,753
117,342
10,746
51,041
51,546
4,009
4,091
1,006
6,472
1,192
5,280
89,245
28,067
24,114
34,396
2,668
42.1
-35.0
19.9
26.9
18.5
12.4
3.1
6.2
26.2
21.2
5,784 6,526 4,219 4,753 12.7
2,879
1,548
5,396
939
4,457
79,385
27,215
22,706
27,262
2,202
1,565
4,236
1,030
453
1,108
1,645
7,143
8,938
2,907
2,912
1,704
1,911
674
728
765
767
312
319
2,056
1,462
948
939
2,618
4,798
973
926
1,773 13.3
.2
8.0
2.2
-.9
-4.8
8.3
8,461 9,727 5,306 5,747
0
`-I
6,026
1,183
448
523
3,872
42.3
14.9
-1.1
-52.8
135.4
3,155 3,980 26.1
PAGENO="0608"
602
APPENDIX C: FEDERAL INSTRUMENTATION PROGRAMS
Department of Defense:
DOD-University Research
Instrumentation Program
Five-year program to upgrade
university research instru-
mentation sponsored by Army
Research Office, Office of
Naval Research, and Air
Force Office of Scientific
Research.
Program goals:
- To stimulate and support
basic research that fur-
thers the technological
goals of DOD.
- To support the training of
graduate students in the use
of research equipment.
Requests are not considered for
instrumentation with a total
cost to DOD of less than
$50,000 or more than $500,000.
Requests for specialized re-
search configurations of
computers that are devoted
primarily to specific DOD
research programs are con-
sidered, provided that the total
government contribution to the
purchase cost of the computer
equipment does not exceed
$300,000.
Agency, Program Title Description
144
PAGENO="0609"
603
University Matching
Matching is encouraged
but is not required
and is not included in
the criteria used for
evaluating proposals.
DOD funds awarded cannot
be used for buildings or
facilities modification,
although such costs when
borne by the university
or other funding source
may contribute to
matching.
Set-up costs may be
included, but costs for
continued operation and
maintenance must be met
by normal research sup-
port mechanisms.
Annual Volume of Funding
Fiscal year 1983 was Phase
I of the program. Thirty
million dollars was allo-
cated equally among the
three armed services for
each year of the program.
- 2,500 proposals were
received totaling
$645 million in
funding requests.
- 200 awards were made
to more than 80
universities.
Fiscal years 1984 and
1985 comprise Phase II.
Sixty million dollars
will be equally distri-
buted over the two years.
53-277 0 - 86 - 20
PAGENO="0610"
604
Agency, Program Title Description
Department of Energy: Program goal is to stimulate
University Research and support basic research
Instrumentation in those universities with
Program existing DOE support.
Funds are provided for acquisi-
tion costs of instruments.
Costs of renovation and
installation, operation~ and
maintenance, service contracts,
and technical support are not
provided.
The usable life span of the
equipment must be estimated
and the institution's plans for
ensuring its continued availabil-
ity during the first five years
must be demonstrated.
National Science Program provides support for
Foundation: development and construction
Astronomical of state-of-the-art detectors
Instrumentation and and data-handling equipment,
Development procurement of detection and
Program analysis systems for telescopes
at institutions that presently
lack such systems, development
of interactive picture-
processing systems, very long
baseline interferometric
instrumentation, and applica-
tion of new technology and
innovative techniques to
astronomy.
PAGENO="0611"
605
University Matching Annual Volume of Funding
No specific fraction of Five-year program pro-
matching is specified, jected to last through
but the level of match- 1989.
ing will be a factor
in the evaluation of Fiscal year 1984 funding
applications, was $4 million.
Matching can include Fiscal year 1985 funding
shipping/installation is $6 million.
and/or the renovation/
modification of the
physical space where the
instrument will be located.
Matching is not Fiscal year 1981 funding was
required. $5.9 million.
Fiscal year 1982 funding was
$6 million.
Fiscal year 1983 funding was
$6.7 million.
Fiscal year 1984 funding was
$9.6 million.
Fiscal year 1985 funding is
$7.9 million.
PAGENO="0612"
606
Agency, Program Title Description
National Science Program provides funds for
Foundation: purchase of multiple-user
Biological instruments in physiologi-
Instrumentation Program cal, cellular, and molecular
biology.
Program supports the devel-
opment of new instruments that
will either extend current
instrument capability in terms
of sensitivity of resolution or
will provide new and alter-
native techniques for detection
and observation of physical or
biological phenomena.
Funds will not be provided
for space renovation, in-
stallation, maintenance
contracts, technical per-
sonnel, and operation of
commercial instruments.
*However, the university must
describe how maintenance and
operation costs will be met.
Personnel and shop costs may
be requested for instrument
development and construction.
National Science Program provides aid to
Foundation: universities and colleges in
Chemical acquiring major items of
Instrumentation multiuser instrumentation
Program essential for conducting
fundamental research in
chemistry.
PAGENO="0613"
607
University Matching Annual Volume of Funding
Matching is required. Fiscal year 1983 funding
The exact amount (in the was $5 million.
range of 25 to 50 percent)
is negotiated with the Fiscal year 1984 funding
university, was $6.2 million.
Renovation of space and Fiscal year 1985 funding
maintenance are accept- is $7.4 million.
able as part of the
university's matching
only if accompanied
by part of the purchase
price.
Matching is required, Fiscal year 1980 funding
but the amount varies, was $4.2 million.
In fiscal year 1984 the
university share was Fiscal year 1981 funding
33 1/3 percent. was $4.6 million.
Fiscal year 1982 funding was
$4.1 million.
Fiscal year 1983 funding was
$6.4 million.
PAGENO="0614"
608
Agency, Program Title Description
National Science Program does not normally
Foundation: provide support for per-
Chemical sonnel, indirect costs,
Instrumentation installation, or operating
Program costs. When such support is
(continued) necessary during the instal-
lation and start-up period for
complex instrumentation,
detailed justification must be
provided.
The university must provide
information on the annual
budget for maintenance and
operation of the proposed
instrument, other research
support services and total
operating budget, and tech~-
nical support staff and main-
tenance expertise provided by
the department. Proposals are
evaluated on the basis of the
ability of the department to
ensure that the instrument will
be well maintained and eff i-
ciently used.
National Science Program provides support for
Foundation: purchase of special-purpose
Computer Research equipment for computer re-
Equipment Grants search. The equipment must
be necessary for the pursuit
of specific research projects
rather than intended to provide
general computing capacity. It
must be needed by more than
one project and difficult to
justify for one project alone.
The total cost must be at least
$10,000.
PAGENO="0615"
609
University Matching Annual Volume of Funding
Fiscal year 1984 funding
totaled $10.2 million.
- $1.3 million went to
small schools with
primarily undergraduate
programs.
- $80,000 was for a new
program that provides
funds to universities in
states that have not
fared well in funding.
- $2.2 million was for
regional instrumentation
facilities.
- Remainder of funding
was for Ph.D.-granting
institutions for equip-
ment over $50,000.
Fiscal year 1985 funding is
about $10.2 million.
Universities must provide Fiscal year 1980 funding
a minimum of 25 percent of was $2 million.
the cost of the equipment
and first-year main- Fiscal year 1981 funding
tenance as matching. was $1 million.
Fiscal year 1982 funding was
$1.2 million.
Fiscal year 1983 funding was
$1.2 million.
Fiscal year 1984 funding was
$1.4 million.
PAGENO="0616"
610
Agency, Program Title Description
National Science Funds for maintenance during
Foundation: the first year .may also be
Computer Research requested.
Equipment Grants
(continued) The university must provide
a detailed plan for the
maintenance and operation
(M&O) of the instrument
including the annual M&O
budget that the department
will allocate.
National Science Program is intended to meet
Foundation: the need for specialized
Earth Sciences equipment that commonly is
Research Instrumenta- too expensive and of too
tion Program broad a potential use to be
justified by a regular research
proposal.
Program provides funds to
purchase major research
equipment, renovate and
upgrade existing equipment,
and develop new instruments
that will extend current
research capabilities. Sup-
port may be requested for
regional facilities to provide
access to large items of equip-S
ment by a broad segment of the
research community.
Personnel and shop costs may
be requested for equipment
development and construc-
tion. The costs of space
renovation, installation,
maintenance, technical per-
sonnel, and operation of
commercial equipment ordin-
arily are not supported.
PAGENO="0617"
611
University Matching Annual Volume of Funding
Fiscal year 1985 funding
is about $1.5 million.
No specific fraction of
matching is specified,
but the university
contribution is a deter-
mining factor in the award.
The university is encour-
aged to assume the costs
of space renovation,
installation, and main-
tenance as matching
in addition to part of
acquisition cost of
the instrument.
Prior to 1983, funding
was variable with most
money coming from small
research projects.
Funding fcr fiscal years
1980 to 1982 was about
$750,000 per year.
Fiscal year 1983 funding
was $2.5 million.
Fiscal year 1984 funding the
was $5 million.
Fiscal year 1985 funding
is $5 million.
PAGENO="0618"
612
Agency, Program Title Description
National Science The university must describe
Foundation: the provisions for maintenance
Earth Sciences of the equipment or facility
Research Instrumenta- and the source of funds to meet
tion Program the costs of maintenance and
(continued) operation. The ability of the
institution to operate and
maintain the equipment is a
determining factor in the award.
National Science New program that supports
Foundation: research in instrumentation
Engineering-Automation for all engineering disciplines.
Instrumentation and The scope will cover everything
Sensing Systems from fundamental research on
Program instrumentation questions to
research leading to develop-
ment of instrumentation and/or
proof of concept.
National Science Program provides funds to
Foundation: purchase new equipment or to
Engineering Research upgrade existing equipment.
Equipment Grants The equipment should be neces-
sary for pursuit of specific
research projects in areas
normally supported by the
engineering directorate.
Funds are not provided for
space renovation, installation,
maintenance contracts, and the
operation of commercial
instruments. However, the
university must provide a
detailed statement of its
intention to provide
PAGENO="0619"
613
University Matching Annual Volume of Funding
Matching is required, Fiscal year 1980 funding
but is negotiated on a was $2.86 million.
case-by-case basis. The
university share is Fiscal year 1981 funding
expected to be at least was $1.8 million.
33 1/3 percent of the
total cost of each item Fiscal year 1982 funding
of equipment. was $1.9 million.
Fiscal year 1983 funding
was $3.9 million.
Fiscal year 1984 funding
was $7.3 million.
Fiscal year 1985 funding
is about $7 million.
PAGENO="0620"
614
Agency, Program Title Description -
National Science these facilities, if required.
Foundation: The ability of the university
Engineering Research to provide essential supporting
Equipment Grants facilities and maintenance is
(continued) a determining factor in the
award.
National Science Program provides support for
Foundation: purchase of major instruments
Materials Research needed for materials research
Instrumentation and for development of new
Program instruments that extend current
measurement capability.
Costs of space renovation,
installation, maintenance con-S
tracts, technical personnel, and
operation of commercial instru-
ments ordinarily are not sup-
ported. Personnel and shop
costs may be requested for
instrument development and
construction. The ability of the
university to operate and main-
tain the instrument and the ade-
quacy of shop and electronics
support are determining factors
in the award.
National Institutes Program began in 1982 in re-
of Health Division sponse to recognition of the
of Research Resources: long-standing need in the
Research Support biomedical research commun-
Shared Instrumentation ity to cope with rapid tech-
Grants Program nological advances in
instrumentation and the
PAGENO="0621"
615
University Matching Annual Volume of Funding
Matching is required, Fiscal year 1983 funding
but no specific frac- was $4 million.
tion is specified.
The level of funds pro- Fiscal year 1984 funding
vided by the university was $6.5 million.
is a determining factor
in the award. Fiscal year 1985 funding
is $6.5 million.
Assumption by the uni-
versity of costs of
space renovation,
installation, main-
tenance contracts,
and technical personnel
is encouraged.
Matching is not Fiscal year 1982 funding
required. was $3.7 million.
Fiscal year 1983 funding
was $14 million.
Fiscal year 1984 funding
was $19.7 million.
PAGENO="0622"
616
Agency, Program Title Description
National Institutes rapid rate of obsolescence of
Health Division of existing equipment.
of Research Resources:
Research Support Program is a subprogram of
Shared Instrumentation the Biomedical Research
Grants Program Support Grant, and supports
(continued) instrumentation used by three
or more investigators.
Program provides funds to
purchase or update expensive
shared-use equipment which is
not generally available through
other NIH mechanisms. Maxi-
mum award is $300,000.
Program funds the acquisition
of equipment only. The institu-
tion must meet those costs
required to place the equipment
in operational order as well as
maintenance, support person-
nel, and service costs. If the
funds requested do not cover
the total cost of the instru-
ment, an award will not be
made unless the remainder of
the funding is assured. The
institution's ability to provide
continued maintenance of the
equipment is a determining
factor in the award.
National Institutes of Program funds regional and
Health Division of national shared instrumen-
Research Resources: tation centers. Its purpose
Biomedical Research is to develop and provide
Technology Program access to very sophisticated
instrumentation and
PAGENO="0623"
617
University Matching Annual Volume of Funding
Fiscal year 1985 funding
is $31.8 million.
Matching is not required,
although some institu-
tional contribution
is encouraged.
Fiscal year 1980 funding
was $15 million.
Fiscal year 1981 funding
was $F6.8 million.
PAGENO="0624"
618
Agency, Program Title Description
National Institutes of technology needed to solve
Health Division of basic biomedical and
Research Resources: clinical research problems.
Biomedical Research
Technology Program
(continued) These resources include core
research programs for instru-
ment and methods develop-
ment, collaborative research
programs, and programs
providing service for users in
biomedical research. The
program provides funds for
initial instrument purchase and
installation. The grant pays the
full cost of the core research
not otherwise supported and
supports aspects of the program
required to provide access to
outside users, such as per-
sonnel, maintenance, and
supplies.
Awards exceed S300,000, the
ceiling for the BRS Shared
Instrumentation Grants
Program. The scope of the
Biomedical Research Tech-
nology Program is broader--its
facilities are located to maxi-
mize accessibility to a par-
ticular region rather than one
university or department.
National Institutes Program provides funds to
of Health Division institutions having an MBRS
of Research Resources: award for acquisition of new
Minority Biomedical equipment or upgrading of
Research Support existing equipment.
Program
PAGENO="0625"
619
University Matching Annual Volume of Funding
Fiscal year 1982 funding was
$17.7 million.
Fiscal year 1983 funding was
$23.5 million.
Fiscal year 1984 funding was
$31.4 million.
Fiscal year 1985 funding is
estimated to be $30.9 million.
Matching is not Fiscal year 1983 funding
required. was $1.3 million.
Fiscal year 1984 funding
was $1 million.
PAGENO="0626"
620
Agency, Program Title
Description
National Institutes
of Health Division of
Research Resources:
Minority Biomedical
Research Support
Program
(continued)
National Institutes of
Health National Insti-
tute of General Medical
Sciences: Shared In-
strumentation Program
There is no limit on the
cost of instrumentation
requested; however, the
maximum award is $135,000.
When the total cost of the
instrument exceeds $135,000,
an award will not be made
unless the remainder of the
funding is assured.
Support for construction,
renovation, maintenance, or
personnel is not provided.
However, the institution's
commitment to support of
operation and maintenance of
the instrument is a deter-
mining factor in the award.
Program was begun in 1978 to
provide funds for purchasing
new or updating existing
major analytical research
instruments that might not be
justified fully for a single
project, but can serve several
projects on a shared basis.
Program goals are to provide
NIGMS grantees with better
access to modern instrumen-
tation and to promote the
diffusion of new techniques
among potential users.
The program provides funds for
instruments in the $30,000 to
$100,000 price range. When
funds exceeding that amount
are requested, the application
is passed automatically to the
DRR Shared Instrumentation
PAGENO="0627"
621
University Matching Annual Volume of Funding
Fiscal year 1985 funding
is $1 million.
The university is expected Funding for fiscal years
to demonstrate its commit- 1979 and 1980 was $9
ment to the instrument by million.
contributing at least half
the costs for maintenance No awards were made in
and technical support per- fiscal year 1981.
sonnel. In addition, the
university must provide for Fiscal year 1982 funding
installation and any needed was $1.3 million.
renovation of existing
facilities. Fiscal year 1983 funding
was $600,000.
Fiscal year 1984 funding
was $200,000.
Fiscal year 1985 funding
is $270,000.
PAGENO="0628"
Agency, Program Title
622
Description
National Institutes of
Health National Insti-
tute of General Medical
Sciences: Shared In-
strumentation Program
(continued)
Program.
The NIGMS program will con-
tribute to both instrument
maintenance and support
personnel. The amount of
funding extended for the
purpose is determined by
customary review groups.
PAGENO="0629"
623
APPENDIX D: ANALYSIS OF LOAN SUBSIDY PROGRAMS
The potential utility of a loan subsidy program for scientific
equipment is analyzed here in terms of hypothetical models and
cost comparisons. Our assumptions about cost components are
based on the experience of the Guaranteed Student Loan (GSL)
Program.* The category of special allowance in the GSL program
is called interest subsidy in this analysis. (The GSL category
named interest subsidy is the interest paid while the student is in
school and, hence, is not relevant to this analysis.)
We examined three alternatives: loan guarantee, loan guaran-
tee with interest subsidy, and direct loan with low interest. The
analysis uses the following assumptions:.
* Market interest rate is 14 percent.
* Tax-exempt interest rate is 7 percent.
* Interest subsidy (the amount necessary to guarantee the
same rate as tax-exempt borrowing) is 7 percent.
* Funding to be made available to the universities to purchase
R&D equipment is to be increased by $100 million, about 23
percent of total spending on academic equipment in 1983.
* Administrative, insurance, and incidental costs of the loan
programs to the government approximate 22 percent of total
costs, which is the experience of the Guaranteed Student Loan
Program.
*Touche Ross & Co., Study of the Costs and Flows of Capital in
the Guaranteed Student Loan Program, Final Report to the
National Commission on Student Financial Assistance
(Washington, D.C., March 1983).
PAGENO="0630"
624
LOAN GUARANTEE
Federal assistance in the form of a loan guarantee would
primarily affect the credit rating of some universities, thus
increasing their access to capital and reducing their interest
expenses. This reduction, however, is likely to be relatively
small. In addition, a loan guarantee program is not likely to
increase total resources significantly.
LOAN GUARANTEE WITH INTEREST SUBSIDY
The loan guarantee with interest subsidy alternative was
designed to increase the total capital available to universities for
equipment, rather than to reduce the cost of debt for those
already participating in the credit markets for that purpose. If an
interest subsidy reduces the cost of funds to below the tax-
exempt rate the strongest universities can obtain in financial
markets, they might substitute federal loans for their own
money. Universities that are less solid financially, or are in
states that do not authorize the use of tax-exempt bonds for
equipment purchases, could thus be crowded out. In addition, the
total resources available to all universities might increase very
little, if at all. The interest subsidy in this alternative, therefore,
was pegged to achieve an interest rate.roughly the equivalent of
the tax-exempt rate.
Amortization of a $100 million, five-year loan at 14 and 7
percent interest and calculation of the interest ~ubsidy are shown
in Table D-l. The subsidy is a residual of interest payments cal-
culated at 14 percent (assumed market rate) and 7 percent
(assumed tax-exempt rate) and discounted at 7 percent. The
interest subsidy would more than double if the repayment period
were increased to 14 years.
The relative proportions of the costs to the government in this
alternative are shown in Table D-2, which is based partly on the
GSL program. As the table shows, the interest subsidy constitutes
77 percent of the total cost. Administrative costs for the GSL
program tend to be relatively small, between 2 and 3 percent. It
is possible, however, that in a smaller program, such as a loan
guarantee with an interest subsidy, the administrative costs would
be somewhat higher. The overall increase in cost to the govern-
ment, nevertheless, should be negligible. Federal reinsurance,
which accounts for 16 to IS percent of cost in the GSL program,
might be lower in a program of loan guarantees with interest
subsidy, because most loans would be made to institutional
borrowers rather than individuals. A reduction of 3 percent would
PAGENO="0631"
TABLE D-1 Amortization Table for $100 Million, Five-Year Loan
C;'
Year Principal Payment Interest
Repayment of
Principal Balance
Annual Rate of 14 Percent
$100,000,000 $29,128,355 $14,000,000
2 84,871,645 29,128,355 11,882,030
3 67,625,320 29,128,355 9,467,545
4 47,964,510 29,128,355 6,715,031
5 25,551,186 29,128,355 3,577,166
$15,128,355 $84,871,645
17,246,325 67,625,320
19,660,810 47,964,510
22,413,324 25,551,186
25,551,166 (3)
Annual Rate of 7 Percent
$100,000,000 $24,389,069 $ 7,000,000
2 82,610,931 24,389,069 5,78 2,765
3 64,004,627 24,389,069 4,480,324
4 44,095,882 24,389,069 3,086,712
5 22,793,525 24,389,069 1,595,547
$17,389,069 $82,610,931
18,606,304 64,004,627
19,908,745 44,095,882
21,302,357 22,793,525
22,793,522 3
Year Difference in Payment Required
Present Discounted Value
(7 Percent Discount Rate)
I $ 4,739,286
2 4,739,286
3 4,739,286
4 4,739,286
5 4,739,286
$ 4,429,239
4,139,476
3,868,669
3,615,579
3,379,045
Present value of payment difference stream
(interest subsidy)
$19,432,008
SOURCE: Coopers & Lybrand.
PAGENO="0632"
626
TABLE D-2 Cost to the Government of a ~100 Million, Five-Year
Loan Program with Interest Subsidy
Cost (dollars)
Percentage
Interest subsidy
19,432,008
77
Reinsurance
4,290,184
17
Administrative
All other
504,727
1,009,455
2
4
Total gross
25,236,374
Total offsets
2,894,612
Net outlays
22,341,762
SOURCE: Coopers & Lybrand.
be expected to save the government $807,640 on a $100 million
loan program.
DIRECT LOAN PROGRAM
In the direct loan alternative, the government is assumed to
raise $100 million, which it then lends to universities at an inter-
est rate of 7 percent, the rate available in the tax-exempt debt
market. Compared with the loan guarantee with interest subsidy,
this alternative entails small additional transaction costs, to raise
the $100 million, and administrative costs, to manage the two
streams of payables and receivables. On balance, these additional
costs are expected to be negligible.
The key finding of our projections for the direct loan alterna-
tive is that the present discounted value of the cost to the govern-
ment is the same, ~I9,432,008, as for the loan guarantee with
interest subsidy described above, if the government borrows at
the 14 percent rate assumed for the previous projections (see
Table D-l). The reason is that the actual amount of subsidy--the
difference between annual repayments from borrowers at a 7
percent rate, and the combined principal and interest (at 14
percent) falling due each year--is the same in both programs. If
the government is able to borrow the $100 million at a lower rate
of interest (as it might well be able to do in the Treasury bill
market), then the direct loan program is the cheaper of the two.
The direct loan program does involvecertain political
considerations. The first is that the additional government
borrowing would represent an increase in the national debt. The
increase is essentially cosmetic, however, as the amount borrowed
would be repaid, except for the interest subsidy, ~ in the loan
PAGENO="0633"
627
guarantee with interest subsidy program. The second consider a-
tion relates to who receives the subsidies from the government.
In a direct loan program, it would be the investors in the Treasury
bill market (or other lenders to the government). In a loan
guarantee with interest subsidy program, the beneficiaries would
be the banks lending low-interest money to the universities by
receiving federal payments, making total amounts received equal
to receipts from loans at market rates.
PAGENO="0634"
APPENDIX E: REPRESENTATIVE STATE REGULATIONS
Purchasing Controls Financing Controls Utilization Controls
Calif ornia~
All contracts for purchase of Higher education financing No formal controls.
equipment approved by Dept. authority finances facilities General requirements
of General Services, and equipment for independent of demonstrable public
institutions, purpose.
ComRetitive procurement for Public institution financing Joint public-private
all purchases in excess of for facilities may include ventures increasingly
$100. all equipment in original common.
construction or renovations.
Special approvals required Public institution financing
for data processing and may incorporate reserves for
telecommunications equipment. additions and improvements;
unclear if replacement may
be included.
Act applies only to public Legislation introduced to allow
institutions, public institutions to participate
in pooled equipment issues.
PAGENO="0635"
Purchasing Controls Financing Controls Utilization Controls
California (continued)
Public institution boards
have delegated authority
to approve contracts up
to defined limits.
Legislation introduced for high
technology financing for public
and independent higher education.
Connecticu tb
All contracts by Dept.
of Admin. Services, unless
DAS authorizes other state
agency to acquire directly.
DAS established equipment
standardization rules for
all agencies. May author-
ize noncompetitive procure-
ment in emergencies.
Competitive procurement required
for purchases above $6,000;
Health & education facilities
authority finances equipment
and facilities for public and
independent institutions.
Equipment financing only as
incident to facilities
projects.
Public and independent
institutions may jointly
use any facilities and
equipment.
Extensive use of quasi-
public corporations for
ownership of property
both tangible and intel~
lectual.
PAGENO="0636"
Purchasing Controls Financing Controls Utilization Controls
Connecticut (continued)
below ~6,000 preferred; not
required below $300.
Special rules for data proces-
sing and "similar" equipment
set by DAS, but may waive for
other agencies.
Georgiac.
All equipment purchases
through Dept. of Admin. Ser-
vices from certified sources,
with preference for items
produced in-state.
DAS set standard specifi-
cations for all equipment.
Public and independent
institutions have separate
higher education financing
authorities.
For private institutions,
equipment financed only as
part of original construction
or renovation.
No explicit limitations.
All property of public
universities vests with
Board of Regents but can
be alienated only with
approval of Governor.
PAGENO="0637"
Purchasing Controls Financing Controls Utilization Controls
Georgia (continued)
Competitive procurement except
if cost under $500 or contin-
uing procurement.
Technical instruments and
supplies exempted from most
purchasing controls, as is
acquisition from U.S. govt.
DAS administers statewide
telecommunications and EDP,
but universities exempted
from mandatory provisions.
Illinoisci
For public institutions,
equipment may be separately
financed.
Purchasing carried out by
each public agency, except
for specified categories.
Educational facilities
authority finances facil-
ities and equipment of
independent institutions.
Higher Education Cooper-
ation Act encourages
interinstitutional coop-
eration; has been defined
to extend to cooperation
between institutions and
other public or nonprofit
entities.
PAGENO="0638"
Purchasing Controls Financing Controls Utilization Controls
illinois (continued)
Competitive procurement
required for equipment over
$2,500; preferred for all.
EFA may issue pooled
equipment bonds.
Statutory limitations on
nonpublic use of equip-
ment.
Special controls for leasing
of computer and telecommunica-
tions equipment.
Public institutions may
issue revenue bonds; other
financing through general
obligations of state.
Statutory limitation on term
of all contracts, including leases;
one-year maximum or appropriations
period, with some exceptions.
Capital development authority
finances public facilities,
including appurtenant equipment.
Iowa~
Board of Regents conducts
purchasing for public
institutions.
Financing of equipment at
public institutions only as
part of facilities construc-
tion project.
No direct controls.
PAGENO="0639"
Purchasing Controls Financing Controls Utilization Controls
Iowa (continued)
Advertise competitively for
all procurements in excess
of $25,000. Limited competi-
tion for other procurement.
Operating funds requisitioned
on as-needed basis within
appropriated, sums.
No private institution financing
agency.
Kentuckyl
Institutions may elect to
control own purchasing
bounded by provisions of
the state's Model Procure-
ment Code.
Smaller institutions may choose
to use services of central stores,
if greater savings can be achieved
by having state order large quan-
tities of certain items.
Institutions have responsi-
bility for financing of
capital projects.
No state controls--
institutions may have
authority to provide best
use of money for ser~
vices rendered and goods
purchased.
PAGENO="0640"
Purchasing Controls Financing Controls Utilization Controls
Maryland~
Centralized control for all
equipment acquisitions for
public institutions, through
Board of Public Works.
Public institutions may
capitalize equipment and
finance through general
obligation bonds if useful
life in excess of 15 years.
Strong statutory limita-
tions on public univer-
sity involvement in
for-profit ventures.
Preference for Maryland
suppliers.
Special rule for acquisition
of computers and software,
with additional approval steps.
(But legislation introduced to
exempt all computer procurements
for academic or research purposes.)
Competitive sealed bids for items
in excess of $750; agencies can
adopt "small procurement procedures"
for lesser amounts.
No higher education facilities
authority for private institutions.
Some limited use of industrial
revenue bond authority for comparable
purposes.
Extensive development of joint
venture financing.
PAGENO="0641"
Purchasing Controls Financing Controls Utilization Controls
Maryland (continued)
Strict review of equipment requi-
sition by BPW, with power to
recommend substitution of
"equivalents."
New Yorkt~
Purchasing by individual
public system (State Univ.
of NY, City Univ. of NY,
statutory colleges, com-
munity college dists).
Purchases under $100 exempt
from competitive procurement;
up to $5,000 need not adver-
tise for bids; beyond $5,000
full competitive procurement.
State Univ. Const. Fund and
CUNY and Dormitory Auth.
equivalents may exempt con-
tracts under $20,000.
Public financing agencies
(State Univ. Const. Fund
and City Univ. Const. Fund)
may finance equipment as well
as facilities.
State Dormitory Authority may
finance facilities for lease
to private institutions, with
appurtenant equipment.
Dependent upon public
system.
PAGENO="0642"
Purchasing Controls Financing Controls Utilization Controls
North CarolinaL
Secretary of Administration
receives requisitions and
makes purchases on behalf of
state agencies, except Univ.
of North Carolina and com-
munity colleges.
Higher education facilities
authority proposed but
recently defeated in referendum.
Extensive joint public-
private activity.
Competitive sealed bids for
all purchases in excess of
$5,000; Advisory Budget Com-
mittee sets requirements for
lesser amounts.
Public financing includes
equipment appurtenant to
facilities project.
Extensive use of quasi-
governmental entities.
Virginial
All purchases made with
state funds must be by Dept.
of General Services.
Higher education facilities
authority finances equipment
as part of facilities project,
but may allow acquisition of
equipment for "a period" after
construction is completed.
Statutory authority for
public institutions to
contract with private
institutions for ser-
vices and facilities.
PAGENO="0643"
Purchasing Controls Financing Controls Utilization Controls
Virginia (continued)
DGS standardizes all pur-
chases and must grant waivers
for exceptions.
DGS may exempt purchases
below specified amount from
its direct control, and may
exempt classes of equipment.
DG'S may authorize state agen-
cies to purchase directly;
has done so for most higher
education.
Industrial Revenue Bond Act
may be used to equip educa-
tional facilities (private),
separate from construction.
Public institution financing
of equipment as part of con-
struction project.
Legislation approved for
joicit public institu-
tion-private sector high
tech R&D activities;
created Center for
Innovative Technology.
CA~
All contracts competitive,
with preference for Virginia
goods.
Agencies may set procedures for
noncompetitive procurement for
items less than $10,000, or
available from a sole source.
PAGENO="0644"
~Ca1. Pub. Con. Code sections 10290-12121, 20650-20659; Ca!. Educ. Code sections 81651-56, 81800-10,
94100-94213; Cal. Gov't. Code sections 11005, 13332-13332.16.
~Conn. Gen. Stat. Ann. sections 3-116a, 3-116b, 4-23j, 4-23k, 4-34, 4-36, 4-69 to 4-124, lOa-22, IOa-89,
lOa-98 to IOa-98g, lOa-110 to ba-I lOg, IOa-126 to lOa-136, IOa-150, IOa-176 to lOa-198.
~Ga. Code sections 20-3-53 to 20-3-60, 20-3-150 to 20-3-214, 50-5-10 to 50-5-11, 50-5-50 to 50-5-81,
50-5-160 to 50-5-169, 50-16-81, 50-16-160 to 50-16-162.
~I11. Rev. Stat. ch. 172, sections 213.1 et seq., 307 et seq., 751 et seq.; ch. 144, sections 68 et seq.,
181 et seq., 351 et seq., 1201 et seq., 1301 et seq.
~Iowa Code Ann. ch. 262, ch. 262A, ch. 263A.
tKy. Rev. Stat. section 164.026; ch. 45A.
gMd. Ann. Code art. XII, sections 12-101 to 12-106; art. XVII, sections 17-101 to 17-107.
!1N.Y. Educ. Law, tit. 1, art. 8-A, sections 370, 376;tit. 7, art. 125, sections 6201, 6213; tit. 7, art. 125-B,
~ections 6270, 6275.
~N.C. Gen. Stat. sections 116-53, 143-2' to 143-7, 143-49 to 143-56.
LVa. Code sections 2.1-422 to 2.1-548, 11-35 to 11-80, 15.1-1373 to 15.1-139!, 23-9.10:3, 23-14 to 23-30.03,
23-30.39 to 23-30.58.
SOURCE: Coopers & Lybrand.
PAGENO="0645"
639
APPENDIX F: REPRESENTATIVE STATE STATUTES AUTHORIZING
THE ISSUANCE OF BONDS TO FUND HIGHER EDUCATION
FACILITIES
Equipment Included
After-Acquired
.
If Part of New
Construction or
Equipment*
Includable as
State/Statutes
Major Renovation
Separate Project
ALABAMA
Educational Building
Authorities Act, Ala.
Code Sec. 16-17-I to
16-17-19 (1983) Yes Yes
ARIZONA
Industrial Development
Plans for Municipal-
ities and Counties, Ariz.
Rev. Stat. Ann. Sec.
9-1151 to 9-1 196 (1983) Yes No
CALIFORNIA
California Educational
Facilities Authority Act,
Cal. Educ. Code Sec.
94100-94213 (1983) Yes Yes
CONNECTICUT
Connecticut Health and
Educational Facilities
Authority, Conn. Gen.
Stat. Ann. Sec. 10a-176
to lOa-l98 (1983) Yes Pending
DISTRICT OF COLUMBIA
Taxation and Fiscal
Affairs, D.C. Code Ann.
Sec. 47-321 to 47-334
(1983) Yes Yes
PAGENO="0646"
640
Equipment Included
After-Acquired
If Part of New
Equipment
Construction or
Includable as
State/Statutes Major Renovation
Separate Project
FLORIDA
Higher Education Facil-
ities Authority Law,
Fla. Stat. Ann. Sec.
243.18 243.40 (1983) Yes No
GEORGIA
Private Colleges and
Universities Authority
Act, Ga. Code Ann. Sec.
20-3-200 to 20-3-214
(198); Georgia Educa-
tion Authority (Univer-
sity) Act, Ga. Code
Ann. Sec. 20-3-150
to 20-3-181 (1983) Yes Varies**
ILLINOIS
Educational Facilities
Authority Act, ill. Rev.
Stat. ch. 144, Sec. 1301-
1326 (1981); Board of
Regents Revenue Bond Act
of 1967, III. Rev. Stat.
ch. 144, Sec. 351-363
(1983); Bonds for Perma-
nent Improvements at State
Educational Institutions
Ill. Rev. Stat. ch. 127,
Sec. 307-313 (1983); Capi-
tal Development Bond Act
of 1972, 111. Rev. Stat.
ch. 127, Sec. 751-765
(1983); State Colleges and
Universities Revenue Bond
Act of 1967, III. Rev.
Stat. ch. 144, Sec. 1201-
1213 (1983); illinois
Building Authority Act, ill.
Rev. Stat. ch. 127, Sec.
213.1-I to 213.16 (1983) Yes Varies**
PAGENO="0647"
641
Equipment Included
After-Acquired
If Part of New
Equipment
Construction or
Includable as
State/Statutes Major Renovation
Separate Project
INDIANA
Indiana Educational
Facilities Authority
Act, md. Code Ann.
Sec. 20-12-63-I to
20-l2-63--29 (1983) Yes Yes
IOWA
State Universities
Buildings Facilities
and Services Revenue
Bonds, Iowa Code Ann.
Sec. 262A. I -262A.1 3;
Medical and Hospital
Buildings at Univer-
sity of Iowa, Iowa
Code Ann. Sec.
263A.1-263A.ll Yes No
KENTUCKY
Property and Buildings
Commission, Ky. Rev.
Stat. Sec. 56.440-
56.495 Yes No
MINNESOTA
Minnesota Higher
Education Facilities
Authority, Minn.
Stat. Ann. Sec.
136A.25-l36A.55 (1983) Yes Pending
NEW ~JERSEY
New 3ersey Education-
al Facilities Author-
ity Law, NJ. Rev.
Stat. Sec. 18A:172A-1
to 18A:72A-39 (1983) Yes No
PAGENO="0648"
642
Equipment Included
If Part of New
Construction or
After-Acquired
Equipment
Includable as
State/Statutes
Major Renovation
Separate Project
NEW YORK
City University Con-
struction Fund Act,
N.Y. Educ. Law Sec.
6270-6282; State Uni-
versity Construction
Fund Act, N.Y. Educ.
Law Sec. 370-384;
Board of Higher Educa-
tion in the City of
New York, N.Y. Educ.
Law Sec. 6201-6216;
New York Dormitory
Authority Act, N.Y.
Pub. Auth. Law Sec.
1675-1694 Yes Varies**
OHIO
Higher Educational
Facility Commission,
Ohio Rev. Code Ann.
Sec. 3377.01-3377.16 Yes No
SOUTH CAROLINA
Educational Facilities
Authority Act for Pri-
vate Nonprofit Insti-
tutions of Higher
Learning, S.C. Code
Ann. Sec. 59-109-10
to 59-109-180 Yes No
TEXAS
Higher Education
Authority Act, Tex.
Educ. Code Ann.
Sec. 53.01-53.46 Yes No
PAGENO="0649"
643
Equipment Included
After-Acquired
If Part of New
Construction or
Equipment
Includable as
State/Statutes Major Renovation
Separate Project
VERMONT
Educational and Health
Buildings Financing
Agency, Vt. Stat. Ann.
tit. 16, Sec. 3851-3862 Yes No
VIRGINIA
Industrial Development
and Revenue Bond Act,
Va. Code Sec. 15.1-1373
to 15.1-1391 (1983);
Bonds and Other Obliga-
tions, Va. Code Sec.
23-14 to 23-30.03
(1983); Educational
Facilities Authority
Act, Va. Code Sec.
23-30.39 to 23-30.58
(1983) Yes Yes
WASHINGTON
Washington Higher
Education Facilities
Authority, Wash.
Rev. Code Ann. Sec.
28B.07.0l 0-28B.07.920
(1984); Wash. Rev.
Code Ann. Sec.
28B. 10.300-
28B.l0-335 (1984) Yes No
* Equipment acquired after construction of the facility.
** At least one, but not all, of the identified statutes in these states
extends to after-acquired equipment.
SOURCE: Coopers & Lybrand.
PAGENO="0650"
644
APPENDIX G: IOWA STATE UNIVERSITY
RESEARCH EQUIPMENT ASSISTANCE PROGRAM
THE BEGINNING OF REAP
The Research Equipment Assistance Program (REAP) at Iowa
State University (ISU) was developed in the early l970s because of
a suggestion made by an advisory committee studying equipment
problems at the university. This committee believed that an
equipment sharing and loan program would make it easier for
faculty members contemplating projects involving equipment to
perform preliminary experiments. Implementation began with the
part-time efforts of the late Alfred J. Bureau, then Assistant
Professor of Physics, and Roger G. Ditzel, then Assistant to the
Vice-President for Research. As a result of initial studies, a
project was initiated in September 1972 to gather information on
the use and availability of major research equipment at the uni-
versity.
On February 1, 1974, the National Science Foundation Re-
search Management Improvement Program funded a research
proposal on this subject submitted by Iowa State University. The
objective of this research was to develop and demonstrate a sys-
tem for improved utilization of high-value research equipment
that would increase research productivity. The functions involved
in the research program included (I) information gathering, (2)
inquiry processing based on requests representing equipment
needs, (3) user education, (4) computer support, and (5) main-
tenance, replacement, and storage requirement studies.
Through this study, it was determined that any equipment
assistance system should provide:
* a means of identifying and locating usable, highly diversi-
fied research equipment to allow planned research to be con-
ducted without unnecessary new item purchases;
* information on availability for use by others of equipment
items assigned to and used part of the time by one individual or
research unit;
* a means of identifying unused equipment so that provision
can be made for proper storage and necessary maintenance;
* a capability for knowledgeable decision making relative to
disposal of obsolete or high maintenance cost items; and
* a means of retrieving problem-solving types of informa-
tion, for example, potential spare parts sources on the campus.
A boundary condition on any such system exists and must be
recognized in its structuring and implementation. That boundary
PAGENO="0651"
645
is one of acceptance by the university researcher. No matter how
sophisticated or well planned the system, it cannot succeed with-
out the overt cooperation of the majority of researchers. If re-
searchers perceive it as "taking their equipment away," they will
not cooperate.
RESULTS OF THE RESEARCH PRO3ECT
As a result of the research project, investigators believed it
was possible and economically feasible to implement an equip-
ment information and sharing system to improve the productivity
of university research personnel. With proper structuring and a
low-key, nonthreatening introduction of a system designed to be
responsive to needs, it was thought that researchers would co-
operate and take advantage of the benefits offered.
When the grant period ended, over 2,500 items of research
equipment had been examined and cataloged, acceptance by ISU
researchers of the philosophy and mechanics of sharing had been
achieved, and four volumes of information on the developed
system, plus videotapes and slide shows, were made available to
other universities.
RESEARCH COMPLETED; REAP CONTINUES
Because of the successful findings of the research study, the
university has continued to support the REAP program since the
grant expired. The program is administe~'ed by the Office of the
Vice-President for Research. By 1974, a central office was estab-
lished to serve as a communications center and focal point for the
program and was staffed by a full-time clerk. This office is pur-
posely located in an education and research building and not in the
central administrative building. (It was felt that faculty members
might be more comfortable and willing to use the service if it
were in their own setting.)
The central office handles all inquiries and information proces-
sing. An inquiry is defined as a request to the REAP central
office for assistance in relation to equipment. The inquiry may
relate to the need for equipment, spare parts, operating manuals,
help in definition of equipment needs to carry out a certain task,
etc. Inquiries may be satisfied by a loan of equipment from the
REAP office to the researcher's department, by a loan from one
department to another, by researchers' sharing a piece of equip-
ment in the same location, by finding minor parts, by providing
information or manuals, or by referring the inquirer to others who
have the same equipment. Since the inception of the program,
PAGENO="0652"
646
the rate of inquiries has greatly increased. The tabulation below
shows the total inquiries for the 12 years 1973-1984 and includes
the number of those inquiries satisfied or not satisfied. It has
been found that the high success rate in satisfying inquiries has
been a major factor in the positive image the REAP program
enjoys.
REAP Inquiries
calendar Year
Total
Number
Number
Satisfied
Number
Unsatisfied
1973
42
33
9
1974
208
168
40
1975
395
335
60
1976
953
799
154
1977
2,236
1,754
482
1978
2,108
1,672
436
1979
1,924
1,724
200
1980
2,201
2,012
189
1981
2,322
2,175
147
1982
2,173
2,029
.144
1983
2,021
1,904
117
1984*
1,445
1,412
33
*Includes nine months of data (lanuary-September).
REAP CATALOG
One of the first goals of REAP was to generate a catalog of
existing equipment, with an estimate of the availability of the
equipment for loan or transfer. The 3une 1984 listing contained
nearly 10,000 items (each with an initial acquisition cost of $500
or more) having a total value of nearly $30 million. It is esti-
mated that about 90 percent of all research equipment on campus
is recorded in the computerized REAP catalog.
RESEARCH TECHNICAL ASSISTANCE GROUP
One function of the program that has proven to be excep-
tionally successful has been the capability of providing expert
repair and calibration of most items of equipment. This has led to
the recent development of a separate program known as the Re-
search Technical Assistance Group (RTAG). RTAG complements
PAGENO="0653"
647
the repair service of other university shops by offering minor
repairs of balances, microscopes, nuclear counting systems, mass
spectrometers, gas chromatographs, spectrophotometers, and
electron microscopes. A major service is the diagnosing of equip-
ment problems with subsequent referral to other university repair
shops.
SUCCESSOF REAP
Perhaps the ultimate testimony to the importance of REAP
was provided in 1978 by an "important notice" addressed to the
presidents of U.S. universities by Richard C. Atkinson, then
Director of NSF. In it he called attention to the Iowa State REAP
system and recommended that others follow suit.
The value of REAP and its spin-off, RTAG, to Iowa State
University is great. The number of inquiries alone proves that the
program is popular and heavily used. In terms of actual dollars
saved due to satisfied inquiries, records indicate that the REAP
program has saved the university nearly $4 million since it began
in 1973. In estimating equipment value as a benefit, the gross
value of the item is not used. Instead, the length of time of the
loan is taken into account and a "pro rata" value used, in order to
arrive at a realistic equipment benefit value. Any equipment on
loan for more than 100 days (which includes permanent transfers
as well) is assumed to have produced savings equivalent to the full
value of the equipment.
The following system is used based on acquisition cost or value
of the item:
* three percent per day for a loan span of one to three days,
* ten percent per week for a time span of four days to three
weeks,
* thirty percent per month for a time span of three weeks to 3
1/3 months, and
* one hundred percent for loans over 3 1/3 months.
For low-value items, a minimum transaction value of $5 is used.
This method for computing savings has been approved by the
General Accounting Office in Washington, D.C.
In addition to the savings mentioned above, many dollars are
saved by RTAG's ability to make expensiveequipment repairs
(which sometimes results in the elimination of expensive service
contracts).
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QUESTIONS
For further information regarding the REAP program at Iowa
State University, please contact Wayne Stensland, Manager,
REAP, 103 Physics, Iowa State University, Ames, IA 50011
(telephone: 515/294-5536).
SOURCE: Vice-President for Research, Iowa State University
(October 1984).
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APPENDIX H: EXAMPLES OF DEBT FINANCING
EXAMPLE 1: REVENUE BOND ISSUE BY STATE UNIVERSITY
Description
Revenue bonds were issued by a state university to finance:
* refunding of existing notes,
* construction of new facilities at the university
hospital,
* debt service reserve of the new issue, equaling the
maximum annual debt service,
* construction period interest, and
* expenses incurred for bond issuance.
The bonds represent a limited obligation of the university
regents and are secured by the gross revenues of the hospital. The
bonds do not represent a debt obligation of the state.
Decision Factors
There are three main reasons why the university issued
long-term debt.
1. The university hospital's funding requirement was
substantial. The revenue bonds allowed the institution to
minimize its borrowing cost, raise the necessary capital, and
provide a debt repayment schedule that could be met out of
hospital revenues.
2. The project was long term and included the construction of
new buildings. The bonds allow the institution to match the life
of the asset to the period over which the debt will be repaid.
3. During the past decade, the issuance of revenue bonds has
become the primary source of capital for construction projects
and major equipment purchases.
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Terms
Amount of Issue: $110,000,000.
Period: The total issue was for 30 years. How-
ever, the individual bonds have matur-
ities scheduled annually over the 30
years. The university also has the
option to buy back the bonds from the
investors before the maturity date (i.e.,
early redemption of bond).
Interest Rate: Varies by bond dependent upon the date
of maturity. The interest rate ranges
from 6.5 percent to 9.875 percent. The
interest rate on the bond is referred to
as the coupon rate.
Additional Fees: The issuance cost of the bonds totaled
$3.5 million, which included financing
and related costs and original issue
discount.
Security Required A portion of the bond proceeds was
by Lender: set aside to establish a debt service
reserve fund.
Terms Required The bond represents a limited
by Borrower: obligation of the university and is
secured by the hospital's revenue.
Type of Project: Ambulatory care facility.
Features
Obligation
The bonds are secured by the financial resources of the
hospital. The hospital is required to maintain certain financial
operating ratios, which would ensure that there are sufficient
funds to meet the bond debt service. The rate covenant states,
The hospital's annual net revenues (gross revenues minus
expenses) are at least 125 percent of the annual debt
service payments (interest plus principal).
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If this ratio is not maintained, the university regents are respon-
sible for taking corrective action. The bonds will be serviced by
the revenues generated by the institution and the debt service
reserve fund.
Security
The bonds are secured by the debt service reserve fund, which
is established at the time the bonds are sold. The reserve
contains sufficient funds to cover the maximum possible annual
debt service.
Preparation of Official Statement
The revenue bond statement presents detailed financial
information on the university and the hospital to demonstrate the
source of revenues to potential investors.
Additionally, a detailed financial feasibility study was pre-
pared for the construction project. These studies are used both to
demonstrate financial soundness to investors and, when necessary,
to provide required data for the State Certificate of Need
process, through which state health planning agencies control the
expansion of health care facilities. In this study, the investor was
shown:
* assessment of the need for hospital services in the area,
* review of economic factors that would affect the success of
hospital operations,
* review of forecasts for the hospital's utilization rates for
services, and
* review of the financial forecasts, including the factors
influencing revenue and cost estimates.
EXAMPLE 2: REVENUE BOND POOL
Description
Revenue notes were issued by a state educational authority to
finance equipment purchases and rehabilitation projects for 15
private colleges within the state. The notes are limited obliga-
tions of the authority, payable only out of revenues and pledged
funds of the participating private institutions. The revenues
consist primarily of the loan repayments made by the colleges
according to their debt repayment schedule as stated in their
individual loan agreements with the authority.
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Decision Factor
Fifteen institutions participated in the program.
The individual institutions' loans ranged from $17,745,000 to
$120,000 for a period of two to seven years. One institution, a
large private university, had the largest loan amount of $1 7.7
million for equipment acquisition and construction over a five- to
seven-year period. Participation in the pool provided both large
and small institutions access to tax-exempt debt. Generally, only
large institutions would be able to issue their own bonds because
of their established credit ratings.
Terms
Amount of Issue: Total issue was approximately $50
million.
Period: The issue has maturities scheduled over
two- to seven-year periods as stated on
the individual bonds.
Interest Rate: Varies by bond dependent upon the date
of maturity. The interest rate ranges
* from 6.25 percent to 8.75 percent.
The interest rate on the bond is
referred to as the coupon rate.
Additional Fees: The issuance cost of the bonds totaled
$2 million, including basic issuance
cost, insurance premium, and under-
writers' discount.
Security Required $5 million of the bond proceeds
by Lender: were set aside to establish a debt
service reserve.
Terms Required The participating institutions
by Borrower: enter into an individual loan agreement
with the educational foundation
authority.
Type of Equipment: Computers and other equipment for
research, telecommunications, and
energy conservation; and building
renovations.
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Features
Administration
Each college or university enters into a separate loan agree-
ment with the authority. These loan agreements are based on the
useful life of the college's equipment purchase and the college's
credit worthiness. The college is required to make semiannual
debt service payments to the authority, reflecting principal and
interest payments, insurance premium amortization, issuance cost
amortization, administrative cost, investment earnings shortfall,
and any other authority-required payment.
Credit Requirements
The participating colleges entered into three types of loan
agreements: (1) an unsecured general obligation to make debt
service payments; (2) a general obligation to make debt service
payments secured by real or personal property of the college; and
(3) a general obligation to make debt service payments secured by
real or personal property of the college, as well as a bank letter
of credit.
In this issue, the pool includes both colleges with strong credit
ratings and those without any proven credit experience. The
three types of loan agreements provide for the necessary credit
enhancements to obtain a favorable credit rating for the issue
without penalizing the financially stronger colleges with a higher
interest rate than these larger institutions would normally obtain
on an individual bond.
Evaluation Criteria
The authority and the insurer of the issue reviewed the indi-
vidual college's financial condition to determine eligibility in the
program. Thecolleges were required to maintain a minimum
two-to-one available assets to general liabilities ratio for the
latest fiscal year, as well as to generate positive unrestricted
current fund earnings after expenditures and mandatory trans-
fers. Additionally, nonfinancial indicators were reviewed, such as
enrollment data and trends.
Special Considerations
The insurer has committed to the issue an insurance policy
that will insure the payment of principal of and interest pn the
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bond. In the event there are not sufficient amounts available in
the debt service fund and the debt service reserve fund to make
debt service payments, the authority's trustee notifies the insurer
of the deficient amount, and the insurer is obligated to pay the
deficient amount according to the terms of the insurance policy.
EXAMPLE 3: INDUSTRIAL DEVELOPMENT BOND
Description
The industrial development bonds were issued by two county
development authorities to provide funds to the research foun-
dation for the construction of and equipment for a scientific and
technical research facility and the purchase of an existing re-
search facility from a private corporation. The research foun-
dation, a state nonprofit corporation, has entered into a loan
agreement with each issuer, in which the issuers loan the bond
proceeds to the foundation for the research facility projects. The
loan agreements require the foundation to pay the principal,
premium (if any), and interest on the bonds, together with all
associated costs and expenses. The foundation will lease the
facilities to an affiliated research corporation of the state
university and to a private corporation. The lease to the private
corporation is incidental to the transaction with only a small
portion leased back to the corporation selling the facility as a
condition of the sale. These lease payments will be the revenue
source for the debt repayment. The university has planned to
fund its lease payments (i.e., bond retirement) entirely through
indirect cost recovery.
Decision Factor
The university had considered raising the funds through a state
building authority. However, the construction costs would have
been $25 per square foot higher under the state authority than
with the industrial development bonds. Additionally, the state
building authority's financing process is oriented to academic
rather than research projects; it is cumbersome and slow, with
numerous regulations. In issuing the industrial development
bonds, there is some risk if the federal government contests the
arms' length relationship between the university and the foun-
dation. However, in the instant case, the arm's length relation-
ship has been recognized by the government.
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Terms
Amount of Two Approximately $17.2 million and
Issues: $7.3 million.
Period: The larger issue has maturities scheduled
over 1- to 20-year periods as stated on the
individual bonds. The smaller issue has
maturities varying over 10 years.
Interest Rate: Varies by bond dependent upon the date
of maturity. The interest rate ranges
from 5.5 percent to 9.625 percent. The
interest rate on the bond is referred to
as the coupon rate. Additionally, 1.25
percent of the amount of 103 percent
of outstanding bonds is payable annually
as a letter of credit fee.
Additional Fees: The issuance cost of the bonds totaled
$696,000, including financing, legal,
printing, and miscellaneous expenses.
Legal fees alone were $90,000. The
first year's letter of credit fee was
$340,000.
Security Required As part of the debt service require-
by Lender: ments, a sinking fund will be started in
year 13 for bonds maturing in year 20.
(Note: A sinking fund represents an
accumulation of funds by the issuer
over a period of time to be used for
retirement of debt, either periodically
or at one time.) The letter of credit
bank required security interests in the
assets of the projects.
Terms Required Though two counties issued the
by Borrower: industrial development bond, the bonds
are to be repaid by the foundation.
Type of Project: The smaller issue was used by the
foundation to purchase and renovate an
existing research complex consisting of
50+ acres of land and 130,000 square
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feet of office and laboratory space.
The larger issue was used to purchase
land and to design and construct a
six-story 190,000 square foot laboratory
building adjacent to the campus.
Features
Obligation
The bond investors will look to the letter of credit bank, which
will look to the foundation for repayment. The bonds are a limited
obligation of the issuing authorities and do not represent any
indebtedness of the state.
Security
The primary security for the issue is the letters of credit and
confirming letters of credit. In the event the foundation defaults
on its loan agreement, the bond trustee will draw the necessary
funds from the letter of credit bank to buy all bonds from the
bond holders. If the letter of credit bank dishonors its obligation,
the bond trustee will draw upon the confirming letter of credit
bank to make payment. This arrangement allowed a Standard &
Poor's AAA rating, though the foundation was essentially without
assets. The letter of credit banks are secured by security inter-
ests in the research facility's land, buildings, and equipment. The
foundation has assigned the facility's rents and leases. The uni-
versity's affiliated research corporation is obligated to pay one
year's debt service to the letter of credit bank in the event of
foundation default and agrees to maintain its net worth at least at
that level.
Administration
The foundation was formed for the purpose of supporting
research activities of public and nonprofit colleges and univer-
sities i~ the state. It is considered a charitable, educational, and
scientific organization exempt from federal income taxes. The
foundation has no plans to undertake any fundraising and expects
to rely upon rent charges from the research institute for the use
of the facilities. The foundation has no long-term lease or con-
tractual commitments from the research institute and its
affiliated university.
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EXAMPLE 4: STATE UNIVERSITY LINE OF CREDIT
Description
The university established a standby line of credit with a state
commercial bank for the purpose of purchasing self-liquidating
equipment. The line of credit is drawn upon by department heads
or principal investigators on an as-needed, project-by-project
basis. Their requests for funds are presented in loan agreements
that specify the use of funds, the period of need, and the revenue
source for repayment. Once these requests are reviewed, the
funds are drawn from the line of credit within funding limits set
by the Board of Regents and the lending limit agreed to by the
bank.
Decision Factor
The university had experienced difficulty in finding adequate
funding for equipment related to instructional and research
activity. Funds from general operating budgets had been largely
used for instructional equipment needs and had not adequately
met the needs of the research programs. The university has found
that its faculty's ability to continue a high level of externally
sponsored research is dependent on its ability to obtain state-of-
the-art equipment. With the recent changes in 0MB Circular
A-2l which allow the university to be reimbursed for interest on
equipment purchases over $10,000, the university decided to
obtain a line of credit, which could be used to acquire self-
liquidating equipment over $50,000. Equipment financed through
the line of credit in connection with external grant or contract
arrangements would qualify as self-liquidating because both
principal and interest on borrowed funds would be fully recovered
from the grant or contract over the financing term.
Since establishing the equipment financing plan, the university
has encountered some difficulty in receiving specific grant
approvalfrom at least one agency for the reimbursement of
financing cost. When the line of credit plan was being considered,
a description of the plan was sent to and discussed with Depart-
ment of Health and Human Services, National Institutes of
Health, National Science Foundation, Office of Naval Research,
and the National Aeronautics and Space Administration. All
agreed that the plan was appropriate and conformed to A-2 I
guidelines.
The line of credit has only been used to acquire equipment for
one grant. The cost of the equipment will be covered by the grant
funds. However, the interest costs are being paid out of a private
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gift fund because the sponsoring agency denied the request for
reimbursement of interest cost.
Terms
Amount of Issue: The ceiling for the line of credit was
negotiated at $2 million.
Period: The line of credit was negotiated for a
five-year period with options to renew.
Either the bank or university can ter-
minate the contract at any time except
with respect to outstanding loans.
Interest Rate: Stated at about two-thirds of the bank's
prime interest rate.
Additional Fees: None.
Security Required None.
by Lender:
Terms Required The bank will make loans to the
by Borrower: university on a project basis with
actual lending occurring only if the
grant is awarded or if user fee terms
are agreed upon to coverdebt service.
Type of Project: Various scientific instruments.
Features
Agreement
The university's Board of Regents approved the line of credit
agreement after a competitive bid process in which a number of
bank proposals were reviewed. The terms of the agreement
specified:
* the ceiling of the line of credit,
* a commitment for lending on a project basis rather than in a
lump sum,
* interest on a tax-exempt basis,
* interest rate established as an index to the bank's prime
interest rate, with the rate for each individual loan set at the
time a draw on the line of credit is negotiated, and
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that the agreement can be terminated at any time by either
party except with respect to outstanding loans.
University Procedures
The principal investigator or department head seeking external
funds for research equipment over a prescribed amount prepares a
request for funds to the vice-president for educational develop..
ment and research. This request presents a justification for the
need and the funding requirements. The request has to describe
the method for repayment as follows:
1. Existing grants that have a multiple year funding period
could be rebudgeted. This could represent one or more principal
investigators.
2. Equipment financing could be proposed in a grant
application.
3. User charges and fees could be from external and/or
internal users.
The request will be reviewed~ and the cost analysis performed
to determine the financial resoutces required to liquidate the
debt. Approved requests are forwarded to the university business
officer who maintains the banking relationships with the line of
credit bank. The business officer will contact the bank to deter-
mine the terms of the new loan. If the terms, interest rate,
index, and maturity are favorable, the business officer will
request the bank to commit the funds to the new loan.
Once the loan is executed and funds transferred to the uni-
versity, a loan account is established in the university plant fund.
The equipment is purchased from this account. To provide an
audit trail for liquidation of the debt, plant fund expenditures will
be reimbursed through charges to the grant account in the current
restricted fund or through transfers of depreciation amounts from
the service account. The Board of Regents is to receive a monthly
status report on the loans made from the line of credit. Addition-
ally, the Board of Regents is to be notified when the line of credit
ceiling has been reached.
EXAMPLE 5: ACQUIRING BIOMEDICAL EQUIPMENT
Description
The university obtained a demand note for a variety of funding
requirements, including both instructional uses and research
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Terms Required None.
by Borrower:
Type of Project: State-of-the-art equipment for the
radiology department costing $1.4
million.
Features
The radiology department had an immediate need for the
equipment but had insufficient funds to purchase the item.
Access to the demand note proceeds enabled the department to
acquire the equipment and pay for it later.
The demand note is serving as an intermediate financing
instrument. The radiology department pays only the interest on
the loan, and the hospital will repay the loan principal in two
years from its capital outlay budget. In two years, the hospital
will be able to justify the use of the equipment in patient care.
Until that time, the department will cover the line of credit
interest cost through user charges.
At the time the equipment is transferred from experimental to
clinical use, it may be necessary to apply to the state health
planning agency for a Certificate of Need under health planning
statutes. The procedures vary from state to state and also over
time, so that the precise requirements will not be known until the
time for transfer.
EXAMPLE 6: MUNICIPAL LEASE
Description
Telecommunications equipment was acquired for a state uni-
versity through its affiliated foundation. In this municipal lease,
the university was the lessee and a bank was the lessor. The title
to the equipment passed to the university at the end of the lease
term.
Decision Factor
The municipal lease was used by the university to finance
equipment acquisition because the state restricted the university
from entering into multiyear indebtedness. The university was
able to acquire the equipment with the municipal lease because
the lease is renewed each fiscal year. The cost of the lease can
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needs. The specific demand note was obtained after a competi-
tive bid process in which proposals from a number of lending
institutions were reviewed.
The demand note was used to finance the acquisition of a
specialized piece of equipment for the radiology department of
the medical school. The department needed to acquire the equip-
ment immediately for research, but the hospital would not be able
to use it for patient care, as third-party payers, specifically Blue
Cross, considered its use experimental.
Decision Factor
The university decided to obtain a demand note to acquire
equipment that the university had normally leased. The note pro-
vided a cheaper form of financing than leasing. However, the
university still leases small pieces of equipment such as copiers.
When the university was first considering the demand note, there
were several projects, academic as well as research, that needed
temporary or short-term funding. The university had a general
set of guidelines for selecting the projects to fund with the
demand note proceeds. All funds had to be used within six months
because of arbitrage restrictions.
Since the time the demand note was obtained, several projects
have repaid their debt or replaced the debt with long-term
financing. Other projects have been substituted as funds are
replaced.
Terms
Amount of Issue: $15 million.
Period: Five-year period with cancellation
clauses.
Interest Rate: Stated at about one-half of prime
interest rate.
Additional Fees: The university obtained a backup line of
credit that cost an additional 1/2
percent.
Security Required The lender was a mutual fund. The
by Lender: university pledged its unrestricted
endowment funds as collateral.
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also be passed on to federal grants and contracts for which the
equipment is used.
- Terms -
Amount of Issue: $500,000.
Period: Municipal lease is written on a yearly
basis with annual renewal options. The
effective length of the lease, including
renewal options, is six years. At the
end of this time, the university will
receive title to the equipment.
Interest Rate: Less than 10 percent.
Additional Fees: Administrative fee to the foundation
calculated as a percent of the principal
amount of the lease.
Security Required Security interest in the purchased
by Lender: equipment.
Terms Required The university had the option to
by Borrower: cancel the lease on a year-to-year basis
in the event that funds were not
appropriated for the lease.
Type of Project: Telecommunications equipment.
Features
The foundation handles the administrative and control pro-
cedures for arranging the municipal lease. In this case, the
university Atmospheric Science Department had need for
telecommunications equipment. This need was documented and
reviewed.
The municipal lease was open for bid, and the proposal with
the most favorable terms was accepted. Because of state require-
ments, the finalization of the municipal lease agreement requires
a lengthy approval process. A municipal lease transaction may
require a tax-exempt opinion from legal counsel if the lessor
requests one.
In the department's lease request, the equipment acquisition
has to be justified. The department also has to explain the source
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and frequency of revenue to repay the debt and has to incur the
cost of equipment insurance.
The department is responsible for funding the debt. It should
be noted that the university in this case cannot borrow except for
self-sustaining enterprises.
EXAMPLE 7: ADJUSTABLE RATE OPTION BOND
Description
The revenue bonds were issued by a state educational author-
ity to fund a facilities project at a private university, including:
* construction of the university computing center,
* purchase of existing land and buildings for use as research,
education, and student activities facilities,
* renovation and construction of laboratory facilities for the
biology and chemistry departments,
* acquisition of equipment for the computing center,
* acquisition of apartment buildings for student housing, and
* construction and renovation of civil and chemical
engineering laboratories.
The university will initially lease to the authority the various
existing facilities referred to under project facilities. In turn, the
university will sublease the facilities back from the authority and
use the bond proceeds to complete renovation and construction of
these facilities. The bonds will be payable solely from the univer-
sity's sublease payments to the authority. The bonds are limited
obligations of the authority. The bonds are not a liability of the
state or any political subdivision of the state.
Decision Factors
The major reason that the university issued an adjustable rate
bond (ARB) was the low interest rates in the short-term market
versus the long-term fixed rate debt market. In the first year, the
ARB had 6 1/4 percent interest. If the university had issued a
long-term fixed rate debt instrument, the interest rate would
have been 10 percent. The savings in first-year interest were
significant. Though the bond's interest rate will be adjusted
annually, the university has the option to convert to a fixed rate
if long-term interest rates become favorable. Many institutions
are using ARBs because of the favorable market conditions,
including low short-term interest rate as compared to long-term
rates and quick placement of bonds with investors.
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Terms
Amount of issue: $35,000,000.
Period: The total issue was for 20 years.
However, the bond holders have the
right to tender (i.e., to have their bonds
repurchased by the university) at a
price equal to 100 percent of the prin-
cipal amount on the annual anniversary
of the issue date. The university has
the option to redeem the bonds (i.e., to
buy back the bonds from the bond
holders) after one year from the date of
issue. There are also optional redemp-
tion provisions that the university may
exercise. Additionally, if the bonds are
converted to a fixed interest rate, the
bond holders will no longer have the
right to tender their bonds.
Interest Rate: The interest rate at the date of issue
was 6 1/4 percent. Annually, on the
anniversary of the issue date the inter-
est rate will be adjusted to reflect
changes in the interest rate index. The
indexing agent of the issue will be
responsible for determining the
adjusted interest rate on an annual
basis, according to an average yield of
at least 20 twelve-month tax-exempt
securities with a comparable debt
category and rating of the university's
bond.
Additional Fees: The issuance cost of the bonds totaled
more than $500,000.
Security Required Under the indenture agreement, the
by Lender: university is required to maintain cash
and securities with a trustee to pay
principal and interest to bond holders in
the event that sublease revenues are
insufficient to cover debt service.
Initially, the university pledged to
maintain unrestricted assets in the
amount of $37 million, which will be
jç.duçed as bonds are retired.
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Terms Required The university has the right to convert
by Borrower: the bonds from an adjustable interest
rate to fixed interest rate. Prior to the
conversion to a fixed interest rate, the
bond holders have the right to tender
(i.e., return) their bonds for purchase by
the university.
Type of Project: Various research and institutional
facilities as described above.
Features
Administration
The authority will issue the bonds and place the bond proëeeds
with the trustee for distribution to the university. Under a sub-
lease agreement with the authority, the university will receive
the bond proceeds for construction and renovation of project
facilities. In turn, the university's sublease payments to the
authority will cover the principal, premium (if any), and interest
payments. The university would be required to fund any tendered
bonds if the returned bonds could not be remarketed and replenish
the debt service reserve fund if the reserve is reduced. In the
event that a bond holder tenders his bond to the university, the
remarketing agent will try to the best of its ability to resell the
tendered bonds.
Adjustable Interest Rate
The interest rate on the bonds will be adjusted on an annual
basis based on the index defined above under interest rate in the
section on terms. The rate will be determined by the remarketing
agent to be the rate that equals but does not exceed the interest
rate necessary to sell all of the bonds tendered.
Conversion to a Fixed Interest Rate
At the direction of the university, the bonds may be converted
to a fixed interest rate, which would hold constant until the date
of maturity. The university could convert the bonds to a fixed
rate if interest rates were anticipated to increase. The bond
holders would have the right to tender (i.e., return) their bonds to
the university prior to the bonds' being converted to a fixed
interest rate.
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Security
The unique feature of this ARB is that it was done without a
backup letter of credit. Normally, a bank letter of credit would
cost annually 1/2 percent to 1 percent of the principal balance.
The university was able to receive an AA rating and sell the issue
because it pledged to maintain unrestricted assets at $37 million.
Therefore, the university reduced its net interest cost as
compared to similar issues.
SOURCE: Coopers & Lybrand.
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APPENDIX I: DEBT FINANCING INSTRUMENTS
Leasing
Private
college or
tax-exempt
foundation
Municipal Leases
Short- Leasing is considered
term a long-term rental
1-10 agreement in the form
years of operating lease or
capital lease
State $100,000
to
$i,00o,ooo
53-277 0 - 86 - 22
1 year A municipal lease is
considered a condition-
al sale lease where the
payments are scheduled
like a lease but the lessee
is considered the property
owner at the lease
inception.
The lessor receives tax-
exempt status on the
interest portion of the
lease payment.
This form of debt is used
when the entity (state,
municipality, or state
university) is precluded by
state law from entering
into debt for a longer
period than a single fiscal
year.
Applicable
Institution
Financing
Range Term General Description
$100,000
to
$1 ,000,00
PAGENO="0674"
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Advantages Disadvantages
Institution acquires the use
of equipment without making
a substantial initial cash
outlay.
Leasing provides a means for
financing small equipment
acquisitions.
Lessee has some protection
against equipment
obsolescence.
Of f the balance sheet debt.
Quick and easy form of
financing.
Short-term financing with
annual renewal options
allowing for long-term
financing as needed.
Leasing provides some pro-
tection against technical
obsolescence of the equip-
ment.
If the institution has
substantial capital
needs and can issue
debt, long-term financ-
ing would be more
cost effective than
leasing.
Leasing requires trade-
offs to be made on
whether the institution
acquires title to the
equipment.
Leasing is another form
of debt which will have
an impact on the insti-
tution's cash flow.
Lessors consider muni-
cipal leases risky
because the government
is legally committed
only for a single fis-
cal year. The lessor
will charge more to
cover the risk of can-
cellation.
PAGENO="0675"
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Line of Credit
State or
private
university
or
foundation
Pool Revenue Bonds
I to 5 Represents an assur-
years ance by a lending
institution that funds
will be made available
as specific project needs
arise.
A university establishes a
line of credit agreement
with a bank, defining the
terms, conditions, and
interest rate to be required
before an actual loan is
made.
The agreement states the
aggregate ceiling of the
loans to be outstanding at
any one time.
Minimum
$5 million
10
years
Offers tax-exempt bond
financing to a group
of colleges and universities
to finance numerous small
projects.
Two types of bond pools:
blind pools do not identify
the individual borrowers or
the projects; composite
pools identify all partici-
pants and projects and loan
amounts to be included in
bond issue.
Applicable
Institution
Financing
Range Tet~ General Description
$l-l5
million
State or
private
institution
PAGENO="0676"
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Advantages
Disadvantages
Insurance of funds avail-
ability against likely but
uncertain needs.
Ability to debt finance low-
priced equipment on more
favorable terms than leasing.
Ready access to funds so
that equipment procurement
is not delayed until grant
or contract funds arrive.
Availability of funds until
permanent debt financing can
be secured.
Insurance of funds availability
if unexpected needs develop.
Institutions are ableto
pool their capita! needs
when institutions have
insufficient capita! needs
to make an individual
Administrative cost and
time required to review
loan request and moni-
tor debt repayment.
Risk that the debt re-
payment guarantees of
dept. heads and princi-
pal investigators will
not be honored.
Pool Revenue Bonds
have the same disad-
vantages as revenue
bonds.
PAGENO="0677"
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Applicable Financing
Institution Range Tethi General Description
Pool Revenue Bonds (continued)
The bonds are issued by a
state educational author-
ity, which disburses the
bond proceeds to partici-
pating colleges and univer-
sities. While the authority
holds the bond proceeds
until the institutions need
funds, the aUthority may
invest the funds at a higher
interest rate than the bond
interest rate. The net
interest income earned on
available funds is used to
partially cover administra-
tive cost. The IRS requires
that all bond proceeds be
disbursed to pool partici-
pants within three.years.
The period of the institu-
tions' loans range from
three to ten years but
cannot exceed the term of
the bond issue.
The financial liability of
the participating institu-
tions is limited to the
amount of their individual
loan agreements.
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Advantages
Disadvantages
revenue bond cost effective
or an institution does not
have a credit rating to
issue debt on its own.
Allows smaller institution
access to tax-exempt debt
financing.
Spreads the cost of issuance
among a number of institutions.
If sizable debt re-
serves and insurance
premiums are required
to protect against the
risk of loan defaults,
the more creditworthy
institutions in the
pool may be subsidizing
the cost of debt for
the less creditworthy
institutions. The finan-
cially stronger institutions
may be able to obtain
lower interest rates
through individual bond
issues and may not wish to
participate in the pool.
PAGENO="0679"
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Applicable
Financing
Institution
Range Ter~n~ General Description
Pool Revenue Bonds (continued)
The individual institution's
interest rate may vary per
loan agreement with the
authority to properly
reflect differences in loan
risk between a financially
strong institution and a
small college.
Tax-Exempt Variable Rate Demand Bond (VRDB)
Nominal Bond carrying a float-
maturi- ing interest rate which
ties of is set periodically to
25-30 a percentage of prime
years interest rate or trea-
sury bills.
The bond is priced as a
short-term security with a
nominal long-term
maturity.
Minimum
$3
million
State or
private
university
with the
assistance
of govern-
ment
authority
PAGENO="0680"
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Advantages
Disadvantages
Provides the university
access to lower interest
rate debt instruments.
Raise substantial funds
for major projects when
long-term rates are too
high to issue permanent
financing.
Risk and cost associ-
ated with the constant
change and movement in
the short-term debt
market (i.e., if a bond
is returned and cannot
be immediately resold
to a new investor, the
university will have to
draw on its letter of credit
to repay the bond holder).
Risk that the university
may not be able to roll
over the VRDBs into
long-term debt.
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TECP are short-term
obligations with stated
maturitiesof 270 days
or less, comparable to
corporate commercial
paper except interest
rate is tax-exempt.
A pool program can be
established by a
designated government
authority which issues
the TECP and lends the
funds to participating
institutions.
The TECP is designed to be
rolled over at its maturity
without delays and addi-
tional issuance cost. The
interest rates on the par-
ticipating institutions'
loans are determined
monthly, based on the
average interest rates of
the TECPs sold in a month.
General Obligation
20-30 Long-term bond secured
years by the full faith, credit
and, usually, taxing power
of the state or local gov-
ernment.
Applicable
Institution
Financing
Range Term General Description
Tax-Exempt Commercial Paper (TECP)
State
Pool
TECP-
university
program
270 days
or
private
minimum
$50
or less
college
million
Pool
or
program
foundation
10 years
mdiv-
idual
loans
minimum
$100,000
Indiv-
idual
loans
1-10
years
State
university
Minimum
$3
million
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Advantages Disadvantages
A university has access to
short-term debt at favorable
interest rates.
Issuance costs are shared
by all participants.
Because the TECP has a
short-term maturity and is
continually rolled over,
the university is not
lockedinto long-term debt
and can repay anytime with-
out penalty.
Favorable credit ratings can
be obtained for the issue
because it is backed by the
state or local government.
For major, long-term
project to fund, a
Revenue Bond or another
long-term debt instru-
ment would match the
useful life of the asset.
For less cost a uni-
versity with an
established credit
rating may be able to
access short-term f i-
nancing through a
line of credit.
Legislative approval is
required for the bond.
If approval is delayed,
project would have to
be delayed or postponed.
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Revenue Bonds
State
university
or
private
university
or college
or
tax-exempt
foundation
For a private institution to
use revenue bond financ-
ing, the institution must
obtain the assistance of a
county, industrial devel-
opment authority, educa-
tional facilities authority,
or similar agency.
The bond investor will look
at the institution's overall
revenue-generating capabil-
ity as a means of assessing
its ability to meet interest
obligations and principal
payments.
State requirements vary on
the authority state univer-
sities have in issuing
revenue bonds.
Applicable
Financing
Institution
Range TiI~ General Description
Minimum
$3
million
20-30
years
Long-term bonds issued
to finance a specific
revenue-generating
project. The bonds are
secured either by the
project's revenue or
the revenue of the
institution as a whole.
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Advantages Disadvantages
Revenue bonds are cheaper
than any form of commercial
financing because interest
to revenue bond investors
is exempt from federal taxes.
The high issuance, le-
gal, and brokerage fees
associated with bonds
mean that a substantial
dollar amount is neces-
sary to make the bond
cost effective.
The Revenue Bonds are
direct obligations of a
state university or college
with the bond holders'
looking to the university
(not the state) for repay-
ment of principal and
interest.
The attractiveness of
revenue bonds is influenced
by the investor's need to
protect from taxes. With
any lowering of tax rates,
the investor will have less
need to shelter income
through revenue bonds.
PAGENO="0685"
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Applicable Financing - _____________________
Institution Range Term General Description
Industrial Development Bonds
Private Minimum 20-30 A security issued by
college or $1 years state, local government,
university million designated. agency, or
or development corporation
tax-exempt to finance the construction
foundation or purchase of buildings
and/or equipment to be
leased to a private
corporation (institution).
The credit of the private
institution is. considered to
be the credit backing the
issue.
PAGENO="0686"
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Advantages Disadvantages
As that happens, to keep
attracting investors,
institutions will have to
offer revenue bonds with
higher interest rates,
which will increase the
institution's borrowing cost.
Revenue bonds are long
term in nature and not
appropriate for financing
short-term equipment
needs.
Industrial Development Bonds The Industrial Devel-
provide private institutions opment Bonds have the
a means of raising substan- same disadvantages as
tial capital, revenue bonds.
Industrial Development Bond
interest is also exempt from
federal taxes.
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Life of Certificates of Parti-
asset cipation are similar to
On Behalf of... leases
except there is no third-
party. guarantee. The
purchaser of the certif i-
cates hasan interest in the
equipment lease. The
certificates represent a
lien on the asset.
Third-party guaranteed
revenue bonds or leases
issued by a foundation on
behalf of a state or private
institution.
Title to equipment is held
by the foundation and
passes to the institution
when the debt is retired.
Applicable
Institution
Financing
Range Ter~ General Description
Certificates of Participation
State or
private
univer-
sities
On Behalf of...
Tax-exempt
foundation
Minimum
$1
million
Minimum
$1
million
Life of
asset
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Advantages
Disadvantages
Institutions that do not
have tax-exempt foundations
can issue the certificates.
Institutions are able to
finance large dollar value
equipment through public
securities investors at
longer terms and at lower
interest rates than other
debt instruments require.
Debt does not affect the
university or college's
balance sheet.
Lease would be on a year-
to-year basis with annual
renewal.
State institutions which
need legislative approval
for Revenue Bonds can use
On Behalf of... financing
without state government
approval.
The foundation funds and
enters into the long-term
lease.
Institutions will have
to plan for the annual
funding of the certifi-
cates as a fixed
obligation.
The purchaser will look
to the institution's
revenue-generating
capability to meet this
fixed obligation and
assess his risk position.
On Behalf of... financ-
ing is viewed as an
indirect obligation of
the institution.
Investors will look to
the institution's reve-
nue-generating capabil-
ity to assess the risk
of the issue.
SOURCE: Coopers & Lybrand.
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APPENDIX 3: EXAMPLES OF EQUIPMENT DONATIONS
Examples I through II below describe equipment donations
involving 14 universities and 12 corporations. Equipment donated
includes computed axial tomography scanners, digital fluoro-
scopes, nuclear magnetic resonance spectrometers, mainframe
computers, microcomputers, software, oscilloscopes, spectrom-
eters, laser units, processing equipment for very large-scale inte-
grated circuitry, computer-aided design systems, and semiconduc-
tor manufacturing equipment.
EXAMPLE I
Circumstances of Donation
* Principal investigators contacted research colleagues at the
corporation.
* The university faculty had produced innovative ideas; these
were then licensed to the donor and developed into successful
products.
* The university was viewed as a recruiting source.
* The university would be used to market the donor's
equipment; principal investigators would be requested to show
equipment to potential purchasers; results of equipment usage
would be provided for trade and scientific shows.
Special Considerations
* The donor receives license for any marketable research; the
university receives the copyright. The donor must sublicense upon
request; both share the royalties from sublicenses.
* The donor expects the marketing activities to be performed.
* In order to have time to obtain patents, the donor has
occasionally requested that scientific results be withheld from
publication. Although university guidelines provide that publica-
tion can only be withheld for 90 days, the university often com-
plies with the request.
226
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Institution's View
* The donation of equipment was seen as the only feasible
alternative, since the level of funding ne.cessary for such special-
ized machinery is unavailable through the National Institutes of
Health.
* The equipment is generally high level, although not
top-of--the--line.
* The donor has paid all maintenance costs.
* Students have developed the necessary software. The donor
has provided an on-site programmer.
* The donor's equipment has been compatible with other
equipment. Major items were self-contained.
* The equipment has worked well.
* The researchers feel that the promotional activity is an
imposition.
* Patent-related issues have been problematic.
Corporate View
The donor has been happy with the university's work.
EXAMPLE 2
Circumstances of Donation
* University faculty and corporate counterparts had
professional contacts prior to the donation.
* The university has an active research faculty that has
pursued innovations.
* The university is attractive to corporations because of its
accomplishments and innovative ideas.
* Corporations are interested in recruiting university students.
* Tax incentives have made contributions even more
attractive.
Special Considerations
* A license to patentable inventions may be made available to
the donor.
* There are no restrictions on the publication rights of work
undertaken by the university.
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Institution's View
The donor does not cover all costs. Researchers believe that
they are more motivated to use the equipment if there is some
cost tothem. Maintenance costs, however, are quite high.
Corporate View
The university is very attractive because of its faculty,
programs, and record of success.
EXAMPLE 3
Corporation View I
* Relationships were established among university develop-
ment office, department heads, researchers, and corporate
counterparts.
* The university identified the equipment that was already
available, plans for using the equipment, the potential users of the
equipment, and their areas of interest.
Corporation View 2
* The corporation had announced its intention to assist uni-
versity programs similar to that at the university; there was no
previous relationship with the university.
* The corporation's program was focused on a specific area of
engineering; the university had one of the country's first engi-
neering schools in this field.
General Corporate View
* Donors were interested in exposing future users to
state-of-the-art equipment.
* The tax benefits have not been a primary incentive to small
companies.
* Excess inventory resulting from lower sales has been a
minor factor.
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Special Considerations
No special considerations were identified.
Institution's View
State-of-the-art equipment is now available, although main-
tenance and technical support costs are a problem. For this
reason, not all equipment that is offered is accepted.
EXAMPLE 4
Circumstances of Donations
* For research and development purposes, faculty members
and department heads work through corporate contacts to obtain
contracts.
* The university has had limited success with sending letters
to organizations with no prior contact. Often, the corporation
may like something about the program being undertaken, and this
will provide a .floor for establishing a relationship.
* With scientific equipment, personal contacts are very
important. The foundation and development officers will help
faculty members and department heads develop plans to inform
corporate representatives about proposed projects.
* Scientific equipment is almost never given in isolation.
Generally, the university has developed a program that the donor
is interested in, and the donor will provide the equipment and
money.
Special Considerations
* Scientific equipment never has any quid pro quo.
With research and development equipment, the nonexclu-
sive use of patents is provided to the contracting corporation, and
the university holds the patent. Sometimes the university will
receive royalties, depending upon the ~rrangement.
Institution's View
* Since the donor does not cover all costs, maintenance and
operating costs are a major problem.
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* The university generally has been happy with the arrange-
ments.
Corporate View
The donating org~nization appears to be pleased with the way
the arrangements have worked out.
EXAMPLE 5
Circumstances of Donation
* The university has a good reputation in many scientific
areas.
* The donors receive feedback on prototype equipment to
work out bugs.
* The university has productive relations with contributors,
which leads to many coming back repeatedly.
* The university faculty conceives interesting projects and
establishes personal contacts with donors.
* Tax benefits are helpful but are not a major factor.
Special Considerations
* Certain corporations give many micros to faculty, and there
is an agreement to share any software developed. The university
has the copyright, but the donor often has exclusive license.
* The donor expects feedback on prototypes.
* There are sometimes restrictions on publication for up to
one year, which must be complied with (does not normally cause
problems).
Institution's View
* The university is generally happy.
* Often the maintenance costs are covered by the donor.
* Many corporations come back many times.
* Sometimes they are offered more equipment than they can
take. They only accept it when it is well matched to their needs.
* They get a good deal of state-of-the-art equipment and
prototypes.
PAGENO="0694"
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Corporate View
There was no specific feedback, but the university assumes
they are satisfied since they keep returning.
EXAMPLE 6
Circumstances of Donations
Corporate
~` Corporations are interested in exposing future users to
state-of-the-art equipment.
* Corporations seek researchers' feedback in order to improve
equipment.
* Corporations donate equipment to demonstrate general
support for higher education.
University
* The university strictly enforces the conditions under which
it will accept gifts: exclusive licensing arrangements are never
provided; nonexclusive agreements are acceptable.
* The university will not provide the donor with written
feedback; however, oral discussions are acceptable.
Special Considerations
* Donor corporations often contribute ancillary expenses such
as maintenance and software along with the equipment.
* Both the university and the corporations initiate contacts.
Corporate contacts are developed through visiting committees
and other visits by corporate executives and researchers.
Individual faculty members develop relationships with corporate
counterparts.
Institution's View
Generally, the university has been able to obtain whatever
equipment has been needed.
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EXAMPLE 7
Circumstances of Arrangements
* Money is primarily given under research contracts. Equip-
merit is supplied if it is needed.
* Contacts are often made through established relationships
with universities.
* One university is a popular donee since many alumni work at
the corporation.
* Arrangements are often entered into when an institution has
begun working on a program in which the corporation is interested.
* Tax benefits have a significant impact on the level of
contributions.
* The corporation feels an obligation to help fund university
research since more is needed. It cannot fund the amounts it
would like to because of the costs. Additional tax benefits would
be a desirable way of lowering costs.
Special Considerations
The corporation installs the equipment and for awhile
maintains it and provides backup support.
Institution's View
It appears that colleges are satisfied with the arrangements.
Corporate View
Results have been good so far. If they had not been, the
corporation would not continue contract research and scientific
equipment donations.
EXAMPLE 8
Circumstances of Donation
* The corporation ordinarily makes a grant after a written
proposal is submitted; proposals come about as a result of con-
tinuing dialogue with university researchers.
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* Considerations include the corporation's desire to support
education; the quality of the institution, its faculty, and its stu-
dents; its ability to undertake proposed projects; its fiduciary
capability; and the importance to the corporation of the tech-
nology under study.
* Ordinarily, R&D expenditures are joint study contracts
under which the corporation provides money, equipment, and
personnel.
* The R&D tax credit is an incentive for the corporation (1) in
making positive decisions on marginal projects, and (2) because
credit ameliorates impact on after-tax profit margins of increased
R&D spending.
Special~ Considerations
* No conditions or restrictions are placed on the institutions
to which it provides grants of equipment.
* Maintenance contracts are usually provided for the war-
ranty period, after which the institution must absorb the cost.
* The corporation is flexible in structuring research con-
tracts, but its primary concern is access to results; no restrictions
are made as to use or publication of results.
Corporate View
* The corporation looks for institutions with ne~ësSary
technical know-how to perform a project.
* Success Of projects is viewed in broad terms. Any advance-
ment of the knowledge base in a particular area is considered a
success.
EXAMPLE 9
Circumstances of Arrangements
* Primary motiVation of contributions is to help upgrade
university research facilities, since many are outdated.
* The corporation hopes to provide well-trained engineers in
the fields the corporation is interested in with the hope that there
will be a supply of good engineers for futL hiring.
Corporations also make donations with the hope that users
will be happy with them and purchase additional products of those
corporations.
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Tax incentives are important regarding the level of
charitable contributions. This is because the higher the per-
centage of product cost that can be offset with tax benefits, the
greater the number of products that can be donated at the same
cost.
Equipment donations are initiated by colleges interested in
obtaining a product and by a corporation when it identifies
institutions that are performing research in areas it is interested
in. Contacts between the corporation and the institutions have
been in existence prior to some contributions, although this is not
true in a large number of instances.
Special Considerations
Equipment is not usually provided under research con~
tracts, which are normally with large research institutions. The
reason for this is that when the corporation enters a research
contract, it does not have adequate personnel on hand to do the
work itself; it looks for colleges or universities with facilities in
place in the particular field of study and specialized personnel.
* Basic research contracts are not often. entered into, since
they will not necessarily provide the corporation with any direct
benefits and they are difficult to justify to shareholders. Also,
since a fair amount of basic research is performed at the corpora~
tion in fields it is interested in, it has less of an incentive to fund
basic research elsewhere.
* When a corporation donates equipment, it also installs it and
provides the same warranty a paying customer receives. If a
service contract is ordinarily provided with the equipment, that is
also included. Corporations would be more willing to provide ser-
vice contracts if additional tax benefits were associated with
them.
Corporate View
The corporation expects colleges to take some responsibil-
ity for operating and maintaining the equipment and does not feel
that it should incur all costs.
The corporation has an interest in seeing the property
maintained, because if students repeatedly observe the equipment
malfunctioning, they will develop a negative image of it and will
be less likely to purchase it in the future.
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EXAMPLE 10
Circumstances of Arrangements
* Primary concerns are with expertise of the institution and
its ability to assist with product application and development.
* Tax incentives make scientific contributions and research
contracts more desirable.
* Arrangements result from informal contacts between
corporate and university counterparts.
Special Considerations
* There is no quid pro quo for contributions of scientific
equipment, although access to data regarding equipment use is
anticipated.
* If research produces any patentable results, the corpora-
tion acquires a license.
Institution's View
Generally there is a favorable perception. If institutions were
not happy, they would not continue to accept equipment and
undertake research arrangements.
Corporate View
Favorable feedback has been received. There was only one
instance where an arrangement was not considered successful.
EXAMPLE II
Circumstances of Donations
Research and Development
* In the case of research and development projects, the
company is mainly looking at what it can receive in return, such
as technology that can be .marketed or put to use in-house for
designing new products (e.g., software).
* Marketing of equipment is also important in the hope that
(I) institutions will purchase additional equipment from the
PAGENO="0699"
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donating company, and (2) that students' experience with the
equipment will encourage future sales.
* Receipt of proposals in which the company is interested and
a proven capacity to conduct high-quality research are influential
in decisions to donate equipment for R&D contracts.
* Tax benefits are helpful in the decision to donate.
Scientific Equipment
* Tax benefits are important in the decision to donate. The
company prefers to donate more expensive items, since there is a
higher markup and they can take advantage of scientific equip-
ment deductions.
* Major contributions were made to one institution for the
following reasons: the company could not enter into an R&D
contract, since the university will not provide exclusive rights to
anyone; informal feedback is useful to the company regarding
equipment performance; the institution has a good research
reputation; close personal ties have developed over the years,
since many high-level employees are graduates of that university;
and since the company's engineers will be working on the equip-
ment with that university's counterparts, the company will have
first-hand knowledge of the information being developed and its
possible uses (the type of work the equipment is being used for Is
important to the company).
Special Considerations
* The university holds the copyright or patent, but the com-
pany has nonexclusive license with no royalty payments to the
univer5lty.
The company has the right to review material before it is
published to ensure that no pi oprietary information is released.
* No special considerations are involved for scientific equip-
ment Contributions. The equipment is given outright without
restrictions.
Institution's View
The company was not aware of any specifics.
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Corporate View
The company is happy with the past record of a number of
institutions. It has recently dramatically increased the level of
contributions and has not yet received the results of most new
projects.
SOURCE: Coopers & Lybrand.
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APPENDIX 4
Prepared Under the Direction of the
Ad Hoc interagency Steering Committee on Academic Research Facilities
with the Assistance of the
NSF Task Group on Academic Research Facilities
ADEQUACY OF
ACADEMIC RESEARCH
FACILITIES
A Brief Report of A Survey of
Recent Expenditures and Projected Needs In
Twenty-Five Academic Institutions
April 1984
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Adequacy of Academic Research Facilities*
ABSTRACT
Recent studies have raised serious questions about the adequacy of academic research
facilities -- the bricks and mortar (and mobile or remote research spaces such as ships,
airplanes, aquaculture facilities, and monitoring stations), which house and support
academic research and research instrumentation. An ad hoc interagency steering
Committee was formed in November 1983 and is planning a detailed study of academic
research facilities. The committee has recently analyzed data on past expenditures and
future needs for academic research facilities as derived from capital facilities planning
documents of 25 major research institutions which perform about 38% of all federally
funded research and development at universities and colleges. From a scaling of these
results, it is estimated that about $1.3 billion per year of Construction, remodeling, and
refurbishment of science, engineering, and medical research facilities is currently being
planned by all universities and colleges over the next five years. This estimate is
consistent with a 1981 study of 15 institutions carried out by the Association of American
Universities. As a percentage of total expenditures, the findings are also Consistent with
capital outlays at industrial research and development laboratories, and at the university
administered Federally-Financed Research and Development Centers.
Introduction
Several recent studies~3 of academic research capabilities concluded that the quality of
research instrumentation in university laboratories has seriously eroded. Strengthened
programs in the Department of Defense, the National Science Foundation and other
Federal agencies are now addressing the replacement and renewal of research instru-
mentation. However, these same studies have also raised serious questions about the
adequacy of academic research facilities -- the bricks and mortar, (and mobile or remote
research spaces such as ships, airplanes, aquaculture facilities, and monitoring stations),
and services which house and support the research instrumentation.
Prepared under the direction of the Ad Hoc Interagency Steering Committee on
Academic Research Facilities with the assistance of the NSF Task Group on Academic
Research Facilities. (Lists of members in the Appendix).
PAGENO="0703"
~97
More recently, Federal Agencies and the Congress have received many expressions of
concern that deteriorating research facilities are becoming a serious problem for
academic scientists and engineers, materially Impairing their ability to work competi-
tively at the frontiers of scientific and engineering knowledge. The House Authorization
Act for the FY 1984 Budget of the Deoartment of Defense directed that a study be
undertaken by the Secretary of Defense on the need to modernize university science and
engineering laboratories essential to long-term national security needs. The Congress also
directed NSF to be an aggressive lead agency in encouraging other Federal agencies, state
and local governments, and the private sector to support the renewal of university
research facilities, and encouraged the Foundation to estimate the magnitude of the
current facilities problem and to assess the success of programs for facilities renewal.
Furthermore, during the past 30 years the National Institutes of Health have provided
major su~port for health research facilities construction, and the Congress has periodi-
cally requested assessments of the status and needs for these research facilities.
Interagency Steering Committee
In view of the important role that a strong academic research effort plays in underpinning
the Nation's economy, health and national defense, the Department of Defense, the
National Institutes of Health, the Department of Energy the U. S. Department of
Agriculture, and ~the National Science Foundation are cooperating in an effort to
determine the magnitude of the problem related to academic research facilities. An ad
hoc steering committee formed with representation from these agencies is planning an in-
depth study of academic research facilities. The objective of this study will be to obtain
a detailed understanding of the condition of academic facilities currently being used for
science, engineering, and medical research and the estimated future nee'is for construc-
tion, remodeling and refurbishment. it is presently planned that this study will be carried
out by the National Academy of Sciences. An internal NSF Task Group has also been
formed to examine available data on research resources, determine what additional
information is needed, develop a credible study design, and work with the interagency
steering committee in formulating a government-wide study of academic scientific and
engineering research facilities.
PAGENO="0704"
698
Initial Study
Discussions with a number of university presidents indicated that their institutions already --
had prepared five year facility plans as well as detailed figures on expenditures for new
construction and the remodeling and refurbishment of existing structures over the past
five year period and were willing to share the information with the interagency steering
committee. Such information was subsequently requested and received from 25 major
research institutions which perform about 38% of all federally-funded research and
development at universities and colleges. From an analysis of these data, it is estimated
that about $495 million per year of construction, remodeling, and refurbishment of
science, engineering, and medical research facilities is planned by these 25 institutions
over the next five years. (See Table I for a breakdown by discipline.~ If these plans are
scaled up in proportion to the share of federally funded R&D all universities and colleges
would require over the next five years about $1.3 billion 2.!E ~ for these purposes. This
estimate is consistent with a 1981 survey of 15 universities carried out by the Association
of American Universities3. Both estimates are probably conservative because the plans
were constrained by the perceived availability of funds. The planned major study will
obtain more detailed and definitive data, and could well result in a higher figure.
Other sources of data were analyzed to see how the estimate of $1.3 billion per year
compared. A private-sector survey4 of industrial research and develooment laboratories
found that 12.7% of total R&D funds are spent on R&D plant. An NSF survey5 shows that
the university-administered Federally-Financed Research and Development Centers
(FFRDc'S) spent 13.6% of their total R&D budget in FY 1983 on R&D plant. Based on the
estimated6 $7.8 billion total R&D at universities and colleges in 1984, these figures would
predict a range of $990 million to $1.06 billion for total R&D plant expenditures at
universities and colleges. The slightly higher estimate of need from our recent study may
result from pressure to recover from past underinvestment. These figures should also be
compared to the estimated7 1984 federal obligation of $(LO million to universities and
colleges for R&D Plant, and the 1981 figure8 of $155 million for the total Federal
contribution to science and engineering facilities for research, development, and instruc
tion. (no breakdown is available).
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699
Table I
Recent Survey of Facilities Expenditures and Needs at 25 Major Academic Research Institutions
o Summary of past and planned capital expenditures from an analysis of long-range
plans.
o The 25 institutions supplied existing planning documents (typically 5 years) and
data on past plus present (usually 1983) capital expenditures (typically 5 years).
o These institutions received 38% of the total Federal R&D obligations to universities
and colleges in Fiscal Year 1981. They performed 34% of all academic R&D
in Fiscal Year 1981.
o Although planning cycles were typically 5 years, they varied from two to seven
years. Therefore, the data are standaradized as yearly averages.
($ millions) (current dollars)
Past & Current No. of Institutions
Avg. annual $185 22
Future
Avg. annual 495 25
Future by Field (supplied by 22 respondents)
(Avg. annual)
Engineering 77 16 15
Phys. Sci., Math.,
Comp. Sci. 121 26 15
Medical .Sci. 94 20 14
Agric. Sci. 35 7 7
Life Sci.-Bio. 65 14 13
Environmental 28 6 6
Other. 50 11 11
470 100
53-277 0 - 86 - 23
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700
REFERENCES
`Bruce L. R. Smith and 3oseph 3. Karlesky, The State of Academic Science, The
Unjversities in the Nation's Research Effort, Change Magazine Press, New York, 1977.
2The Scientific Instrumentation Needs of Research Universities, A Report to the
National Science Foundation by the Association of American Universities, 3une 1980.
3The Nation's Deteriorating University Research Facilities, Prepared for the
Committee on Science and Research of the Association of American Universities, 3uly
1981. * -
4ç~pital Spending Study of Research and Development Laboratories, Flad and
Associates, Inc., Madison, Wisconsin, December 10, 1982.
5Federal Funds for Research and Development - Fiscal Years 1981, 1982, and 1983,
Vol. XXXI, Detailed Statistical Tables, National Science Foundation, NSF 82-326,
pp.l14,15.
6Defense and Economy Major Factors in 7% Real Growth in National R&D
Expenditures in 1984, Science Resources Studies Highlights, National Science Foundation,
NSF 83-316, July 22,1983.
7Federal Funds for Research and Development - Fiscal Years 1982, 1983, and 1984,
~`o1. XXXII, Detailed Statistical Tables, National Science Foundation, NSF 83-319, p.15.
8Academic Science/Engineering R&D Funds - Fiscal Year 1981, Detailed Statistical
Tables, National Science Foundation, NSF 83-308, p.120.
PAGENO="0707"
701
Ad Hoc Interagency Steering Comittee on Academic Research Facilities
Dr. Helen Gee Dr. James Wilson
Chief Staff Specialist
Program Evaluation Branch Office of the Deputy Undersecretary of
Office of Program Planning Defense for Research and Engineering
and Evaluation Department of Defense
Office of the Director
National Institutes of Health Dr. N. Kent Wilson
Deputy Assistant Director
Dr. Michael Goldberg Directorate for Mathematical and
Associate Director for Program Physical Sciences
Planning and Evaluation National Science Foundation
Office of the Director
National Institutes of Health Dr. Leo Young
Director
Dr. Clare Harris Research and Laboratory Managerment
Associafe Administrator Office of the Deputy Undersecretary of
Cooperative State Research Science Defense for Research and Engineering
U. S. Department of Agriculture Department of Defense
Dr. Chris E. Kuyatt
Senior Policy Analyst Observers:
Controller's Office
National Science Foundation Mr. Nathaniel B. Cohen
Di rector
Dr. P.ichard Stephens Managemeiit Support Division
Director Office of External Relations
Division of University and National Aeronautics and Space
Inc~ustry Programs Administration
Office o~ Field Operations Management
Office of Energy Research Mr. Frank Owens
Department of Energy Chief
University Training and Research
Dr. Israel Warshaw Programs
Program Manager Office of External Relations
Division of University and Industry National Aeronautics and Space
Programs Administration
Office of Field Operations
Office of Energy Research
Department of Energy
NSF Task Group on Academic Research Facilities
Will3am S. Kirby Lewis G. Mayfleld
Carlos E. Kruytbosch William T. Dosterhuls
Chris E. Kuyatt James C. Tyler
Ronald R. LaCount p1. Kent Wilson
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National Science Foundation
Washington. D.C. 20550
Ofhcal Bus:YesS
PENALTY FOR PR'VATE USE. $3~
01*1*01. INCLUDING ZIP CODE).
702
THIRD CLASS
ButkRat. ~ L
POSTAGE AND FEES PAID
NATIONAL SCIENCE FOUNDATION
P4SF440
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703
APPENDIX 5
NIH Program Evaluation Report
Academic Research
Equipment and Equipment
Needs in the Biological
and Medical Sciences
Executive Summary
April 1985
~ j
* * * * * * * * * * * * * * * * * * *`~~
* S S S S S S S S S S S S S S S S S S ~
S S S S S 555555555*******
:
U.S. Department of Health and Human Services
National Institutes of Health
PAGENO="0710"
704
NIH Program Evaluation Report
ACADEMIC RESEARCH EQUIPMENT
AND EQUIPMENT NEEDS IN THE
BIOLOGICAL AND MEDICAL SCIENCES
Executive Summary
Howard J. Hausman, Ph.D.
Research Consultant
Westat, Inc.
Kenneth Burgdorf, Ph.D.
Westat, Inc.
Prepared for:
Program Evaluation Branch
Office of Program Planning and Evaluation
National Institutes of Health
Bethesda, MD 20205
Submitted by:
Westat, Inc.
1650 Research Blvd.
Rockvjlle, MD 20850
April 1985
This project, Project Evaluation No. NIH-83-3ll, Contract No.
NO1-OD-3-2l20, received support from the evaluation set-aside
Section 513, Public Health Service Act.
PAGENO="0711"
705
EXECUTIVE SUMMARY
Because of continuing concerns about the age and condi-
tion of research equipment in academic institutions, and about
the effect of obsolescent equipment on the quality of research
in the nation's universities and medical schools, the Congress
of the United States charged the National Science Foundation
with conducting inventories of, and analyses of the needs for,
*
scientific instrumentation. NSF initiated a feasibility study
to determine how pertinent information could be obtained and how
suitable indicators of the status of research instrumentation
could be developed. That study was followed by specifications
for a baseline national survey, which was funded by NSF as a
two-phase study starting in 1982. Using a stratified proba-
bility sample of 43 universities, the Phase I survey of existing
research instruments and instrumentation needs was conducted
during the 1982-83 academic year for the physical and computer
sciences and engineering. The report of this survey is available
**
from the National Science Foundation.
For Phase II of the study, which encompasses the bio-
logical, agricultural, and environmental sciences, the National
Institutes of Health joined the National Science Foundation by
funding a survey of the biological sciences in medical schools
to provide a comprehensive picture of instrumentation in those
sciences. NIH also provided for a limited study to determine
the feasibility of obtaining the same data for medical (i.e.,
*An Act to Authorize Appropriations for the National Science
Foundation for Fiscal Year 1980, and for Other Purposes. Public
Law 96-44, Section 7.
**Academic Research Equipment in the Physical and Computer Sciences
and Engineering: An Analysis of Findings from Phase I of the
National Science Foundation's National Survey of Academic Research
Instruments and Instrumentation Needs. Westat, Inc., December 1984.
1
PAGENO="0712"
706
clinical) sciences as for the biological sciences. For this
purpose departments of medicine were chosen. After a stratified
probability sample of 24 medical schools was selected, Phase II
was conducted during the 1983-84 academic year. The results of
the Phase II survey for the biological sciences and departments
of medicine are the subject of this report.
Overview
From the results of this study of instrumentation
needs and instrument systems in the biological sciences and
departments of medicine, it is apparent that there are def i-
ciencies in the current levels of instrumentation. The extent
of the deficiencies varies significantly among the subfields of
research. More advanced instrumentation is needed to allow
investigators to perform critical experiments which cannot now
be adequately conducted. Better maintenance and repair facilities
are needed. Although 18 percent of the current national stock
of equipment is considered state-of-the-art, that status is lost
very rapidly; the need for replacement by upgrading is continuous
and of the highest importance.
Department-Level Findings
More than half of the heads of departments/facilities,
in assessing the needs and priorities of their departments,
stated that critical scientific experiments could not be con-
ducted because their departments lacked appropriate instru-
mentation. This was more often stated for the biological sciences
than for departments of medicine, and for public institutions
than for private institutions.
2
PAGENO="0713"
707
The capability of existing equipment to enable researchers
to pursue their major interests was rated excellent for tenured
faculty by only one-sixth of the departments, while over one-
fourth re~garded their capability as insufficient. For untenured
faculty the proportion of equipment rated insufficient was one-
third. More than twice as many graduate school departments as
departments in medical schools answered "insufficient," however,
and three times as many departments in public institutions as in
private institutions did so. Compared with other fields of
science, the current stock of equipment in the biological sciences
as a whole was more favorably assessed than in any other field,
but this was primarily due to medical schools. For biological
science departments in graduate schools, the degree of insufficiency
matched that given for graduate school departments in other
fields, such as physical sciences and engineering.
The same patterns were found f or assessments of instru-
mentation support services (i.e., machine and electronics shops),
with about half of the departments calling them insufficient or
nonexistent. Departments of medicine considered their support
better than did the biological sciences, and private institutions
better than public institutions.
Although these assessments are based not on quanti-
tative data but rather on informed opinion, the consistency with
which some large groups report more inadequacies than other
groups indicates a widespread perception of a problem.
If increased Federal funding were available for pur-
chase of research equipment, two-thirds of heads of departments!
facilities would put funds into instruments costing between
$10,000 and $50,000, while another one-fifth desired instruments
between $50,000 and $1 million. Private institutions wanted
more instruments in the upper range than public institutions.
PAGENO="0714"
708
In other fields of science, there was more of a need for instruments
in the range of $50,000 to $1 million than was found in the
biological sciences, and even for systems costing above $1 million --
which none of the department heads in the biological sciences
mentioned as a top priority need.
When asked to list the three research instruments
costing between $10,000 and $1 million that were most urgently
needed, department heads often listed various types of prepara-
tive instruments. For most disciplines, these were the most
frequently needed items. Nearly 80 percent of the instruments
mentioned were in categories where the median cost of the instrument
was under $75,000. Instruments with a median cost over $100,000
most frequently mentioned were electron microscopes and NMRs.
The biological sciences and departments of medicine
spent a total of $158 million on research equipment costing over
$500 in FY 1983, and an additional $36 million on maintenance
and repair. The mean amount spent for research equipment in
FY 1983 was $48,000 per doctoral degree awarded annually. The
mean amount per faculty-level researcher was $5,900. Medical
schools spent about twice the amount per doctoral degree and
researcher as graduate schools, and private institutions consid-
erably more than public institutions.
The National Stock of Academic Research Equipment
There were over 21,000 instrument systems in the cur-
rent inventories of the biological sciences and departments of
medicine, with an aggregate purchase cost of $555 million. In
terms of constant 1982 dollars, the cost of these instruments is
estimated at $863 million. The biological sciences had more
PAGENO="0715"
709
instrument systems than any other field of academic science, but
the mean cost per instrument system ($27,000) was the lowest for
any field except agricultural sciences.
About three-fourths of all presently existing academic
research instruments in the biological and medical sciences cost
between $10,000 and $25,000. Only five percent cost between
$75,000 and $1 million, but they accounted for one-fourth of all
funds spent for equipment.
Since the amount of research activity in the several
biological sciences subfields varies considerably, numerical
comparisons between the subfields are dominated by the relative
"size' of each enterprise. In an attempt to normalize between-
subfield and institutional comparisons, instrument numbers and
costs were calculated per researcher and per graduate degree
awarded. The resulting ratios are indices only and do not repre-
sent actual one-time costs per researcher or per degree awarded.
Mean dollar amount of research instrumentation per researcher in
the biological sciences was about $21,000, but the amount in
medical schools per researcher was 50 percent higher than in
nonmedical schools. For departments of medicine, the mean equip-
ment investment per researcher was $15,000. Mean aggregate
equipment cost per doctoral degree awarded in 1982-83 in the
biological sciences was $l43r500, but for medical schools that
cost was more than twice as much as in nonmedical schools. Private
institutions had higher investments per researcher and per graduate
degree than public institutions.
State-of-the-art instruments constituted 18 percent of
the national stock in 1983, although the percentage was larger
in private institutions than public institutions. Another 65
percent were in active research use, although not classified as
state-of-the-art. Instruments that were not in active use
PAGENO="0716"
710
because of technological obsolescence or inoperable mechanical
condition, but that were still physically present at the insti-
tution, constituted another 16 percent of the national stock.
Departments of medicine, however, had twice as large a per-
centage of obsolete or inoperable instruments on their inven-
tories as the biological sciences.
Age and Condition of Academic Research Equipment
For all instruments in the national stock, 44 percent
were from 1 to 5 years old, and 27 percent were over 10 years
old. Omitting the inactive systems from consideration, the
proportion of instruments aged 1 to 5 years was 50 percent, and
22 percent were over 10 years old. For instrument systems that
were in active research use, departments of medicine had a higher
proportion of newer instruments than did the biological sciences,
and private institutions were higher than public institutions.
Compared with other fields of science, instruments in the biolog-
ical sciences were somewhat older.
Most state-of-the-art instruments in 1983 were relatively
new. Fifty percent of instruments purchased in 1983 were state-
of-the-art, but of those purchased two years earlier (in 1981),
only 37 percent were still considered state-of-the-art. Six-
year old instruments were classified as state-of-the-art only 13
percent of the time. Altogether, 85 percent of the state-of-
the-art instruments were from 1 to 5 years old, and only 3 percent
were over 10 years old.
About half of all instrument systems actively in use
for research were in excellent working condition. As would be
expected, there is a relationship between working condition and
age of the instrument. Thus, 78 percent of instruments from 1
6
PAGENO="0717"
711
to 3 years old were in excellent condition; of instruments 4 to
6 years old, 57 percent were in excellent condition; and of
those 10 to 12 years old, only 26 percent were rated as excellent.
Accompanying this decline in operating condition with age of
instrument was the `retirement" of instruments as they got older.
In the biological sciences, 60 percent of instruments that were
inactive (presumably because of mechanical or technological
obsolescence) were over 10 years old.
Of the state-of-the-art systems, which were relatively
new, 85 percent were considered to be in excellent condition.
Only 44 percent of those not considered state-of-the-art were
in excellent condition, however. These "other" systems were
considerably older and they constituted nearly 80 percent of all
equipment in active use.
A substantial amount of other than state-of-the-art
equipment is to be expected. Much laboratory research does not
require the most advanced instrumentation. A problem arises,
however, when investigators using non-state-of-the-art equipment
do not have access to more advanced equipment when needed. This
problem was found frequently; nearly half of the non-state-of-
the-art instruments in research use were the most advanced instru-
ments of their kind to which users had access. This situation
is an obstacle for investigators attempting to engage in more
sophisticated research. The entire research effort in the
biological sciences is hindered when problems such as mechan-
ically unreliable equipment and lack of access to advanced
instrumentation become prevalent.
7
PAGENO="0718"
712
Funding of Equipment in Active Research Use
Almost all research instruments (94%) in the biologi-
cal sciences and departments of medicine were acquired new.
Sources of funding were evenly split between Federal and non-
Federal sources for the biological sciences, but for departments
of medicine, nearly two-thirds of the funds came from non-Federal
sources. For private institutions, a larger proportion of equip-
ment funds came from Federal sources than for public institutions.
NIH was the principal source of Federal funds for
acquisition of research equipment in the biological and medical
sciences, contributing 44 percent of all funds for medical schools
and 31 percent for graduate schools. NSF was the only other
significant Federal source, contributing a larger proportion of
graduate school funds than of medical school funds. The insti-
tutions were the major source of non-Federal funds. State
governments and private foundations gave only small amounts for
research equipment. The amount contributed by business and
industry for equipment was negligible.
NIH funds, while accounting for 38 percent of all
equipment purchases, contributed 47 percent of the support for
purchases of instruments in the $10,000 to $25,000 range but
only 28 percent of the dollar support for existing equipment
costing $75,000 or more. Institutions, however, which con-
tributed 37 percent of all funds for equipment, purchased 31
percent of the instruments costing under $25,000 and 41 percent
of those costing $75,000 or more. NSF-supported purchases for
equipment followed the same pattern as that for institutions.
Sixty percent of all biological science instruments
received full or partial Federal funding, compared to 48 percent
of those in departments of medicine.
PAGENO="0719"
713
Location and rise of Academic Research Equipment
About 65 percent of all equipment in the biological
sciences and 70 percent in departments of medicine were located
in the laboratories of individual investigators. The remainder
were in inherently shared-access facilities, mostly department-
managed common laboratories. Costly instruments were frequently
located in the inherently shared-access facilities; this held
true to a greater extent for graduate schools than for medical
schools, and for public institutions than for private institu-
tions. Older instruments were also more likely to be- located in
inherently shared-access facilities.
The location of most instruments within laboratories
of individual-investigators did not necessarily mean that they
were not shared. The mean number of users-of all instruments
was 11 per instrument. The large majority of instrument systems
were available for general purposes, as opposed to being dedi-
cated for specific experiments. For these general purpose instru-
ments, the mean number of users was almost 12 per instrument.
About 95 percent of all instruments in the biological
sciences were used by faculty within the same department, and 85
percent were also used by graduate students, medical students,
and postdoctorates from the departments. Additionally, 36 per-
cent were used by faculty from other departments in the insti-
tution. Visiting researchers from other universities and visiting
nonacademic researchers used the more costly instruments far
more frequently than the lower cost ones; this held true also
for researchers from other departments at the same institution.
The average instrument in an investigator's laboratory
was freely accessible to other research investigators, as evidenced
by-the numbers of users and the origins of users. From this
PAGENO="0720"
714
observation, together with the finding that 35 percent of all
instruments were located in facilities that are -- by their very
nature -- shared-access, it is evident that sharing of research
equipment is common in academic facilities.
Maintenance and Repair of Academic Research Equipment
Only 16 percent of departments in the biological and
medical sciences considered their maintenance and repair (M&R)
facilities as excellent. Nearly 50 percent reported either
insufficient or nonexistent facilities. On the whole, departments
of medicine were more satisfied with their M&R facilities than
were departments in the biological sciences. All departments of
medicine had such facilities, while 18 percent of biological
science departments did not.
In FY 1983, 22.5 cents were spent on M&R for every
dollar spent for new equipment. The mean expenditure per depart-
ment for M&R was $30,200. Nearly two-thirds of this amount was
spent for service contracts and field service as needed. Service
contracts, used more frequently than any other means of servicing
instruments, cost an average of $2,300 per instrument, compared
to $700 per instrument for field service and less for university-
based M&R staff and research personnel, who sometimes performed
this function.
The amount spent per instrument for M&R rose after the
instrument became six years old. While the overall mean expendi-
ture per instrument was $1,100, it was $900 for those between 1
and 5 years old, and over $1,300 for those over 5 years of age.
The mean M&R expenditure for instruments costing from $75,000 to
$1 million, $6,300, was far more than the $700 expended for N&R
for those costing between $10,000 and $29,999.
10
PAGENO="0721"
715
Group Comparisons
Thus far, findings have been summarized with respect
to topic areas. In addition, numerous differences have been
observed among groups of institutions, among subfields of research
within the biological and medical sciences, and between the
biological sciences and the other fields of science encompassed
in the larger two-year study of academic research equipment.
These group comparisons are briefly summarized here.
Differences Among Institutions
(1) Medical and graduate (nonmedical) schools. Levels
of investment in research instrumentation were substantially
higher for medical schools than for other academic institutions.
For all indices examined -- equipment per institution, per instru-
ment, per faculty-level researcher, per doctoral degree awarded --
medical schools had larger instrumentation investments, both
aggregate and current, than graduate (nonmedical) schools.
(2) Private and public institutions. Privately con-
trolled institutions consistently showed an advantage over public
institutions on a number of important dimensions. Their research
instruments generally cost more, were newer, and were better
able to meet research needs. Private institutions also had
better maintenance facilities and spent more for maintenance and
repair of their instruments.
11
PAGENO="0722"
716
Differences Among Subfields of Research in the
Biological Sciences
Certain subfields of research stand out from the others
in some characteristics. A brief summary of major differences
follows.
* Biochemistry had the largest number of instruments
costing over $10,000 -- nearly 4,500. It also had a higher
proportion of instruments funded by Federal agencies than any
other subfield.
* In many respects, molecular/cellular biology
appeared to be the best equipped research subfield. It had the
second largest number of instruments, 2,900. In percentage of
instruments in excellent working condition, it ranked very high.
Department heads in this discipline were more satisfied with the
quality of their current instrumentation than in any other sub-
field. Equipment expenditures per faculty researcher in 1983
exceeded by a large amount those for all other disciplines.
* Anatomy and pathology were two of the smaller
subfields in numbers of instruments. They had the highest costs
per instrument, $32,000 and $31,000 respectively. Both subfields,
particularly anatomy, also had unusually high proportions of
instruments over 10 years old in active research use.
* Zoology, botany, and food/nutrition were disciplines
found almost entirely in nonmedical subdivisions of universities.
They were the three subfields with the smallest numbers of instru-
ments. Very high proportions of department heads stated that
their staff could not perform critical experiments in these
disciplines because they lacked appropriate instrumentation.
12
PAGENO="0723"
717
Food/nutrition had the lowest cost per instrument ($22,000) of
any subfield, the poorest maintenance, and had, by far, the
lowest percentage of Federal funding for its equipment.
Differences Between Departments of Medicine and
Biological Science Fields
Departments of medicine, included in the survey as an
experiment to assess the feasibility of obtaining instrumentation
indicators for medical (clinical) sciences, apparently can pro-
vide data on samples of research instruments as easily as the
biological sciences. With respect to Department/Facility Ques-
tionnaires, however, it was learned that some of the larger,
more diverse departments of medicine had difficulty in assembling
expenditure, funding and needs data for all the clinical fields
subsumed within their jurisdictions. A better approach to
collecting such data might be to go directly to each of the
component clinical programs or subunits of departments of medicine.
For most of the analyses performed in this report,
departments of medicine (and presumably, the clinical sciences)
had somewhat different results than the biological sciences.
Departments of medicine apparently retired instruments at an
earlier age than did the biological sciences. Within medical
schools, the average costs of equipment per researcher were
nearly twice as large for the biological sciences as for depart-
ments of medicine. This difference on an index of equipment
intensity is probably a function of the kinds of research performed
by physician-researchers in clinical departments, compared with
those in the basic biological sciences. Whereas over half of
the funds for purchase of equipment in the biological sciences
came from Federal agencies, 38 percent of equipment funds came
13
PAGENO="0724"
718
from those sources for departments of medicine. The difference
was made up by institutional funds, indicating a possible differ-
ence in institutional resources between the clinical and
biological sciences.
Differences Between Biological Sciences and Other
Fields of Science
The biological sciences differed from the other fields
of science addressed in the field survey. They accounted for 38
percent of the instruments in all the fields surveyed; the next
largest field was the physical sciences, with 25 percent of all
instruments. The mean cost per instrument in the biological
sciences was $27,000, compared to $41,000 for the physical sciences
and $35,000 for engineering. Instruments in the biological
sciences were somewhat older than those in other fields, but
there were proportionately fewer instruments in the national
stock in biology that were technologically or mechanically
obsolete. The average instrument in the biological sciences was
used by somewhat fewer investigators than was the case in other
fields. The func~ing pattern for the biological sciences was
unlike that for any other field, because of the prominence of
NIH as a funding source in the biological sciences: NIH directly
contributed 39 percent of the costs of all academic instrumentation
in this field.
14
PAGENO="0725"
719
APPENDIX 6
NIH Program Evaluation Report
Academic Research
Equipment and Equipment
Needs in the Biological
and Medical Sciences
April 1985
*****.*.***.
* * * S * * * S S S S S S S S S S S
S S S S S S S S S S S S S S S S S S S ~
S S S S *55555555* ~ S S S S S
S S S S S 555555555.*****.
: : : : : : : : : : : : : : : :
U.S. Department of Health and Human Services
National Institutes of Health
PAGENO="0726"
720
NIH Program Evaluation Report
ACADEMIC RESEARCH EQUIPMENT
AND EQUIPMENT NEEDS IN THE
BIOLOGICAL AND MEDICAL SCIENCES
Howard J. Hausman, Ph.D.
Research Consultant
Westat, Inc.
Kenneth Burgdorf, Ph.D.
Westat, Inc.
Prepared for:
Program Evaluation Branch
Office of Program Planning and Evaluation
National Institutes of Health
Bethesda, MD 20205
Submitted by:
Westat, Inc.
1650 Research Blvd.
Rockville, MD 20850
April 1985
This project, Project Evaluation No. NIH-83-3ll, Contract No
NOl-OD-3-2l20, received support from the evaluation set-asid
Section 513, Public Health Service Act.
PAGENO="0727"
721
HIGHLIGHTS
This report presents findings from a survey of
existing research instruments and instrumentation
needs in biological science departments and faci-
lities in a national sample representative of the
249 U.S. universities and medical schools with
the largest R&D funding. The data are part of a
larger survey of academic research instrumentation
in all major fields of science and engineering.
The survey focuses on instrument systems in the
$10,000 - $1 million range.
As a test of the feasibility of collecting data
for clinical fields as well as for basic science
fields, medical school departments of medicine
were included in the data collection. No major
feasibility or response problems were encountered
and data from these departments were included in
the analysis of findings.
* At all levels of data collection, from central
administration to department heads to faculty
researchers, response rates were extraordinarily
high -- in the 95-100 percent range. This excep-
tional response appears to indicate high levels
of interest and concern about the adequacy of
existing research equipment.
* Less than one in five biological science depart-
merit heads characterized the adequacy of their
current research instrumentation as "excellent,"
and nearly 60 percent reported that there are
important subject areas in which researchers in
their departments cannot conduct critical experi-
ments because of a lack of necessary equipment.
* The 1983 national stock of academic research
equipment in the biological sciences and depart-
ments of medicine is estimated to have an aggre-
gate original cost of $555 million and a replacement
cost (in constant 1982 dollars) of $863 million.
Per faculty-level researcher, the average amount
of equipment (in original-cost dollars) is $21,200
per person.
* Most items of equipment in the 1983 national
stock were comparatively inexpensive. The mean
purchase cost per instrument system was only
$27,000 in this field, far lower than for most
other major fields of science and engineering.
ii
PAGENO="0728"
722
The unit costs of the most urgently needed research
equipment, as reported by biological science
department heads, were also comparatively low.
Many of the most frequently mentioned items of
needed equipment had purchase costs of $30,000 or
less.
* Only 18 percent of instruments in the 1983 national
stock were classified by their principal users as
state-of-the-art. About that same amount (i.e.,
16 percent of the total stock) appeared to be
totally obsolete and no longer useful in research.
* Of the equipment in active research use in 1983:
- Half the systems were in some degree of
disrepair (i.e., in less than excellent
working condition);
- 80 percent were not state-of-the-art; and
- Of these latter instruments, half were the
most advanced instruments to which their
users had access.
* Facilities for the maintenance and repair of
research instrumentation were characterized as
insufficient or nonexistent by nearly half of the
department heads.
* About 22.5 cents were spent for maintenance and
repair (M&R) of research instruments in FY 1983
for every dollar spent to acquire equipment in
that year. Most M&R was performed through ser-
vice contract or field services as needed. The
mean cost per instrument for a service contract
was $2,3000, compared to $700 for field service
and less for service performed by university-
based personnel.
* The mean expenditure per instrument system for
M&R in 1983 was $1,100. It was $900 for instru-
ments up to 5 years old, but more than $1,300 for
those six years and older. While an average of
$700 was spent for M&R on instruments with an
original purchase cost less than $25,000, $6,300
was spent in 1983 for an instrument costing
between $75,000 and $1 million.
111
PAGENO="0729"
723
* Most equipment that was used for research in 1983
was used extensively. The mean number of users
per system per year was 11, and most systems were
used by several types of users (faculty,, graduate
students, etc.) both from the host department and
from other locations.
* Within the general parameters of need/condition!
obsolescence just described, private institutions
were typically somewhat better equipped than
public institutions: the research equipment in
private institutions tended to be newer, more
costly, more voluminous and in better repair than
that in public institutions. Similar differences,
in favor of medical schools, were found between
medical schools and nonmedical academic institutions.
iv
PAGENO="0730"
724
ACKNOWLEDGMENTS
The two-phase, baseline National Survey of Academic
Research Instruments and Instrumentation Needs was designed and
conducted by Westat, Inc., initially under the sponsorship and
direction of the Universities and Nonprofit Institutions Study
Group, Division of Science Resources Studies, of the National
Science Foundation (NSF). Phase I of the research, involving
collection of data for the physical and computer sciences and
engineering, was conducted under NSF Contract No. SRS-8017873.
Phase II, a part of which is the subject of this report, involved
collection of data for biological sciences, departments of medi-
cine, and other fields; it was supported jointly by NSF under
the above contract and by the Program Evaluation Branch, Office
of Program Planning and Evaluation (OPPE) of the National Insti-
tutes of Health (NIH). The NIH support provided for collection
and analysis of data from a nationally representative sample of
medical schools (under NIH Contract No. NO1-OD-3-2120), in addi-
tion to the NSF-sponsored data collection from nonmedical compo-
nents of U.S. colleges and universities. Preparation of this
report was also supported by the above-referenced NIH contract.
At the NIH Program Evaluation Branch, Helen Hofer Gee,
Ph.D. (Branch Chief), and Charles Sherman, Ph.D. (Project
Officer), performed major roles in the development of the Phase
II design and analysis plan and provided technical oversight
during the survey. In addition, niajor contributions were made
by Marvin Cassnan, Ph.D. (National Institute of General Medical
Sciences), W. Sue Badman, Ph.D. (Division of Research Resources,
NIH), and Rachel E. Levinson (OPPE, NIH), who developed the
instrument typology that was used for the analysis of instruments
identified by respondents as being most urgently needed at the
current time.
V
PAGENO="0731"
725
The following contractor staff performed significant
roles in the survey and in preparing this report:
Lance Hodes, Ph.D., Westat Corporate Officer-in-Charge
Kenneth Burgdorf, Ph.D., Principal Investigator and
Second Author of Report
Howard J. Hausman, Ph.D. (Westat consultant), University
Recruitment and Liaison, and Principal Author of
Report
Cindy Gray, Data Processing Supervisor
Joseph Waksberg, Statistical Advisor
Deborah Turner, Table Programmer
Kristine White, Editor
Carol Hambright, Graphics
In addition to the NIH and Westat project teams, the
project's Phase II Advisory Group made many valuable contribu-
tions both in the refinement of the research design and in the /
assessment of the statistical findings. The members of this
group are listed in Appendix D.
vi
PAGENO="0732"
726
CONTENTS
Chapter
HIGHLIGHTS ii
ACKNOWLEDGEMENTS V
INTRODUCTION 1-1
1.1 Background of the Survey 1-1
1.2 Overview of the Survey. 1-5
1.3 Objedtives and Limitations of This
Analysis 1-7
1.4 Contents of This Report.. 1-8
2 METHODOLOGY 2-1
2.1 Sample Design 2-1
2.2 Survey Procedures 2-7
2.3 Definitions 2-7
2.4 Survey Response 2-12
2.5 Data Collection for Departments of
Medicine 2-18
2.6 Treatment of Data 2-19
3 NEEDS AND PRIORITIES FOR RESEARCH EQUIPMENT
ASSESSMENT BY DEPARTMENT HEADS 3-1
3.1 Adequacy of Current Instrumentation. . . 3-1
3.2 Priorities for Increased Federal
Support 3-5
3.3 Types of Instrumentation Most Urgently
Needed 3-7
3.4 Summary 3-12
4 EXPENDITURES FOR RESEARCH EQUIPMENT, FY 1983. 4-1
4.1 Department Expenditures for Instrumen-
tation 4-1
4.2 Equipment Expenditures per Research
Investigator and per Institution . . . . 4-3
4.3 Summary 4-6
5 THE NATIONAL STOCK OF ACADEMIC RESEARCH
EQUIPMENT 5-.1
5.1 Number and Cost of Instrument Systems. . 5-1
5.2 Unit Costs 5-5
5.3 State-of-the-Art and Obsolete Instrument
Systems 5-15
5.4 Summary 5-18
viii
PAGENO="0733"
727
CONTENTS (continued)
Chapter
6 AGE AND CONDITION OF RESEARCH EQUIPMENT . . . 6-1
6.1 Age of Research Equipment 6-1
6.2 Condition of Research Equipment 6-10
6.3 Summary 6-17
7 FUNDING OF EQUIPMENT IN ACTIVE RESEARCH USE . 7-1
7.1 Means of Acquiring Research Equipment. . 7-1
7.2 Funding Sources for Research Equipment . 7-1
7.3 Summary 7-13
8 LOCATION AND USE OF ACADEMIC RESEARCH
EQUIPMENT 8-1
8.1 Location of Equipment 8-1
8.2 Availability for General Purpose Use . . 8-6
8.3 Annual Number of Research Users per
Instrument System. 8-9
8.4 Summary 8-13
9 MAINTENANCE AND REPAIR 9-1
9.1 Assessment of M&R Facilities 9-1
9.2 The Costs of M&R 9-3
9.3 Relationship of Means of Servicing to
Working Condition 9-8
9.4 M&R Costs and Age of Instruments . . . . 9-8
9.5 Summary 9-12
10 SUMMARY 10-1
10.1 Overview 10-1
10.2 Department-Level Findings 10-1
10.3 The National Stock of Academic Research
Equipment 10-3
10.4 Age and Condition of Academic Research
Equipment 10-4
10.5 Funding of Equipment in Active Research
Use 10-6
10.6 Location and Use of Academic Research
Equipment 10-7
10.7 Maintenance and Repair 10-8
10.8 Group Comparisons 10-9
ix
PAGENO="0734"
728
CONTENTS (Continued)
Tables
Table
1-1 Percent of NIH research project grant
funds allocated for permanent laboratory
equipment, fiscal years 1966-1974 1-2
1-2 NIH equipment awards, fiscal years
1975-1984 1-3
2-1 Institution sample design, graduate
(nonmedical) schools 2-2
2-2 Institution sample design, medical schools. . 2-3
2-3 Department/facilities survey response rates:
Biological and Medical Sciences 2-14
2-4 Equipment survey response rates: Biological
and Medical Sciences 2-16
2-5 Status of sampled equipment items:
Biological and Medical Sciences 2-17
3-1 Department/facilities reporting important
areas in which critical experiments cannot
be performed due to lack of needed equipment:
Biological and Medical Sciences 3-2
3-2 Department/facility assessment of adequacy of
available research instrumentation:
Biological and Medical Sciences 3-4
3-3 Department/facility recommendations for
increased Federal support for research
instrumentation: Biological and Medical
Sciences 3-6
3-4 Number of requests and average cost of
research instruments most urgently needed
in academic settings, by type of instrument:
Biological and Medical Sciences 3-8
3-5 Distribution of estimated costs for most
urgently needed research equipment, by
department: Biological and Medical Sciences. 3-10
x
PAGENO="0735"
729
CONTENTS (Continued)
Tables (continued)
Table
3-6 Types of research instruments most urgently
needed by department: Biological and
Medical Sciences 3-11
4-1 Instrumentation-related expenditures in
FY 1983; Academic departments and facilities:
Biological and Medical Sciences 4-2
4-2 Research equipment expenditures per person
and institution in FY 1983; Academic
departments and facilities: Biological
and Mediàal Sciences 4-4
5-1 Amount of academic research equipment, by
setting; Instrument systems in 1983 national
stock: Biological and Medical Sciences . . . 5-2
5-2 Aggregate cost of academic research equip-
ment, by setting; Instrument systems in 1983
national stock: Biological and Medical
Sciences 54
5-3 Distribution of academic research equipment,
by system cost range; Instrument systems in
1983 national stock: Biological and
Medical - Sciences 5-6
5-4 Distribution of aggregate costs Of academic
research equipment,by system cost range;
Instrument systems in 1983 national stock:
Biological and Medical Sciences 5-7
5-5 Mean aggregate original purchase cost of
academic research equipment per institution
and per instrument system, by setting;
Instrument Systems in 1983 national stock:
Biological and Medical Sciences 5-9
5-6 Mean aggregate original purchase cost of
academic research equipment per doctoral
degree awarded and per faculty-level
researcher; Instrument systems in 1983
national stock: Biological and Medical
Sciences 5-11
xi
PAGENO="0736"
730
CONTENTS (Continued)
Tables (continued)
Table
5-7 Average number of doctorates awarded from
1980 to 1983 and aggregate instrument costs
per degree; Instrument systems in 1983
national stock: Biological and Medical
Sciences 5-14
5-8 Research status of academic equipment;
Instrument systems in 1983 national stock:
Biological and Medical Sciences . 5-16
5-9 Aggregate cost of academic research equip-
ment, by system research status; Instrument
systems in 1983 national stock: Biological
and Medical Sciences 5-17
6-1 Age of academic research equipment;
Instrument systems in 1983 national stock:
Biological and Medical Sciences 6-2
6-2 Percent of academic research equipment that
is state-of-the-art, by year of purchase;
Instrument systems in 1983 national stock:
Biological and Medical Sciences 6-4
6-3 Age of academic research equipment;
Instrument systems in research use in 1983:
Biological and Medical Sciences 6-6
6-4 Age of academic research equipment;
State-of-the-art instrument systems in
research use in 1983: Biological and Medical
Sciences 6-9
6-5 Percent of academic research equipment in
excellent working condition, by research
status; Instrument systems in research use
in 1983: Biological and Medical Sciences . 6-12
6-6 Research function of academic research equip-
ment that is used for research but is not
state-of-the-art; Instrument systems in
research use in 1983: Biological and Medical
Sciences 6-13
xii
PAGENO="0737"
731
CONTENTS (Continued)
Tables (Continued)
Table
7-1 Means of acquisition of academic research
equipment; Instrument systems in research
use in 1983: Biological and Medical
Sciences 7-2
7-2 Acquisition cost of academic research equip-
ment, by means of acquisition; Instrument
systems in research use in 1983: Biological
and MedicalSciences 7-3
7-3 Sources of funds for aôademic research
equipment by field and setting
Instrument systems in research use in 1983:
Biological and Medical Sciences 7-5
7-4 Sources of funds for academic research
equipment, by institutional control;
Instrument systems in research use in 1983:
Biological and Medical Sciences 7-8
7-5 Sources of funds for academic research
equipment, by system cost range;
Instrument systems in research use in 1983:
Biological and Medical Sciences . 7-11
7-6 Federal involvement in funding of academic
research equipment; Instrument systems in
research use in 1983: Biological and
Medical Sciences 7-12
8-1 Location of academic research equipment;
Instrument systems in research use in 1983:
Biological and Medical Sciences 8-2
8-2 Percent of academic research equipment
located in shared-access faäilities, by
research status; Instrument systems in
research use in 1983: Biological and Medical
Sciences 8-4
8-3 Percent of academic research equipment located
in shared-access facilities, by system cost;
Instrument systems in research use in 1983:
Biological and Medical Sciences 8-5
xiii
53-277 0 - 86 - 24
PAGENO="0738"
732
CONTENTS ~Continued)
Tables (continued)
Table
8-4 Percent of academic research equipment
located in shared-access facilities, by age
of system; Instrument systems in research
use- in 1983: Biological and Medical Sciences. 8-7
8-5 Experimental role of academic research
equipment; Instrument systems in research
use in 1983: Biological and Medical Sciences. 8-8
8-6 Mean number of research users of academic
research equipment, by research function;
Instrument systems in research use in 1983:
Biological and Medical Sciences 8-10
8-7 Percent of academic research equipment used
by various types of research users;
Instrument systems in use in 1983: Biological
and Medical Sciences 8-12
9-1 Department/facility assessment of available
instrumentation support services:
Biological and Medical Sciences 9-2
9-2 Mean FY 1983 expenditure per department!
facility for maintenance and repair of
research equipment: Biological and Medical
Sciences 95
9-3 Principal means of servicing in-use academic
research instruments: Biological and Medical
Sciences 9-7
9-4 Percent of in-use academic research instru-
ment systems that are in excellent working
condition, by system age: Biological and
Medical Sciences 9-9
9-5 Mean expenditure in 1983 per system for
maintenance and repair of in-use academic
research instrument systems, by system age:
Biological and Medical Sciences 9-10
xiv
PAGENO="0739"
733
CONTENTS (Continued)
Figures
Figure
6-1 Percent of equipment in the national stock
considered to be state-of-the-art in 1983,
by year of purchase 6-5
6-2 Age distribution of academic research
equipment in active research use:
Biological and Medical Sciences 6-11
6-3 Percent of academic research equipment
that is in excellent working condition, by
year of purchase: Biological and Medical
Sciences 6-14
7-1 Sources of funds for equipment 7-4
Exhibit
Exhibit
2-1 Department types and subfields of research
for the Biological and Medical Sciences . . . 2-9
APPENDIX
A COMPARISON TABLES FOR ALL FIELDS OF SCIENCE . A-i
B DEPARTMENT/FACILITY QUESTIONNAIRE B-i
C INSTRUMENT DATA SHEET C-i
D ADVISORY GROUP, PHASE II SURVEY D-1
E SAMPLING ERRORS E-1
xv
PAGENO="0740"
"34
1. INTRODUCTION
1.1 Background of the Survey
First-rate research requires first-rate equipment.
Research instruments in the biological and medical sciences
perform a .variety of functions, such as:. sorting cells, visual-
izing tissues, sequencing proteins or nucleotides, measuring
physical properties, and performing complex computations.
Scientific instruments must be in proper working condition,
capable of performing their functions, and possess the techno-
logical capacity to obtain the kinds of date, quantities of
data, and the resolution of data required by the research prob-
lems at the frontiers of present knowledge. Lacking such instru-
mentation, investigators are either severely handicapped in
their ability to design experiments and to collect data, or they
must turn away from some of the most important problems of their
discipline.
The evolution of scientific research problems and
equipment has spawned'increasingly complex and expensive instru-
mentation. Replacement of obsolete instruments, as well as
acquisition of instruments of totally new design and capabilities,
is frequently necessary to maintain the level of research that
will keep the United States at the forefront of scientific knowl-
edge and technology.
Many advances in scientific knowledge and in instru-
ment technology have originated in university-based labOratories
since World War II. However, since the early 1970's, colleges
and universities have experienced falling student enrollment and
rising costs in all phases of operation. The resulting fiscal
retrenchments have reduced the ability of institutions to fund
1-1
PAGENO="0741"
735
the purchase of scientific research equipment at the very time
that equipment costs have been rapidly increasing. Simulta-
neously, Federal support for the purchase of equipment has been
declining.1 For example, the National Institutes of Health,
which is the principal source of support for the biological
sciences, has experienced a decline in the percentage of research
grant and contract awards earmarked for the acquisition of re-
search instruments. Table 1-1 shows that the percentage of
research project grant funds expended for permanent laboratory
equipment declined from nearly 12 percent in 1966 to less than
six percent by 1974. Table 1-2 presents a more recent time-
series showing the amount and proportion of research and shared
instrumentation program awards budgeted for equipment. The
percentages vary from 4.6 percent in 1975 to 3.7 percent in
1984.
Table 1-1. Percent of NIH research project grant funds allocated
for permanent laboratory equipment, fiscal years
l966_l974*
Year
Percent
1966
11.7%
1967
11.8
1968
9.5
1969
7.5
1970
5.9
197].
6.2
1972
6.6
1973
4.9
1974
5.7
*
Includes the National Cancer Institute, the National Institute
of General Medical Sciences, and the National Heart and Lung
Institute. Source: National Science Foundation, Science
Indicators, 1974, Table 2-12.
`See Kennedy, Donald. Government Policies and the Cost of Doing
Research; Science, 1 February 1985, Vol. 227, pp. 480-484.
1-2
PAGENO="0742"
736
*
Table 1-2. NIH equipment awards, fiscal years 1975-1984
[Dollars in thousands]
Year
.
Dollars budgete
for equipment
d
Percent of total
dollars awarded
1975
$ 49,693
4.6%
1976
56,673
3.9
1977
-
*
- 58,697
-
4.3
1978
68,009
.
4.4
1979
85,161
4.6
1980
79,327
3.8
1981
73,359
3.3
1982
74,657
3.2
1983
89,512
3.4
1984
.
109,720
3.7
*
Includes all NIH extramural research and shared instrument programs.
Source: NIH internal document.
Evidence has been accumulating that these funding
problems have affected the quality of research in universities.
A recent survey of 16 prestigious research universities revealed
that leading investigators were already experiencing difficulty
in performing experimental research at the frontiers of their
fields because of the lack of proper instrumentation.2 While
the survey confirmed other accounts of the problem, all of the
evidence was anecdotal, and a demand arose for more comprehensive
and objective data.
In recognition of the need for "objective information
in the area," the House Committee on Science and Technology
recommended that the National Science Foundation "conduct
2Association of American Universities. The Scientific Instru
mentation Needs of Research Universities, Report to NSF, l980~
1-3
PAGENO="0743"
737
inventories of, and analyses of the needs for, scientific instru-
mentation."3 The resulting legislation, when enacted and signed
into law, directed the Foundation to "develop indices, correlates
or other suitable measures or indicators of the status of scien-
tific instrumentation in the United States and of the current
and projected need for scientific and technological instrumen-
tation."4 In response to this mandate, the Foundation initiated
a feasibility study in FY 1980: (a) to design quantitative
indicators of current status and trends in the stock, condition,
utilization and needs for research instrumentation in academic
settings, and (b) to assess the availability of this information
and determine the most appropriate data sources and methods of
data collection. The advisory group for this study included
representation from the National Institutes of Health.
The feasibility study, conducted in the fall of 1981
at a national sample of 38 colleges and universities, concluded
that it is feasible to obtain reliable quantitative indicators
of current status and trends in academic research instrumenta-
tion. The feasibility study final report presented recommenda-
tions concerning proposed data collection methodologies and
statistical indicators to be constructed from the resulting
data.5 Final specifications for the baseline national. survey
were developed by NSF following extensive review of the feasi-
bility study findings by other Federal agencies and by university
scientists and research administrators.
3House of Representatives Report No. 96-61 (1979), p. 30.
4An Act to Authorize Appropriations for Activities for the National
Science Foundation for Fiscal Year 1980, and for Other Purposes.
Public Law 96-44, Section 7.
5lndicators of Scientific Research Instrumentation in Academic
Institutions: A Feasibility Study. Westat, Inc., March 1982.
1-4
PAGENO="0744"
738
1.2 Overview of the Survey
The National Survey of Academic Research Instruments
and Instrumentation Needs calls for the development of quanti-
tative baseline indicators of the national status and of emerging
trends in the stock, cost/investment, condition, obsolescence,
utilization, and need for major research instruments in academic
settings. . -
This baseline survey was conducted in two phases.
Phase I, conducted during the 1982-83 academic year at a strati-
fied probability sample of 43 universities, was concerned with
existing academic research instruments and instrumentation needs
in the physical and computer sciences and in engineering. Phase
I was conducted entirely under NSF sponsorship.6
The National Institutes of Health joined the study for
Phase II, which was conducted during the 1983-84 academic year
with the collection of data for the biological, agricultural,
and environmental sciences. The same sample of universities
that participated in Phase I contributed to Phase II. In addition,
a separately drawn sample. of 24 medical schools was added, under
NIH sponsorship, to provide a comprehensive picture of academic
instrumentation in the biological sciences.
A limited study was also undertaken to determine the
feasibility of obtaining the same data for medical (i.e., clinical)
sciences as for the biological sciences. Departments of Medicine
in the medical schools were chosen for this purpose. The partic-
ular medical sciences included in Departments of Medicine are
6Academic Research Equipment in the Physical and Computer Sciences
and Engineering: An Analysis of Findings From Phase I of the
National Science Foundation's National Survey of Academic Research
Instruments and Instrumentation Needs. Westat, Inc., December
1984.
1-5
PAGENO="0745"
739
not consistent from one institution to another, but include a
variety of clinical subspecialty areas. This segment of the
study is not equivalent to the sampling survey done for the
biological sciences, since no defined set of disciplines is
covered, but it can be considered a case study to be evaluated
for the possibility of more formal investigation.
In each phase, two kinds of data were collected. First,
all departments and nondepartmental research facilities in appli-
cable fields were asked to provide information about the department
or facility as a whole, particularly as regards research equipment
costs and needs. Department/facility heads provided this infor-
mation. Second, from equipment listings supplied by the university,
a sample of research instrument systems was selected from each
department and facility, and the principal investigator (or
other knowledgeable individual) was asked to provide information
about the sampled instrument's cost, age, condition, use, etc.7
These latter data were used to construct quantitative statistical
indicators of these variables for the national stock of existing
academic research instruments in the fields surveyed.
The equipment survey component of each phase was
restricted to instrument systems with an original purchase cost
of $10,000 to $1 million. Systems above this range are generally
well-known throughout the research and policymaking communities
and are individually subject to ongoing policy analysis. The
lower limit was set at $10,000 for efficient survey coverage.
According to the feasibility study, instruments priced at
$10,000 or more accounted for over 80 percent of the aggregate
costs, but only 10 to 1.5 percent of the total number of systems,
7Until very recently, it would not have been feasible to obtain
the kinds of equipment lists required for the selection of
instrument samples. Most of the computerized university property
inventory systems that were so useful in generating sampling
lists for the study had come into being, or had been substantially
upgraded, within the past 1-3 years.
1-6
PAGENO="0746"
740
of all academic research instruments costing $500 and over.
Also, it was the consensus of the NSF Interagency Working Group
advisors that individual pieces of equipment below $10,000 are
seldom of critical importance in determining whether an academic
scientist or engineer is able to pursue his or her research
interests.
1.3 Objectives and Limitations of This Analysis
This analysis is concerned primarily with the biolog-
ical sciences in medical schools and in the nonmedical components
of colleges and universities, the latter being referred to as
graduate schools. Additional data are reported for Departments
of Medicine in the medical schools as part of an exploration of
the feasibility of obtaining information on instruments used in
clinical research.
The study provides a baseline for measuring future
changes in instrument costs, quantity, obsolescence, condition,
and utilization. It also provides, for the first time, a set of
quantitative statistical indicators for measuring these changes.
The statistics presented here function as a snapshot of the
current status of instrumentation in academic settings, couched
in terms of the indicators. Not only do these figures describe
what has been found for 1983 in the biological and medical
sciences, but they also permit comparisons with different fields
of science. In addition, the most important needs of departments
and iiondepartment research facilities are summarized in general terms.
terms.
While this study offers the potential for assessing
changes over time, that potential can be realized only by repli-
cations of the survey at suitable periods. To a limited extent,
1-7
PAGENO="0747"
741
there are some data in the present study that display trends for
the last few years of instrument acquisition;, these data are
suggestive of the total picture but are not definitive, and they
need determination from a separate survey.
This survey did not collect information on the total
number, cost, and condition of all equipment in academic research
settings, since the instruments included were limited to those
costing between $10,000 and $1 million. Moreover, in this study
no account has been taken of instrumentation that may be available
to at least some university and medical school investigators in
nonacademic research facilities, a factor that may influence the
need for research instruments.
The principal analytic objectives'of the present
study are: (a) `to construct and examine a variety of quantitative
statistical indicators of major characteristics of the current
national stock of academic research equipment in several fields,
and (b) to document differences among research fields and among
types of institutions in amount, age, condition, obsolescence,
sharing/usage, and perceived current needs for equipment.
1.4 Contents of This Report
This report focuses on statistical findings from the
survey of the biological sciences and departments of medicine.
There are eight more chapters. Chapter 2 is a brief description
of the survey methodology and of the response rates for the
survey. Chapters 3 through 9 present statistical findings in
each of six broad topic areas:
Needs and Priorities for Research Equipment:
Assessments by Department Heads
1-8
PAGENO="0748"
742
Expenditures for Equipment, FY .1983
* The National Stock of Academic Research Equipment
* Age and Condition of Research Equipment
* Funding of Equipment in Active Research Use
* Location and Use of Research Equipment
* Maintenance and Repair
Chapter 10 is a summary of the principal findings of the survey.
The appendices include a set of comparison tables for all fields
of science (see Appendix A), offered so that major results for
the biological sciences may be compared with those for all other
fields surveyed in Phases I and II. The questionnaire forms
used in the survey may be found in Appendices B and C. Appendix
D lists the members of the project's Phase II Advisory Group,
and Appendix E presents informaiton about the statistical precision
of the major types of national estimates derived from the survey
examples.
1-9
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2. METHODOLOGY
2.1 San~p1e Design
2.1.1 Institutions
2.1.1.1 Graduate Schools
The graduate school segment of this study, perhaps
more accurately termed the nonmedical school component, consisted
of the same set of 43 institutions selected as the stratified
probability sample for the NSF Phase I study referenced previously.
The universe' from which this sample was drawn constituted the
largest academic research and development (R&D) institutions in
the nation: the 157 nonmedical, nonmilitary U.S. colleges and
universities that had $3 million or more in separately budgeted
science and engineering (S/E) R&D expenditures in any of the
fiscal years FY 1977 - FY 1980.8 One of the sampled institu-
tions, a technical college, had no research equipment in the
biological sciences; therefore, this report was based on data
collected from 42 sampled institutions.
The 157 institutions in the graduate school universe
collectively account for 95 percent of all nonmedical S/E R&D
expenditures reported to NSF for FY 1980 by all U.S. colleges
and universities. Thus, although the survey represents only a
small fraction of the nation's approximately 3,000 postsecondary
8Academic Science R&D Funds, Fiscal Year 1980: Detailed Statistical
Tables. Surveys of Science Resources Series, National Science
Foundation, 1982 (GPO Publication No. NSF82-300).
2-1
PAGENO="0750"
744
institutions, it encompasses most institutions with significant
capabilities for the kinds of advanced research that require
instrumentation in the $l0,000+ range. Such capabilities are
assumed to be very limited, or nonexistent, at most of the
thousands of other U.S. institutions of higher education that
have been excluded from the study universe.
In selecting the study sample of 43 institutions, the
probability of selection of each institution in the survey uni-
verse was approximately proportional to its R&D size, as indi-
cated by its FY 1980 nonmedical S/E R&D expenditures. Within
R&D size classes, the proportion of private (or public) insti-
tutions in the sample was approximately the same as in the nation
as a whole. The design is summarized in Table 2-1.
Table 2-1. Institution sample design, graduate (nonmedical) schools
FY 1980 S/E R&D No. institutions in nation No. institutions in sample
expenditures Total Private Public Total Private Public
Total, all
institutions
over $3 million 157 53 104 43 15 28
Large institu-
tions, total 38 11 27 23 7 16
Over $90
million 3 2 1 3 2 1
$52. 5-$89. 9
million 15 3 12 10 2 8
$33-$52.4
million 20 6 14 10 3 7
Smaller institu-
tions, total 119 42 77 20 8 12
$19-s 32.9
million 30 11 19 10 4 6
$3-$18.9
million 89 31 58 10 4 6
2-2
PAGENO="0751"
2.1.1.2 Medical Schools
745
For the medical school component of the study, a sample
of 24 medical schools was selected from the universe of all
medical schools with at least $3,000,000 in total NIH awards in
l982.~ The 92 schools in this universe accounted for 97 percent
of all NIH awards made in FY 1982 to U.S. medical~schools. For
the sample; six schools were selected from each of four strata,
as shown in Table 2-2.
Table 2-2. Institution sample design, medical schools
FY 1980 S/E R&D
expenditures
No. institutions in nation
No. institutions in sample
Total
Private
Public
Total Private
Public
Total, all
institutions
over $3 million
92
40
52
24
10
.
14
Large institu-
tions, total
Over $43.6
million
$25.0-$42.2
million
20
8
12
13
6
7
7
2
5
12
6
.6
6
4
2
.
6
2
4
Smaller institu-
tions, total
$l3.5-$24.7
million
$3.l-$l3.4
million
72
18
~
54
27
.
9
~
18
45
9
36
12
6
6
4
3
1
8
3
5
The selection procedure was one that maximized overlap
with the original NSF institutionsample. The probability of
selection of each institution in the survey universe was approxi-
mately proportional to its FY 1982 NIH award size.
9Summary of NIH FY 1982 Extramural Awards to Medical Schools,
Internal document, National Institutes of Health.
2-3
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746
2.1.2 Departments and Facilities
At each sampled graduate and medical school, the follow-
ing departments and facilities were identified as candidates for
inclusion in the survey:
* All academic departments in the biological sciences;
All institutfonally operated, nondepartmental
research or instrumentation facilities in the
biological sciences; and
* Departments of medicine in the medical schools.
All departments/facilities that contained one or more research
instrument systems in the $10,000 to $1,000,000 cost range were
asked to participate. A total of 195 biological science
departments/facilities in the graduate schools and 168 in the
medical schools, in addition to 24 departments of medicine, were
identified as `in-scope.' Each department/facility was asked to
complete a Department/Facility Questionnaire concerning its
instrumentation-related expenditures, needs and priorities, and
sources of funding support. (See Appendix B.)
2.1.3 Research Instruments
The survey.was limited to instrument systems that
(a) were used primarily for research in 1983 or were intended
for such use; and (b) originally cost $10,000 to $1,000,000,
including the cost of any separately-purchased, dedicated acces-
sories or components. The sequence of steps taken at each
department/facility to obtain a sample of such instruments is
described in the following paragraphs.
2-4
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747
A preliminary listing of all $10,000+ items of
research equipment was obtained, usually from the institution's
computerized central property inventory system. Often, the pre-
liminary lists were overly inclusive, containing in addition to
items of research equipment, miscellaneous property such as
laboratory and other furniture, physical plant equipment (e.g.,
exhaust hoods, heating and air conditioning units), field trans-
portation equipment (trucks-or vans), secretarial equipment
(word processors, reproduction units), and the like.
After preliminary screening out of entries that
were unquestionably inappropriate, a random probability sample
of $l0,0O0-~- items was selected from each department/facility.
All items costing $50,000 or more were included in the survey.
For items in the $10,000 to $49,999 range, sampling rates ranged
from 100 percent for departments/facilities with from 1 to 11
such items down to a simple random sample of 14.3 percent (1/7)
for departments/facilities with 97 or more such items. The
intent of this design was to ensure adequate sample sizes for
analysis without overburdening large departments and facilities.
Across the 387 eligible departments/facilities in the
66 sampled institutions (42 graduate schools and 24 medical
schools), a total of 9,238 equipment items were identified in
preliminary listings; of these, 4,555 were selected for the
survey sample. Overall, the equipment sample included 190 items
costing between $100,000 and $1,000,000; 452 items costing
between $50,000 and $99,999; and 3,913 items in the $10,000 to
$49,999 range.
For each sampled instrument, department/facility
administrators were asked to arrange for the brief Instrument
Data Sheet to be filled in by the responsible principal investi-
gator or other person knowledgeable about the instrument's status,
cost, and condition. (See Appendix C.)
2-5
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2.1.4 Estimation Procedures
In later chapters, all results are reported in the
form of national estimates statistically weighted to represent
all applicable research departments and nondepartmental research
facilities in the biological and medical sciences at institutions
in the study universe. As noted earlier, the universe to which
survey estimates apply consists of the l~7 largest nonmedical
R&D universities in the nation and the 92 medical schools with
the largest total NIH awards.
The estimation weights that were applied to depart-
ment/facility questionnaire data were not complex. Since all
applicable departments and facilities in a sample university
were asked to participate in the survey and since most of them
actually did provide survey responses, the estimation weight for
each responding department was simply the inverse of the selec-
tion probability of the university or medical school in which
the department or facility was located, multiplied by a small
nonresponse adjustment factor.
Estimation weights for the survey of $10,000 to
$1,000,000 instruments were somewhat more intricate. The weight
for a completed instrument questionnaire was the product of:
The university sampling weight -- the inverse of
the university's probability of selection;
* The instrument sampling weight -- the inverse of
the probability of selection of the particular
instrument from the department or facility equip-
ment list;
* An adjustment to the initial instrument sampling
weight in situations where the instrument was
part of a larger system with two or more separately
2-6
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749
listed components in the $10,000 to $1,000,000
range (in which case, the system selection proba-
bility was larger than the selection probability
for any one component); and
A nonresponse adjustment, where needed.
Information about the statistical accuracy of national
estimates derived from the study samples of departments and
instrument~ is presented in Appendix E.
2.2 Survey Procedures
At each institution, all data collection arrangements
were handled by a survey coordinator appointed, for graduate
schools, by the office of the president of the university and,
for medical schools, by the dean of the school. Typically,
coordinators were themselves senior administrators, such as
deans of the graduate schools or vice presidents of research.
These individuals were responsible for identifying all the relevant
departments and facilities; obtaining needed preliminary lists
of equipment; and after equipment samples had been selected by
the survey contractor, arranging for the distribution, completion,
and return of survey questionnaires.
2.3 Definitions
The following definitions and guidelines are provided
to assist the reader in using the data in this report.
2-7
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2.3.1 Field of Science
This report is concerned with two broadly defined
fields: (a) biological sciences, and (b) the clinical (or medical)
sciences, which are represented by departments of medicine.
Nationally, departments of medicine comprise 40 percent of faculty
in clinical departments. The bulk of the data was reported
either by c~epartment type or by subfield of research. Data
obtained from the Department/Facility Questionnaire were broken
out by department type, based largely on the name of the depart-
ment or facility. The analysis categories are shown in Exhibit 2-1.
The category of biology, general and n.e.c. (riot
elsewhere classified), is a combination of biological science
departments and facilities that do not fit into any of the other
classifications. The majority of these are departments of general
(undifferentiated) biology, which are not uncommon in nonmedical
schools. However, a few miscellaneous medical school department
facilities conducting research in a variety of biological science
fields (i.e., cancer research centers and other interdisciplinary
biomedical science research centers) are included in this
classification.
When findings about instrument systems are based on
information from the Instrument Data Sheet, the data are broken
out by subfield of research, rather than by type of department.
This is because an instrument may be carried on the inventory of
a department in one discipline while actually being used in a
discipline other than the one implied by the department name.
For example, many instruments assigned to departments of general
biology were actually used for research in biochemistry or molec-
ular biology. The user of the instrument was asked on the
questionnaire to list_the principal field of research in which
the instrument was employed, and the researcher's description
2-8
PAGENO="0757"
751
Exhibit 2-1. Department types and subfields of research
for the biological and medical sciences
Biochemistry
Microbiology
(includes immunology, bacteriology, virology)
Molecular/Cellular Biology
(includes genetics, embryology, developmental biology)
Physiology/Biophysics
Anatomy
Pathology
(excludes laboratory medicine, clinical pathology,
clinical chemistry)
Pharmacologyfl oxicology
(excludes clinical pharmacology)
Zoology/Entomology
(includes parasitology)
Botany
Food and Nutrition
Biology, General and n.e.c.
(includes cancer research centers, interdisciplinary
biomedical science research facilities)
Departments of Medicine*
Interdisciplinary, n.e.c.**
*For subfields of research, the designation is Medical Sciences!
Departments of Medicine, and includes instruments located in
other departments.
**
This category is used only for subfields of research; n.e.c.
means not elsewhere classified.
~-Q.
PAGENO="0758"
752
for classifying the instrument into its subfield of research.
There were significant differences between the number of instru-
ments assigned to departments named for a discipline and the number
used in the subfield of research carrying the name of that discipline.
One designation change was necessary in the parallel naming of
the two sets. Several subfields of medical sciences research
were present in most departments of medicine. Instruments used
for research in one or another of the medical sciences -- most
of which were located in departments of medicine -- were given a
generic subfield classification of Medical Sciences/Departments
of Medicine. A subfield category was also needed to account for
a small number of instrument systems that were carried on the
inventories of departments in the biological sciences but were
actually used in fields outside the biological sciences -- biomedical
engineering, chemistry, etc. This subfield category was named
"Interdisciplinary, n.e.c.'
2.3.2 Institution Control
Institutions were classified according to the nature
of the controlling body; i.e., private vs. public ownership.
2.3.3 ~y~qp
For purposes of data collection, an instrument system
was defined as a sampled instrument or component, selected from
a department/facility property inventory list, plus any separately
acquired `add-ons" or components that, as of December 31, 1983,
were dedicated solely for use with the sampled items. The instrument
system was the basic counting unit in the equipment survey, and
all reported cost figures reflected costs for the full system --
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753
the base unit plus all dedicated accessories. The equipment
survey was limited to systems with an original purchase cost of
$10,000 to $1,000,000.
2.3.4 1983 National Stock of Academic Research Equipment
Th this report, the "national stock" of academic re-
search equipment refers to all instrument systems costing $10,000
to 1,000,000 that, as of December 31, 1983, were physically
located at an academic institution in the survey universe and
were principally used ~or intended for use) in original scientific
research in one or more of the fields encompassed by the survey.
The term national stock includes systems actually used for research
in 1983 as well as existing components of nonoperational systems
still under construction at the end of 1983. Research systems
that were physically present but inoperable or inactive through-
out 1983 are also included as part of the national stock.
2.3.5 Purchase Cost
The purchase cost refers to the manufacturer's list
price at the time of original purchase (i.e., when new). For
multi-component systems, the purchase cost is the aggregate list
price of all components and accessories. Except where clearly
specified otherwise, all cost/value/investment statistics in
this report refer to system purchase cost.
2.3.6 Acquisition Cost
In this report, this is the actual cost to acquire the
instrument system at the present university, including trans-
portation and construction/labor costs. For used, discounted,
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754
or rebated equipment, it is the price actually paid to the seller
plus transportation and installation costs; for donated, loaned,
transferred, or surplus equipment, it is just the transportation
and installation costs, if any.
2.3.7 1982 cost-Equivalent
This is the original purchase cost converted to 1982
dollars using the Machinery and Equipment Index of the Annual
Producer Price Index (PPI) to adjust for inflation. Arith-
metically, the value is calculated by multiplying the original
purchase cost by the ratio of the 1982 Annual PPI for Machinery
and Equipment to the index for the year in which the instrument
system was originally purchased or constructed.
2.4 Survey Resppp~q
In a complex, multistage survey such as this, there
are several levels or types of response to consider. The first
level is the institution; participation by the institution makes
possible all other data collection. The next level is the depart-
ment, or nondepartmental research facility, with its response to
the Department/Facility Questionnaire addressed to the department
head. The third level is the faculty researcher asked to com-
plete the Instrument Data Sheet. The final level is the response
to individual items on the questionnaires, i.e. the percentage
of respondents giving usable answers to each item.
2-12
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755
2.4.1 Institution Response
The rate of response for institutions was 100 percent.
At each of the 24 sampled medical schools, the deans promptly
agreed to participate and appointed coordinators, who arranged
for the preparation and delivery of preliminary equipment list-
ings for all applicable departments/facilities and subsequently
arranged for the delivery and return of survey materials to and
from these departments/facilities. Similarly, there was a 100
percent response rate among the 42 sampled graduate schools that
had been sampled in Phase I of the study.
2.4.2 De~partment/Facility Questionnaires
Completed Department/Facility Questionnaires were
received from 95 percent of the department heads -- 367 of the
387 eligible departments and facilities. Table 2-3 reports
these returns in detail. Three of the department categories had
a 100 percent response rate. With the exception of departments
of medicine, 91 percent of the questionnaires were returned.
Departments of medicine had a response rate of 83 percent. In a
few departments of medicine, the organizational structure was
such that an overall response for all the clinical subdivisions
in those departments was not feasible. There was essentially
the same response rate for institutions with large R&D expenditures
as for those with small expenditures. Departments in private
institutions, however, responded with slightly less frequency
than did those in public institutions (90 percent vs. 97 percent).
2-13
PAGENO="0762"
38:;
28 `~3
8 ~8
a ~
~ I
~ `~1
a
I ~I
ox
2
PAGENO="0763"
757
2.4.3 Instrument Data Sheet
Faculty researchers returned completed Instrument Data
Sheets for 4,397 instrument~, constituting 97 percent of the
4,555 instruments in the equipment sample (see Table 2-4). As
would be expected with an overall response rate this high, no
differences worth noting were found by type of department, size
of R&D expenditures, institution controlr cost of equipment, or
age of equipment.
In Table 2-5 an analysis of the Instrument Data Sheet
returns is shown by status, or classification as to eligibility
for inclusion in the study. Of the 4,555 instruments for which
Instrument Data Sheets were forwarded, 3,358 were found to be
actively in research use. Another set of 582 instruments were
found to be either inactive or inoperable throughout the year,
or not yet placed into service. These two sets of instruments,
numbering 3,940 or 83.5 percent of the sample, constituted the
national stock that formed the basis for the analysis. An
additional 457 instruments were classified as out of scope for
this study for a variety of reasons. No response was received
for 158 instruments. Refusals accounted for 90 of these nonre-
sponses. For the remaining 68, no knowledgeable person could be
found to answer the detailed questions asked about the instrument,
e.g., the principal investigator was absent from the institution
and no one else was familiar with the instrument.
2.4.4 Questionnaire Item Response
Most questionnaire items had response rates close to
100 percent. For this reason, in most of the tables in the body
of this report, it did not seem worthwhile to present a category
labeled "not ascertained." Such a category would usually have
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a ~
~cn
~
~1
&~
c.,1
PAGENO="0765"
759
Table 2-5. Status of sampled equipment items: Biological and Medical Sciences
Item response status
*
Total
Graduate
schools
Medical
schools
No. f Percent
No. Percent
No. j Percent
Total, all sampled items
4555
100.0
1984 100.0
2571 100.0
Instrument/system in research use
3358
73.7
1516 76.4
1842 71.6
Other items in national stock, total -
582
25
557
12.8
0.5
12.2
237 12.0
11 0.6
226 11.4
345 13.4
14 0.5
331 12.9
Not yet in use
No longer in use: inactive or
inoperable through 1983
Out-of-scope, total
457
10.0
165 8.3
292 11.4
No longer present -- sold, scrapped,
traded-in, cannibalized, etc.
Not research equipment - teaching,
office, etc.1
Dedicated accessory of instrument!
system in research use2
Other, e.g., cost out of range,
duplicate listing
179
170
46
62
3.9
3.7
1.0
1.4
67 3.4
61 3.1
14 0.7
23 1.2
112 4.4
109 4.2
32 1.2
39 1.5
Nonresponse, total
158
3.5
66 3.3
92 3.6
Refusal
Other3
90
68
2.0
1.5
43 2.2
23 1.2
47 1.8
45 1.8
110 the extent possible, items in this category were edited from institution equipment
listings prior to sampling. Otherwise, the number and percent of such items would
have been larger.
2lnformation about accessories is contained in the data record for the principal
instrument or component of the system.
3Other nonr-eaponae was due principally to unavailability of person knowledgeable about
the instrument -- ill, on sabbatical, etc.
2-17
PAGENO="0766"
160
contained less than 2 percent of all responses. Consequently,
however, different tables dealing with the same basic data (such
as the estimated total number of instrument systems or the
estimated total cost of equipment) may show slightly different
totals.
2.4.5 Summary Statement-on Response
The exceptionally high response rates obtained in this
study suggest that the major topic of ~the survey -- the adequacy
of academic research equipment in the biological and medical
sciences -- is a matter of widespread interest and concern at
all levels of the academic research community, from central
administration to front-line principal investigators. Response
rates of the same magnitude were also obtained in Phase I of the
study.
2.5 Data Collection for Departments of Medicine
One objective of the study was to assess the feasibility
of applying the survey methodology to the medical (clinical)
sciences in medical schools. From Table 2-4, it appears that
instrument data could be obtained from departments of medicine
at about the same level of response as was achieved from depart-
ments in the biological sciences at medical schools.
However, departments of medicine had more difficulty
with the Department/Facility Questionnaire. Four of the 24
departments of medicine in the medical school sample did not
respond to that questionnaire (Table 2-3). It was learned from
the institution coordinators that the difficulty lay with the
structure of these departments. In at least some medical schools,
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761
departments of medicine are larger and more diverse than most
departments in the biological sciences. The several clinical
divisions or units that constitute departments of medicine in
those instances operate with relative independence. Information
about equipment expenditures, funding sources, etc., is often
not maintafned for the department of medicine as a whole. Also,
judgments on major departmental needs and priorities become too
difficult when-so many diverse interests-are involved. While
the response to the Department/Facilities Questionnaire was a
"respectable" 83 percent among departments of medicine, the
problem of one person responding for a number of diverse clinical
fields suggests that it might be better, when seeking instrumen-
tation information for specific clinical sciences, to ask each
clinical division or unit head directly.
All things considered, however, the conclusion is that
it is feasible to obtain data on the clinical sciences with the
survey methodology used for this study. The data actually
obtained in the current survey of departments of medicine, while
not easily interpreted in terms of fields or subfields of science,
were obtained from a nationally representative sample of such
departments. In this report, these sample data have been aggre-
gated to produce national estimates for departments of medicine
in the same way that all other survey data were treated.
2.6 Treatment of Data
Discussion of the study results is organized around
specific tables, each table being based on an item in one of the
two survey questionnaires. Most of these tables follow the same
format. In general, responses to questions on the survey question-
naires are broken outby department type (in. the case of data
from the Department/Facilities Questionnaire) or by subfield of
2-19
PAGENO="0768"
762
research (in the case of data from the Instrument Data Sheet).
These breakdowns typically are followed by two sets of summary
groupings (1) field and setting which separates biological
sciences from the medical schools' departments of medicine, and
also divides biological sciences into graduate (nonmedical)
schools and medical schools; and (2) institution control, which
separates private from public institutions.
It has already been noted that the tables in subsequent
chapters report results in the form of national estimates, statis-
tically weighted to represent all departments in the survey
universe. Typically, estimates are rounded to a level of pre-
cision judged appropriate for the particular table (e.g., percent-
ages in integers, dollars in thousands). Because each estimate
is rounded individually, numbers and percentages may not sum
exactly to the totals shown in a given table.
This analysis of the biological and medical sciences
is part of a study of larger scope which includes all fields in
the physical and life sciences, engineering, and computer sciences.
As a result, it is possible to place the biological sciences in
perspective with the other sciences. A few such comparison tables
are included in Appendix A of this report. Relevant comparisons
are discussed in the body of the report with references made to
the appropriate appendix tables.
2-20
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763
3. NEEDS AND PRIORITIES FOR RESEARCH EQUIPMENT:
ASSESSMENT BY DEPARTMENT HEADS
A stratified probability sample of 367 biological and
medical science department heads provided an overview of the
condition of their research instrumentation for this study. The
selected department heads represented over 1,200 departments and
research facilities at institutions conducting 95 percent of the
nation's academic research in the biological and medical sciences.
The assessments made by these department heads constitute a
significant front-line view of the current stock of instrumenta-
tion, the scope of maintenance and repair activities within
departments, and the nature of the most pressing needs for new
or replacement equipment.
3.1 Adequacy of Current Instrumentation
A set of questions was asked of department/facility
heads relating to adequacy of the instrumentation in place
during 1983. In reply to a question on whether there were
important subject areas in which critical scientific experiments
could not be conducted in 1983 because needed equipment was
lacking, 58 percent of the departments/facilities responded in
the affirmative. (See Table 3-1.) The percentages ranged from
only 27 percent in molecular/cellular biology to about 75 percent
for botany and general biology and 87 percent for food/nutrition.
This problem existed in 59 percent of the biological sciences
departments, compared to 41 percent of the departments of medi-
cine. A large difference appears for institution control, with
only 42 percent of departments in private institutions reporting
such a deficiency, compared to 65 percent of those in public
institutions.
3-1
53-277 0 - 86 - 25
PAGENO="0770"
764
TABLE 3-1
V!PARTPIENTStFACILXTIEE REPORTING IMPORTANT AREAS IN WHICH CRITICAL EXPERIMENTS
CANNOT BE PEF~0RMED DUE TO LACK OF NEEDED EGUIPPIENTI BIOLOGICAL AND MEDICAL SCIENCES
PERCENT REPORTING INABILITY TO
NUMBER OF CONDUCT CRITICAL EXPERIMENTS
DEPARTPIENTS/FACILITIES DUE TO LACK OF NEEDED EQUIPMENT
TOTAL 1219 58
DEPARTMENTS
BIOCHESISTRY- - 144 - 42
MICROBIOLOGY 151 50
MOLECULARICELLULAR BIOLOGY 74 27-
PHYSIOL0GY~0I0PHY5ICS 132 56
ANATOMY B2 60
PATHOLOGY 80 -62
PHARMACDLOGY~TOXIC~LOGY 104 60
ZODLOGY1ENTONOLOGY 69 - 69
BOTANY - 33 78
FOOD AND NUTRiTION Xl 87
BIOLOGY. GENERAL AND N.E.C. 210 75
DEPARTMENTS OF MEDICINE 81 41
FIELD AND BETTING
BIOLOGICAL SCIENCES. TOTAL 1138 59
GRADUATE SCHOOLS - 500 60
NEDICAL SCHOOLS 588 - 58
DEPARTMENTS CF MEDICINE 81 41
INSTITUTION CONTROL
PRIVATE 379 42
PUSLIC -840 65
3-2
PAGENO="0771"
765
Relative to other fields of science, departments in
the biological sciences reported less frequently that they were
unable to perform critical experiments. Comparison Table A-l in
Appendix A reveals that about 90 percent of departments in the
physical sciences and engineering, and 95 percent of those in
the computer sciences, reportedly lacked the equipment needed
for frontier experiments -- in contrast to 59 percent for the
biological- sciences. -
When asked to rate the adequacy of available research
instrumentation for tenured and untenured faculty-level researchers
(Table 3-2), department heads described the current stock of
equipment as excellent for tenured facult~i in only 16 percent of
the departments, and for untenured faculty in 15 percent. It
was considered insufficient in 27 and 33 percents of the depart-
ments respectively. Once more, there were large differences by
department type, with molecular/cellular biology departments
considering themselves better equipped than any other discipline.
Botany and food/nutrition again had the largest proportion of
departments reporting insufficient instrumentation, particularly
for: untenured researchers.
Biological science departments in medical schools were
far less likely to report insufficient equipment (15% to 38% for
tenured faculty) than were similar departments in graduate
schools. There was also a large difference in response to this
question in favor of private institutions, with 36 percent of
private school departments considering their equipment excellent.
Only seven percent of the public institutions considered their
equipment excellent.
Comparing the biological sciences with other fields of
science (Appendix Table A-2) again indicates that, for tenured
faculty, biology has a more favorable assessment of existing
3-3
PAGENO="0772"
TOTAL
DEPART RENTS
BIOCHEMISTRY
FIELD AND SETTING
BIOLOGICAL SCIENCES. TOTAL 100
GRADUATE SCHOOLS 100
MEDICAl. SCHOOLS 100
DEPARTMENTS OF REDICINE 100
INSTITUTION CONTROL
PRIVATE
TABLE 3-f
0EPNRTIIENTIFACILITT ASSESSMENT OF ADENUACY OF AVAILABLE RESEARCH INSTRUMENTATION
BIOLOGICAL AND MEDICAL SCIENCES
PERCENT OF DEPARTIIEMTB/FACILITIES
ASSESSING INSTRUMENTATION AVAILABLE TO
TENURED FACULTY AND ENUIVALENT P.I.N ASs
PERCENT OF 0EPANTIIENTS/PACILITIES
ASSESSING INSTRUMENTATION AVAILABLE TO
UNTENUNED FACULTY AND EQUIVALENT P.1.. ASP
TOTAL EICELLENT ADESUATE INSUFFICIENT
TOTAL EOC~LLENT ADEQUATE INSUFFICIENT
100 16 57 27
100 15 52 33
100 25 61 14
100 27 36 17
MICROBIOLOGY
M0LECU1.AR/CELLULAR BIOLOGY
100 lb 42 42
100 40 51 9
100 17 31 52
100 40 4? Il
PHYSIOLOGY/BIOPHYSICS
100 25 57 15
100 31 51 15
ANATOMY
PATHOLOGY
100 II 67 22
100 14 75 II
100 0 75 22
100 S * 67 25
PHARRACOLOGY/TOIICOLOGY
ZOOLOGT/ENTOHOLOGT
100 7 75 15
lID 7 4B 45
100 0 78 22
100 7 34 59
~I
~
C~
BOTANY
100 14 1? 67
100 14 IS 65
FOOD AND NUTRITION
100 0 44 56
100 4 04 72
BIOLOGY. GENERAL AND
N.E.C.
100 4 A? 27
.
100 7 * 65 2S
DEPARTMENTS OF MEDICINE
100 24 41 35
100 20 33 47
15
89
26
100
13
33
32
14
45
38
100
13
42
43
16
69
15
100
IS
63
22
24
41
35
100
20
33
47
100
36
53
II
100
37
46
17
100
7
59
34
100
6
54
40
PUBLIC
PAGENO="0773"
767
research equipment than any other field except materials science.
The lower percentage of insufficient instrumentation for biological
sciences as a whole, however, can be traced to the particularly
low proportion of medical school departments giving this rating.
Biological science departments located in graduate schools show
much closer agreement with departments in the physical sciences,
engineering, and computer science when reporting insufficient
instrumentation. -
3.2 Priorities for Increased Federal Support
Department/facility heads were asked to choose how
they would allocate increased Federal funding for research equip-
ment from the viewpoint of investigators in their departments/
facilities. Each head was asked to select one of four options.
Table 3-3 presents their choices. Overall, two-thirds of depart-
ment heads in the biological sciences and departments of medicine
identified instrument systems in the $10,000 to $50,000 cost
range as the top priority need for their departments. Another
20 percent selected systems costing between $50,000 and $1,000,000.
Only 12 percent recommended increased funding for equipment
under $10,000, and not a single department/facility head chose
large scale facilities costing over $1,000,000. This pattern of
recommendations is a strong validation for the decision to confine
the present study to equipment in the cost range of $10,000 to
$1,000,000.
Differences among disciplines are complex. Chair-
persons in departments of microbiology, pathology, and botany,
showed a statistically "normal" distribution of needs ranging
across all three cost categories, while 90 percent of the pharma-
cology departments' priority needs were concentrated in the
middle cost range. Molecular/cellular biology had the largest
3-5
PAGENO="0774"
TABLE 3~3
DEPARTMENT/FACILITY RECOMRENDATIONS FOR INCREASED FERERAL SUPPORT FOR RESEARCH INSTRUMENTATION
BIOLOGICAL AND MEDICAL SCIENCES
PERCENT OF DEPARTMENTS/FACILITIES RECOMRENDING AS TOP PRIORITY AREA FOR INCREASED
FEDERAL SUPPORT OF ACADEMIC RESEARCH ENUIPMENTI
OYSTERS IN SYSTEMS IN
LARGE SCALE 150.000-HI MILLION SIO.000-$50,000 LAD ENUIPMENT
TOTAL FACILITIES RANGE RANGE UNDER 110.000 OTHER
TOTAL 100
DEPARTMENTS
BIOCHEMISTRY
MICROBIOLOGY
MOLECULAR/CELLULAR BIOLOGY
PHYSIOLOGY/BIOPHYSICS
ANAT DRY
PATHOLOGY
PHARMACOLOGY/TOO ICOLOGY
ZOOLOGY/ENTOMOLOGY
BOTANY
FOOD AND NUTRITION
BIOLOGY. GENERAL AND N.E.C.
DEPARTRENTS OF MEDICINE
FIELD AND SETTING
BIOLOCICAL SCIENCES. TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
DEPARTMENTS OF MEDICINE
INSTITUTION CONTROL
PRIVATE
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
20
66
12
2
0
24
59
8
9
*
0
20
55
25
0
0
31
54
IS
0
0
17
81
2
0
0
17
76
7
0
0
24
56
20
0
0
8
90
2
0
0
5
70
25
0
0
25
49
26
0
0
15
74
7
4
0
22
64
11
3
0
2B
72
0
0
0
19
86
12
3
0
21
63
15
I
0
19
69
10
2
0
29
57
13 1
11 2
PUBLIC
100 0 18 71
PAGENO="0775"
769
proportion (31%) needing comparatively expensive ($50,000 to
$1 ,000,000) systems. Private institutions reported needs for
systems in the $50,000 to $1,000,000 range more often than did
the public institutions (29% to 16%).
Most fields of science indicated a need for more expen-
sive equipment than was reported in the biological sciences
(Appendix Table A-3). While 20 percent of departments in the
biological sciences professed a need for systems in the $50,000
to $1,000,000 cost range, 36 percent of those in the environmental
sciences and 43 percent in the physical sciences reported needing
equipment in that price range. Conversely, the biological sciences
and agriculture were the only fields with an appreciable number
of departments describing their top priority as laboratory equip-
ment costing less than $10,000.
3.3 Types of Instrumentation Most Urgently Needed
Department/facility heads were asked to list up to
three pieces of research equipment costing between $10,000 and
$1 million that were most urgently needed. They were also asked
to indicate the approximate cost of each piece of equipment.
Responses were classified according to a typology developed for
this study by a team of NIH scientists,1° and they were then
statistically weighted to reflect all biological science and
medicine departments represented by responding departments in
the sample. Table 3-4 shows the resulting response frequencies
for each instrument type. It also presents the mean and median
costs for each instrument type. Perhaps the most striking finding
in this table is that the research instruments most urgently
Sue Badman, Ph.D. ,Tharvjn Cassman, Ph.D., and Rachel Levinson
developed the study typology.
3-7
PAGENO="0776"
TOTAL. ALL TYPES
INSTRUMENT TYPE
PREPARATIVE (,.g., CENTRIFUGES.
SC1NTI LLATION COUNTERS, INCUBATORS)
DNA ANALYZERS-SYNTHESIZERS
ELECTRON MICROSCOPY (ER)
GENERAL SPECTROSCOPY
HIGH PRESSURE LIGUID
CHR01IATOCRA~HY (HPLC)
X-RAY 25
CLINICAL DEVICES E23 25
MISCELLANEOUS 152
113 DATA ARE NATIONAL ESTIMATES BASED ON LISTINGS OF UP TO THREE
TD~-PRIORITY NEEDS, AS REPORTED BY THE STUDY SAMPLE OF 367 DEPARTMENTS.
TOTAL NUMBER OF REGUESTS IS 927.
(23 SAMPLE CONSISTS OF ONLY SEVEN ITEMS. ONE OF WHICH HAD AN UNUSALLY HIGH COST.
770
TADLE 34
NURSER OF REG'JESTS AND AVERAGE CXCI OF RESEARCH INSTRUMENTS MOST URGENTLY
NEEDED IN ACADEMIC SETTINGS, DY TYPE OP INSTRUMENT; BIOLOGICAL AND
MEDICAL SCIENCES 113
NUMBER OF ---ESTIMATED COST---
REGUESTS MEAN MEDIAN
3203 *87.300 *40.000
1030 45.900 29.500
COMPUTERS
NUCLEAR MAGNETIC RESONANCE (NMR)
LIGHT MICROSCOPY
CELL SORTERS
MASS SPECTROSCOPY (MS)
IMAGE ANALYZERS
367 B4.100
35? 190.100
283 38.600
2fl 31.500
150 89.500
111 316.700
128 61.100
124 l5B.9~O
B! 178.300
77 77.500
184.800
154.000
SB, 000
71.000
145,000
25.000
26.500
45.000
250,000
29,000
140,000
90.000
38.000
95.000
20.000
30.000
3-8
PAGENO="0777"
771
needed in the biological sciences and departments of medicine
are, for the most part, comparatively inexpensive. Even though
cost was not a factor as department heads constructed their
`wish lists," the overall median cost of most urgently needed
instruments was only $40,000. The most frequently cited type of
needed equipment, "preparative instruments," had a median cost
of only $29,500. "Big-ticket" items, those with a median cost
above $l00-,000, were mentioned comparatively infrequently:
electron microscopes (359 of 3,203 mentions), cell sorters (124
mentions), and NMR spectrometers (111 mentions).
Departments varied considerably in the level of cost
of the equipment on their "wish lists." (See Table 3-5.) For
departments of microbiology, physiology/biophysics, pharmacology!
toxicology, and food/nutrition, 70 percent or more of the top
priority instruments cost less than $60,000. For departments of
anatomy and medicine, on the other hand, about 50 percent cost
more than $60,000.
Table 3-6 shows the types of research instruments
needed most by departments in different fields. For this analysis,
the 14 types of equipment were consolidated into 7 categories by
combining instrument types with similar functions. The HPLC and
preparatory instrument category, which had the least expensive
and the greatest number of items listed, was especially prevalent
for departments of microbiology (50 percent of all items identified)
and pharmacology/toxicology (52 percent). Most types of departments
had a peak frequency in this category, but also had secondary
peaks in other categories unique to the discipline represented
by the department. Departments of anatomy were an exception,
with a peak (38 percent of the top priority equipment) in the
relatively costly category of electron microscopy.
3-9
PAGENO="0778"
772
TABLE 2-0
DIETROITIOT4 OF EET!YATED COST! FOR YOST URGENTLY NEEDED RESEARCH INSTRUMENTS. BY DEPARTMENT;
EIDLOGICAL AND MEDICAL SCIENCES 013
INSTRUMENT COST RAYGE
$10000- 121.000- $41.000- $61~000- $101,000- $201000-
IOTA. 120.000 $40000 $60.000 $100,000 $200,000 AND OVER
TOTAL 3203 090 1060 422 434 362 329
100% 18% 33% 13% 147. 11% 100
DE~ART!ENTS
DIOCM%TIISTF:Y 366 . 65 113 44 78 21 36
1000 187. 31% 12% 217. 8% 10%
MICROBIOLOGY 441 69 183 68 70 36 16
100% 16% 41% 15% 16% 8% 4%
PIOLECULAR/CELLULAR EIOLOGY 167 42 48 9 22 34 13
100% 20% 29% 6% 13% 20% 8%
PMYS1OLDGYIBIOPHYSICS 324 38 144 44 23 35 40
100% 12% 44% 14% 7% 11% 12%
ANATOIY 223 24 62 24 43 16 55
100% 11% 28% 11% 19% 7% 28%
PATHDLDGY 230 26 92 20 20 48 20
100% 11% 40% 9% 9% 21% 11%
FH4R"AOLDGY~TDD1CDL0GY 296 0% 148 21 34 21 22
100% 18% 50% 7% 11% 7% 7%
ZOOLO%YFEETOTIOLDGY 163 61 20 26 23 15 17
100% 38% 12% 16% 14% ~% 10%
BOTANY 100 8 38 22 10 0 14
100% 8% 38% 22% 10% 8% 14%
FOOD 6010 NUTRITIDT 126 36 34 28 20 7 0
1007. 29% 27% 23% 16% 6% 0%
BIDLO%Y, GENERAL AND N.E.C. 594 142 143 ~1 62 99 57
100% 24% 24% 10% 10% 17% 10%
DEPARTMENT! OF MEDICINE 172 27 42 25 30 13 35
100% 15% 24% 142 17% 8% 210
013 DATA ARE NATIONAL ESTIMATES BASED ON LISTINGS OF UP TO THREE TOP-PRIORITY NEEDS. AS REPORTED BY
THE STUDY SAMPLE OF 367 DEPARTMENTS. TOTAL NUMBER OF REQUESTS IN THE SAMPLE -IS 927.
3-10
PAGENO="0779"
366 13 7 177
1002 47. 22 482
441 44 57 220
1002 102 132 502
67 3 24 61
1002 22 142 372
324 38 40 125
1002 122 122 392
223 41 85 49
1002 182 382 222
230 5 78 68
1002 22 34~ 382
296 35 8 154
1002 122 32 522
163 16 43 63
1002 102 262 392
100 2 17 47
1002 22 172 472
126 2 7 50
1002 22 62 402
594 19 104 233
1002 32 182 402
172 11 16 54
1002 62 92 312
25
12
301
92
54
152
95
262
5
12
14
42
35
82
16
lOX
2?
92
47
112
46
282
12
42
0
02
3
22
5
22
38
92
13
82
75
232
19
92
13
62
5
22
13
62
21
92
20
92
0
02
18
82
35
122
43
152
0
02
21
72
9
62
11
72
2
12
20
122
18
182
5
52
0
02
11
112
43
342
13
102
0
02
11
92
100
09
5
42
13 55 0 25
82 322 02 152
TABLE 3-6
TYPES OF RESEARCH INSTRUMENTS MOST URGENTLY NEEDED. BY DEPARTMENT; BIOLOGiCAL AND MEDICAL SCIENCES (13
COMPUTERS EM AND NMR AND MS AND CLINICAL AND
AND IMAGE LIGHT HPLC AND GENERAL ANALYZERS- CELL SORTERS
TOTAL ANALYZERS IIICROSCOPY PREPARATIVE SPECTROSCOPY SYNTHESIZERS X-RAY AND MISC.
TOTAL
3203 227 487 1322
1002 72 152 412
394 44a
122 142
DEPARTMENTS
BIOCHEMIDTRY
MICROdIOLOGY
MOLECULAR/CELLULAR BIOLOGY
PHYSIOLOGY/BIOPHYSICS
AMATORY
P A TH OLD GY
PHARMACOLOGY/TOO I COLOGY
ZOOLOGY /ENTDMOLOGI
BOTANY
FOOD AND NUTRITION
BIOLOGY, GENERAL AND N.E.C.
DEPARTMENTS OF MEDICINE
(13 DATA ARE NATIONAL ESTIMATES BASED ON LISTINGS OF UP TO THREE TOP-PRIORITY NEEDS, AS REPORTED BY THE STUDY SAMPLE OF 367
DEPARTMENTS. TOTAL NUMBER OF RESUESTS IN THE SAMPLE IS 927.
PAGENO="0780"
774
3.4 Summary
Department heads in the biological sciences and in
departments of medicine varied by discipline in the degree to
which they considered presently available equipment adequate for
current research needs. Overall, over half reported that critical
experiments in their disciplines could not be performed because
suitable instrumentation was not available. While about one-
fourth of all departments considered their instrumentation for
tenured faculty researchers to be insufficient, in some disci-
plines the percentage was much higher. A larger proportion of
insufficient instrumentation was reported for nontenured research-
ers. On both of these adequacy parameters, private institutions
reported more favorable conditions than public institutions, by
wide margins.
There was a marked need in the biological and medical
sciences for upgrading/expansion of equipment in the $10,000 to
$50,000 cost range, with some disciplines also expressing a need
for more expensive items ranging from $50,000 to $1,000,000.
Compared to those in other fields, biological science
departments appeared to judge themselves as less severely impaired
by lack of equipment needed to perform critical experiments and
by insufficient instrumentation for investigators to conduct
research in their major interests. In the latter instance,
however, only the medical schools had this advantage, for biology
departments in the graduate schools closely resembled departments
in other graduate school fields on the degree of perceived insuf-
ficiency of current instrumentation. Concerning priority needs
for equipment in different cost ranges (when compared to other
fields of science), the biological sciences in both graduate and
medical schools were more likely to need systems in the $10,000
to $50,000 category. They were correspondingly less likely to
need instrumentation costing more than that.
3-12
PAGENO="0781"
775
The types of research equipment that were most needed,
according to department heads, were predominantly below $75,000
in cost, although there was considerable variation among
departments on cost distribution. The most common need across
departments was for instruments in the preparative or HPLC
category, and these were the least costly of the needed instrument
types. The remainder of their instrument needs were unique to
each department.
3-13
PAGENO="0782"
776
4. EXPENDITURES FOR RESEARCH EQUIPMENr, FY 1983
Current expenditures for scientific research equipment
are one indicator of the economic well-being of the scientific
enterprise. Analyzing expenditures by appropriate units --
dollars spent per faculty-level researcher, and per institution --
permits comparisons, of rela~tive funding among various groups of
institutions and other areas of interest. When comparable data
are obtained for future years, trends in expenditure rates can
be monitored.
4.1 Department Expenditures for Instrumentation
Table 4-1 presents information on FY 1983 department!
facility instrumentation-related expenditures in three categories:
(1) purchase of research equipment costing $500 or more;
(2) purchase of research-related computer services, where separate
charges are incurred for this purpose; and (3) maintenance and
repair of research equipment. Nearly three-fourths of all
instrumentation-related expenditures are used to purchase equip-
ment, with the rest being almost evenly divided between the cost
of purchased computer services and maintenance and repair expenses.
The greatest variation among departments occurs in the percentage
of total instrumentation expenditures for purchases of computer
services. Several types of departments are much heavier purchasers
of computer services than others. Aside from any computers used
*within the departments that do not practice separate billing,
departments of molecular/cellular biology spent 27 percent of
their instrumentation funds for services from institutional or
other computing facilities. A similar proportion was spent by
food/nutrition, and almost as much by pathology. Departments of
anatomy, biochemistry, and microbiology were the least likely to
purchase computer services from outside the departments.
4-1
PAGENO="0783"
777
TABLE 4-I
INSTRUMENTATION-RELATED EXPENDITURES IN FY 1983
ACADER1C DEPARTMENTS AND FACILITIES, BIOLOGICAL AND MEDICAL SCIENCES
000LLARS IN MILLIONSI
~---PY 19B3 EIPENOITURE5 AND PERCENT OF EXPENDITURES-
PURCHASE OP
PURCHASE OF RESEARCH- MAINTENANCE,
RESEARCH RELATED REPAIR OF
EQUIPMENT COMPUTER RESEARCH
TOTAL $500 OR BORE SERVICES EQUIPMENT
TOTAL
DEPARTMENTS
BIOCHEMISTRY
MIC000IXLOGT
MOLECULAR/CELLULAR BIOLOGY
PHYSIOLOGT/BIOPHTSICO
ANATOMY
PATHOLOGY
PHARMACOLOGYFTOX ICOLOGY
ZOOLOGY /ENTXROL000
BOTANY
FOOD AND NUTRITION
BIOLOGY GONORAL AND N.E.C.
DEPARTMENTS OF MEDICINE
FIELD AND SETTING
BIOLOGICAL SCIENCES TOTAL 192.3
1000
GRADUATE SCHOOLS 79.0
loot
MEDICAL SCHOOLS 103.3
1000
DEPARTMENTS OF MEDICINE 31.4
1000
INSTITUTION CONTROL
PRIVATE - 100.6
1000
PUBLiC 123.1
100%
MD23.B
1000
$158.2
710
M29.9
130
H35.7
160
24.4
1000
19.1
782
1.1
5%
4.3
13.8
1000
10.7
781
.4
3%
17%
2.6
08.9
1000
IB.4
640
7.9
270
0.6
91
24.9
1000
17.8
70%
2.7
11%
.4.4
181
.
12.7
1000
9.7
77%
. .3
20..
2.6
13.1
1000
8.0
610
2.7
21%
2.4
IB.B
1000
13.3
71%
2.7
14%
180
2.8
150
7.0
1000
4.9
70%
.
.8
11%
1.3
181
3.9
1000
3.0
77%
.3
7%
.6
6.1
100%
3.8
62%
1.1
25%
161
.8
041
38.7
100%
03.6
61%
7.3
09%
7.7
20%
31.4
0000
21.9
820
2.1
7%
3.~
111
132.4
690
27.8
14%
32.2
51.8
66%
13.0
170
14.0
80.5
710
14.5
13%
18%
18.3
25.9
.
2.0
161
3.5
69.2
69%
89.0
70%
16.8 14.1
17% 14%
13.0 21.1
XIX 171
4-2
PAGENO="0784"
778
Amounting to one-sixth of total instrumentation expendi-
tures in 1983 funds spent for equipment maintenance and repair
were an important component of the total investment in instru-
mentation. These expenditures are well worth tracking over time
to detect trends and any relationship to equipment performance.
In the field and setting breakout, departments of
medicine spent a much smaller proportion of their instrumentation
funds on computer services and maintenance than did biological
science departments located in either graduate or medical schools.
There were no noteworthy differences between private and public
institutions.
4.2 Equipment Expenditures per Research Investigator and
per Institution
Department/facility heads were also asked how many
faculty-level researchers were employed in their departments
that year. Table 4-2 presents, by department type, survey find-
ings concerning numbers of faculty-level researchers, the dollars
spent on research equipment (previously shown in Table 4-1), and
the unit values -- dollars spent in 1983 per faculty-level
researcher and per institution.
A cautionary note: the only source used for numbers
of faculty and research equipment expenditures in FY 1983 was
information provided by departments. While the department is
usually the principal base for research in a discipline, many of
the members of a department may be engaged in research in sub-
fields outside that discipline. For example, some members of a
department of microbiology may actually be engaged in research
in the subfields of biochemistry or molecular biology. Therefore,.
4~3
PAGENO="0785"
TABLE 4-S
RESEARCH EQUIPMENT EXPENDITURES IN FY 1983 PER FACULTY RESEARCHER AND INSTITUTION
ACADEMIC DEPARTMENTS AND FACILITIES: BIOLOGICAL AND MEDICAL SCIENCES
CDOLLARS IN THOUSANDS 3
-EXPENDITURES PER PERSON AND INSTITUTION-
FACULTY-LEVEL
RESEARCHERS C13
FY 1933
EQUIP. EXP. PER
ElF. NUMBER PERSON
TOTAL - M15~.2XO 26.633 *3.9
DEPARTMENTS
BiOCHEMISTRY
19.100
2.216
8.6
- t23
MICROBIOLOGY
10.700
2.187
4.9
-
MOLECULAR/CELLULAR BIOLOGY
18.400
843
21.8
PHYSIOLOGYIBIOPHySICS
17.800
2.446
7.3
-
ANATOMY
9.700
1.314
6.4
PATHOLOGY
8.000
2.041
3.9
-
FHARMACOLDGYITOXICOLOGy
13.300
1.799
7.4
-
ZOOLOGY/ENTOMOLOGY
4.900
1.213
4.0
-
BOTANY
3.000
752
4.0
-
FOOD AND NUTRITION
3.800
730
5.2
-
BIOLOGY, GENERAL AND N.E.C.
23.600
4.305
3.2
-
DEPARTMENTS OF MEDICINE
25.900
6.386
4.1 .
-
FIELD AND SETTING
BIOLOGICAL SCIENCES, TOTAL
132,300
20.248
6.3
249
331.3
GRADUATE SCHOOLS
51.800
9.654
5.4
157
330.3
MEDICAL SCHOOLS
50.500
10.594
7.6
92
873.0
DEPARTMENTS OF MEDICINE
25.900
6.386
4.1
92
iNSTITUTION CONTROL
PRIVATE
69,200 8.366 8.3 ~3 744.1
PUBLIC 89.000 18.268 4.9 136 370.5
C13 NUMBER OF FACULTY AND EQUIVALENT NON-FACULTY RESEARCHERS (FULL-TIRE AND
FART-TIME) WHO PARTICIPATE IN ONGOING RESEARCH PROJECTS AND WHO ARE MEMBERS OF
THE DEPARTMEUTE OF THE GRADUATE AND YEDICAL SCHOOLS IN THE SURVEY UNIVERSE. AS
REPORTED BY DEPARTFENT HEADS.
C!) SINCE SOME NINDS OF DEPARTMENTS EXIST tARGELY EITHER IN MEDICAL SCHOOLS OR
OUTSIDE MEDICAL SCH3OLS~ NO SIYGLE DENOMINATOR WOULD BE APPROPRIATE.
779
INSTITUTIONS
ElF. PER
NUMBER INST.
249 *633.3
4-4
PAGENO="0786"
780
the numbers given within departments for researchers and equipment
expenditures do not necessarily indicate the figures applicable
to the various subfields of research.
With this reservation, it is still useful to examine
indicators of relative funding for research equipment in different
types of departments. Overall, FY 1983 expenditures were $5,900
per facult~~-level researcher'. Except for molecular/cellular
biology, which had an extraordinary level of expenditures of
$21,800 per researcher, the expenditure ratio among departments
ranged from $3,900 for pathology to $8,600' for biochemistry.
The larger institution-level groupings in Table 4-2
eliminate the interpretive ambiguities noted for the department-
level statistics, since assuming the expenditures and numbers of
researchers for all departments is equivalent to the summations
for all subfields o~ research. For FY 1983, the research equip-
ment expenditures per researcher in the biological sciences
exceeded by a large amount those of departments of medicine:
$6,500 to $4,100 per person. It was also observed that the 92
departments of medicine had an average of 69.4 faculty-level
researchers per department, larger than the average per depart-
ment of 21.2 for all,, 1,255 departments represented in the study.
In the clinical fields, physician/researchers must allocate
their time to patient care and residency teaching as well as
research. This may contribute to a research environment in
departments of medicine that is not comparable to that in the
biological sciences.
Excluding departments of medicine, medical schools had
nearly twice as many researchers per institution as graduate
schools, 115.2 to 61.5, and medical schools outspent graduate
schools by $7,600 to $5,400 on new research equipment in FY 1983
per researcher. Medical schools also had nearly twice as many
4-5
PAGENO="0787"
781
researchers per institution as graduate schools, 115.2 to 61.5.
Per institution, medical schools spent about two and a half
tines as much as graduate schools for research equipment in FY
1983.
Private schools spent nearly twice as much for research
equipment per researcher as public institutions. Expenditures
per institntion for private schools were $744,100, compared to
$570,500 for public institutions.
4.3 Summary
In the biological sciences and in departments of medicine,
instrumentation-related expenditures accounted for about $223
million in FY 1983. Nearly three-fourths went for purchase of
research equipment costing $500 and up, with one-sixth going for
maintenance and repair. Purchase of computer-related services
showed the widest variation among departments.
Expenditures for research equipment in FY 1983 were
analyzed on a per capita and per institution basis. For all
departments, the expenditure rate was $5,900 per faculty-level
researcher. However, for departments of molecular/cellular
biology, expenditures per researcher were $21,800, far greater
than those for other types of departments. Apparently, there
was a large influx of money into this field in FY 1983.
Medical schools in general had higher expenditures for
research equipment than graduate schools within the biological
sciences. Expenditures per researcher were 40 percent higher in
medical schools, and medical schools spent two and a half times
more than graduate schools, per institution,, for research equipment
in FY 1983.
4-6
PAGENO="0788"
782
Private institutions spent nearly twice as much per
researcher and 30 percent more per institution than did institutions
under public control.
4- 7
PAGENO="0789"
783
5. THE NATIONAL STOCK OF ACADEMIC RESEARCH EQUIPMENT
A major objective of this survey is to provide baseline
estimates for the numbers and costs of instrument systems devoted
to research in the nation's universities and medical schools.
This chapter also provides estimates for the proportions of
instrumen systems consider~d state-of-the-art and obsolete, and
unit costs of existing equipment per researcher, doctoral degree
granted, and institution.
These estimates are important indicators of the current
national stock of academic scientific research equipment.
Furthermore, as a baseline against which future changes can be
measured, they will be the initial points for determining trends
in the status of academic research equipment.
The format of the tables around which discussion will
be organized is that appropriate to subfields of research. The
data were obtained from the Instrument Data Sheet of the survey,
rather than from the Department/Facility Questionnaire used for
the two preceding chapters. Each instrument was classified
according to the subfield of scientific research in which it was
employed, rather than according to the department that carried
it on inventory.
5.1 Number and Cost of Instrument Systems
Table 5-1 shows the numbers of instrument systems for
graduate schools and medical schools. Between the two settings,
there are over 21,000 systems. However, medical schools have
more than twice as many systems as graduate-schools.
5~ 1
PAGENO="0790"
TABLE 01
AMOUNT OF ACADEMIC REEEARCF EQUIPMENT. BY SETTING
INSTRUMENT SYSTEMS IN 1903 NATIONAL ETOCK BIOLOGICAL AND MEDICAL SCIENCES
NUMBER AND PERCENT OF SYSTEMS----
SETTING
GRADUATE MEDICAL
TOTAL SCHOOLS SCHOOLS
01480 7010 0446?
100% 1000 1000
4479 1543 2936
21% 220 200
1640 533 1107
8% 87. 6%
0943 1460 1483
140 210 100
2720 734 1986
13% 100 14%
538 79 459
3% 10 3%
0014 69 940
5% 10 77.
0089 186 1903
10% 3% 13%
501 328 173
2% 57. 1%
469 447 22
27. 60 -
410 393 18
2% 6% -
1656 1103 553
87. 167. 4%
2836 57 2779
03% 10 197.
191 84 107
1% 00 1%
784
TOTAL
SUBFIELD OF RESEARCH
BIOCHEMISTRY
MICROBIOLOGY
MOLECULAR/CELLULAR BIOLOGY
PHTSIOLOGY/EIOPHYSI CS
ANATOMY
PATHOLOGY
PHARMACOLOGY/lOS ICOLOGY
ZOOLOGY /ENTOEOLOGY
BOTANY
FOOD AND NUTRITION
BIOLOGY, GENERAL AND N.E.C.
MEDICAL SCIENCES/DEPIB MED
INTERDISCIPLINARY, N.E.C.
INSTITUT000 CONTROL
PRIVATE
PUBLIC
7180
14305
67%
2204 4976
31% 34%
4512 9493
69% 660
5-2
PAGENO="0791"
785
The number of instrument systems in the various sub-
fields of research ranged widely, with a larger number in bio-
chemistry than in any other subfield -- almost 4,500 (21 percent
of all instrument systems). The subfields of botany, zoology,
and food/nutrition, found almost exclusively in graduate schools,
and anatomy, a medical school subfield, had relatively few sys-
tems. Five of the larger subfields -- biochemistry, micro-
biology, molecular/cellular- biology, physiology/biophysics, and
general biology -- had significant representation in both
settings. Instrument systems used in pathology, pharmacology,
and medical sciences were located almost entirely in medical
schools.
Turning to the aggregate purchase costs of equipment
shown in Table 5-2, the original purchase cost for all $lO,000+
equipment in the biological sciences and departments of medicine
was about $555 million. The dollar value (aggregate purchase
cost) of existing equipment in the fields surveyed was twice as
great in medical schools as in non-medical schools. Using the
Machinery and Equipment Index of the annual Producer Price
Index, these costs were converted into constant 1982 dollars.
The total cost was estimated at $863 million. The variation of
aggregate costs among the subfields approximates that found for
numbers of instruments.
Appendix Table A-4 provides the numbers of instrument
systems and their costs for all fields of research. Of all
instruments found in both Phase I and Phase II of the study, the
biological sciences accounted for 38 percent -- more than any
other field. In aggregate costs biology was second by a small
amount to the physical sciences, although the latter possessed
only 25 percent of the instrument systems. The field with the
third largest numberof. systems was engineering, with 20 percent;
all other fields had between 2 and 6 percent of the instrument
systems.
5-3
PAGENO="0792"
786
TABLE 72
AO7.RETATE COST OF ACADEF.IC RESEARCH ESUIPSENT~ BY SETTING
INSTRURENT OYSTERS IN 1953 NATIONAL STOCK: SIDLOGICAL AND MEDICAL SCIENCES
500LLARS IN MILLIONS)
COST OF SYSTEMS AND PERCENT OF COST
SETTING
TOTAL GRADUATE SCHOOLS MEDICAL SCHOOLS
COST IN COST IN COST IN
ORIGINAL CONSTANT ORIGINAL CONSTANT ORIGINAL CONSTANT
PURCHASE 1982 PURCHASE 1982 PURCHASE 1982
COST DOLLARS COST DOLLARS COST DOLLARS
$505.7 $063.6 $175.) $272.2 $380.4 $591.4
1007. 100% 100% 100% 100% 100%
TOTAL
SUBFIELD OF RESEARCH
BIOCHEMISTRY 104) 108.9 36.9 53.9 67.4 100.0
197. 16% 21% 20% 16% 16%
T1CROOIOLDGY 40.B 64.1 12.8 20.7 28.0 43.0
77. 7% 7% 8% 7% 7%
TOLECULARICELLULAR SIOLOGY 84.5 124.8 38.6 58.5 45.9 66.3
15% 14% 22% 21% 12% 11%
FHYSIOLOGY/BIOFHYEICS 73.9 112.0 18.1 28.8 00.7 83.2
13% 13% lOX 11% 15% 14%
ANATOMY 17.4 31.7 2.1 3.7 15.4 27.9
3% 4% 1% 1% 4% 0%
PATHOLOGY 31.5 53.9 2.1 3.8 29.4 50.2
6% 1% 1% 8% 6%
F!-ARMACOLDTY/TOXICOLOGY 46.8 69.0 3.8 5.2 43.1 63.8
El 8% 2% 2% 11% 11%
200L0GY/ENTOP1OLOGY 13.1 20.6 7.3 11.9 0.8 8.7
27. 2% 4% 4% 2% IX
BOTANY 11.4 16.3 10.3 15.2 1.1 1.1
2% 2% 6% 6% - -
FOOD AND NUTRITION 8.9 13.3 8.0 12.9 .4 .5
.2% OX 5% 5% - -
BIOLOGY GENERAL AND N.E.C. 47.3 82.2 31.0 52.4 16.3 29.8
9% lOX 187. 19% 4% OX
REOICAL SCIENCES/DENS NED 69.1 107.2 1.0 1.3 68.1 106.0
12% lOX 1% - 18% 10%
INTERDISCIPLINARY, N.E.C. 6.8 9.3 2.9 3.8 3.9 5.5
1% IX 2% 1% IX IX
INSTITUTION CONTROL
PRIVATE
PUBLIC
203.8 299.4 58.7 84.0 140.1 215.4
- . 377. 35% 337. . 31X 38% 36%
351.9 564.2 116.6 188.2 235.3 376.0
63% 65% 67% 6fl 62X 64%
5-4
PAGENO="0793"
787
Overall, about three-fourths of existing research
instruments in the survey cost range fell in the $10,000 to
$24,999 range, and only five percent cost $75,000 or more (Table
5-3). The cost pattern varied considerably among the subfields,
however. More than 75 percent of the instruments in biochemistry,
microbiology, pharmacology, botany, and medical sciences were in
the lowest cost category. The other subfields ranged downward
to a low of 55 percent for anatomy. A differencewas also found
between the biological sciences (72 percent in the lowest cost
group) and departments of medicine (78 percent in that group).
The distribution of aggregate purchase costs among the
cost categories (Table 5-4) indicated that the 5 percent of all
instruments costing $75,000 or more actually consumed 24 percent
of all the money spent on major equipment purchases. Private
institutions had 32 percent in the upper cost category, compared
to 20 percent for public institutions.
With the exception of agriculture, all other fields of
science had a higher proportion of systems costing $75,000 or
more than did biology (see Appendix Table A-5). For the physical
sciences, 47 percent were in this group, and for engineering 40
percent. Computer science had 57 percent, with materials science
and the environmental sciences having almost as much.
5.2 Unit Costs
With varying numbers of instruments and users in the
different institutions and subfields of research, it is useful to
examine aggregate instrumentation costs in terms of units, such
as the number of instrument systems, the number of researchers,
and the number of doctoral degrees awarded within a subfield.
5-5
PAGENO="0794"
SUBFIELD. OF RESEARCH
BIOCHEMISTRY
PATH OLOGY
PHARMACOLOGY/TOOICDLOGY
ZOOLOGY/ENTOMOLOGY
DEPARTMENTS OF MEDICINE
INSTITUTION CONTROL
PRIVATE
PUBLIC
TOTAL
`PHYSIOLOGYIBIDPHYSICS
788
TABLE 1-3
DISTRIBUTION OF ACADEMIC RESEARCH ENUIPIIENT. BY SYSTEM COST RANGE
INSTRUMENT SYSTEMS IN 19B3 NATIONAL STOCK' BIOLOGICAL AND MEDICAL SCIENCES
NUMBER AND PERCENT OF SYSTEMS
ORIGINAL PURCHASE COST
$10000- $05,000- $75000-
TOTAL $24,999 $74999 RI 000000
21470 15638 4826 1006
1000 731 220 50
4479 3475 893 110
1000 7B1 200 20
MICROBIOLOGY 1640 0239 343 58
1000 760 210 41
MOLECULAR/CELLULAR BIOLOGY 2939 1939 860 139
1000 660 290 50
2720 1951 627. 142
1000 720 030 50
ANATOMY 535 290 200 43
1000 550 371 00
1014 609 306 90
1000 600 310 90
2089 1638 381 69
1000 780 . 180 30
493 357 107 28
1000 730 221 60
BOTANY 469 . 369 73 27
1000 790 . 160 60
FOOD AND NUTRITION 410 293 109 B
1000 710 270 20
BIOLOGY, GENERAL ANO N.E.C. 1656 1178 374 104
1000 711 231 60
MEDICAL 0CIENCES/DEFTS MED 2836 2173 498 16S
1000 770 180 60
191 125 43 23
1000 650 231 120
BIOLOGICAL SCIENCES. TOTAL 17582 12592 4164 826
1000 720 240 50
GRADUATE SCHOOLS 7006 5045 1678 283
1000 721 240 40
MEDICAL SCHOOLS 10577 7547 2486 543
1001 710 241 50
3880 3046 662 180
1000 780 170 Dl
7167 5092 . 1640 434
1000 710 031 60
04303 10546 318S 572
1000 740 220 40
INTERDISCIPLINARY, N.E.C.
FIELD AND SETTING
5-6
PAGENO="0795"
789
TABLE 8-4
IISTRIBUTION IF AGGREGATE COSTS OF ACADEMIC RESEARCH ENUIYMENT, BY OYSTER COST RANGE
INSTRUMENT SYSTEMS IN 1983 NATIONAL OTOCRI BIOLOGICAL AND MEDICAL SCIENCES
EDOLLARS IN BILLIONS]
-DOLLARS AND PERCENT OF AGGREGATE PURCHASE COST-
-ORIGINAL SYSTEM PURCHASE COST---
N1O,000- $25,000- $75,000-
TOTAL N04.999 $74,999 $1,000,000
TOTAL $564.1 NO43.O $184.6 $136.4
1005 435 331 245
SUBFIELD OF RESEARCH
BIOCHEMISTRY 104.8 00.6 32.4 16.9
1002 535 315 165
HICROBIOL009 40.9 19.7 12.8 8.5
1001 4S2 311 215
MOLECULAR/CELLULAR BIOLOGY $4.8 30.0 33.0 01.7
1002 351 395 265
PHYSIOLOGT/EIOPHYSICS 78.9 30.3 24.0 22.0
1005 391 315 292
ANATOMY 17.7 4.3 9.2 4.2
1002 245 322 245
PATHOLOGY 31,6 9.1 12.7 9.7
1005 092 405 315
PHAHRACOLOGY/TOIICOLOGY 40.0 25.6 13.7 8.8
1005 532 295 185
200LOGY/ENT000LOGY 13.1 1.4 4.2 3.5
1002 411 325 271
BOTANY 11.4 5.9 0.0 2.8
1005 512 232 242
FOOD AND NUTRITION 9.4 4.6 4.1 .7
1005 491 442 71
BIOLOGY, GENERAL AND N.E.C. 49.1 17.9 13.1 16.1
1002 362 311 332
MEDICAL SCIENCES/DEPTS MED 69.5 32.0 18.7 17.9
1002 472 072 261
INTERDIDCIFLIIqART. N.E.C. 6,S 1.0 2.0 3.0
1002 262 291 452
FIELD AND SETTING
BIDLO2ICAL SCIENCEI, TOTAL 469.8 198.9 138.5 114.4
1002 421 342 242
GRADUATE SCHOOLS 177.6 77.5 62.0 35.1
1002 442 302 212
MEDICAL OCHOOLS 292.0 119.4 96.4 76.3
1002 411 332 262
DEPARTMENTD OF MEDICINE 94.3 48.1 28.0 22.0
1002 492 005 232
INSTITUTION CDNTBOL
PRIVATE 229.1 79.0 63.7 66.9
1002 392 301 322
PUBLIC 354.5 164.0 120.9 69.6
1002 462 345 205
5-7
PAGENO="0796"
790
Table 5-5 shows mean purchase costs per institution and
per instrument system. Overall, the dollar cost of the current
instrumentation inventory in medical schools is nearly four times
as large per institution as it is in graduate schools. In this
table, medical school totals include the aggregate costs of
instrumentation in departments of medicine, so the aggregate cost
per institution for only the biological sciences in medical
schools w5uld be $3,176,000 -- about three times the mean amount
per graduate school. This difference is about the same as that
noted earlier in analyses of FY 1983 equipment expenditures (see
Table 4-2).
For most subfields (except those located almost entirely
outside medical schools -- botany, general biology, etc), the
average dollar amount of research equipment per institution was
substantially higher in medical schools than in other academic
institutions. Public institutions, primarily because they were
larger and contained more departments, had slightly larger dollar
amounts of research equipment per institution than private schools.
Turning to mean costs per instrument system, there was
a notable difference between medical and graduate schools, with
medical schools having invested about $1,000 more per instrument
system on the average. T.he difference appeared consistently
among the subfields as well. In private institutions the average
system cost $29,200, considerably more than the $24,800 cost
found in public institutions.
The mean cost of instrument systems in the biological
sciences can be compared with mean instrument costs for other
fields of science (see Appendix Table A-4). The mean for bio-
logical sciences ($27,000) was the lowest for any field except
agriculture. Computer science had the highest mean cost, $54,000.
Costs for environmental sciences averaged $47,000, and the mean
was $41,000 for the physical sciences.
5-8
PAGENO="0797"
791
IABL.E ~
MEAN AGGREGATE ORIGINAL PURCHASE COST OP ACADEMIC RESEARCH EGUIPRENT PER
INSTITUTION AND PER INSTRUMENT SYSTEM, BY SETTING
1NSTRUP.ENT SYSTEM! iN 1983 NATIONAL STOCK; BIOLOGICAL AND MEDICAL SCIENCES
IPIEAN COST DOLLARS IN THOUSANDS3
COST PER COST PER
INSTITUTION INSTRUMENT SYSTEM
GRADUATE MEDICAL GRADUATE MEDICAL
SCHOOLS SCHOOL! SCHOOLS SCHOOLS
TOTAL $3116.6 94.135,0 $23.0 $26.3
SUBFIELD OF RESEARCH
BIOCHZGISTV~Y 235.? 732.2 23.9 23.0
MICROBIOLOGY 61.7 303.9 24.0 25.3
PIOLECULARICELLULAR BIOLOGY 24A.O 496.9 26.4 31.0
PHYSIOLOGY,DIDPHySICS 113.4 605.6 24.7 26.0
ANATOMY 13.1 166.9 26.6 33.6
13.1 319.6 30.4 31.1
24.0 466.1 20.4 22.6
46.4 63.4 22.3 33.3
65.7 11.9 23.0 *
FOOD AND NUTRITION 53.9 4.3 21.6
BIOLOGY. GENERAL AND N.E.C. 197.3 177.1 26.1 29.5
MEDICAL SCIEDCES/DEPTS MED 6.3 740.6 17.5 24.3
INTERDISCIPLINARy, N.E.C. 16.4 42.2 34.5 36.4
-INSTITUTIOD CONTROL
PRIVATE l.107.4 3.628,6 26.6 29.2
PUBLIC 1.12I.4 4,524.6 24.2 24.8
* NUMBER OF CASES IN THE UNDERLYING SAYPLE WAS INSUFFICIENT FOR A RELIABLE ESTIMATE.
PATHOLGGY
FHARñACOLOGYI TOE ICGLOGY
ZOILOGYIEGT000LDGY
BGT.~NY
5-9
PAGENO="0798"
792
Since the amount of research activity in the several
biological science subfields varies considerably, numerical com-
parisons among the subfields are dominated by the relative `size"
of the enterprise. In an attempt to normalize between-subfield
comparisons, instrument numbers and costs were calculated per
researcher and per doctoral student. The resulting ratios are
only indices and do not represent actual one-time costs per
researcher- or per degree awarded.
In Table 5-6, mean aggregate costs of existing instru-
ment systems per researcher and per doctoral degree awarded are
shown by field and setting and by institution control. The
numbers of researchers and doctoral degrees are also shown in
Table 5-6. The overall mean aggregate cost of equipment per
researcher was $21,000. There was a sizable difference in the
biological sciences, however, between medical schools (where the
mean is $27,600 per researcher), and graduate schools (with a
mean of $18,400 per researcher). For private institutions the
cost per researcher was $25,000, while for public institutions it
was $19,400.
These aggregate equipment costs per researcher may be
compared with the analogous FY 1983 expenditures shown in Table 4-2.
The ratio of aggregate equipment cost per researcher for medical
schools to graduate schools is 1.5; for 1983 equipment expenditures,
the ratio is 1.41. The corresponding ratios for private institutions
*to public institutions are 1.29 for aggregate equipment costs and
1.69 .f or 1983 equipment expenditures. Another comparison is the
ratio of the biological sciences in medical schools to departments
of medicine. For aggregate equipment costs that ratio is 1.86;
it is 1.85 for 1983 equipment expenditures.
5-10
PAGENO="0799"
793
TABLE 5-6
MEAN AGGREGATE PURCHASE COST CF ACADEMIC RESEARCH EQUIPMENT PER DOCTORAL
DEGREE AWARDED AND PER FACULTY-LEVEL RESEARCHER
INSTRUMENT SYSTEMS .11) 1963 NATIONAL STOCK; BiOLOGICAL AND MEDICAL SCIENCES
EMEAN COST DOLLARS IN THOUSANDS3
FACULTY-LEVEL
DOCTORAL DEGREES El) RESEARCHERS (2)
COST PER COST PER
NUMBER DEGREE NUMBER RESEARCHER
TOTAL 3,275 $172.2 26.635 $21.2
FIELD AND SETTING
BiOLOGICAL SCIENCES, TOTAL 3, 275 143.5 20.246 23.2
GRADUATE SCHOOLS 1~946 91.3 9,654 16.4
MEDICAL SCHOOLS 1,329 219.9 10,594 27.6
DEPARTMENTS OF MEDICINE - - 6.386 14.6
INSTITUTION CONTROL
PRIVATE 919 226.0 6,366 25.0
PUBLIC 2,362 150.1 18.268 19.4
-CI) RESEARCH DOCTORATES AWARDED DURiNG 1952-93 DV DEPARTMENTS IN THE
GRADUATE AND MEDICAL SCHOOLS OF THE SURVEY UNIVERSE, AS REPORTED DY
DEPARTMENT HEADS.
(23 NUMBER OP FACULTY AND E0'JIVALENT NON-FACULTY RESEARCHERS (FULL-TIME
AND PART-TIME) WHO PARTICIPATE IN ONGOING RESEARCH PROJECTS AND WHO ARE
MEREERS OF THE DEPARTMENTS OF THE GRADUATE AND MEDICAL SCHOOLS IN THE
SURVEY UNIVERSE, AS REPORTED DY DEPARTMENT HEADS.
5-11
PAGENO="0800"
794
Of course, the expenditures for 1983 are reflected in
the aggregate equipment costs. The 1983 numbers, however, are
the latest available single year estimates of level of investment
in research instrumentation for the institutions and fields repre-
sented in this survey, while aggregate costs are an accumulation
of more than 15 years of equipment investments. There is a notable
consistency in the patterns these two sets of statistics follow,
suggesting that current expenditure levels are generally consistent
with long-range historical trends. However, for the comparison
of private and public institutions, the ratios show a wider gap
for 1983 equipment expenditures than for the long term aggregate
costs. While this is an observation for only one year, this
finding suggests that the long-standing gap in equipment expendi-
tures between private and public institutions may be increasing.
The average dollar amount of instrumentation per doc-
toral degree awarded in the biological sciences was $143,500.
Biological science departments in medical schools had a far higher
mean per degree than did graduate schools, $219,860 to $91,300.
Since departments of medicine do not award doctoral degrees, this
statistic is not applicable to them. Private institutions' mean
amount of equipment per degree was $228,000, compared to $150,000
for public institutions.
The dollar amount of research equipment per doctoral
degree can be estimated for each subfield, but it is necessary to
consult another source for the denominator data. The National
Research Council conducts an annual survey of doctorate recipi-
ents and reports not only by broad discipline, but also by fine
field within disciplines.11 By grouping the data for the fine
11Summary Report 1983, Doctorate Recipients from United States
Universities, Office of Scientific and Engineering Personnel,
National Research Coüñcil, National Academy Press, 1983, p.47.
5-12
PAGENO="0801"
195
fields to correspond to the subfield categories used in this
study it was possible to compute the mean dollar amount of
research equipment per doctoral degree, by subfield. To smooth
out the effects of annual fluctuations, especially for subfields
with small numbers of degrees, the mean annual number of doctorates
awarded, averaged over the four-year period, 1980 to 1983, was
used as the denominator in the calculations.
Table 5-7 shows that the annual number of doctoral
degrees, 3,864, is larger than the 3,281. found earlier from the
data reported by depa~rtment heads. The difference results
primarily from the larger base of institutions from which the
National Research Council (NRC) collected its data. While the
base of institutions for this.study was the 249 universities and
medical schools that collectively spend 95 percent of the nation's
R&D funds, NRC used all doctorate-granting institutions. The
aggregate costs of instrument systems per doctoral degree awarded
for biological sciences as a whole becomes $121,600 by~this
measure.
The subfields of research varied widely in instrument
costs per degree awarded. The four subfields that are almost
entirely located in graduate schools -- zoology, botany, food!
nutrition, and general biology -- were far lower in mean dollar
amount of research equipment per degree than the other subfields.
At the upper end was pathology (largely a medical school field)
with a mean of $310,000 of equipment per degree. Molecular!
cellular biology, physiology/biophysics, biochemistry, and
pharmacology also had means of over $160,000 in research equip-
ment per degree. The remaining fields had substantially lower
amounts of equipment per degree than those mentioned.
5-13
53-277 0 - 86 - 26
PAGENO="0802"
796
TABLE 1-7
AVERAGE NWIDER O~ DOCTORATES AWARDED ANNUALLY FROPI 19BD TO 1983 AND
AGGREGATE INETRUPIEP4T COSTS PER DECREE
INSTRUMENT SYSTEMS IN 1903 NATIONAL STOCK; BIOLOGiCAL AND MEDICAL SCIENCES
(DOLLARS IN THOUSAND!)
NUMBER OP INSTRUMENT
DOCTORAL COST PER
DEGREES £13 DEGREE £23
DIOLOGICAL SCIENCES, TOTAL 3~864 $121.6
EUBTIELD OF RESEARCH
BIOCHEMISTRY 653 160.5
MICROBIOLOGY 482 84.3
MOLECULAR/CELLULAR BIOLOGY 434 195.4
PHYS1DLDGY/BIOPHYSICS 401 191.8
ANATOMY 142 124.6
PATHOLOGY 102 309.8
PHARMACOLOGY/TOE ICOLOGY 272 176.5
200LCGY!ENTDTOLDGY 436 30.0
BOTANY 206 55.3
FOOD AND NUTRITION 219 42.9
BIOLOGY, GENERAL AND N.E.C. 514 95.5
(13 SOURCE OP DATA; SUMMARY REPORT 1983, DOCTORATE RECIPIENTS FROM UNITED
STATES UNIVERSITIES OFFICE OF SCIENTIFIC AND ENGINEERING PERSONNEL,
NATIONAL RESEARCH COUNCIL. NATIONAL ACADEMY PRESS. 1983. p.47.
(23 AGGREGATE ORIGINAL PURCHASE COST.
5-14
PAGENO="0803"
797
5.3 State-of-the-Art and Obsolete Instrument Systems
State-of-the-art instruments constituted 18 percent of
all biological and medical science instruments in the 1983
national stock of academic research equipment (see Table 5-8).
Other instruments in research use in 1983 accounted for an
additional 65 percent of the national stock, so that a total of
83 percenf of all instrument systems in the national stock were
in active research use in 1983.
The remainderof the national stock consisted of a
negligible number (less than one percent) of systems waiting to
be put into service and 16 percent that were no longer in use
although they were still physically present at their respective
institutions. The instruments in the latter group were,
presumably, technologically obsolete and/or mechanically
inoperable.
As compared to public institutions, private institu-
tions have proportionately more state-of-the-art research
equipment (23% of the private school national stock vs. 16% of
the public school national stock). For the most part, however,
there are remarkably few differences between institutions or
subfields in the research status of the current stock of
research equipment.
Table 5-9 reveals that the 18 percent of instruments
classified as state-of-the-art were responsible for 25 percent
of the aggregate cost of all equipment in the national stock;
these instruments had a mean cost of $36,200 per system. Other
instruments in research use averaged $24,700 per system, and
those no longer in research use averaged $21,100. Means were
calculated by dividing aggregate costs in Table 5-9 by numbers
5-15
PAGENO="0804"
9451.! 58
RESEARCH STATUS OF ACADEHIC RESEARCH ESUIPRENT
IROTRUNENT OYSTERS IN 1903 NATIONAL STOCR' BIOLOGICAL AND 5001CM. SCIENCES
NURSER AND PERCENT OF SYSTENS
--SYSTEN RESEARCH STATUS-------.
----IN RESEARCH USE--" HOT YET IN NO LONGER
STATE-OF- RESEARCH IN RESEARCH
TOTAL THE-ART OTHER USE USE
2*485 3881 1402* *42 3440
1002 152 650 II 161
2 373
- 82
O 186
- 111
O 101
32
41 338
22 121
O 87
162
17 223
22 222
3! 296
22 142
S 77
- 151
O 33
71
8 55
21 130
21 638
11 380
18 1034
10 362
O 0
798
TOTAL
SUDFIELO OF RESEARCH
BIOSHEHISTRY 4479 801 3304
1000 180 741
HICROBIOLOSY 1840 242 lEON
1002 ISO 742
HOLECU1.ARICELI.UI.NR BIOLOGY 2943 832 2010
1002 282 652
PHTSIOLOOY/SIOPHYSICS 2700 SIt 1822
1000 190 670
ANATOHY 038 135 316
*002 251 090
RATHDL009 1014 175 601
1001 172 592
PHARIRACOLOOTFTOIICGLOGY 2S0~ 237 1524
1000 1.10 731
001LOOY/ENTONOLOOY 501 *24 098
1002 251 590
BOTANY 469 106 330
1002 032 700
FOSS -AND NUTRITION 410 88 259
1002 222 632
8101.009, GENERAL AND N.E.C. 1856 177 821
*002 112 500
NEDICAL SCIENCESFDEPTS NED 2838 369 1415
1002 130 502
IHTERSISCIPLINARR. N.E.C. 191 77 114
1002 400 600
FIELD AND SETTING
DIOLOGICAL SCIENCES. TOTAL
ORA208TE SCHOOLS
lOGICAL SCHOOLS
OEPA#TRENTS OF PIED1CONE
INSTITUTION CONTROL
PRIVATE
PUBLIC
17597 3251 1*8*6 124 2408
1002 *81 671 12 *41
7015 135! 4757 32 874
1001 192 682 - 122
10582 1899 7059 92 1532
1002 181 672 12 III
3858 631 2206 IN 1034
1002 162 571 - 271
7*80 1641 4522 44 973
1002 231 . 632 II 142
14305 2041 9500 98 2466
1001 162 662 12 171
5-16
PAGENO="0805"
799
AGGREGATE COST OF ACADEMIC RESEARCH EIUIPMENT BY OYSTER RESEARCH STATUS
ONSTRUMENT SYSTEMS IN 1913 NATIONAL 010CR: BIOLOGICAL AND MEDICAL SCIENCES
(DOLLARS IN NILLIBNS3
AGGREGATE PURCHASE COST AND PERCENT OF COBT--------
SYSTEM RESEARCH STATUS
----IN RESEARCH ABE--- NOT YET IN NO LONGER
STATE-OF- RESEARCH IN RESEARCH
TOTAL THE-ART OTHER USE USE
TOTAL 8564.0 9140.5 9346.5 N4.5 872.6
1000 250 610 12 132
SUBFIELD OF RESEARCH
BIOCHEMISTRY 104.8 20.7 72.2 .5 6.4
1552 052 692 12 62
MICROBIOLOGY 40.9 9.1 08.1 .0 3.6
1002 DOG 690 - 92
MOLECULAR/CELLULAR BIOLOGY 94.8 34.5 48.0 0 2.1
1002 410 572 32
PHYIISLSIYIBIOPHYSIC$ 78.9 2U.2 49.4 .9 6.5
1522 260 642 12 Ri
ANATOMY 17.8 4.4 10.7 S 2.6
1002 252 602 152
PATHOLOGY 31.8 6.U 19.3 .5 5.8
1502 192 612 20 IRS.
PHARMACOLSGY/TOIICOLOGY 48.0 9.1 31.0 .9 7.0
1000 190 652 02 150
ZOOLOGY/ENTOMOLOGY 13.1 3.8 7.7 .5 1.6
1002 290 590 - 120
BOTANY 11.4 3.6 7.0 5 .6
1002 300 632 50
FOOD AND NUTRITION 9.4 0.4 5.4 .5 1.1
1002 252 582 52 102
BIOLOGY, GENERAL AND N.E.C. 49.1 8.7 20.1 .6 14.8
1001 IRS 510 12 300
MEOICHL SCIEHCEI/DEPTS RED 69.5 11.2 37.4 .3 20.5
0002 162 540 - 302
INTERDISCOPLINARY, N.E.C. 6.B 2.0 4.8 0
1005 300 710
FIELD HNS SETTING
BIOLOGICAL SCIENCES, TOTAL 469.8 121.8 091.7 4.0 00.1
1000 062 622 00 112
GRADUATE SCHOOLS 177.6 46.2 110.8 1.7 18.9
1002 262 602 12 112
MEDICAL OCHOSLU 292.2 75.7 180.9 2.5 33.2
1002 262 602 12 112
DEPARTMENTS OF MEDICINE 94.3 18.7 54.8 .3 20.5
1502 200 582 - 221
INSTITUTION C2NTRSL
PRIVATE 209.6 65.3 120.0 1.8 22.5
1052 312 572 12 112
PUBLIC . - 354.5 75.3 226.5 2.7 50.1
1002 212 642 12 142
5-17
PAGENO="0806"
800
of systems from Table 5-8. These average costs must be inter-
preted with some caution, however, for state-of-the-art instru-
ments were acquired almost entirely within the last five years,
as will be shown in the following chapter on Age and Condition
of Equipment. Other instruments still in research use had a
much broader spread of acquisition dates, while the majority of
those no longer in research use were over 10 years old. Infla-
tion was a significant factor over this period of time, and
expenditures for instruments in each of these research status
categories were affected differently by inflation.
Among subfields, there were substantial differences in
mean costs of state-of-the-art systems. General biology1s state-
of-the-art instruments cost an average of $49,200, and those for
molecular/cellular biology cost an average of $41,500. Those
with the least expensive state-of-the-art instruments were food/
nutrition ($27,300) and medical sciences ($30,300). The mean
cost of state-of-the-art instruments in biochemistry, the sub-
field with the largest number of items, was $32,100.
Private institutions again showed a bias toward more
expensive equipment, with a state-of-the-art average of $39,800,
as compared to a $33,600 average for public institutions.
5.4 Summary
There were over 21,000 instrument systems, with an esti-
mated aggregate original purchase cost of $555 million, in the
biological sciences and departments of medicine encompassed by
this survey. The cost of these instrument systems in constant
1982 dollars was estimated to be $863 million. The largest single
subfield of the biol~gical sciences, with nearly 4,500 instru-
ments in the $10,000 to $1 million cost range, was biochemistry.
5-18
PAGENO="0807"
801
The biological sciences had more instrument systems than
any other field of science surveyed, 38 percent. The physical
sciences had 25 percent of all systems, but their aggregate cost
was slightly greater than that for the biological sciences. The
mean cost per instrument system for biological sciences was
$27,000, the lowest for any field of science except agriculture.
By comparison, the average cost per instrument for physical
sciences was $41,000.
About five percent of all instruments included in the
study had an original purchase cost between $75,000 and
$1 million; however, these accounted for about one-fourth of the
aggregate cost of all extant research instrument systems costing
over $10,000. Almost three-fourths of the systems cost between
$10,000 and $24,999.
Medical schools spent three times as much per institu-
tion for instrumentation in biological sciences as graduate
schools. The mean dollar. amount of equipment per researcher for
the biological sciences, about $21,000 overall, was about 50
percent higher for medical schools than for graduate schools.
For departments of medicine the cost per researcher was lower,
about $15,000. This, apparently, was reflective of the excep-
tionally large numbers of faculty-level researchers associated
with departments of medicine. Private institutions had higher
instrument investments per researcher than public institutions.
The levels of the differences found for aggregate cost of equip-
ment per researcher and per institution closely paralleled those
found in Chapter 4 for FY 1983 equipment expenditures. Appar-
ently, there is a consistency over time in relative expenditures
for these groups.
During 1982-83 the mean dollar amount of research
instrumentation per doctoral degree awarded in the biological
5-19
PAGENO="0808"
802
sciences was $143,500. However, for medical schools the mean was
$220,000, compared to $91,000 for graduate schools. Private
institutions also had somewhat higher costs per doctoral degree
awarded than public institutions.
State-of-the-art instruments constituted 18 percent of
the national stock, while instruments that were not state-of-the-
art but were in active research use accounted for another 65
percent of the national stock. Another 16 percent were no longer
in active use, apparently because of technological obsolescence
or mechanical disrepair.
State-of-the-art instruments cost, on the average, over
$36,000 per instrument, but other instruments that were in active
use (and were usually purchased earlier) cost a little less than
$25,000 per instrument. There was also a difference in mean cost
for state-of-theart instruments in favor of private institutions
over public institutions, about $40,000 to about $34,000.
5-20
PAGENO="0809"
803
6 AGE AND CONDIT ION OF RESEARCH EQUIPMENT
The age and operating condition of research instrumen-
tation available to the nation s academic researchers has been
the subject of many anecdotal reports, and it has been a major
subject of inquiry in the present survey.
It was disclosed in the preceding-chapter (Table 5-8)
that, for the biological sciences and departments of medicine as
a whole, 16 percent of the 1983 national stock of academic
research instrumentation was not used at all during the year,
apparently because of mechanical or technological obsolescence.
A few new instruments were still being prepared for -use in the
- laboratory. The remainder were actively used for research in
1983. In this chapter, statistics will first be presented on the
age of all equipment in the national stock. Then, the emphasis
will shift to instrument systems in active research use in 1983,
the 83 percent of the national stock still in use.
6.1 Age of Research Equipment
For the biological sciences and departments of medicine
as a whole, 44 percent of the systems in the 1983 national stock
were 5 years old or less, and 29 percent were between 6 and 10
years old. The remaining 27 percent were over 10 years old
(Table 6-1). There was variation among subfields of research:
three of the subfields that are predominately in graduate schools
(zoology, botany, and food/nutrition) had more than half of their
instrument systems in the one-to-five year age range. At the
other extreme, anatomy and general biology had the highest
proportions of systems over 10 years old, with 41 percent. for
anatomy and 37 percent for general biology. -
6-1
PAGENO="0810"
804
ACE OF ACA009IC RESEARCH ENUIPNENT
INSTR090NT OYSTERS IN 1983 NATIONAL STOCO) BIOLOGiCAL AND NEDICAL SCIENCES
MENDER AND PERCENT OF SYSTENS
SYSTEM AGE (FRON YEAR OP PURCHASE)
UVER 10
1-5 YEARS 6-10 YEARS YEARS (1973
TOTAL (1979-93) (1974-78) OR SEFORE)
TOTAL 01373 9408 6239 2706
1002 442 292 272
SUBFIELD OF RESEARCH
BIOCHEMISTRY 4463 2024 1278 1)61
1002 422 292 262
MICROBIOLOGY 1633 630 266 439
1002 392 322 272
MOLECULAR/CELLULAR BIOLOGY 2933 1416 825 663
1002 482 292 232
PRYSIOLOCY/BIEP14TSICS 2703 1320 716 667
1S02 492 282 252
ANATOMY 238 21! 108 219
1002 392 202 412
PATHOLOGY 1014 390 296 328
1002 382 292 322
PHHRRACOLOOY/TSESCOLOGY 2005 925 599 258
1002 442 292 272
000LOCTIENT090LOCT 301 280 98 122
1502 362 202 242
BOTANY 469 247 112 110
1002 232 242 232
FEDS AND NUTRITION 400 207 101 92
1002 522 221 232
BIOLOGY. GENERAL AND N.E.C. 1631 487 544 800
1002 302 332 372
MEDICAL SCIENCES/OEPTO 000 2912 1170 911 73)
1002 402 322 262
INTERDISCIPLINARY. N.E.C. I!) 115 26 17
1002 622 302 92
FIELD AND SETTING
BIDLECICAL SCIENCES. TOTAL 17009 7670 2027 4811
.1002 442 291 272
GRADUATE SCHOOLS 6966 3240 1821 1906
1002 472 262 272
MEDICAL SCHOOLS 10243 4431 3207 2906
1002 422 302 292
DEPARTMENTS OP MEDICINE 3864 1728 .1212 995
1002 451 312 232
INSTITUTION CONTROL
PRIVATE 7142 3403 2118 161,
1002 482 302 232
PUBLIC 14231 ~O23 4121 4097
1002 422 292 292
6-2
PAGENO="0811"
805
Private institutions had 6 percent more instruments
that were 1 to 5 years old than did public institutions, with 6
percent fewer in the over-b-year category.
The biological sciences had somewhat older instrument
systems than did most other fields of science (Appendix Table A-7).
Several fields -- agricultural sciences, environmental, sciences,
engineering, and particularly computer science -- had larger
proportions of instruments that were from 1 to 5 years old than
did the biological sciences.
State-of-the-art systems constituted 18 percent of all
biological and medical science instruments in the national stock
(Table 6-2). The percentages of systems acquired each year that
were still considered to be state-of-the-art in 1983 are charted
in Figure 6-1. For example, 50 percent of the systems acquired
in 1983 were state-of-the-art, while 41 percent of those pur-
chased the year before were still state-of-the-art. This
diminished to 37 percent of those purchased in 1981; it was down
to 8 percent of those acquired during 1974 to 1978 and was
practically zero for the earlier years. One conclusion is that
f.ive years is essentially the outer limit for equipment to remain
state-of-the-art, with the falling off starting after the first
year.
At private institutions, 23 percent of the instruments
were classified as state-of-the-art, while 16 percent of those in
public institutions were so classified. The decline with instru-
ment age is roughly parallel for the two groups of institutions.
The remaining tables in this chapter describe systems
in active research use in 1983, a subset of all instruments in
the national stock. Table 6-3 shows the age distribution of
actively used equipment. Fifty percent were five years old or
6-3
PAGENO="0812"
FIELD AND SETTING
BIOLOGICAL SCIENCES~ TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
DEPARTMENTS OF MEDICINE
INSTITUTION CONTROL
PRIVATE
PUBLIC
806
TABLE 6!
PERCENT OF ACADEMIC RESEARCH ESUIPRENT THAT IS STATE-OF-THE-ART BY YEAR OF PURCHASE
INSTRUMENT SYSTEMS IN 1983 NATIONAL STOCK BIOLOGICAL ~ND MEDICAL SCIENCES
---PERCENT OF SYSTEMS CLASSIFIED AS STATE-OF-THE-ART---
YEAR OF PURCHASE
1974- BEFORE
TOTAL 1983 1982 1981 1980 1979 1975 1974
TOTAL 18% 80% 41% 37% 23% 22% 8% 2%
18% 49%
19% 83%
18% 48%
16% 84%
41% 38%
44% 38%
38% 44%
40% 32%
28% 19% 9% 2%
26% 16% 12% 1%
24% 22% 7% 3%
15% 32% 4% 1%
23% 83% 42% 44% 28% 30% 10% 2%
16% 48% 40% 33% 22% 18% 6% 2%
6-4
PAGENO="0813"
807
Figure 6-1. Percent of Equipment in the Netional Stock
ThQt Is St~te-of-the-4rt in-I 963,
by Year of Purchase.
ip ~
1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 and
~ar1ier
Year Equipment was Purchased
6-5
PAGENO="0814"
808
TABLE 6-3
ACE OF ACADEMIC RESEARCH EQUIPMENT
INBTRUMENT SYSTEMS IN RESEARCH USE IN 19533 BIOLOGICAL AND MEDICAL SCIENCES
--NUMBER AND PERCENT OF IN-USE SYSTEMS
SYSTEM AGO (FROM YEAR OF PURCHASE)
OVER 10
1-3 YEARS 610 YEARS YEARS (1973
TOTAL (1979-83) (1974-78) OR BEFORE)
TOTAL 17855 8896 0117 3B43
1000 001 .91 220
SUBFIELD OF RESEARCH
BIOCHEMISTRY 4097 0006 1110 981
1000 491 270 240
MICROBIOLOGY 1430 613 526 312
1001 420 361 212
MOLECULAR/CELLULAR BIOLOGY 2832 1406 824 602
1000 500 290 211
PHYSIOLOGY/BSOFHYIICS 0331 1261 612 457
1000 040 262 202
ANATOMY 430 208 ¶5 105
1000 441 210 350
PATHOLOGY 770 334 038 003
1000 430 310 261
PHARMACILOGY/T001COLOGY 1736 BOB SIN 381
1022 490 290 221
000LOGYIENTOROLOGY 422 263 86 AM
1000 632 201 162
BOTANY 436 243 103 09
1000 060 240 200
FOOD ANG NUTRITION 343 198 RU 60
1001 182 050 182
BIOLOGY GERERAL AND NEC. 986 402 300 233
1000 412 360 241
MEDICAL SCIERCES/OEFTO BED 1704 989 211 284
1002 000 292 162
INTERDISCIPLINARY. N.E.C. 1,0 118 06 17
1000 621 300 92
FIELD AND SETTING
BIOLOGICAL DCIEHCES TOTAL 10019 73(9 4303 3393
1000 492 292 232.
GRAOUATE SCHOOLS 6288 3132 1368 1387
1002 OIl 260 231
REDICAL SCHOOLS 8931 4187 2737 2008
1002 471 312 222
DEPARTMENTS OF MEDICINE 2836 1377 811 447
1001 060 291 162
INSTITUTION CONTRIL
PRIVATE 6136 3284 1787 1060
1001 042 291 171
PUBLIC 11719 0612 3329 3778
1001 482 281 242
6-6
PAGENO="0815"
809
less., 29 percent were from 6 to 10 years old, and 22 percent were
over 10 years old. The major difference :befween these and the
national stock statistics shown in Table 6-1 was in the number of
instrument systems that were over 10 years old. This difference
of 1,863 systems in the over-b--years old category was 54 percent
of the total number of systems that were no longer in research
use (Table 5-8). Thus, as would be expected, obsolete and mop-
erable equipment tended to be older.
All the subfields had substantial numbers of instru-
ments removed from the over-l0-years old category in the change
from national stock to instruments actively in research use. The
subfields with the largest proportions of instruments removed
were general biology and medical sciences. Even after removal of
instruments not in use, 35 percent .of the in-use instruments in
anatomy were over 10 years old, more than any other subfield.
Apparently, older instruments are more useful in research for
this discipline than for the other subfields.
Departments of medicine displayed a different pattern
than the biological sciences in age of instruments in research
use. They had 56 percent of their instruments in the 1-to-S year
range, compared to 49 percent for the biological sciences, and
they had 16 percent over 10 years old, whereas the biological
sciences had 23 percent in this category.
The contrast between departments of medicine- and the
biological sciences extends to their difference in prevalence'of
instruments no longer in research use. Departments of `medicine
contained twice the proportion of such instruments as biological
sciences in the national stock (Table 5-8). When these were
removed from the count to determine the proportions of instru-
ments actually in research use it was discovered that only 44
percent of the instruments that were no longer in use in
G-7
PAGENO="0816"
810
departments of medicine in 1983 were over 1Q. years old, whereas
for the biological sciences 60 percent of those no longer in use
were over 10 years old. This difference indicates a tendency to
discard instruments at an earlier age in departments of medicine
than in the biological sciences. It also suggests that fields,
institutions, or departments that have large amounts of unused,
retired instrumentation lying about are not necessarily ill-
equipped. In some circumstances, this may actually indicate a
comparatively well-funded instrumentation situation.
There was a difference between private and public
institutions in age distribution. For private institutiom~, 54
percent of in-use systems were from 1 to 5 years old, and 17
percent were over 10 years old. For public institutions the
comparable figures were 48 percent for instruments 1 to 5 years
old and 24 percent for those over 10 years old.
Compared with other fields of science (Appendix Table
A-8), the tendency of the biological sciences to have older
instrument systems becomes even more pronounced when only those
systems still in active use are examined. In the instrument age
range of 1 to 5 years, the differences between biology and the
other fields were somewhat larger for instruments in active use
than they were for the full national stock.
State-of-the-art systems constituted 22 percent of all
those that were in use during 1983. This percentage was calcu-
lated from the data in Table 5-8, after eliminating the inactive
equipment. The age distribution of state-of-the-art instruments
in active use is shown in Table 6-4. For all subfields combined,
85 percent were between 1 and 5 years old. Anatomy and general
biology, however, had only about 65 percent of their state-of-
the-art instruments in the 1 to 5 year group. For departments of
medicine, 91 percent of the state-of-the-art instruments were
6-8
PAGENO="0817"
811
AGE OF ACADENIC RESEARCH ENUIPRENT
STATE-OF-THE-ART INSTRUNERT OYSTERS IN RESEARCH USE IN 1953' BIOL500CAI. AND NEDICA(. SCIENCES
RWIBER AND PERCENT OF STATE-OF-THE-ART SYSTESS
OYSTER AGE lYNCH YEAR OF PURCHASE)
OVER 10
1-2 YEARS 6-10 YEARS YEARS (1973
TOTAL 1979-83) 11914-78) OR BEFORE)
TOTAL 3864 3289 482 114
1002 852 122 32
SUBFIELD OF RESEARCH
BIOCHENISTRY 796 709 67 20
1002 890 82 32
RICR0010LOGY 242 2)2 31
1000 872 130
ROLECULAR/CELLULAR BIOI.IGY 832 627 150 22
1000 792 182 32
PHYSIOLOGY/BIOPHYSICS 218 445 65 6
1002 862 132 12
ANATORY 132 9) 38 8
1000 680 272 62
PATHOLOGY 175 133 * 24 17
1002 782 142 102
PHARSACOLO0YITOSIcOLOOY 033 201 19 13
1002 862 82 52
100LOGY/ERTOROLOGY 124 017 1 6
1502 942 12 52
BOTANY 108 93 10 3
1002 082 92 32
FOOD AND NUTRITION 88 80 8 0
1002 902 10.2
BIOLOGY. GENERAL AND N.E.C. 171 109 51 11
1002 842 302 72
NEDICAL SCIENCESJOEPTS NED 389 356 10 3
1002 972 30 12
INTERDIOCIPL.INARY. N.E.C. 77 66 9
1002 882 122 22
FIELD AND SETTING
BIOLOGICAL SCIENCES. TOTAL 3234 2896 434 103
1002 032 130 32
GRADUATE SCHOOLS 1348 1106 215 27
1002 802 182 22
REDICA). SCHOOLS 1886 1591 219 17
1002 142 122 42
OEPARTRENTS OF NEDICINE 831 572 08 II
1000 910 82 02
INSTITUTION CONTROL
PRIVATE 1825 1378 214 38
1002 852 132 22
PUBLIC 2236 1092 280 76
1002 850 120 32
6-9
PAGENO="0818"
812
five years old or less, compared with 83:percent for the biological
sciences. Overall, only 3 percent of state~of-the-art instruments
were ten or more years old.
The remaining instrument systems in research use were
not state-of-the-art. This group had a very different age pattern
than that for the state-of-the-art systems. Figure 6-2 illus-
trates the contrast. Whereas 85 percent of the state-of-the-art
systems were from 1 to 5 years old, the others were more widely
distributed over the age categories: 40 percent were from 1 to 5
years old, 33 percent between 6 and 10 years old, 19 percent from
11 to 15 years old, and 8 percent over 15 years.
6.2 Condition of Research Equipment
Aside from the age of the equipment, an important issue
addressed by this study is how well academic research equipment
is actually performing. The next two tables provide some insight
into this question. Table 6-5 details how many of the instruments
in active research use were in excellent working condition, and
Table 6-6 reveals what function they served in the laboratory.
About half of all instrument systems in the study were
considered by the responsible research investigator to be in
excellent working condition (Table 6-5). Since a relationship
has already been found between the age of instruments and their
removal from active research use (Table 6-3 and ensuing dis-
cussion), it can reasonably be assumed that there is a relation-
ship between the working condition of instruments and their age.
This relationship is shown in Figure 6-3, which gives the per-
centage of instruments in excellent condition by year of purchase,
grouped into three-year periods. For instruments purchased
between 1981 and 1983, 78 percent were in excellent condition.
6-10
PAGENO="0819"
813
Figure 6-2. Age Distribution of Academic Research
Equipment in Active Research Use:
8iological and Medical Sciences.
100% __________
8%
19%
Cl)
z
U,
cC
C-
z
0
L&J
a-
YEAR OF PURCHASE
1979-83
1974-78
1969-73
1968 AND BEFORE
STATE-OF-THE NOT STATE-OF-
ART THE-ART
6-1].
PAGENO="0820"
TOTAL
SUBFIELD OF AESEARCH
BIOCHEMISTRY
MICROBI OLOGY
MOLECULAR/CELLULAR BIOLOGY
PHYSIOLOGY/BIOPHYSICS
ANATOMY
PATHOLOGY
PHARMACOLOGY/TOO ICOLOGY
ZOOLOGY /ENT000LOGY
BOTANY
FOOD AND NUTRITION
BIOLOGY~ GENERAL AND N.E.C.
`MEDICAL SCIENCES/DEPTS MED
INTERDISCIPLINARY, N.E.C.
FIELD AND SETTING
BIOLOGICAL SCIENCES TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
DEPARTMENTS OF MEDICINE
INSTITUTION CINTROL
PRIVATE
PUBLIC
B70 441.
830 44%
814
lADLE 6-S
PERCENT OP ACADEMIC F:ESEARCN EQUIPOE~T IN EXCELLENT WORKING CONDITION,
BY RESEURCH STATUS -
INSTR500NT SYSTEMS IN RESEARCH USE IN 1982: BIOLOGICAL AND MEDICAL SCIENCES
PERCENT CF SYSTEMS IN EXCELLENT WORKING CONDITION
----1983 RESEARCH STATUS----
STATE-SF-THE- OTHER IN-USE
TOTAL ART SYSTEMS SYSTEMS
85%
44%
470
790
40%
49%
81%
42%
09%
900
46%
800
890
02%
080
810
48%
000
88%
37%
48%
DIX
40%
64%
940
01%
35%
700
00%
600
860
01%
09%
890
02%
49%
810
41%
030
730
41%
03%
850
.
44%
04%
880
44%
02%
820
43%
05%
830
47%
6-12
PAGENO="0821"
815
TABLE 6-8
RESEARCH FUNCTION OF ACADEMIC RESEARCH ESUIPRENT THAT 25 USED FOR RESEARCH
BUT IS NOT STATE-OF-THE-ART
INSTRUMENT SYSTEMS IN RESEARCH-USE IN 1983: BIOLOGICAL AND MEDICAl. SCIENCES
NURSER AND PERCENT SF NON STATE-OP-THE-ART SYSTEMS---
RESEARCH FUNCTION
THE MOST ADVANCED USED FOR RESEARCH. BUT
INSTRUMENT TO AHOCH MORE ADVANCED EQUIPMENT
TOTAL STS USERS HAVE ACCESS IS AVAILABLE
TOTAL. SELECTED FIELDS 13991 0787 5204
1000 412 192
SUBFIELD OF RESEARCH
BIOCHEMISTRY
NICROBIOLOGY
MOLECULAR/CELLULAR BIOLOOY
PHYSIOLOGY FBI OPHYSS CS
ANAT DRY
PATHOLOGY
PHARMACOLOOY/TDSSCOLOOY
005LOGYIENTOMOLOOY
BOTANY
FOOD AND NUTRITION
BIOLOGY. GENERAL AND N.E.C.
MEDICAL. SCOENCES/OEPTS MED
INTERDISCIPLINARY. N.E.C.
FIELD AND SETTING
BIOLOGICAL SCIENCES. TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
DEPARTMENT OF MEDICINE
INSTiTUTION CONTROL
PRIVATE
PUBLIC
3300
1052
1235
372
-2564
632
I20~
1002
488
400
721
602
1990
1002
746
382
I2N3
622
1818
1002
742
412
1076
590
318
1002
11,
572
136
432
601
1000
290
482
311
520
1504
1002
.
678
452
846
552
298
1002
181
612
*
117
390
330
1002
141
432
188
072
259
0002
148
572
*
Ill
432
01,
1002
411
502
408
502
1405
1002
490 -
351
903
650
114
1002
54
472
60
11185
1002
4995
421
6790
382
4739
0002
ZOOS
422
2739
582
7047
1002
1995
432
4050
572
2206
1001
792
361
1413
642
*
4511
1002
1802
402
2709
600
9079
1000
3905
422
1494
582
6-13
PAGENO="0822"
816
crc
cc)
(1)
U)
Q
z
c-c
cx
0~
Figure 5-3. Percent or Academic Research Equipment That s in
Exceflent Working Condition, by Year of Purchase:
~iologica1 and Medical Sciences-
1981-1983 1978-1980
1975-1977 1972-1974 1969-1971 1968 ~nd before
YEAR OF PUR~HA5E
6-14
PAGENO="0823"
817
The percentage drops for successive three-year periods to 21
percent for those purchased from 1969 tà 1~971.
A small rise to 30 percent occurs for instruments 14
years and older. This small rise may be explained by another
factor underlying the age-condition relationship. As shown in
Figure 6-2, the proportion of instruments in active use decreases
with age. Instruments that are in poor condition are routinely
removed from use and disposed of, so that an ever-decreasing
number of older instruments are retained in the laboratories.
Thus, only 6 percent of all instruments in use are more than
fifteen years old. Undoubtedly, these are the instruments that
have been maintained sufficiently well to leave them in at least
average working condition. Technological obsolescence is
probably not a consideration for the functions that these instru-
ments perform.
State-of-the-art systems, recently acquired for the
most part1 had 85 percent in excellent working condition. By
contrast, only 44 percent of the non-state-of-the-art systems
were rated as being in excellent condition. These other in-use
systems constitute nearly 80 percent of the systems in active
use.
By itself, the existence of a substantial amount of
non-state-of-the-art research equipment is not a problem. Even
the best-equipped research facilities would be expected to have
such equipment -- for use in routine analyses, as backups for
more advanced instruments, etc. Non-state-of-the-art equipment
is a problem only in situations where its users do not have
access to more advanced equipment when needed. Table 6-6 shows
that this problem situation is not uncommon: nearly half (41%)
of all non-state-of-the-art instrument systems in research use
6-15
PAGENO="0824"
818
in the fields surveyed are the most advanced instruments of their
kind to which their research users have access
Among subfields, thereis. relatively little variation
in the percent of instruments in excellent working condition.
However, there is considerable variation in the percent of non-
state-of-the-art instruments for which more advanced instruments
are available. The subfields that hadthe largest;proportions of
more advanced instruments available (over 60 percent) were
medical sciences, biochemistry, and.molecular/ cellular biology..:
The subfields that. had to rely more than half the time on non-
state-of-the-art equipment as the most advanced available were
anatomy, zoology, and food/nutrition. . Departments of medicine
had advanced instruments available when needed more frequently
than did the biological sciences.
Other fields of science reported approximately the same
proportions of instruments in excellent working condition as the
biological sciences (Appendix Table A-9). However, biology had
somewhat higher proportions.of instruments that were not state-
of-the-art, for which more advanced equipment was available when
needed, than did most other fields (Appendix Table A-b).
The adequacy of research instruments in the biological
sciences must be questioned when half of the equipment is in some
degree of disrepair (i.e., is in less than excellent working
condition and when nearly half of instruments that are not state-
of-the-art are the most advanced to which investigators have
access -- especially when these other instruments constitute
nearly 80 percent of all equipment in use. Is the research corn-
munity well .served by so widespread a lack in capabilities for
front-line research? Granted that not every procedure in bio-
logical research. requires the most advanced instrumentation, a
number of disciplines appear to have too little advanced equipment
compared to the subfields that are best endowed.
6-16
PAGENO="0825"
819
6.3 Summary
For the subfields of research included in this study,
44 percent of the instrument systems in the 1983 national stock
were from one to five years old, while 27 percent were over 10
years old. However, for the subset of systems actively used for
research in 1983, the proportion of systems in the age range 1-5
years was a much larger 50 percent, and those over 10 years old
constituted only 22 percent. Departments of medicine had a
higher proportion of the newer instruments than the biological.
sciences. They also replaced instruments more quickly.
Private institutions had proportionately more of the
newer instruments than public institutions and fewer of the older
ones. Compared with other fields of science in the survey,
instruments in the biological sciences tended to be somewhat
older.
The percentage of systems acquired in years prior to
1983 that were still considered state-of-the-art in 1983 fell off
sharply with increasing age of the instrument. Of those purchased
in 1983, 50 percent were considered state-of-the-art. However,
only 37 percent of those purchased two years earlier, in 1981,
were still considered state-of-the-art. Six-year-old instruments
were classified as state-of-the-art only 13 percent of the time.
Evidently, the life span for classification as state-Of-the-art
is very short.
The age distribution of state-of-the-art instruments
dropped off very sharply; however, for their instruments in
active research use that were not classed as state-of-the-art
there ~as a more moderate decline in age distribution, from 40
percent of those from I to 5 years old to 27 percent for those
over 10 years old.
6-17
PAGENO="0826"
820
An important issue is how well research equipment is
actually performing. `~bout half of the insfrument systems were
considered to be in excellent working condition -- 85 percent for
state-of-the-art instruments but only 41 percent for other in-use
instruments. As would be expected, there was a strong relation-
ship between age of instruments and their working condition, with
78 percent of those from 1 to 3 years old in excellent condition
but only 21 percent of those between 11 and 13 years old. A
small number of instruments even older than that were still
performing adequately in their presumably routine functions.
Systems that were not state-of-the-art accounted for
nearly 80 percent of all instruments in actual research use. Such
instruments play an important role in research laboratories when
state-of-the-art equipment is not required. However, when
research investigators do not have access to more advanced
equipment, thus having to "make do" with older, less capable
instruments, they face an obstacle in their attempt to engage in
more sophisticated research. This is apparently the situation
generally in some subfields of research, and in other subfields
in at least a large proportion of laboratories. Overall, nearly
half of the non-state-of-the-art instruments in the biological
sciences were the most advanced to which investigators had
access. For departments of medicine, that percentage was closer
to one-third. To the extent that these obstacles to instrument
performance and capability appear, the entire research effort in
the biological sciences is hampered.
6-18
PAGENO="0827"
821
7. FUNDING OF EQUIPMENT IN ACTIVE
RESEARCH USE -
Two questions of interest concerning the funding of
research equipment are: (1) where do the funds come from to
purchase equipment in the biological and medical sciences; and
(2) aside from purchasing equipment, what other means are
commonly employed to acquire equipment. It is not possible to
determine from this study if any changes over time have occurred.
However, the data do provide a baseline against which to measure
future changes.
7.1 Means of Acquiring Research Equipment
Both the numbers of instrument systems and the costs
of these systems (Tables 7-1 and 7-2) indicate that the only
significant method of procurement was purchasing new equipment.
Ninety-four percent of the systems, with a total cost of 95
percent of all funds spent, were obtained this way. Locally
built systems scarcely appeared as a factor in the biological
and medical sciences. There was practically no donated equip-
ment, and the purchase of used items was negligible.
7.2 Funding Sources for Research Equipment
Federal agencies and non-Federal sources each provided
one-half of the money for research equipment. Figure 7-1 illus-
trates the amounts contributed by the several sources. More
details are provided in Table 7-3, which also reveals that the
departments of medicine did not follow the funding pattern of
the biological sciences: departments of medicine obtained their
funds in nearly a two-to-one ratio from non-Federal sources.
7-1
PAGENO="0828"
822
DEANS OF ACQUISITION OF ACAOEMIC RESEARCH EQUIPMENT
INOTRURENT OYSTERS IN RESEARCH USE IN 19831 BIOLOGICAL AND MEDICAL SCIENCES
NURSER AND PERCENT OF IN-USE SUNlESS
MEANS OF ACQUISITION
FUR- PUR-
CHASED LOCALLY CHASES ----OONATED---- GOVT
TOTAL NEW BUILT USED NEW USES SURFLUO OTHER
TOTAL 17809 16734 78 540 26 38 43 370
1000 942 - 32 - - - 22
SUBFIELD OP RESEARCH
BIOCHEMISTRY 4090 3874 4 ISA 0 17 0 94
1002 952 - 32 - 22
RICROBIOLOGY 1443 1367 0 34 4 12 9 15
1000 952 - 22 - IX 12 IX
MOLECULAR/CELLULAR BIOLOGY 0818 2680 2 79 0 0 0 26
1002 952 - 32 22
PHYSIOLOGY/BIOPHYSICS 0314 2095 02 Ba 6 6 01 78
1002 912 IX 42 - - 12 32
AMATORY 450 406 0 35 0 0 0 10
1000 902 82 22
PATHOLOGT 775 729 0 SO 9 0 0 15
1002 942 32 IX OX
PHARIMACOLOGT/TIIICOLOGT 1760 1660 15 00 0 0 9 05
0000 942 10 32 - IX
100LO0YIENTOPIOLOGY 420 386 6 23 2 0 0
1002 922 IX OX - II
BOTANY 438 400 0 8 0 0 4 2
1002 972 SI 15 -
FOOD AND NUTRITION 347 325 2 17 0 3 0 0
IOOX 942 - OX IX
BIOLOGY, GENERAL AND N;E.C. 993 900 16 40 3 0 0 15
1002 932 22 42 - IX
MEDICAL ICIENCESIDEPIS MED 1754 1690 0 35 2 0 0 56
1002 952 OX - 32
INTERDISCIPLINARY N.E.C. 191 178 9 4 0 0 0 0
1002 93X 50 22
FIELD AND SETTING
BIOLOGICAL SCIENCES TOTAL 12008 14130 78 451 20 36 43 050
1002 942 12 32 - - - 22
GRADUATE SCHOOLS 6074 5712 35 010 3 13 10 89
1002 942 12 32 - - - IX
MEDICAL SCHOOLS 8933 0418 40 241 17 24 30 162
1002 942 - 32 - - - SI
DEPARTHENTS OF HEOICINE 2521 2604 0 90 8 2 0 119
1002 922 3X -. - 42
INSTITUTION CONTROL
PRIVATE 6132 5811 41 156 .10 23 9 83
1002 952 12 32 - - - 12
PUBLIC 11697 10923 37 384 16 16 34 287
1002 932 - 32 - - - 22
7-2
PAGENO="0829"
823
AC1010ITIGN COST UP ACADERIC RESEARCH ENUOPRENY. BY REAMS CF AC$U051TIOII
INSTRUMENT OYSTERS IN RESEARCH USE IA (9$3t BIOLOGICAL. AND MEDICAL. SCIENCES
(DOLLARS IN RILLIOOS3
----ACN015ITION COST AND PERCENT OP COSTS OF IN-USE OYSTERS----
-----NEARS OF AClUIS1TODN--.----"~-
PUN- PUR-
CHASES LOCALLY CHASED ----DONATED---- COV~T
TOTAL NEW BUILT USES NEW USES SURPLUS OTHEN
TOTAL $472.9 4448.2 $6.4 1(4.9 1.6 1.1 5.1 $1.8
1000 932 02 32 - - - -
SUBFIELD OP NEMEANCH
SIOCHENIOTRY 95.1 90.2 .1 2.2 0 0 0 .3
1842 972 - 22 12
N1~NO11SLSUY 36.4 35.0 S .7 0 .1 A .4
0002 962 - 22 - - 12
NOLECULARICELLULAN SIDLOGY *1.0 77.4 1.0 2.1 0 0 S .2
1002 961 12 32 -
PNY$IDL5OY~BIDPHY55c5 65.0 60.0 S.D 2.2 .5 0 $ .3
1002 90* 30 32 - 10
AMATORY 14.9 24.1 S .8 0 0 S 0
0002 93! 32
PATHOLOGY 04.7 03.7 0 .A .3 0 0 0
1002 96* 22 2!
PHANRACOLOGYtTOXICOLOGT 38.6 37.6 .4 .0 0 0 0 0
1000 902 1* 10
000LOOTFENT000LOCY 10.7 9.9 .4 .4 0 0 0 .1
1002 902 3* 4% 12
BOTANY 10.7 10.3 0 .0 0 ~0 0 0
1002 90* 02 -
FOOD AND NUTRITION 7.7 7.0 .1 .4 0 0 0 0
100* 932 22 32
BIOLOGY. GENERAL AND N.E.C. 34.3 31.0 2.2 1.2 0 U 4 0
1000 902 62 32 -
RESICAL SCOENcESFSEFTS NED 46.7 43.1 0 3.5 0 0 0 .1
1002 92* I! -
INTER010CIPtiNA0Y. N.E.C. 6.9 6,3 .3 .2 0 0 0 0
1002 942 45 02
FIELD AND OETTINE
000L000CAL SCIENCES. TOTAL 403.7 384.4 6.4 10.2 .6 .1 .1 1.3
1002 93* 21 32. - - - -
GRADUATE SCHOOLS 103.! 144.0 3.2 4.9 0 0 0 .5
1002 942 22 32 - -
RESICAL SCHOOLS 249.9 239.7 3.1 33 .6 .1 0 .8
1002 96* II 22 - - - -
DEPARTMENTS OP MEDICINE 09.1 A3.N 0 4.7 0 0 0 .4
IOU! 922 72 12
INSTITUTION CONTROL
PRIVATE 180.3 171.3 -4.3 3.7 .2 .1 0 .4
- 1002 912 20 20 - - -
PUBLiC 292.4 27-6.8 1.9 11.2 .5 0 .1 1.4
100* 952 11 40 - - -
7-3
PAGENO="0830"
824
Figure 7- 1 Sources of Funds for Acodemic Reseerch
Equipment in Active Reseerch Use:
Oiologicel end Medicel Sciences.
Other
INSTITUTIONS ~
Government
Private
NON-FEDERAL; 5O~Z Foundations
7-4
PAGENO="0831"
825
TAStE 7-3
SDURCES OF FUNDS FOR ACADEMIC RESEARCH EGUIPRENT. BY FIELD AND SETTING
INSTRUMENT SYSTEMS IN RESEARCHUSE IN 1983: BIOLOGICAL AND MEDICRL SCIENCES
CDOLLARS IN IIILLIONS3
FUNDS CONTRIBUTED AND PERCENT OF FUNDS
FIELD AND SETTiNG
BIOLOGICAL SCIENCES
GRADUATE MEDiCAL DEPARTMENTS
TOTAL SCHOOLS SCHOOLS OF MEDICINE
TOTAL. ALL SOURCES $446.8 $148.3 $232.0
1002 1002 100%
$68.8
100%
FSDERAL SOURCES, TOTAL
251.4
302
73.?
312
120.0
362
23.2
35%
NSF
33.6
82
22.3
132
10.9
32
.4
12
NIH
171.3
382
46.4
312
102.6
442
22.6
34%
DOD
4.0
12
1.0
12
1.2
IX
1.8
37.
OTHER FEDERAL SOURCES
12.3
32
6.1
4%
5.3
22
.8
1%
NON-FEDERAL SOURCES. TOTAL
221.4
30%
72.4
492
112.0
482
41.0
82%
INSTITUTION OR DEPARTMERT FUNDS
163.6
37%
47.2
322
16.9
372
31.5
47%
STATE GRANT/APPROPRIATION
18.4
42
11.4
CX
6.0
32
1.0
IX
PRIVATE NONPROFIT FOUNDATION
27.0
6%
7.3
52
14.0
6%
5.7
9%
BUSINESS OR iNDUSTRY
7.7
2%
4.5
32
2.4
1%
.7
IX
OTHER NON-FEDERAL SOURCES
6.6
12
1.?
12
.
2.6
1%
2.1
3%
7... 5
PAGENO="0832"
826
NIH was the principal source of Federal funds for
equipment. Graduate schools obtained 31 pe~er~t of their equip-
ment funds from NIH, while the biological sciences in the
medical schools secured 44 percent. For departments of medicine,
NIH was the only significant Federal source. NSF contributed 15
percent of the graduate schools' equipment funds, but only 5
percent of the medical schools'.
Institutional funds were reported to be the principal
source for non-Federal moneys, with 32 percent of the graduate
schools' equipment funds, 37 percent of the medical schools',
and nearly half of all funds for departments of medicine. The
meaning of institutional funds in this context is not entirely
clear. The research investigators who supplied information on
the funding sources for the instruments for which they were
responsible could not be expected to know the sources of money
supplied by the institution unless it had been earmarked by a
specific donor. It is possible that some of the institution's
funds originated with the FederaL government through programs
such as the Biomedical Research Support Grants, which are dis-
bursed through a formula based on an institution's total research
funding and intended to provide unrestricted support to biomedical
research. Another possible source is the indirect cost portion
of research grants, which may be redirected by the institution
into equipment funding or, in the case of some States that
receive the indirect costs for state-supported institutions,
routed back to the institution for the same purpose. Technically,
these can be considered to be institutional funds, although they
do not originate from within the institution's own resources.
To what extent the total that was designated institutional fund-
ing contained this re-routed Federal funding -- or similar non-
Federal unrestricted grants -- cannnot be determined from these
data.
7-6
PAGENO="0833"
827
Another source that may be included in the institu-
tional fund category f or medical schools, ad~ which may also
account for some of the differential in equipment funding between
graduate and medical schools, is the revenue generated from
clinical activities of the faculty. No estimate can be given
for that element from the data in this survey.
Besides the institutional funds, no matter what their
origins may have been, other non-Federal sources played minor
roles in equipment funding. State funds constituted 3 percent
of equipment money for medical schools, but 8 percent for
graduate schools (which had a considerably higher proportion of
public institutions). Private nonprofit foundations contributed
about 5 percent of equipment spending for the biological sciences
and 9 percent for departments of medicine. Business and industry,
a source that might relieve the Federal government of some of
the burden for research support, contributed only 2 percent of
all equipment funds in the biological and medical sciences.
Private institutions fared a little better proportion-
ately from the Federal government than did public institutions.
They received 53 percent of their equipment funds from Federal
agencies compared with the 47 percent received by public insti-
tutions (Table 7-4). The average Federal contribution for
research equipment to 93 private institutions was $992,000 per
institution, whereas the 156 public institutions averaged
$828,000. Institutional funds,' however, were about the same for
private and public universities and medical schools, both in
terms of percentage of funds and in average dollars per institution.
The only other significant difference in funding sources was the
7 percent of the total contributed by state governments to public
institutions compared to practically no State government contri-
butions to private institutions.
7-7
`53-277 0 - 86 - 27
PAGENO="0834"
828-
TASLE 7-4
SOURCES CF FUNDS FQR -ACADEMIC RESEARCH EGUIPNENT~ BY INSTITUTIONAL CONTROL
INSTRUNENT SYSTEMS IN RESEARCH USE IN 1983 BIOLOGICAL-AND MEDICAL SCIENCES
- tDDLLARS IN M1L.LIONS3
-FUNDS CONTRIBUTED AND PERCENT OF FUNDS-
-CONTROL OF INSTITUTION--
PRIVATE PUELIC
TOTAL INSTITUTIONS INSTITUTIONS
TOTAL. ALL SOURCES $446.8- $172.7 1274,1
_I-OOx - 100% - - 100%
FEDERAL SOURCES, TOTAL - 221.4 92.3 129.1
- 00% 03% - 47%
NSF - - - 33.6 11.8 21.8
- 8% 7% 8%
NIH - 171.0 71.7 - 99.8
- 38% 42% 36%
DOD 4.0 3.1 - - .9
- - 1% 2% - -
OThER FEDERAL SOURCES - - 12.3 5.7 - -6.6
- 3% 3% 2%
NON-FEDERAL S3URCES~ TOTAL 225.4 80.4 145.0
00% 47% 03%
INSTITUTION DR DEPARTMENT FUNDS 165.6 61.7 103.9
37% 36% 38%
STATE GRANT/APPROPRIATION 18.4 .6 17.9-
4% - - - 7%
PRIVATE NONPROFIT FOUNDATION - 27.0 12.0 - 14.0
6% 7% 5%
BUSINESS OR INDUSTRY 7.7 4.0 3.7
- 2% 2% - 1%
OTHER NON-FEDERAL SOURCES 6.6 1.7 4.9
- 1% 1% 2%
7-8
PAGENO="0835"
829
The funding sources for biological sciences are com-
pared with those for other fields in Appendi~Tables A-li and
A-l2. In A-li, the proportions of funds each field received
from the various sources are summarized, and in A-12 the distri-
bution of each source's funds by field is shown. Table A-li
shows that the biological sciences received a larger portion of
their equipment funds from Federal sources than any other surveyed
field except the physical and materials sciences. By far the
largest part of the Federal funds for the biological sciences
came from NIH. Each of the other fields had its own pattern of
funding sources, none of which resembled that for the biological
sciences. For example, about half of the funds for agricultural
sciences came from the institutions themselves, whereas all
other fields had much lower proportions of funding from the
institutions. Business and~ industry were not much of a factor
except for computer science and, perhaps, environmental sciences.
Appendix Table A-l2 indicates the principal, interest
of each Federal agency f or the surveyed fields of science, as
well as the distribution of funds from all of the other sources.
NIH, for example, distributed almost all of its equipment funds
to the biological sciences, with nearly all of the remainder to
the physical.sciences. NSF, on the other hand, granted about
half of its funds to the physical sciences and about a sixth
each to engineering and the biological sciences. Department of
Agriculture funds went mostly to agricultural sciences. The
next highest level of Department of Agriculture funding-went to
the.biological sciences. in graduate schools. `While more of the
university funds went to the biological sciences than to any
other field, equipment funds from that source are broadly dis-
tributed among all fields, roughly in proportion to their total
funding.
7-9
PAGENO="0836"
830
Another perspective concerning funding is shown in
Table 7-5, which illustrates the pattern of lunding from various
sources by system cost categories. The Federal sources accounted
for 50 percent of all equipment funding, as did the non-Federal
sources. However, 55 percent of funding for equipment costing
less than $25,000 came from Federal sources, with the remaining
45 percent coming from non-Federal sources. Conversely, 46
percent of the funding for instruments costing $75,000 or more
was purchased with Federal money, compared to 54 percent from
non-Federal money.
NIH, which contributed 38 percent of all equipment
funding, provided 47 percent of the funds for instruments costing
under $25,000 and 28 percent for those costing $75,000 or more.
NSF showed the reverse pattern, providing 8 percent of all equip-
ment funding but 5 percent of the funds for instruments costing
less than $25,000 and 12 percent for those costing $75,000 or
more. Institutional funds were also skewed toward the more
expensive items, with 31 percent for all instruments under $25,000
and 41 percent for those costing $75,000 or more.
Federal involvement as a source of funding is examined
in Table 7-6. For example, 42 percent of the equipment items
were funded without any Federal money, while 48 percent were
funded exclusively with Federal funds. Wide variations among the
subfields occurred, ranging from 59 percent of the biochemistry
items receiving full Federal funding to 36 percent of microbiology
instruments to 13 percent for food/nutrition. Non-Federal fund-
ing was the dominant source for medical sciences and food/nutrition,
along with pathology and microbiology. Shared funding was used
to purchase only 10 percent of all instrument systems. The
percentage of shared costs was at a low level for all subfields,
with medical sciences the lowest of all at 4 percent.
7-10
PAGENO="0837"
831
TABLE 70
SOURCES OF FUNDS FCR ACADEMIC RESEARCH ESUIPRENT, BY SYSTEM COST RANGE
INSTRUMENT SYSTEMS 101 RESEARCH USE ON 1953: BIOLOGICAL AND MEDICAL SCIENCES
(DOLLARS IN MILLIONS)
FUNDS CONTRIBUTED AND PERCENT CF FUNDS
SYSTEM ACQUISITION COST
UNDER $25,000- $75000
TOTAL $25,000 $74,999 OR MORE
TOTAL, ALL SOURCES 5446.8 $104.7 $143.0 0119.1
1002 1002 1002 100%
FEDERAL SOURCES. TOTAL 221.4 102.5 64.6 24.3
207. 55% 457. 46%
NSF 03.8 10.0 8.9 14.8
8% 0% 6% 12%
NIH 171.0 86.6 01.7 33.2
38% 477. 36% 282
DOD 4.0 1.7 1.2 1.1
1% 17. 1% 1%
OTHER FEDERAL SOURCES 12.3 4.2 2.9 0.2
3% 2% 2% 4%
NON-FEDERAL SOURCES. TOTAL 220.4 82.2 78.4 64.8
00% 40% 05% 547.
INSTITUT1ON CR DEPARTMENT PONDS 160.6 57.8 09.0 48.3
377. 31% 42% 417.
STATE GRANT/APPROPRIATION 15.4 5.4 8.6 3.4
4% .0% 02 3%
PRIVATE NONPROFIT FOUNDATION 27.0 11.1 7.7 8.1
6% 67. 5% 77.
BUSINESS OR INDUSTRY 7.7 2.3 3.2 2.3
2% 1% 22 2%
* OTHER NON-FEDERAL SOURCES 6.6 2.6 1.3 2.7
1% 1% 1% 2%
7-11
PAGENO="0838"
832
TABLE 76
FEDERAL INVOLVEMENT IN FUNDING OF ACADERIC RESEARCH EQUIPMENT
INITRDRENT SYSTEMS IN RESEARCH USE IN 19R3 BIOLOGICAL AND MEDICAL SCIENCES
NU9DER AND PERCENT OF SYSTEMS
-FEDERAL FUNDING INVOLVEMENT-
NO PARTIAL 1000
TOTAL FUNDING FUNDING FUNDING
16334 6818 1704 7772
1000 402 100 480
3742
1000
1311
1000
0615
1000
0181
1000
371
1000
711
1000
1589
1000
399
1000
422
1000
326
1000
811
1000
1632
1000
175
1000
1081 467 2195
290 120 590
682 178 491
502 132 360
1158 240 1217
440 92 472
811 255 1111
372 120 510
154 38 17?
410 100 480
377 47 291
532 72 410
665 124 SOD
420 82 500
172 42 184
432 112 460
143 61 210
342 140 520
250 33 43
772 102 132
335 124 356
410 152 442
946 65 622
580 42 382
81 31 63
460 180 360
TOTAL
SUBFIELD OF RESEARCH
BIOCHEMISTRY
MICROBIOLOGY
MOLECULAR/CELLULAR BIOLOGY
PHYSIGLOGYFBIGPHYSICS
ANATOMY
PATHOLOGY
PHARMACDLOGY/TOOICOLOGY
200LOGY/ENTINOLOGT
BOTANY
FOOD AND NUTRITION
BIOLOGY. GENERAL AND N.E.C.
MEDICAL SCIEO4CES/OEFTS RED
INTERDISCIPLINARY. N.E.C.
FIELD AND SETTING
BIOLOGiCAL SCIENCES. TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
DEPARTMENTS CF MEDICINE
INSTITUTION CGNTRGL
PRIVATE
PUBLIC
13785 5540 1604
1002 400 022
5729 2363 792
1002 410 142
8056 3178 811
1000 392 102
2548 1317 100
1002 520 42
6640
482
2574
452
4066
502
1132
442
5733 2289 426 3019
1002 402 70 532
10600 4569 1278 4753
1000 432 120 450
7-12
PAGENO="0839"
833
The summary totals in Table 7-6 reveal a considerable
difference between the extent of non-Federal funding for the
biological sciences and departments of medicine. For the latter,
52 percent of their instruments were completely funded by non-
Federal sources, while for the biological sciences only 40 percent
were completely dependent on those sources. In private institu-
tions, 53 percent of the instruments received total funding from
Federal agencies, compared with 45 percent for public institutions.
About half of the instruments in the biological sciences
were completely funded by Federal sources, the same proportion
as found for physical sciences; however, the physical sciences
had partial funding from Federal sources about twice as often as
biology (Appendix Table A-13). Agricultural science instruments
rarely had any Federal funding, but almost all those in materials
science had at least partial Federal funding.
7.3 Summary
Almost all instrument systems in the biological, sciences
and departments of medicine were purchased new. No other means
of acquisition played a significant role.
Funding sources for the biological sciences in graduate
schools differed from those in medical schools. While both
received about half of their funds from Federal sources -- `and
NIH `was by far the largest Federal contributor to both settings
-- NSF contributed three times as much to the graduate schools
as it did to medical schools. Among the non-Federal sources,
the institutions were the major contributors, with a slightly
higher proportion of institutional funds going to medical schools
than to "graduate schools. Institutional funds, however, contain
an undetermined component of money originating from Federal sources.
7-13 `
PAGENO="0840"
834
Funds from the state were a minor factor, but they went mostly
to graduate schools. - Departments of medicixie, however, received
62 percent of their funding from non-Federal sources, three-
fourths of that being from their institutions. Private institu-
tions received a higher proportion of their equipment funds from
Federal sources than did the public'institutions.
Federal sources as a whole funded a larger percentage
of instruments costing under $25,000 than did non-Federal sources,
which in turn funded .a larger' percentage of those costing over
$25,000.' The funds granted by NIH wer,e used for instruments
costing `less than $25,000, far more than for those costing
$75,000 and more. The reverse was true for NSF's funds.
Private institutions had a higher percentage of instru-
ments completely funded by Federal sources when compared `with
public institutions. ` `
`7-14 `
PAGENO="0841"
835
8. LOCATION AND USE OF ACADEMIC RESEARCH EQUIPMENT
Questions have been raised periodically concerning the
extent to which research equipment in academic laboratories is
available to qualified research investigators in other laboratories.
Is sharing of expensive instrument systems a common practice, or
do academic investigators tend to duplicate desirable instruments
even though the equipment may lie unused within their own labor-
atories for considerable periods of time?
The present survey cannot answer all of these questions;
the need for similar instruments in separate laboratories is a
matter for local evaluation of how best to use the time and
effort of skilled research teams. Nevertheless, many institutions
have departmental laboratories where commonly used equipment is
shared by. most investigators and their staff members. In this
chapter, data are presented on the location of equipment --
whether in individual investigators' laboratories or in shared
facilities -- and on how many research personnel use instruments
in each type of facility.
8.1 Location of Equipment
In the biological sciences, for both graduate and
medical schools, about 65 percent of all equipment was located
in within-department laboratories of individual principal inves-
tigators (P.I.s) (Table 8-1). For departments of medicine, the
comparable number was 70 percent. Almost all of the remaining
instrument systems were in department-managed common laboratories,
with about 3 percent -- less for departments of medicine -- in
nondepartmental instrumentation facilities and 1 percent in
8-1
PAGENO="0842"
836
TABLE D1
LOCATTDN OF ACADEMIC RESEARCH EBUIPHENT -
INSTRUMENT SYSTEMS IN RESEARCH USE IN 1983: BiOLOGICAl. AND NED1CAL SCIENCES
NURSER AND.ffRCENT OF SYSTEMS
FIELD AND SETTING
BIOLOGICAL SCIENCES
GRADUATE MEDICAL DEPARTMENTS
SCHOOLS SCHOOLS OF MEDICINE
TOTAL. ALL LOCATIONS 6069 8912 2810
- 1002 1002 1002
WITHIN DEPARTMENT lAB iF 3930 0692 1962
INDIVIDUAL PRINCIPAL INVESTIGATORS 602 642 702
SHARED-ACCESS FACILITIES. TOTAL 2139 3219 848
302 362 302
* NATIONAL. REGIONAL OR INTER- 48 06 04
UNIVERSITY INSTRUMENTATION 12 12 22
FACILITY
NON-DEPARTMENTAL RESEARCH 202 324 37
FACILITY 32 42 12
DEPARINETIT-RANAGED COMMON LAB 1860 2824 686
312 322 242
OTHER 29 16 71
- - 32
8-2
PAGENO="0843"
837
national or regional facilities. For convenience, these latter
three locations are collectively referred to as inherently
shared-access facilities.
Compared with other fields of science (Appendix Table
A-l4), the location pattern for the biological sciences agrees
most closely with those in agriculture and the physical sciences.
The environmental sciences and engineering each had about half
their systems in P.1.-controlled laboratories. In the remaining
fields, nondepartmental facilities played a more prominent role.
Table 8-2 displays the percentage of systems in shared-
access facilities by subfield of research and by state-of-the-
art status. About 35 percent of both state-of-the-art and other
in-use systems were in shared-access facilities. Several subfields
had about 30 percent in shared facilities: biochemistry, molecular!
cellular biology, physiology/biophysics, pharmacology/toxicology,
and zoology. The other subfields ranged upward to as high as 50
percent. In a majority of the subfields it appears that state-
of-the-art instruments were somewhat less likely to be in shared
facilities than were other in-use instruments.
In Table 8-3, the proportions of instrument systems in
shared-access facilities are presented within cost categories.
Of systems costing between $10,000 and $24,999, only 31 percent
were in shared facilities, whereas 63 percent of those costing
between $75,000 and $1,000,000 were in shared facilities.
In the biological sciences, graduate schools and medical
schools had the same overall proportions of instruments in shared-
access facilities, yet 71 percent of the graduate school instru-
ments in the top cost category were in such locations, compared
8-3
PAGENO="0844"
838
TABLE B-!
PERCENT CF ACADEMIC RESEARCH ESUIPHENT LOCATED IN SHARED-ACCESS FACILITIES.
BY RESEARCH STATUS -
INSTRUMENT SYSTEMS IN RESEARCH USE IN 19821 BIOLOGICAL AND MEDICAL SCIENCES
PERCENT OF SYSTEMS IN
SHARED-ACCESS FACILITIES
---1983 RESEARCH STATUS--'--
STATE-OF-THE- OTHER SYSTEMS
TOTAL ART SYSTEMS RESEARCH USE
TOTAL 332 34% 33%
SUBFIELD OF RESEARCH
BIOCHEMISTRY 29% 23% 30%
MICROBIOLOGY 482 54% 462
MOLECULAR/CELLULAR BIOLOGY 312 31% 312
PHYSIOLDGY/BIIPHYSICS 272 29% 27%
ANATOMY 49% 42% 33%
PATHOLOGY 40% 32% 422
PHARMACOLOGY/TOO ICDLOGY 302 312 302
ZGOLOGY/ENTOMOLOGY 282 28% 29%
BOTANY 442 23% 31%
FOOD AND NUTRITION 47% 44% 482
BIOLOGY~ GENERAL AND N.E.C. 53% 46% 34%
MEDICAL SCIENCES/DEPTS MED 392 46% 37%
INTERDISC1PLINARY. N.E.C. 41% 40% 42%
FIELD AND SETTING
BIOLOGICAL SCIENCES. TOTAL 362 33% 36%
GRADUATE SCHOOLS 35% 31% 38%
MEDICAL SCHOOLS 36% 33% 36%
DEPARTMENTS CF MEDICINE 30% 34% 2Y%
INSTITUTION CONTROL
PRIVATE 31% 34% 31%
PUBLIC 37% 34% 37%
8-4
PAGENO="0845"
TOTAL
S'JBF1ELD OF RESEARCH
BIOCHEMISTRY
MICROS! ILOGY
MOLECULAR/CELLULAR BIOLOGY
PHYSIILOGYIBI DPHYSI CS
ANATOMY
PATHOLOGY
PHARMACOLOGYF TOO ICOLOGY
ZOOLOGY/ENTOPIOLOCY
BOTANY
FOOD AND NUTRITION
BIOLOGY, GENERAL AND N.E.C.
MEDICAL SCIENCES/DEPTS PIED
IHTERDISCIPLINARY, N.E.C.
FIELD AND SETTING
BIOLOGICAL SCIENCES, TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
DEPARTMENTS OP MEDICINE
INSTITUTION CONTROL
PRIVATE
PUBLIC
297. 27% 337. 457.
4E7. 45% 561 61%
317. 277. 337. 747.
277. 247. 327. 467.
37% 837. 707.
247. 641 68%
297. 33% 417.
217. 39% 37.
407. 427. 1007.
467. 49% 7.01
467. 57% 93%
33% 49%
38% 467. 467.
367. 32% 417. 647.
35% 327. 397. 717.
367. 327. 417. 81%
307. 257. 437. 58%
317. 25% 35% 57%
37% 32% 44% 677.
839
TA8LE 8-3
PERCENT CF ACADEMIC RESEARCH EQUIPMENT LOCATED IN SHARED-ACCESS FACILITIES.
DY SYSTEM COST -
INSTRUMENT SYSTEMS IN RESEARCH USE IN 1983; BIOLOGICAL AND MEDICAL SCIENCES
PERCENT OF SYSTEMS IN SHARED-ACCESS FACILITIES
SYSTEM PURCHASE COST
$10,000- $25,010- 175.000-
TOTAL $24,999 $74.999 $1,000,000
357. 31% 417. 63%
497.
407.
307.
287.
44%
477.
:3%
391
417.
8-5
PAGENO="0846"
840
with 61 percent for medical schools. Public institutions had
somewhat higher proportions in shared-access facilities across
all cost categories than private institutions.
Older instruments were more frequently located in
shared-access facilities (Table 8-4). Of those over 10 years
old, 41 percent were in such locations, compared to 32 percent
of those between 1 and 5 years old. This trend was apparent in
10 of the 13 subfields. It was truealso for both private and
public institutions.
.8.2 Availability for General Purpose Use
About 17 percent of all research instruments in the
fields surveyed were dedicated for use in a particular experiment
or series of experiments (Table 8-5). About one-third of these
dedicated instruments had been physically modified in some way
to make them suitable for their intended use. The rest were
reserved intact for the specified experiments, their calibration
and position undisturbed by outside use. Physiology/biophysics
had the largest proportion of dedicated systems, 32 percent.
The biological sciences had a smaller proportion of
dedicated systems than most other fields of science (Appendix
Table A-l5). The physical sciences (39%), engineering (37%),
environmental sciences (33%), and agricultural sciences (24%)
all had larger proportions of their research equipment reserved
for special purpose use than did the biological sciences.
8-6
PAGENO="0847"
TOTAL
SUBFIELD OF RESEARCH
BIOCHEMISTRY
MICROBIOLOGY
MOLECULAR/CELLULAR BIOLOGY
PHYSIOLOGY/BI OPHYSECS
ANATOMY
PATHOLOGY
PHARMACOLOGY/TOXICOLOGY
ZOOLOGY/ENTOMOLOGY
BOTANY
FOOD AND NUTRITION
BIOLOGY~ GENERAL AND N.E.C.
MEDiCAL SC1ENCEB/DEPTS RED
INTERDISCIPLINARY, N.E.C.
FIELD AND SETTING
BIOI.OGICAL SCIENCES~ TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
DEPARTMENTS OF MEDICINE
INSTITUTION CONTROL
PRIVATE
PUBLIC
29% 29%
48% 37%
317. 26%
27% 24%
49% 47%
40% 37%
30% 30%
28% 227.
447. 317.
47% 427.
7.3% 7.6%
39% 37%
417. 38%
24% 34%
50% 64%
37.7. 37%
287. 36%
7.3% 7.0%
38% 47%
247. 39%
37% 44%
647. 7.77.
48% 7.8%
7.1% 47%
44% 38%
7.4% IY%
29% 33% 36%
_33% 37% 43%
8-7
841
TABLE 8-4
PERCENT OF ACADEMIC RRSEARCH EGUIFMENT LOCATED IN SHAREO~ACCESS FACILITIES
BY AGE OF SYSTEM
INSTRUMENT SYSTEMS IN RESEARCH USE IN 1983: BIOLOGICAL AND MEDICAL SCIENCES
PERCENT IF SYSTEMS IN SHARED-ACCESS FACILITIES
SYSTEM AGE (FROM YEAR OF PURCHASE)
OVER 10
1-5 YEARS 6-10 YEARS YEARS (1973
TOTAL (1979-83) (1974-78) OR BEFORE)
35% 32% 367. 41%
36%
30%
31%
387.
417.
36%
33%
35%
44%
30%
30%
32%
29%
31%
37%
PAGENO="0848"
842
7*5*2 8-5
ESPERORENTAL ROLE OF ACADESOC RESEARCH ESUOPHEST
INST005EST OYSTERS 05*ESEARCN USE IN l~53* BIOLOGICAL ASS REDACAL SCIENCES
NURSER AND PERCENT OF OYSTERS -
1953 EOPERINESTAL ROLE
---OEOICATEO CII------ GENERAL
TOTAL NSD*FIES SOT R000FIED PURPOSE
TOTAL *7441 554 0036 14S20
1000 01 122 832
505FIELD OF RESEARCH
SOOCKERISTRY 4019 17* 349 3500
1000 42 92 872
NOC000IOL009 1449 30 45 0374
1002 22 32 951
POLECULARFCELLULAR BIOLOGY 0735 21 540 2469
1002 12 92 HOG
PHY500LOIYIBIOPHYSOCS 2290 292 431 0574
1002 130 102 652
ANATOSY 439 12 74 353
1002 32 172 502
PATHOLOGY 750 13 65 650
1002 52 92 902
PNANNACOLOGYIT505COLOGY 1707 - 80 345 12,0
1002 02 202 752
050LOEYIEST500LOGY 401 12 79 319
1000 30 102 752
BOTANY 412 IA 41 325
1002 42 102 062
FOOD ASS NUTRITION 307 21 47 259
0002 62 042 792
5102.009. SESERAL ASS S.E.C. 994 76 115 S04
-1002 52 122 512
SEDIcAL SCSENCES/DEPTO 200 1708 109 1A7 1410
1002 82 152 332
*STEB015CIPLINASY. S.E.C. 177 10 30 130
1002 60 072 772
FIELD ASS SETTING
SSSLD0SCAL SCSESCES. TOTAL 14705 655 1106 10060
*002 40 *22 832
GSA2UATS SCSOOLI 5935 205 582 5044
*002 32 lOG $72
R000CAL OC500LD 5757 451 1224 7112 -
1002 52 140 812
DEPA#TRSNTS OF SEDOCISE 0707 223 230 2062 -
1002 52 32 532
ISISTOTUTIOS CONTROL
PRIVATE 596* 241 755 4912
- 0002 52 131 322
- PUSLIC 11400 093 1077 9600
1002 52 lOG 842
£15 DEDICATED FOR USE IN A SPECIFIC EIPEROYENT OS SERIES OF EIPESINESTS. AS DISTINCOIOHED
PROS GESERAO. PURPOSE SSST0UNESTS. DEDICATES 0NSTRURENT SYSTORS SAY OR SAY NOT INVOLVE
* SODSFOCATIOSO* `ANY SPECIAL CALODSATSON. PRSG2APRRISG.OR OTHER NODIFSCATI0S 84001
NESDESCO 1148 ISSTNUIIEST UNSUITABLE -FOR GENERAL PURPOSE uSE.'
8-8
PAGENO="0849"
843
8.3 Annual Number of Research Users per Instrument System
An index of how widely academic research equipment is
used is the mean annual number of users per instrument system.
In Table 8-6 it is seen that the average instrument system in
the biological sciences and departments of medicine was used by
10.9 researchers in 1983. This number varied among subfields,
from a low of 8.0 users per system per year in zoology and 8.6
in medical sciences to a high of 14.2 for both microbiology and
general biology. General purpose instruments had a mean of 11.8
users, in contrast to about 6.6 users for dedicated instruments.
As shown in the second .part of Table 8-6, graduate
schools had more users per instrument than did medical schools,
and biological sciences as a whole had considerably more than
departmentsof medicine. Private institutions had slightly more
users per system than did public institutions, and state-of-the-
art instruments were used by slightly more researchers than
other, in-use instruments. However, purchase cost showed the
only noteworthy differential: instrument systems in the cost
range of $75,000 to $1,000,000 had much larger mean numbers of
users than did those in the two lower cost ranges. In all of
these comparisons, general purpose instruments weremore broadly
used than were dedicated ones, as would be expected.
Appendix Table A-16 shows that the biological sciences,
along with agricultural sciences, had fewer users per instrument
than all other fields of science. The physical sciences, which
had the same proportion of instruments in the laboratories of
principal investigators as did the biological sciences (Appendix~
Table A-iS), nevertheless had 15.5 users per instrument, noticably
more than the biological sciences
8-9
PAGENO="0850"
TOTAL
SUBFIELD OP RESEARCH
BIOCHEMISTRY
MICROBIOLOGY
MOLECULAR/CELLULAR BIOLOGY
PHYBIOLOGYIBIOPHYSICD
GNAT DRY
PATHOLOGY
PHAMMACDLDGY/TOIICOLOGY
ZOOLOGY /ENTOMOLGGY
BOTANY
FOOD AND NUTRITION
BIOLOGY. GENERAL AND N.E.C.
MEDICAL OCIENCEO/OEPTS MED
ONTER015CIPLINARY. N.E.C.
FIELD AND NETTING
BIOLOGICAL SCIENCES. TOTAL
GRADUATE ICHOOLD
MEDICAL SCHOOLS
DEPARTMENTS OF MEDICINE
INSTITUTION CONTROL
PRIVATE
PUII.IC
RESEARCH STATUS
STATE OP THE ART
OTHER
PURCHASE COOT
NII.DOOSD4.9?5
$05. UIS-N7N.9~
N75.USONI .000,000
11.0 4.9 AS
14.2 U 7.9
12.0 -0 10.1
9.2 6.7 4.6
9.6 0 7.3
11.7 0 12.4
9.2 10.0 5.5
0.0 U 6.0
12.3 U 6.4
11.1 N 3.5
14.2 5.0 6.2
l.A 0.6 6.3
13.0 N 4.4
11.8
14.0
10.1
10.9
10.4
11.0
00.1
B.B
13.2
12.3
16.1
9.1
14.6
844
MEAN NURSER IF REIEARCH USERS OF ACADEMIC RESEARCH EENUSPRENT BY RESEARCH FUNCTION
INSTRUMENT SYSTEMS IN RESEARCH USE IN Ii83~ :BIOLOGOCAL-AMS MESICAL:ECIENCED
MEAN NURSER OP RESEARCH USERS--
- 1903 RESEARCH FUNCTION---
-----OCOICATEO III------ .GEREMAL
TOTAL MODIFIED NOT HODIFIED PURPOSE
10.9 7.0 6.4 11.0
11.4 7.8
10.3 11.0
10.8 AU
8.2 4.8
6.5 10.3
6.2 13.0
6.7 11.8
5.5 8.8
11.3 7.0 7.0 12.1
10.7 A.Y 6.1 11.A
11.2 ~5.0 .6.6 12.7
IS.B 7.8 63 11.5
10.3
5.7
5.5
11.2
11.2
8.4
7~7
11.8
18.1
11.7
10.0
19.9
* NUMBER IF CASES IN THE UNDERLYING-SAMPLE HAS INSUFFICIENT FOR A RELIABLE ESTIMATE.
ElI B0000AY!O FOR USE IN A SPOCIFOCEOPERBMENTUM.00R0050? EBPEBDMEHTS.AB B1STSNSUOSM!B
FROM GENERAL PURPOSE INSTRUMENTS. DEDICATED INOTRUHEAT OYSTERS MAYOR MAY HOT INVOLVE
MODIFICATIONSI ANV SPECIAL CALIBRATION, PROGRAMMING OR OTHER M050FICATION NHICH
RENDERED THE INSTRUMENT UNSUITABLE FOR GENERAL PURPOSE SSE.~
8-10
PAGENO="0851"
845
Another approach to quantification of instrument usage
is the extent to which instruments are used by researchers from
outside the departments in which they are located. In Table 8-7,
researchers are classified according to their origin: first
being faculty or faculty-equivalent researchers from within the
department; then graduate students, medical. students, and post-
doctorates from within the department; and then researchers from
increasingly remote origins, Of course, individual instruments
could be used by more than one category of user.
For all subfields, 95 percent of the instruments were
used by faculty of the host department. In addition, 36 percent
of these same instruments were used by researchers from other
departments of the same institution, 10 percent were used by
researchers from other universities, and 14 percent were used by
nonacademic researchers. Eighty-two percent of all instruments
were also used by graduate students, medical students, and post-
doctorates within their own departments.
There was little variation among subfields in the
percentage of instrument systems used by faculty from the host
department. There was also little variation among subfields for
percent of instruments used by graduate and medical students and
postdoctorates, except for pathology and medical sciences, which
had significantly lower percentages than other fields. For
these two subfields, there is probably a relationship between
the reduced usage of instruments and the lack of graduate students.
Pathology, for example, had the smallest number of doctoral
degrees awarded of all the subfields studied (Table 5-7). For
medical sciences, the research was performed mostly in departments
of medicine, which do not award graduate degrees. With the
exception of microbiology, all of the major subfields had a
little over 30 percent of their instruments used by researchers
8-11
PAGENO="0852"
846
SUBFIELD OF RESEARCH
BIOCHEPIISTRY 93.20 84.2! 39.7! 8.3! 12.00
RICROBIOLO!Y 96.10 86.50 49.80 5.9% 9.5%
NOLECULAR/CELLULAR BIOLOGY 97.4! 88.50 32.10 6.40 19.70
PHYSIOLOGY/BIOPHYSICS 95.9% 81.6! 33.80 9.7% 8.20
ANATORY 96.6% 81.2% 31.60 6.2! 10.30
PATHOLOGY 97.00 64.70 29.40 7.9% 7.1%
PHARRACOLOGY/TOOICOLOGY 92.90 89.90 33.4! 10.4! 16.20
100LOSY/ENTOPIOLOGY 96.77. 86.7! 31.00 8.0% 9.90
BOTANY 97.00 88.1! 34.8! 12.9! 17.6!
FOOD AND NUTRIT108 94.3! 83.6! 32.80 8.52 17.6%
BIOLOGY. GENERAL AND N.E.C. 93.20 77.32 36.2! 14.4! 10.40
REDICAL OCIENCES/DEPTS RED 97.40 69.0% 35.3% 16.4! 23.5!
INTERDISCIPLINARY. N.E.C. 89.1! 74.8! 51.2! 34.4% 16.9%
FIELD AND SETTING
BIOLOGICAL SCIENCES. TOTAL 95.0!
GRADUATE SCHOOLS 90.20
REDICAL SCHOOLS 94.9%
EEPARTSENTS OFREDICINE 96.3!
INSTITUTION CONTROL
95.90 81.50 31.00 8.80 13.60
94.9% 83.1% 39.3% 10.1! 14.10
TABLE B-i
PERCENT OF ACADERIC RESEARCH ESUIPPIENT USED DY VARIOUS TYPED IF RESEARCH USERS
IN8TRUPIENT OYSTERS IN RESEARCH ODE IN 1983: BIOLOGICAL AND REDICAL SCIENCES
PERCENT OF IN-USE OYSTERS USED IN 1983 BY:
GRADUATE
AND REDICAL
STUDENTS AND RESEARCHERS
FACULTY. POST DOCS.. FROR OTHER RESEARCHERS
THIS DEPT.! THIS DEPT.! DEPTS. THIS FROR OTHER NONACADERIC
FACILITY FACILITY INSTITUTION UNIVERSITIES RESEARCHERS
TOTAL 93.2! 82.5! 36.4! 9.6! 13.90
83.22 36.3! 9.1% 12.9!
86.6% 33.4! 8.1! 13.1!
84.3! 38.2! 9.8% 12.7!
68.2% 36.9! 12.4! 19.3!
PRIVATE
PUBLIC
RESEARCH STATUS
STATE OF THE ART
OTHER
PURCHASE COST
SIS.000-124999
823.000-174999
175,200-81.000.000
96.7! 82.2% 32.8! 12.0! 18.00
94.8! 82.6% 37.4% 9.0% 12.8%
95.1% 83.3% 33.1% 6.1% 12.2%
95.3! 81.1% 40.6% 15.8! 16.5%
93.0! 78.6! 60.9! 31.0! 25.4!
8-12
PAGENO="0853"
847
from other departments at the same institution. For microbiology,
a remarkably high 50 percent of their instruments were used by~
researchers from other departments in the same institution.
Non-academic researchers were most frequently found in molecular!
cellular biology and in the medical sciences.
The second part of Table 8-7 shows that departments of
medicine shared equipment most extensively with nonacademic
researchers than did biological sciences. Public institutions
shared with researchers from other departments at the same univer-
sity a little more than did private institutions. It was some-
what more cornnion for state-of-the-art instruments to be shared
with researchers from other universities and with nonacademic
researchers than it was for other instruments.
As with many other statistics examined in this report,
instrument usage varied most notably by instrument purchase cost
level. For graduate students and postdoctorates, there was a
slight tendency for the usage proportions to decline with increasing
cost of the equipment. However, a very pronounced usage increase
with increasing cost of equipment was evident for researchers
from other departments within the same institution, fo~ researchers
from other institutions, and for nonacademic researchers. Evidently,
more expensive equipment is more likely to be shared with invest-
igators from outside.
8.4 Summary
About 65 percent of all equipment for the biological
sciences was located in the laboratories of individual investigators;
for departments of medicine, 70 percent were in those locations.
The remainder were in inherently shared-access facilities, the
most common of which were department-managed common laboratories.
8-13
PAGENO="0854"
848
Costly instrument systems were more likely to be located
in shared facilities than were those with lower purchase costs.
About two-thirds of instruments costing between $75,000 and $1
million were in shared facilities, compared to about one-third
of those costing from $10,000 to $24,999. Graduate schools
tended to have higher proportions of their most costly instruments
in shared facilities than did medical schools, as did somewhat
more of the public institutions than the private institutions.
Older instruments were more likely to be located in
shared facilities. Overall, 41 percent of the instruments over
10 years old were so located, compared to 32 percent of those 5
years old or less. This pattern appeared consistently in the
biological science subfields, but did not appear at all in
departments of medicine.
Only 17 percent of instruments in the biological sciences
were dedicated to specific experiments or series of experiments,
the remainder being available for general use. This proportion
of dedicated equipment was about half that for most other fields
of science.
The average number of users for instrument systems in
the biological sciences was about 12 per instrument for general
purpose instruments and about 7 for dedicated instruments. It
was lower for instruments in departments of medicine. The
biological sciences had fewer users per instrument than all
other fields of science except agriculture. The most costly
instruments in the biological sciences (those costing between
$75,000 and $1 million) had substantially more users per
instrument than those in lower cost categories.
8-14
PAGENO="0855"
849
The more costly instrument systems_ (over $75,000) were
very likely to have been used by investigators from outside the
department, and even, from outside the institution. There was
also a tendency for state-of-the-art instruments tobe used by a
wider range of users than equipment not considered state-of-the-
art. `
In the biological sciences, considerable sharing routinely
takes place, especially with instruments not dedicated to specific
experiments. The percentages of instruments used by researchers
from within.the same department, by graduate and medical students
and postdoctorates, and by members of other departments in the
same institution -- all indicate an impressive amount of cross-
* usage of instruments. Additionally, a high percentage of instruments
are located in inherently shared-access facilities, and there ~
especially widespread use of the most expensive instruments.
Thus, one can conclude that in academic sciences sharing of
equipment is the rule and not the exception.
8-15
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850
9. MAINTENANCE AND REPAIR
The effective cost of research instrumentation extends
beyond original acquisition cost. The quality of an instrument's
performance and its longevity depend on ade4uate maintenance
practices throughout its working life. A number of questions
relating to the quality and costs of maintenance and repair
(M&R) were asked in the survey of both department heads and
users of instruments. This chapter presents the findings on M&R
for the biological and medical sciences.
9.1. Assessment of M&R Facilities
Department/facility heads assessed the instrumentation
support services available to their departments, including such
facilities as electronics and machine shops. Their evaluations
are reported in Table 9-1.
Overall, only 16 percent regarded their facilities as
excellent, and nearly 50 percent reported insufficient or non-
existent facilities. The patterns of response among the depart-
ments were quite varied. Departments of molecular/cellular
biology and physiology/biophysics assessed 32 percent of their
M&R facilities as excellent. Departments of food/nutrition,
however, could find no facilities to rate as excellent, while
for botany and pathology there were only 6 percent and 8 percent
respectively, of excellent facilities. Thirty-eight percent of
the pharmacology/ toxicology departments reported that they had
no M&R facilities at all.
9-1
PAGENO="0857"
TOTAL
DEPARTNENTS
BIOCHENISTRY
NICROBIDLDGY
ROLECULARICEL.LULAR BIOLOGY
PXfYSIOLOGY/BIO?HYSICS
M4ATORY
PATHOLOGY
PHARRACOLOGY/TOX ICOLOGY
ZODLOIVIENTOROLOGY
BOTANY
FOOD AND NUTRITION
BIOLO~Y. GENERAL AND N.E.C.
DEPARINERTS OF NEDICINE
FIELD AND SETTING
100 16 30 37
100 12 37 33
100
32
35
100
32
38
100
22
46
100
8
26
100
20
18
100
12
31
100
6
54
100
0
33
100
13
33
100
6
64
BIOLOGICAL SCIENCES. TOTAL 100
GRADUATE SCHOOLS 100
PIEDICAL SCHOOLS 100
DEPARTPIENTS OF MEDIcINE 100
INSTITUTION CONTROL
PRIVATE 100
PUBLIC 100
17
18
9 24
17 13
22
44 22
24 38
39 18
18 22
53 14
38 lb
30 0
851
TABLE 9-1
DEPARTMENT/FACILITY ASSESSMENT ~F AVAILABLE INSTRUMENTATION SUB.PQRT SERVICES
BIOLOGICAL AND MEDICAL SCIENCES
PERCENT OF DEPARTMENTS/FACILITIES ASSESSING
INSTRUMENTATION SUPPORT SERY1CES AS:
TOTAL EXCELLENT ADEQUATE INSUFFICIENT NONEXISTENT
100 16 36 31 17
31 18
33 17
29 20
30 `0
19 22
36 16
16 34
16 34
17 34
6 64
30 29
9 39
9-2
PAGENO="0858"
*852
Only 6 percent of the departments of medicine viewed
their M&R facilities as excellent, but 64. percent stated that
they were adequate, for a total of 70 percent rated adequate or
better. All departments of medicine reported that they had some
kind of M&R facility. The biological sciences as a whole had a
less satisfactory view of their M&R facilities, with a total of
50 percent having adequate or better facilities and 18 percent
reporting none at all.
Private institutions rated 30 percent of their facili-
ties as excellent, a much larger proportion than the 9 percent
for public institutions. Private institutions also reported a
higher proportion of departments without M&R facilities -- 22
percent to 16 percent.
9.2 The Costs of M&R
It has already been shown (Table 4-1) that $35.7 million
was spent for M&R in FY 1983 by academic departments and facilities
in the biological and medical sciences, compared to $158.2 million
in reported purchases by `the same departments and facilities for
items of research equipment costing $500 or more. This amounted
to 22.5 cents spent on M&R for every dollar spent to acquire new
equipment in that year.
There are several facets of expenditures f or M&R.
They may be described as: (1) costs of services provided by
sources `outside .the institution -- i.e., service contracts and
field service as needed; (2) salaries for university-employed
M&R personnel; and (3) costs of supplies, equipment, and facili-
ties used for `M&R within the department.
9-3
PAGENO="0859"
853
The mean expenditure per department for all these
costs was $30,200 in FY 1983, of which nearly two-thirds was
spent for outside services, as shown in Table 9-2. There was
considerable variation by department in mean expenditure. Among
the biological sciences, the largest mean expenditures were
found for general biology ($36,200), physiology/biophysics
($35,900), and molecular/ cellular biology ($35,700). The small-
est mean expenditures were made by food/nutrition ($15,100),
botany ($16,900), and microbiology ($17,300).
The biological science departments also varied in
their relative use of outside services as opposed to university-
based M&R staff and facilities. While the overall proportion
spent by biological science departments for outside services was
62 percent of M&R funds, departments of zoology/entomology used
only 38 percent of their funds for outside services, with the
remainder going into university staff salaries and the supplies
and facilities used by those staff members. Similarly, for
physiology/biophysics 47 percent went into outside services. At
the other end were botany (80 percent for outside services),
pharmacology/toxicology (77 percent), and Microbiology (73 percent).
M&R expenditures for departments of medicine were
quite different from those for the biological sciences, averaging
$59,700 per department, compared to $25,800 for graduate schools
and $31,300 for biological sciences in medical schools. More-
over, departments of medicine relied on outside services more
heavily, spending 76 percent of their M&R funds for this purpose
compared to 62 percent for the biological sciences. The larger
mean expenditure for departments of medicine can be traced to
their greater size; there were more than twice as many instru-
ments in use per department for departments of medicine as there
were for the average biological sciences department. The differ-
ential in mean expenditures disappears when this factor is
controlled.
9-4
PAGENO="0860"
854
TABLO 9D
MEAN FY 1983 EXPENDITURE PER DEPARTMENT/FACILITY FOR RAINTENANCE AND REPAIR DF RESEARCH EAUIPRENTI
BIOLOGICAL AND MEDICAL SCIENCES -
000LLARS IN THOUSANDS 3
PER DEPARTMENT REAM FT 1983 EXPENDITURE FOR MAiNTENANCE
AND REPAIR OF RESEARCH E8UIPMENT
R/R SERVICE UNIVERSITY-EMPLOYED RIM SUPPLIES
CONTRACTS AND fIR PERSONNEL E8UIPRENT
TOTAL FIELD SERVICE SALARIES AND FACILITIES
TDTAL~ SELECTED FIELDS $30.0 $19.0 *6.4 84.8
DEP ART REM TI
BIOCHEMISTRY 29.7 19.6 6.0 4.0
RICROBIOLDGT 17.3 12.7 1.9 2.7
MOLECULAR/CELLULAR BIOLOGY 30.7 22.7 8.0 0.0
PHYSIOLOGY/BIOPHYSICS 30.9 16.7 12.8 6.4
ANATOMY 3U.5 18.0 4.1 7.9
PATHOLOGY 28.9 19.4 6.2 3.2
PHARMACOLOGTITOIICOLOGY 27.0 21.1 0.6 3.7
000LOGY/ENTIMOLOGY 21.3 8.1 7.0 0.7
BOTANY 16.9 13.6 1.9 1.3
FOOD AND NUTRITION 10.1 8.7 3.7 2.7
BIOLOGY. GENERAL AND N.E.C. 36.2 21.2 9.0 0.0
DEPARTMENTS OF MEDICINE 0Y.7 40.4 6.7 7.6
FIELD AND SETTING
BIOLOGICAL SCIENCES. TOTAL DB.6 17.6 6.4 4.6
GRADUATE SCHIOLS 20.8 16.1 0.7 4.1
MEDICAL SCHOOLS 31.3 19.0 7.1 0.2
DEPARTMENTS OFREDICINE 39.7 45.4 6.7 7.6
INSTITUTION CONTROL
PRIVATE 39.6 26.3 7.3 5.8
PUBLIC 26.0 13.6 6.0 4.3
9-5
PAGENO="0861"
855
Private institutions spent 50 percent more per depart-
ment on M&R than public institutions. Sixty-seven percent of
their M&R expenditures went into outside services, compared to
60 percent for public institutions.
The methods of providing M&R service are presented in
more detail in Table 9-3. These data, and those for the remain-
ing tables in this chapter, were supplied by instrument users on
the Instrument Data Sheet. As shown in Table 9-3, 39 percent of
the instrument systems were maintained unaer service contract.
Field service as needed was employed for 27 percent of the instru-
ments, university-based M&R staff serviced 10 percent, and research
personnel handled 8 percent. Overall, 17 percent of the systems
did not have service contracts and did not require any servicing
during the year.
About 50 percent of the instruments used in microbiology
and molecular/cellular biology were under service contract,
whereas only 9 percent of those in food/nutrition, 18 percent of
those in zoology/entomology, and 23 percent of those in physiology/
biophysics had service contracts. Food/nutrition tended to use
local M&R staff and research personnel instead of service contracts
to perform the necessary service, and zoology/entomology often
used field service. In both these subfields, about 30 percent
of their instruments required no service at all. Physiology/
biophysics also used university staff and research persons more
frequently than other subfields instead of service contracts.
There were essentially no differences between depart-
ments of medicine and the biological sciences in patterns of M&R
servicing. Private institutions, however, tended to use service
contracts and field services about 20 percent more often than
public institutions.
9-6
PAGENO="0862"
856
TABLE ?~3
PRINCIPAL NEARS OF SERVICING IN-UOE ACADEMIC RESEARCH INSTRUMENTS; BIOLOGICAL AND MEDICAL SCIENCES (1]
PERCENT OF IN-USE SYSTEMS BY PRINCIPAL REARS OF SERVICING (2]
SERVICE NONE FIELD UNIV. R/R RESEARCH
TOTAL CONTRACT REQUIRED SERVICE PERSONNEL PERSONNEL
TOTAL, SELECTED FIELDS
SUBFIELD OP RESEARCH
BIOCHEMISTRY 150
MICROBIOLOGY 100
MOLECULAR/CELLULAR BIOLOGY 100
PHYSIOLOGY/BIOPHYSICS 100
ANATOMY 100
PATHOLOGY 100
PHARMACOLOGY/TOO ICOLOGY 100
ZOOLOGY/ENTOMOLOGY 100
BOTANY 105
FOOD AND NUTRITION 100
BIOLOGY, GENERAL AND N.E.C. 100
MEDICAL SCIENCES/DEPTS. MED ZOO
INTERDISCIPLINARY N.E.C. SOD
FIELD AND SETTING
1000 390 570 271 100 80
42 14 26 9 8
02 17 20 6 6
Dl 13 08 4 0
23 20 27 16 50
36 33 25 1 5
44 13 31 7 6
38 17 24 8 13
18 31 37 8 6
32 14 30 17 7
9 30 29 02 11
35 19 23 16 8
38 15 31 13 4
27 16 19 11 OS
23 9 5
29 10 10
BIOLOGICAL SCIENCES. TOTAL 100
GRADUATE SCHOOLS 100
MEDICAL SCHOOLS 100
DEPARTMENTS (F MEDICINE 100
INSTITUTION CONTROL
PRIVATE
PUBLIC
39 17
38 56
40 18
38 15
26 50
26 11
26 B
31 11
8
9
S
100 44 19
100 36 16
(1] PERCENTS NAY NOT SUM 10.100 BECA5IDE OP ROUNDING.
(23 IF MORE THAN ONE PORN OF SERVICING WAS USED IN 1Y83, THE INSTRUMENT SYSTEM WAS ASSIGNED TO
THE FIRST-LISTED CATEGORY THAT APPLIED.
9-7
PAGENO="0863"
857
Relationship of Means of Servicing to Working Condition
In Table 9-4~, an analysis is presented of the propor-
tion of. instruments in excellent working condition by the means
used to service the instrument .in 1983, with age of -equipment
held constant. It has already been shown (Figure 6-3) that a
strong relationship exists between the age of an instrument and
its working condition; this relationship is also reflected in
Table 9-4. Within each age category, however, there seems to.be
little difference in proportion of instruments in excellent
condition between those under service contract and those receiv-
ing M&R by any other means. ~The category No Service Required,
of course, is excluded in this analysis.)
This lack of relationship between 1983 nieans of ser-
vicing and 1983 working condition, while interesting, does not
necessarily imply a wider lack of relationship between an instru-.
ment's history of M&R and its mechanical longevity. Longitudinal
data would be required for the examination of .such cause-and-
effect relationships.
9.4 M&R Costs and Age of Instruments
M&R for an instrument system in the biological and
medical sciences costs more after the instrument is over five
years old, according to Table 9-5. Overall, the sean expendi-
ture per system for M&R in FY 1953 was .$90L~ ~for systems from 1
to 5 years -old, $1,400 for those between 6 soil 10 years old, and
$1,300 for those 11 years and older. The pattern of lower M&R
costs during the first five years held true for all subfields.
9-8
PAGENO="0864"
858
TAStE 4-4
PEYCENT CF IS-USE ACADEMIC RESEARCH INSTRUMENT OYSTERS THAT ARE IN EXCELLENT WORKING CONDITION
BY SYSTEM AGE: BIOLOGICAL AND MEDICAL SC1ENCES -
PERCENT OF IN-USE SYSTEMS IN EXCELLENT WORKING
CONDITION El] BY SYSTEM AGE
1-0 YEARS 6-10 YEARS 11+ YEARS
TOTAL 1979-83) 1974-79) BEFORE 1974)
TOTAL SELECTED FIELDS 537. 717. 41% 25/.
PRINCIPAL MEANS OF
SERVICING 02]
SERVICE CONTRACT 49 66 40 29
NO SERVICE RESUIRED 76 BR 64 40
FIELD SERVICE. AG NEEDED DI 71 39 24
UNIVERSITY-SMFLOYEO 39 06 29 22
MAINTENANCE/REPAIR STAFF
RESEARCH PERSONNEL 44 65 42 20
FACULTY FOST-OOCS,
GRADUATE STUDENTS)
(13 BASED ON USER CHARACTERIZATION.
ED] IF ROME THAN ONE FORM OF SERVICING WAS USED IN 1993 THE INDTRUMENT SYSTEM WAS ASSIGNED
TO THE FIRST-LISTED CATEGORY THAT APPLIED.
9-9
PAGENO="0865"
859
TABLE `-3
MEAN EXPENDITURE IN 1953 PER SYSTEM FOR MAINTENANCE AND REPAIR OF IA-USE ACADEMIC RESEARCH
INSTRUMENT SYDTEMS. DY SYSTEM AGE: BIOLOGICAL AND )IEDICAI. SCIENCES
- PER SYSTEM MEAN EXPENDITURE IN 1983 FOR MAINTENANCE
HAD REPAIR SY SYSTEM AGE
1-3 YEARS 6-lU YEARS hA YEARS -
TDTAL (1979-83) (1974-78) (BEFORE 1974)
TOTAL SELECTED FIELDS 85.100 8900 NO.400 NO.300
SUBFIELD OF RESEARCH
BIOCHEMISTRY 1.000 800 1.300 1.000
MICROBIOLOGY 0.200 900 1.100 1.800
MOLECULAR/CELLULAR BIOLOGY 1.200 850 1.600 l.A0O
PHRXIOLOGY!BI5PMY5105 MOO 805 0.000 900
ANATOMY 1.600 800 2.000 2.40D
PATHOLOGY 1.600 1.000 1.600 0.400
PRARMACOLOGY/TOZICOLOGY 1.100 1.100 1.300 700
000LOGY/ENTOMOLSGY TOO 300 1.300 1.400
BOTANY 800 000 1.100 BOO
FOSS AND NUTRITION 600 300 300 1,000
BIOLOGY. GENERAL AND N.E.C. TOO 1.300 1.300 2.A0S
MEDICAL SCIENCES/DEPTS. MED 0.400 1.200 2.000 1.000
ONTERDISCIPLINARY. N.E.C. 2.000 1.400 1,900 3.800
FIELD AND SETTING
BIOLOGOCAL SCIENCES. TOTAL thUS 000 0.300 1,400
GRADUATE SCHOOLS 1.000 700 1.300 I.OOD
ME000AL SCHOOLS 1000 900 1.300 1.000
OEPARTMETATS OF MEDICINE 1.200 1.000 1.600 1.000
INSTITUTION CONTROL
PRIYATE 1.000 MOO 0.300 0.300
PSSLIC 1000 800 1.300 0.300
S1O.000-824.R99 700 300 900 TOO
$23.005-$74.R99 1.400 BOO l.ROO 0.400
173.000-55 .000.000 6.300 0.900 6.200 6.300
PRINCIPAL MEANS OF
SEMY100NG 110____
SERVICE CONTRACT 0.3U0 2.000 2.300 2.300
AS SERVICE RESUORES 0 U 0 0
FIELD SERVICE. AS NEEDED 700 300 800 1.000
UNIYEMSITY-EMPLOYED 600 300 300 500
MAINTENANCE/REPAIR STAFF
RESEARCH PERSONNEL 400 300 300 300
FACULTY. POST-OOCS.
GRADUATE STUDENTS)
000 IF MORE THAN ONE FORM OF SERVICING WAS USED ON 1983, THE INSTRUMENT SYSTEM WAS ASSIGNED
TO THE FOR5T-iISTEO CATEGORY THAi APPLIED.
9-10
53-277 0 - 86 - 28
PAGENO="0866"
860
The mean expenditure for all instruments was $1,100.
The subfields with the lowest M&R expendi.tur~s were food/nutrition
($600), zoology/entomology ($700), botany ($800), and physiology/
biophysics ($900). The highest expenditures were made by general
biology ($1,700) and pathology and anatomy ($1,600 each).
Departments of medicine and biological sciences had
nearly the same mean expenditures. Private institutions spent
$1,300 per instrument on M&R, while public institutions spent
$1,100.
Large differences in mean M&R expenditures were found
for size of instrument purchase cost. For instrument systems
costing between $10,000 and $24,999, an average of $700 was
spent for M&R. The mean expenditure for those costing between
$25,000 and $74,999 was $1,400, and for the most costly instru-
ments, the mean expenditure was $6,300. This M&R cost differen-
tial was reflected in each of the age categories, especially for
those 11 years and older.
Service contracts were by far the most costly means of
performing M&R service with an average of $2,300 per instrument,
compared to $700 for field service, $600 for M&R staff within
the university, and $400 for research personnel. The costs for
all means of servicing increased with age of instrument, the
increment in cost for instruments 5 years old or less and that
for instruments 11 years and older being 25 percent for service
contracts, 100 percent for field service, 60 percent for M&R
staff, and 67 percent for research personnel.
9-11
PAGENO="0867"
861
9.5 Summary
Only 16 percent of departments in the biological and
medical sciences considered their facilities for maintenance and
repair as excellent, while nearly 50 percent reported insufficient
or nonexistent facilities. Departments of medicine were more
satisfied with their M&R facilities than were departments in the
biological sciences. All departments of medicine had such faci-
lities, while 18 percent of biological science departments did
not.
In FY 1983, 22.5 cents were spent on M&R for every
dollar spent for new equipment. The mean expenditure per depart-
ment for M&R was $30,200. Nearly two thirds of this amount went
into service contracts and field service as needed. Private
institutions spent 50 percent more per department than public
institutions.
Instruments were serviced under contract more frequently
than by any other means, followed by field service. No servicing
was required for 17 percent of the instruments. Negligible
differences were found in the proportions of instruments in
excellent working condition between instruments under service
contract and those maintained by other means, when age of instru-
ments was held constant.
The amount spent per instrument for M&R rose after the
instrument became six years old. While the overall mean expendi-
ture per instrument was $1,100, it was $900 for those between 1
and 5 years old, and over $1,300 for those over 5 years of age.
The mean M&R expenditure for instruments costing from $75,000 to
$1 million, $6,300, was far more than the $700 expended for
those costing between $10,000 and $29,999. Service contracts
cost an average of $2,300 per instrument, compared to $700 for
field service and less for other means of servicing.
9-12
PAGENO="0868"
862
In comparisons among the biological science disciplines,
those with the most favorable (and satisfactory) M&R resources
were consistently molecular/cellular biology and physiology/
biophysics, followed by general biology. The least satisfactory
was food/nutrition.
9-13
PAGENO="0869"
863
10. SUMMARY
10.1 Overview
The results of this study indicate that there are
deficiencies in the current levels of instrumentation. The
extent of the deficiencies varies significantly among the sub-
fields of research. More advanced instrumentation is needed to
allow investigators to perform critical experiments which cannot
now be adequately conducted. Better maintenance and repair
facilities are needed. Although 18 percent of the current
national stock of equipment is considered state-of-the-art, that
status is lost very rapidly; the need for upgrading is continuous
and of the highest importance.
10.2 Department-Level Findings
More than half of the heads of departments/facilities,
in assessing the needs and priorities of their departments,
stated that critical scientific experiments could not be con-
ducted because their departments lacked appropriate instrumenta-
tion. This was more often stated for the biological sciences
than for departments of medicine, and for public institutions
than for private institutions.
The capability of existing research equipment to enable
researchers to pursue their major research interests was rated
excellent for tenured faculty by only one-sixth of the departments,
while more than one-fourth rated their capability as insufficient.
The proportion rated insufficient for untenured faculty was
one-third. More than twice as many graduate school departments
as departments in medical schools answered "insufficient," how-
ever, and three times as many departments in public institutions
10-1
PAGENO="0870"
864
as in private institutions did so. Compared with other fields
of science, the biological sciences as a who~.le had a more favor-
able assessment of their current stock of equipment than any
other field, but this was primarily due to medical schools. For
biological science departments in graduate schools, the degree
of insufficiency matched that given by graduate school depart-
inents in other fields, such as physical sciences and engineering.
Although these assessments are based not on quantitative
data but rather on informed opinion, the consistency with which
some large groups report more inadequacies than other groups
indicates a widespread perception of a problem.
If increased Federal funding were available for pur-
chase of research equipment, two-thirds of heads of departments!
facilities would put funds into instruments costing between
$10,000 and $50,000, while another 20 percent desired instruments
costing between $50,000 and $1 million. Private institutions
preferred more instruments in the upper range than public insti-
tutions. In other fields of science, there was more of a need
for $50,000 to $1 million instruments than was found in the
biological sciences, and even for systems costing above $1 million
-- which none of the department heads in the biological sciences
mentioned as a top priority need.
When asked to list the three research instruments
costing between $10,000 and $1 million that were most urgently
needed, department heads often listed various types of preparative
instruments. For most disciplines, these were the most frequently
needed items. Nearly 80 percent of the instruments mentioned
were in categories where the median cost of the instrument was
tinder $75,000. Instruments with ~ median cost over $100,000
that were mentioned most frequently were electron microscopes
and NMRs.
10-2
PAGENO="0871"
865
A total of $158 million was spent on rcsearch equipment
costing over $500 in FY 1983 by the biological sciences and
departments of medicine, with an additional $36 million spent on
maintenance and repair of research equipment. The mean amount
spent for research equipment in FY 1983 was $48,000 per annual
coctoral degree awarded. The mean amount per faculty-level
researcher was $5,900. Medical schools spent about twice the
amount per doctoral degree and researcher as graduate schools,
and private institutions considerably more than public institutions.
10.3 The National Stock of Academic Research Equipment
There were over 21,000 instrument systems in the current
inventories of the biological sciences and departments of medicine,
with an aggregate purchase cost of $555 million. In terms of
constant 1982 dollars, the cost of these instruments is estimated
at $863 million. The biological sciences had more instrument
systems than any other field of academic science, but the mea~i
cost per instrument system ($27,000) was the lowest for any
field except agricultural sciences.
About three-fourths of all presently existing academic
research instruments in the biological and medical sciences cost
between $10,000 and $25,000. Only 5 percent cost between $75,000
and $1 million, but they accounted for one-fourth of all funds
spent for equipment. Mean dollar amount of research instrumenta-
tion per researcher in the biological sciences was about $21,000,
but the amount in medical schools per researcher was 50 percent
higher than in nonmedical schools. For departments of medicine,
the mean equipment investment per researcher was $15,000. Mean
aggregate equipment cost per doctoral degree awarded in 1982-83
in the biological sciences was $143,500, but for medical schools
that cost was more than twice as much as for nonmedical schools.
10-3
PAGENO="0872"
866
Private institutions had higher investments per researcher arid
per graduate degree than public institutions-
State-of-the-art instruments constituted 18 percent of
the national stock in 1983, although the percentage was larger
in private institutions than public institutions. Another 65
percent were in active research use, although not classified as
state-of-the-art. Instruments that were not in active use
because of technological obsolescence or inoperable mechanical
condition, but that were still physically present at the insti-
tution, constituted another 16 percent of the national stock.
Departments of medicine, however, had twice as large a percentage
of obsolete or inoperable instruments on their inventories as
the biological sciences.
10.4 Age and Condition of Academic Research Equipment
For all instruments in the national stock, 44 percent
were from one to five years old, and 27 percent were over 10
years old. Omitting the inactive systems from consideration,
the proportion of instruments aged 1 to 5 years was 50 percent,
and 22 percent were over 10 years old. For instrument systems
that were in active research use, departments of medicine had a
higher proportion of newer instruments than did the biological
sciences, and private institutions had a higher proportion
than public institutions. Instruments in the biological sciences
were somewhat older than those in other fields of science.
Most of the state-of-the-art instruments in 1983 were
relatively new. Fifty percent of instruments purchased in 1983
were state-of-the-art, but of those purchased two years earlier
(in 1981), only 37 percent were still considered state-of-the-
art. Six-year-old instruments were classified as state-of-the-
art only 13 percent of the time. Altogether, 85 percent of the
10-4
PAGENO="0873"
867
state-of-the--art instruments were from 1 to 5 years old, and
only 3 percent were over 10 years old. -.
About half of all instrument systems actively in use
for research were in excellent working condition. As would be
expected, there is a relationship between working condition and
age of the instrument. Thus 78 percent of instruments from 1 to
3 years old were in excellent condition; of the instruments 4 to
6 years old, 57 percent were in excellent condition; and of
those 10 to 12 years old, only 26 percent were rated as excellent.
Accompanying this decline in operating condition with age of
instrument was the `retirement' of instruments as they got older.
In the biological sciences, 60 percent of instruments that were
inactive (presumably because of mechanical or technological
obsolescence) were over 10 years old.
Of the state-of-the-art systems, which were relatively
new, 85 percent were considered to be in excellent condition.
Only 44 percent of those not considered state-of-the-art were in
excellent condition, however. These "other" systems were con-
siderably older and they constituted nearly 80 percent of all
equipment inactive use.
A substantial amount of other than state-of-the-art
equipment is to be expected. Much of laboratory research does
not require the most advanced instrumentation. A problem arises,
however, when investigators using non-state-of-the-art equipment
do not have access to more advanced equipment when needed. This
problem was found frequently; nearly half of the non-state-of-
the-art instruments in research use were the most advanced
instruments of their kind to which users had access. This
situation is an obstacle for investigators attempting to engage
in more sophisticated research. The entire research effort in
the biological sciences is hindered when problems such as
10-5
PAGENO="0874"
868
mechanically unreliable equipment and lack of access to advanced
instrumentation become prevalent. -.
10.5 Funding of Equipment in Active Research Use
Almost all research instruments (94%) in the biological
sciences and departments of medicine were acquired new. Sources
of funding were evenly split between Federal and non-Federal
sources for the biological sciences, but for departments of
medicine, nearly two-thirds of the funds came from non-Federal
sources. For private institutions, a larger proportion of equip-~
ment funds came from Federal sources than was the case for public
institutions.
NIH was the principal source of Federal funds for
acquisition of research equipment in the biological and medical
sciences, contributing 44 percent of all funds for medical schools
and 31 percent for graduate schools. NSF was the only other
major Federal source, contributing more to graduate schools
than to medical schools. The institutions were the majo~ source
of non-Federal funds. State governments and private foundations
gave only small amounts for research equipment. The amount
contributed by business and industry for equipment was negligible.
NIH funds, while accounting for 38 percent of all
equipment purchases, contributed 47 percent of the support for
purchases of instruments in the $10,000 to $25,000 range, but
only 28 percent of the dollar support for existing equipment
costing $75,000 or more. Institutions, however, which contributed
37 percent of all funds for equipment, purchased 31 percent of
the instruments costing under $25,000 and 41 percent of those
costing $75,000 or more. NSF-supported purchases for equipment
followed the same pattern as that for institutions.
10-6
PAGENO="0875"
869
Sixty percent of all biological science instruments
received full or partial Federal funding, coEparedto 48 percent
of those in departments of medicine.
10.6 Location and Use of Academic Research Equipment
About 65 percent of all equipment in the biological
sciences and 70 percent in departments of medicine was located
in the laboratories of individual investigators. The remainder
was in inherently shared-access facilities, mostly department-
managed common laboratories. Costly instruments were frequently
located in the inherently shared-access facilities; this held
true to a greater extent for graduate schools than for medical
schools, and for public institutions than for private institutions.
Older instruments were also more likely to be located in inherently
shared-access facilities.
Location of instruments within laboratories of individual
investigators did not necessarily mean that they were not shared.
The mean number of users of all instruments was 11 per instrument.
The large majority of instrument systems were available for
general purposes, as opposed to being dedicated for specific
experiments. For these general purpose~instrurnents, the mean
number of users was almost 12 per instrument.
About 95 percent of all instruments in the biological
sciences were used by faculty within the same department, and 85
percent were also used by graduate students, medical students,
and postdoctorates from the departments. Additionally, 36 percent
were used by faculty from other departments in the institution.
Researchers from other universities and nonacademic researchers
used the more costly instruments far more frequently than the
lower-cost ones; this held true also'for researchers from other
departments at the same institution.
10-7
PAGENO="0876"
870
The average instrument in an investigator's laboratory
is freely accessible to other research investigators, as evi-
denced by the numbers of users and the origins of users. From
this conclusion, together with the 35 percent of all instruments
located in faciliti~s that are -- by their very nature -- shared-
access, it is evident that sharing of research equipment is
common in academic :acilities.
10.7 Maintenance and Repair
Nearly 50 percent of department/facilities heads assessed
their maintenance and repair (M&R) facilities as either insuffi-
cient or nonexistent. Overall, only 16 percent regarded their
facilities as excellent. In private institutions, however, 30
percent rated their facilities as excellent, compared to 9 percent
for public institutions.
M&R expenditures in FY 1983 were $35.7 million, which
amounted to 22.5 cents spent for M&R in that year for every dollar
spent to acquire new equipment.
The mean expenditure per department for M&R in FY .1983
was $30,200. Nearly two-thirds of that expenditure was used for
outside services, i.e., service contracts or field services as
needed.
For instruments in research use during 1983 the mean
M&R expenditure was $1,100. Instruments that were from 1 to 5
years old, however, had a mean M&R expenditure of $900, compared
to over $1,300 for those more than 5 years old. The original
purchase cost of inst:~uments gave rise to the largest differences
in mean M&R expenditures: for those costing under $25,000 the
mean M&R outlay was $700 in 1983; for those costing between
10-8
PAGENO="0877"
871
$25,000 and $74,999 it was $1,400; and for those costing between
$75,000 and $1 million the mean 1983 expendiTture for M&R was
$6,300.
Service contracts cost an average of $2,300 per instru-
ment, compared to $700 for field service and less for other means
of servicing. They were used to maintain 39 percent of the
instruments. An additional 27 percent of the instruments were
given field service as needed. Research personnel and university-
based M&R staff performed this service for 18 percent of the
instruments. The remaining 17 percent neither had service con-
tracts nor required M&R in 1983.
10.8 Group Comparisons
Thus far, findings have been summarized with respect
to topic areas. In addition, numerous differences were observed
among groups of institutions, among subfields of research within
the biological and medical sciences, and between the biological
sciences and the other fields of science encompassed in the
larger two-year study of academic research equipment. These
group comparisons are brief ly.summarized here.
10.8.1 Differences Among Institutions
(1) Medical and graduate (nonmedical) schools. Levels
of investment in research instrumentation were substantially.
higher for medical schools than for other academic institutions.
For all indices examined -- equipment per institution, per instru-
ment., per faculty-level. researcher, per doctoral degree awarded --
medical schools had larger instrumentation investments, both
aggregate and current, than graduate (nonmedical) schools.
10-9
PAGENO="0878"
872
(2) 1?rivate and public institutions. Privately con-
trolled institutions consistently showad an advantage over public
institutions on a number of important dimensions. Their research
instruments generally cost more, were .newer, and were better
able to meet research needs. Private ±nstitutions also had
better maintenance facilities.
10.8.2 Differences Among Subfields of Research in the
Biological Sciences
Certain subfields of research stand out from the others
in some characteristics. A brief summary of major differences
follows.
* Biochemistry had the largest number of instruments
costing over $10,000 -- nearly 4,500. It also had a higher
proportion of instruments funded by Federal agencies than any
other subfield.
* In many respects, molecular/cellular biology
appeared to be the best equipped research subfield. It had the
second largest number of instruments, 2,900~. In percentage of
instruments in excellent working condition, it rsnked very high.
Department heads in this discipline ware more satisfied with the
quality of their current instrumentation than in soy other sub-
field. Equipment expenditures per :f:acalty researcher in 1983
exceeded by a large amount those icr all other ~disciplines.
Anatomy and pathology were two of the smaller
subfields in numbers of instruments. They had the highest costs
per instrument, $32,000 and $31,000 :raspectivaly. Both subfields,
particularly anatomy, also. had nnusuaily high proportions of
instruments over U) years old in active research. use.
10-10
PAGENO="0879"
873
Zoology, botany, and food/nutrition were disciplines
found almost entirely in nonmedical subdiv*isi~ons of universities.
They were the three subfields with the smallest numbers of instru-
ments. Very high proportions of department heads stated that
critical experiments could not be performed in these disciplines
because they lacked appropriate instrumentation. Food/nutrition
had the lowest cost per instrument ($22,000) of any subfield,
the poorest maintenance, and had, by far, the lowest percentage
of Federal funding for its equipment.
10.8.3 Differences Between Departments of Medicine and
Biological Science Fields
Departments of medicine, included in the survey as an
experiment to assess the feasibility of obtaining instrumentation
indicators for medical (clinical) sciences, apparently can pro-
vide data on samples of research instruments as easily as the
biological sciences. With respect to Department/Facility Ques-
tionnaires, however, it was learned that some of the larger,
more diverse departments of medicine had difficulty in assembling
expenditure, funding, and needs data for all the clinical fields
subsumed within their jurisdictions. A better approach to
collecting such data might be to go directly to each of the
component clinical programs or subunits of departments of medicine.
For most of the analyses performed in this report,
departments of medicine (and presumably, the clinical sciences)
had somewhat different results than the biological scid'nces.
Departments of medicine apparently retired instruments at an
earlier age than did the biological sciences. Within medical
schools, the average costs of equipment per researcher were
nearly twice as large for the biological sciences as for depart-
ments of medicine. This difference on an index of equipment
intensity is probably a function of the kinds of research performed
10-il
PAGENO="0880"
874
by physician-researchers in clinical departments, compared with
those in the basic biological sciences. Wh~reas over half of
the funds for purchase of equipment in the biological sciences
came from Federal agencies, 38 percent of equipment funds came
from those sources for departments of medicine. The difference
was made up by institutional funds, indicating a possible difference
in institutional resources between the clinical and biological
sciences. Departments of medicine also had better maintenance
and repair facilities than the biological sciences.
10.8.4 Differences Between Biological Sciences and Other
Fields of Science
The biological sciences differed from the other fields
of science addressed in the survey. They accounted for 38
percent of the instruments in all the fields surveyed; the next
largest field was the physical sciences, with 25 percent of all
instruments. The mean cost per instrument in the biological
sciences was $27,000, compared to $41,000 for the physical sciences
and $35,000 for engineering. Instruments in the biological
sciences were somewhat older than those in other fields, but
fewer instruments in the national stock in biology were techno-
logically or mecha:~iically obsolete. The average instrument in
the biological sciences was used by somewhat fewer investigators
than was the case In other fields. The funding pattern for the
biological sciences was unlike that for any other field, because
of the prominence of NIH as a funding source in the biological
sciences: NIH directly contributed 39 percent of the costs of
all academic instrt~mentation in this field.
10-12
PAGENO="0881"
875
APPENDIX A
COMPARISON TABLES FOR ALL FIELDS
OF SCIENCE
A-i
PAGENO="0882"
876
INDEX OF COMPARISON TABLES FOR ALL SURVEYED
FIELDS OF SCIENCE.
Table
A-i Number of departments and facilities and
percent reporting important subject areas
in which criticai experiments cannot be
performed due to lack of needed equipment,
by field A-5
A-2 Department/facility assessment of adequacy
of available research instrumentation, by
field A-6
A-3 Department/facility recommendations for
increased federal support for research
instrumentation, by field A-7
A-4 Total amount and cost of academic research
instrumentation in national stock, by field A-8
A-5 Distribution of aggregate costs of academic
research instrument systems in national
stock, by system purchase cost and by field A-9
A-6 Research status of academic research instru-
ment systems in national stock, by field A-lO
A-7 Age of academic instrument systems in
national stock, by field A-li
A-8 Age of academic instrument systems in
research use, by field A-l2
A-9 Percent of in-use research instrument
systems in excellent working condition,
by system research status and by field A-13
A-b Research function of academic instrumentation
that is used for research but is not state-
of-the-art, by field A-l4
A-il Sources of funds for acquisition of in-use
academic research equipment, by field A-l5
A- 3
PAGENO="0883"
877
INDEX OF COMPARISON TABLES FOR ALL SURVEYED
FIELDS OF SCIENCE (Continued)
Table
A-12 Fields receiving funding support for
acquisition of in-use research equipment,
by source of funds A-16
A-13 Federal involvement in funding of in-use
academic research instrument systems, by
field A-17
A-14 Location of in-use academic research
instrument systems, by field A-18
A-15 Research function of in-use academic
research instrument systems, by field A-19
A-16 Mean Number of research users of in-use
academic research instrument systems,
by research function and by field A-20
A- 4
PAGENO="0884"
TABLE A-i
NUMBER OF DEPARTMENTS AND FACILITIES AND PERCENT REPORTING IMPORTANT SUBJECT AREAS IN
WHICH CRITICAL EXPERIMENTS CANNOT BE PERFORMED DUE TO, LACK OF NEEDED EQUIPMENT BY FIELD El]
PERCENT REF'ORTING INABILITY
TO CONDUCT CRITICAL
NUMBER OF EXPERIMENTS DUE TO LACK
DEPARTMENTS/FACILITIES OF NEEDED EOU1PMENT
TOTALS SELECTED FiELDS 2507 74
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 241 83
BIOLOGICAL SCIENCES~ TOTAL 1136 59
GRADUATE SCHOOLS 550 60
MEDICAL SCHOOLS 588 50
ENVIRONMENTAL SCIENCES 235 63
PHYSICAL SCIENCES 367 89
ENGINEERING 652 90
COMPUTER SCIENCE a9 95
MATERIALS SCIENCE 19 100
INTERDISCIPLINARY7 N.E.C. 65 76
El] ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING THE 157 LARGEST R & 0
UNIVERSITIES AND THE 92 LARGEST R 0 0 MEDICAL SCHOOLS IN THE NATION. FOR PHASE
II FIELDS (AGRICULTURAL~ BIOLOGICAL AND ENVIRONMENTAL SCIENCES)~ ESTIMATES ARE
AS OF DECEMBER 1963. FOR ALL OTHER FIELDS; ESTIMATES ARE AS OF DECEMBER 1982.
SAMPLE IS 697 DEPARTMENTS AND FACILITIES.
PAGENO="0885"
TOTAL, SELECTED FIELDS
FIELD OF RESEARCH
AGRICULTURAL SCIENCES
DIOLOSICAL SCIENCES, TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
ENVIRONMENTAL SCIENCES
FHYSICAL SCIENCES
ENGI NEER INS
COMPUTER SCIENCE
MATERIALS SCIENCE
INTENDISCIFL INARV, N.E C
100/. 151. 59/. 26/.
1007. 147, 487. 397.
1007. 16/ 697. 15%
1001. 10/. 66/. 257.
1007. 47. 547. 427.
1007. 9/. 427. 50/,
100/, 2/ 57/. 457.
1007. 27/, 587. 157.
1007. 3O~ 337. 377.
52%
100% 15% 53% 327.
100% 15% 427. 437.
100% 15% 63% 223
100/. 107. 54% 367.
1007. 27. 49% 49%
1007. 6% .37% 577.
1007. ` 27. 527. 467.
1 007. 20% 357. 45T
1007. 32% 307. 377.
TA8LE A-S
DEPARTMENT/FACILITY ASSESSMENT OF ADEQUACY OF AVAILABLE RESEARCH INSTRUMENTATION. BY FIELD El]
PERCENT OF DEFARTHENTS/FACILITIES PERCENT OF DEPARTMENTS/FACILITIES
ASSESSING INSTRUMENTATION AVAILABLE TO ASSESSING INSTRUMENTATION AVAILABLE TO
TENURED FACULTY AND EQUIVALENT P.1.' s AS1 UNTENURED FACULTY AND EQUIVALENT P.1. s AS;
TOTAL EXCELLENT ADEQUATE INSUFFICIENT TOTAL EXCELLENT ADEQUATE INSUFFICIENT
1007. 11% 53% 36% 100% 10% 47% 43%
100% 8% 47/. 44% 100% 8% 39%
[1] ALL STATISTICS AXE NATIONAL ESTIMATES ENCOTFASS!N12 THE 157 LARGEST N B UNIVERSITIES AND THE 92 LARGEST S B B MEDICAL SCHOOLS
IN THE NATION. FOR PHASE II ILLSS (AGRICULTURAL. T:IULUGICAL AND ENVIRONMENTAL SCIENCES), ESTIMATES ARE AS OF DECEMBER 1983. FOR
ALL OTHER FIELDS, ESTIMATES APE AS OF DECEMBER l151. SANFLE IX 897 DEFARTMENTS AND FACILITIES.
PAGENO="0886"
TOTAL SELECTED FIELDS 1007.
FIELD OF RESEARCH
1007. 67. 797. 157.
1007. - 207. 667. 137.
1007. - 217. 637. 157.
1007. - 197. 697. 107.
1007. 6/. 367. 547. 27.
1007. 7.7. 437. 447. 67.
1007. 37. 28/. 607. 97.
1007. - 25/. 757.
1007. - 637. 177.
1007. - 487. 457.
TABLE A-3
DEPARTMENT/FACILITY RECOMMENDATIONS FOR INCREASED FEDERAL SUPPORT FOR RESEARCH INSTRUMENTATION,
DY FIELD (1)
PERCENT OF DEPARTMENTS/FACILITIES
RECOMMENDING AS TOP PRIORITY AREA FOR INCREASED
FEDERAL SUPPORT OF ACADEMIC RESEARCH EQUIPMENT:
SYSTEMS IN SYSTEMS IN
LARGE $50,000- $10,000-
SCALE $1,000,000 $50000
TOTAL FACILITIES RANGE RANGE
LAB
EQ UI PM EN I
UNDER
$10000 OTHER
27. 267. 617. 107. `17.
AGRICULTURAL SCIENCES
SIOLOGICAL SCIENCES TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
ENVIRONMENTAL SCIENCES
PHYSICAL SCIENCES
ENGI NEERING
COMPUTER SCIENCE
MATERIALS SCIENCE
INTERDISCIPLINARY N.E.C. 7/.
[1] ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING THE 157 LARGEST R B D UNIVERSITIES AND THE
92 LARGEST R & D MEDICAL SCHOOLS IN THE NATION. FOR PHASE II FIELDS (AGRICULTURAL BIOLOGICAL AND
ENVIRONMENTAL SCIENCES) ESTIMATES ARE AS OF DECEMITER 1983. FOR ALL OTHER FIELDS ESTIMATES ARE AS
OP DECEMBER 1982. SAMPLE 17. 597IJEPARTMENTS AND FACILITIES.
27.
17.
27.
27.
27.
PAGENO="0887"
881
TABLE A~4
TOTAL AMOUNT AND COST OF ACADEMIC RESEARCH INSTRUMENTATION IN NATIONAL
STOCH, BY FIELD El]
C DOLLARS IN THOUSANDS]
NUMBER AND ACCRECATE
PERCENT OF PURCHASE COST MEAN PURCHASE
INSTRUMENT AND PERCENT COST PER
SYSTEMS OF COST SYSTEM
TOTAL, SELECTED FIELDS 46738 116307S0 $35
1007. 1007.
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 1934 42599
47. 37.
BIOLOGICAL SCIENCES, TOTAL 17513 471286 27
387. 297.
GRADUATE SCHOOLS 7290 186272 26
167. 117.
MEDICAL SCHOOLS 10326 283016 28
227. 177.
ENVIRONMENTAL SCIENCES 2679 126231 47
67. 87.
PHYSICAL SCIENCES 11544 481861 41
257. 307.
ENGINEERING 9423 .333613
207. 207.
COMPUTER SCIENCE 1113 50026 34
27. 47.
MATERIALS SCIENCE 731 37120 51
27. 27.
INTERDISCIPLINARY, N.E.C. 1371 76022 SO
37. 57.
El] ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING THE 137 LARGEST F
UNIVERSITIES AND THE 92 LARGEST R 0 MEDICAL SCHOOLS IN THE NATION. FOR PHASE
II FIELDS (AGRICULTURAL BIOLOGICAL AND ETIV1RCMMEUTAL SCIENCES) ESTIMATES A~E
AS OF DECEMBER 1963. FOR ALL OTHER FIELDS, ESTIMATES ARE AS CF DECEMEER 1922.
SAMPLE IS 8704 INSTRUMENT SYSTEMS.
A- 8
PAGENO="0888"
882
TABLE A-S
DISTRIDUTION OF AGGREGATE COSTS OF ACADEMIC RESEARCH INSTF:LMENT SYSTEMS IN
NATIONAL STOCM~ BY SYSTEM ~URCHAEE COST AND BY FIELD I 1]
EDCLLAAS IN MILLIONS]
-AGGREGATE PURCHASE COST AND PERCENT OF COST--
SYSTEM PURCHASE COST
$10000- $25000- $75000-
TOTAL $24999 $74,999 $1000000
TOTAL SELECTED FIELDS $1630.73 $463.77 $020.37 E646.64
1007. 287. 327. 407.
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 42.60 23.33 14.33 4.94
1007. 557. 347. 127.
BIOLOGICAL SCIENCES. TOTAL 471.29 1~7.29 160.13 113.87
1007. 427. 347. 247.
GRADUATE SCHOOLR 186.27 81.04 64.32 40.91
1007. 447. 357. 227.
MEDICAL SCHOOLS 280.02 116.20 90.81 72.96
1007. 417. 347. 267.
ENVIRONMENTAL SCIENCES 126.23 22.24 36.04 67.95
1007. 187. 297. 547.
PHYSICAL SCIENCES 4S1.88 100.21 103.94 227.73
1007. 217. 327. 477.
ENGINEERING 333.61 S9.~6 111.99 132.16
1007. 277. 347. 407.
COMPUTER SCIENCE 60.03 5.54 17.03 33.95
1007. 147. 297. 577.
MATERIALS SCIENCE 37.12 0.91 11.0.6 20.15
1007. 167. 307. 547.
INTERDISCIPLINARY N.E.C. 78.02 16.79 15.30 40.88
1007. 227. AO7. 597
Cl) ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING THE 157 LARGEST F 1 D
UNIVERSITIES AND THE 92 LARGEST R 0 MEDICAL SCHOOLS. IN THE NATION. FOR PHASE
II FIELDS (AGRICULTURAL SIOLOGICAL AND ENVIRONMENTAL SCIENCES) ESTIMATES ARE
AS OF DECEMBER 1983. FOR ALL OTHER FIELDS, ESTIMATES ARE AS OF DECEMBER 1982.
SAMPLE IS S704 INSTRUMENT SYSTEMS.
A- 9
PAGENO="0889"
I.,,
60
46767 5075 25399
1007. 177. 61/.
1'.)
0
TABLE A-b
RESEARCH STATUS OF ACADEMIC RESEARCH INSTRUMENT SYSTEMS ITT NATIONAL STOCI4 BY FIELD (1)
NUME:ER AND PERCENT OF SYSTEMS
SYSTEM RESEARCH STATUS
----IN RESEARCH USE---- NOT YET IN NO LONGER
STATE-OF- RESEARCH IN RESEARCH
TOTAL THE-ART OTHER USE USE
TOTAL, SELECTED FIELDS 771 9522
.27. 207.
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 1904 437 . 1215 24 277
100/. 22/. 627. 17. 14/.
BIOLOGICAL SCIENCES, TOTAL 17633 3268 11834 124 2406
1007. 197. 677. 17. 147.
GRADUATE SCHOOLS 7300 1435 4958 32 874
1007. 207. 657. - 127.
MEDICAL SCHOOLS 10333 1833 6876 92 1532
1007. 187. 677. 17. 157.
ENVIRONMENTAL SCIENCES 2682 518 1608 48 508
100/. 197. 607. 27. 197.
PHYSICAL SCIENCES 11656 1725 7076 161 2694
1007. 157. 617. 17. 237.
ENGINEERING 9425 16~9 5111 327 2288
1007. 157. 547. 37. 247.
COMPUTER SCIENCE 1115 186 692 65 172
1007. 177. 627. 67. 157.
MATERIALS SCIENCE 731 116 534 3 78
1007. 167. 737. - 117.
INTERDISCIPLINARY. N.E.C. 1571 135 329 19 1099
1007. 87. 217. 17. 707.
(13 ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING THE 157 LARGE21 R .5 D UNIVERSITIES
AND THE 92 LARGEST R I B MEDICAl. SCHOOLS 1N.THT NATION. POT PHASE II FIELDS (AGRICULTURAL.
BIOLOGICAL AND ENVIRONMENTAL SCICT4CEY( ESTIMATES ARE AS OP DECEMBER 1983. POT ALL OTHER
FIELDS~ ESTIMATES ARE AS OF DECENELE 1982. SAMPLE IS 8704 INSTRUMENT SYSTEMS.
PAGENO="0890"
884
TABLE A-7
AGE OF ACADEMIC RESEARCH INSTRUMENT SYSTEMS IN NATIONAL 870CM. BY FIELD U]
NUMBER AND PERCENT OF SYSTEMS
SYSTEM AGE (PROM YR OF FURC~ASE)C2]
OV~ 10
TOTAL 1-5 YEARS 6-10 YEARS. YEARS
TOTALS SELECTED FIELDS 45890 21663 10885 13342
* 1007. 477. 247. 297.
FIELD OF RESEARCH
* AGRICULTURAL SCIENCES 1950 1028 518 407
* - 1007. 537. - 287. 217.
* BIOLOGICAL SCIENCES, TOTAL 17545 7768 498~ 4812
1007. 447. 287. 277.
- GRADUATE SCHOOLS 7250 3431 1854 1965
* . 1007. 477. 287. 277.
MEDICAL SCHOOLS. lC39~ 4337 3111 2847
1007. 437. 307. 287.
ENVINONMENTAL SCIENCES 2864 1412 660 592
1007. 537. 257. 227.
PHYSICAL SCIENCES 11484 5155 2461 3869
1007. 457. 217. 347.
ENGINEERING 9224 4845 1723 2656
1007. 537. 197. 297.
COMPUTER SCIENCE 1073 9~9 87 116
1007. 817. 87. 117.
* MATERIALS SCIENCE 731 239 113 379
1007. 337. 157. 527.
INTERDISCIPLINARY. N.E.C. 1219 34& 361 - 511
1007. 297. 307. 427.
U] ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING THE 157 LARGEST P & B
UNIVERSITIES AND THE 92 LARGEST P D MEDICAL SCHOOLS IN THE NATION. FOR PHASE
II FIELDS (AGRICULTURAL~ BIOLOGICAL AND ENVIRONMENTAL SCIENCES) ESTIMATES ARE
AS OF DECEMBER 1993. FOR ALL OTHER FIELDS ESTIMATES ARE AS OF DECEMBER 1982.
SAMPLE 1.8 87-34 INSTRUMENT SYSTEMS.
C23 FOR PHASE II FIELDS~ AGE INTERVALS ARE I~5 YEARS (1979-93) 6-10 YEARS
((974-78); OVER 10 YEARS (1973 CR BEFORE). FOR PHASE I FIELDS INTERVALS ARE
1-5 YEARS (1978-82); 6-10 YEARS (1973-77); OVER 10 YEARS 1972 OR BEFORE).
A-il
PAGENO="0891"
885
9757 9174
247. 22%
447 23
277. I:1.
4242 3396
28% 237.
1602 1447
2:7. 237.
2641 1949
307. 227.
546 361
267. 177.
1872 2260
217. 267.
1299 1509
SI 10
103 312
167. 48%
TABLE A-B
AGE OF ACADEMIC INSTAUMENT SYSTEMS IN RESEARCH USE. BY FIELD El]
NUMBER AND PERCENT OF IN-USE SYSTEMS
SYSTEM AGE FROM YR OF FURCHASEC2]
OVER 10
TOTAL 1-5 YEARS 6-10 YEARS YEARS
36350 19419
100% 53%
TOTAL, SELECTED FIELDS
FIELD OF RESEARCH
AGRICULTURAL SCIENCES
BIOLOGICAL SCIENCES, TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
ENVIRONMENTAL SCIENCES
PHYSICAL SCIENCES
ENGINEER 1MG
COMPUTER SCIENCE
MATERIALS SCIENCE
INTERDISCIPLINARy, N.E.C.
1653
100%
10050
1 007.
6372
100%
8683
1 00%
2123
1007.
5763
1 00%
6777
1 00%
674
1 007.
650
1 00%
952
087.
7416
49%
3323
:57.
4093
477.
1217
577.
4431
037.
092
813
93%
235
404 155 73
100% 41% ~3% 14%
I I~] ALL STATISTICS ARE NATIONAL ESTIMATES ENCCMPASSINC THE 157 LARGEST N B 0
UNIVERSITIES AND THE 92 LAROEST S B D MEDICAL SCHOOLS IN THE NATION. FOR CHASE
II FIELDS (AGRICULTURAL. BIOLOGICAL AND ENVIRONMENTAL SCIENCES). ESTIMATES ARE
AS OF DECEMBER 1983. FOR ALL OTHER FiELDS, ESTIMATES ARE AS OF DECEMBER 1982.
SAMPLE IS .5950 INSTRUMENT SYSTEMS.
ES] FOR ~HASE II FIELDS AGE INTERVALS ARE I-S ~E~S5 (l~~9-83 ; 6-10 YEARS
(1974-78); OVER 10 YEARS 1973 OP BE~OPE. FOR FHASEI FIELDS INTEPVALS ARE
1-5 YEARS 197S-85); 4-10 ~EARS (1973-77)I OVER IG IEARS 1972 OR BEFORE).
A-12
PAGENO="0892"
TA8LE A-9
PERCENT OF IN-USE RESEARCH INSTRUMENT SYSTEMS IN EXCELLENT WORKING
CONDITION. BY SYSTEM RESEARCH STATUS AND BY FIELD (1]
PERCENT OF SYS-TEMS IN
- EXCELLENT. WORKING CONDItION
RESEARCH STATUS------
STATE-OF-THE- OTHEF~ IN-USE
-- TDTAL ART SYSTEMS SYSTEMS
TOTAL. SELECTED FIELDS 527. D4% 43%
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 567. 817. 477.
BIOLOGICAL SCIENCES. TOTAL 537. 867. . 44%
GRADUATE SCHOOLS 557. 90% 44%
MEDICAL SCHOOLS S~7. 627. 447.
ENVIRONMENTAL SCIENCES 507. 827. 40%
PHYSICAL SCIENCES 527. 64% 447.
ENGINEERING 517. 657. 40%
COMPUTER SCIENCE 567. 897. 477.
MATERIALS SCIENCE 321. 747. 237.
INTERDISCIPLINARY, N.E.C. 447. 587. 397.
(13 ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING tHE 157 LARGEST R & 0
UNIVERSITIES AND THE 92 LARCEST F 0 MEDICAL SCHOOLS IN THE NATION. FOR PHASE
II ~IELD6 (AGRICULTURAL. DIOLOGICAL AND ENVIRONMENTAL SCIENCES), ESTIMATES ARE
AS OF DECEMSER 1983. FOR ALL OTHEF FIELDS. ESTIMATES ARE AS OF DECEMBER 1982.
SAMPLE IS 698S INSTRUMENT SYSTEMS.
PAGENO="0893"
887
TABLE A-1O
RESEARCH FUNCTION OF ACADEMIC INSTRUMENTATION THAT IS USED FOR RESEARCH BUT
IS NOT STATE-OF-THE-ART, BY FIELD (1]
NUMBER AND PERCENT OF NON
STATE-OF-THE-ART SYSTEMS
RESEARCH FUNCTION
THE MOST ADVANCED USED FOR RESEARCH
INSTRUMENT TO BUT MORE ADVANCED
WHICH ITS USERS EQUIPMENT IS AVAIL-
TOTAL HAVE ACCESS ABLE WHEN NEEDED
TOTAL, SELECTED FIELDS 28335 13172 15163
1007. 467. 54*f,
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 1215 681 535
1007. 567. 447.
BIOLOGICAL SCIENCES TOTAL 11804 5076 6728
1007. 437. 577.
GRADUATE SCHOOLS 4940 2i58 2782
1007. 447. 567.
MEDICAL SCHOOLS 6864 2918 3945
1007. 437. 577.
ENVIRONMENTAL SCIENCES 1598 756 841
1007. 477. 537.
PHYSICAL SCIENCES 7067 3470 3549
1OCS 497 517.
ENGINEERING 5097 2536 2561
1007. 507. 50/.
COMPUTER SCIENCE 692 351 341
1007. 51/. 497.
MATERIALS SCIENCE 534 164 350
1007. 357. .55/.
INTERDISCIPLINARY, N.E.C. 329 118 211
1007. 367. 54~.
Cl) ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING T~5 1S7 LARGEST ~ D
UNIVERSITIES AND THE 92 _APGEST 4 0 MEDICAL SCHOOLS IN THE NATION. FOR PHASE
II FIELDS (AGRICULTURAL, BIOLOGICAL AND ENVIRONMENTAL SCIENCES ESTIMATES ARE
AS OF DECEMBER 1993. FOR ALL OTHER FIELDS, ESTIMATES ARE AS OF DECEMBER 1982.
SAMPLE IS S393 INSTRUMENT SYSTEMS.
A- 14
PAGENO="0894"
TA8LE A-Il
SOURCES OF FIflIDS FOR ACQUISITION OF IN-USE ACADEMIC RESEARCH EQUIPMENT DY FIELD (I)
(DOLLARS IN MILLIONS)
-ACQUISITION COST AND PERCENT OF COST
SOURCE OF FUNDS
FEDERAL UNIV. STATE DUSI-
TOTAL TOTAL NSF NIH 000 DOE NASA USDA OTHER FUNDS GOVT. NESS OTHER
TOTAL SCLECTED FIELDS $1178.0 $640.3 $230.6 $176.5 $I03.~? $83.1 $30.8 $5.0 $30.2 $371.5 $61.5 $43.2 $61.5
1007. 547. 20% 157. ~7. 5% 3% - 37. 327. 5~/. 47. 5%
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 36.1 7.8 1.7 1.3 0 .3 * .3 2.7 1.5 17.8 6.7 1.8 2.1
100% 217. 5% 47. - 1% 1% 77. 4% 497. 167. 57. 6%
DIOLOGICAL SCIENCES TOTAL 381.3 198.5 35.3 149.7 2.1 3.5 .4 1.9 5.5 131.2 18.6 6.5 26.5
1007. 52% 9~ 397. 1% 1% - - 17. 347. 57. 27. 75
GRADUATE SCHOOLS 156.1 80.6 24. 48.9 1.0 .7 .4 1.7 3.5 48.2 13.0 4.3 10.0
1007. 52% l6~ 31'. 1% - - 17. 2% 31% 87. 3% 6%
MEDICAL 5CHOOLS 225.2 117.9 10.8 100.8 1.2 2.9 0 .2 2.1 83.0 5.5 2.3 16.4
(1) 1007. 52% 5% 457. 17. 17. - 1% 37% 2% 1% 7%
ENVIRONMENTAL SCIENCES 92.3 45.7 16.5 .5 6.6 8.2 5.4 0 8.5 27.5 7.2 8.4 3.5
100% 507. 107. - 7% 9% 67. 9% 30% 87. 9% 4%
PHYSICAL SCIENCES 351.9 229.1 116.1 19.5 32.3 33.0 22.3 .1 5.7 92.2 6.6 4.1 20.0
100% 65% 337. 67. 9% 9% 6% - 2% 267. 27. 17. 67.
ENGINEERING 218.9 106.4 35~I 2.7 45.8 14.4 2.2 .3 5.8 78.5 13.5 13.1 7.4
100% 497. 167. 1% 21% 7% 1% - 3% 36% 6% 6% 3%
COMPUTER SCIENCE 46.9 21.5 10.6 .3 9.1 .3 0 0 1.0 11.5 4.9 7.7 1.2
100% 467. 237. 17. 197. 17. - 2% 25% 10% 16% 3%
MATERIALS SCIENCE 34.1 24.3 13.5 .7 5.4 3.4 0 0 1.3 6.0 2.6 .6 .6
100% 717. 40% 27. 167. 10% 4% 18% 87. 2% 2%
INTERDISCIPLINARY. N.E.C. 16.6 7.0 1.8 1.9 2.4 0 0 0 .9 6.8 1.5 .9 .4
100% 427. 117. 117. l~% - - - 57. 417. 9% 67. 2%
(I] ALL STATISTICS ARE NAT IO~1AL ESTIMATES ENCOMPASSTNG THE 157 LARGEST R 0 UNIVERSITIES AND THE 92 LARGEST R Z~ 0
MEDICAL SCHOOLS IN THE NATION. FOR PHASE II FIELDS AGRICULTURAL. BIOLOGICAL AND ENVIRONMENTAL SCIENCES) ESTIMATES
APE AS OF DECEMBER 1963. FOR ALL OTHER FIELDS EStIMATES ARE AS OF DECEMBER 1962. SAMPLE IS 6985 INSTRUMETIT SYSTEMS.
PAGENO="0895"
TABLE A-IS
FIELDS RECEIVING FUNDING SUPPORT FOR ACQUiSITION CF IN-USE RESEARCH EQUIPMENT BY SOURCE OF FUNDS (I]
(DOLLARS IN MILLIONS)
- - ACQUISITION COST AND PERCENT OF COST
SOURCE OF FUNDS
FEDERAL UNIV. STATE DUSI-
TOTAL TOTAL NSF NIH DOD DOE NASA USDA OTHER FUNDS GOVT. NESS OTHER
TOTAL SElECTED FIELDS $1178.0 $640.3 $230.8 $176.5 $103.9 $63.1 $30.8 $5.0 $30.2 $3715 $61.5 $43.2 $61.5
1007. 100/. 1007. 1007. 100/. 1007. 1007. 1007. 1007. 1007. 1007. 1007. 1007.
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 36.1 7.B 1.7 1.3 0 .3 .3 2.7 1.5 17.8 6.7 1.8 2.1
37. 17. 17. 17. - - 17. 547. 5% 5% 117. 4% 3/.
BIOLOGICAL SCIENCES TOTAL 341.3 198.5 35.3 149.7 2;1 3.5 .4 1.9 3.5 13l~2 18.6 6.5 26.3
327. 317. 157. 83/. 27. 6% 17. 377. 187. 357. 307. 157. 437.
GRADUATE SCHOOLS 136.1 80.6 24.5. 48.9 1.0 .7 .4 . 1.7 3.5 48.2 13.0 4.3 10.0
137. 13/. 11% 287. 17. 17. 1% 34% 117. 137. 217. 107. 167.
MEbICAL SCHOOLS 225.2 117.9 10.8 100.8 1.2 2.9 0 .2 2.1 83.0 5.5 2.3 16.4
197. 167. 5/. 577. 17. 57. 37. 7% 22% 97. 5/. 277.
ET~VihONMET~TAL SCIENCES 92.3 45.7. 16.5 .5 6.6 8.2 5.4 0 8.5 27.5 7.2 a.4 3.5
87. 77. 77. - 67. 137. 18% 28% 7% 127. 197.. 67.
PHYSICAL SCIENCES 351.9 229.1 116.1 19.5 32.3 33.0 22.3 .1 5.7 92.2 6.6 4.1 20.0
307. 367. 507. 11/. 317. 527. 737. 27. 19% 257. 117. 107. 32%
EIthINEERI)Th 216.9 102.4 35.1 2.7 45.8 14.4 2.2 .3 5~8 78.5 u.s 1~.1 1 7.4
19/. 177. 15/. 27. 44% 237. 77. 77. 19% 21% 227. 30% 12%
CdM~WTER SCIENCE 46.9 21.5 10.8 .3 9.1 .3 0 0 1.0 11.5 4.~ 7.7 1.2
4z 37. SC - 97. - - 37. 3% [17. 18% 27.
MAtERIALS SCIENCE 34.1 24.3 13.5 .7 5.4 3.4 0 0 1.3 6.0 2.6 .6 .6
17. 47. 67. - . 57. 57. 4% 27. 47. 17. 17.
INTERDISCIPLINARY. N.E.C. 16.6 7.0 1.8 1.9 2.4 0 0 0 .9 6.8 1.5 .9 .4
1% 17. IL 17. 27. - - - 3% 2% 2% 2% 17.
(11 ALL STATISTICS ARE. NATIONAL ESTIMATES ENCOMPASSING THE 157 LARGEST R 6 D UNIVERSITIES AND THE 92 LARGEST R 6
MEDICAL SCHOOI.S IN THE NATION. FOR PHASE II FIELDS (AGRICULTURAL, BIOLOGICAL AND ENVIRONMENTAL SCIENCES). ESTIMATES
ARE AS OF DECEMSEN 1983. FOP ALL OTHER FIELDS. ESTIMATES ARE AS OF DECEMEER 1982. SAMFLEIS 6985 INSTRUMENT SYSTEMS.
PAGENO="0896"
* TAIILE A-13
FEDERAL INVOLVEMENT IN FUNDING or IN-USE ACADEMIC RESEARCH INSTRUMENT
SYSTEMS, DY FIELD (1]
PERCENT OF SYSTEMS
--FEDERAL FUNDING INVOLVEMENT-
NO PARTIAL 1007.
FUNDING FUNDING FUNDING
TOTAL. SELECTED FIELDS 1007. 337. 187. 447.
FIELD OF RESEARCH
AGRICULTURAL SCIENCES 1007. 727. 107. 187.
BIOLOGICAL SCIENCES, TOTAL 1007. 40% 12'!. 497.
GRADUATE SCHOOLS 1007. 417. 14'!. 457.
MEDICAL SCHOOLS 1007. 397. 107. 517.
ENVIRONMENTAL. SCIENCES 100% 43% 187. 387.
PHYSICAL SCIENCES 1007. 247. 277. 497.
EUGINEERIr1c, 1007. 43% 207. 377.
COMPUTER SCIENCE * * 100% 427. 297. * 297.
MATERIALS SCIENCE * 1007. 137. 321'. 557.
IN1ERDIsC'.PL (NARY. rLE.C. ioo:~ bOX 27% 237.
(1) ALL STAT.IFTICS ARE HAT IlirIAL ~T fl-TAlES ENCIiI1PASS(NG THE 157 LARGEST R T 0
UNIVERSI TIES AND THE 92 LA~LS I F 1 2 liE DI CAL CrlCOLS Iii THE NAT ION. FOR PHASE
11 F IELDE (AGE ICUL (HEAL I: ITJLIID (CAL Allil ENVI R2FMEI( IAL SC IENCE~) * EDT IIIATES ARE
AS OF DECEMIER 193.3. FiT!: ~.L 0 IFS! TIELDIfi ESLILAISS AEE i~3 OF OECEMI3ER 1902.
SANFLE I C ~9DF I NSTF:uMLri I FYSTENC -
TOTAL
PAGENO="0897"
I4ESEAFCH INSTRUMENT SYSTEMS, ITY FIEI.D [1]
-- - ------------ NUMEER ANp PERCENT OF SYSTEMS-
- ~~-- --- ------- LOCATION
LAB OF NAT'L OR NOIIDEFYRT- DEPARTMENT OTHER
INDIVIDUAL REGIONAL MENTAL MANAGED SHARED
TOTAL F. I. LAB FACILITY COMMON LAB ACCESS
H
co
2340 11466 532
67. 32~/. 17.
TADLE A- 14
LOCAT I 014 OF 111-USE ACADEIII
TOTAL, SELECIED FIELDS
FIE1~D OP RESEARCH
AGE CUlTURAl. SçI ElITES
AIOLOEICAL SCIENCES TOTAL
GRADUATE SCHOOLS
IIEDICAL SCHOOLS
EIIVI I:ONMEIITAL SCIENCES
PHYSICAl. SCIENCES
11-101111 ER 1140
CITMFU I sr~ SC I Fl-ICE
ITATCITIAI. 3 STJEIICE
111 El'I)IDCIPL Il-lAST 11.E.i.
36212 21390
1007. 597.
1631 1037
1007. 647.
15016 9739
1007. 657.
6353 4168
1007. 667.
8663 5571
1007. 647.
2083 1080
1007. 027.
8731 5708
1007. 657.
4777 3412
1007. 507.
578 170
1007. 197.
642 121
10D7. 197.
454 124
100/. 277.
484
17.
17.
I 08
17.
62
17.
46
17.
56
37.
1 96
27.
56
17.
2
37
67.
17
47.
61 504
47. 31%
483 4641
37. 317.
223 1871
47. 297.
260 2770
37. 327.
280 550
137. 287.
546 2118
67. 247.
430 2673
67. 39'!.
122 573
147. 657.
309 176
48% 27%
109 203
24% 457.
18
1%
45
29
16
88
47.
163
27.
205
3%
11
17.
0
2
(1) ALL 0441 ISIICS ARE 1-IR1IOIIAL ESTIIIATES EI4COI-IFASSII1G TIlE 157 LARG~ST S ID UNIVERSITIES
AND Till: 10 L AI1NE9I IT I S MOD! CII. OCIIOOLS IN THE NA 11011. FOR PHASE II F IELDS (AGR ICULTURAL
LIIOLON CAL Al-ID EOV IRUNI-IEIJI AL SCI EIICEII) , ESTIMATES AIIE AS OF DECEMDEII 1983. FOR ALL OTHEII
F I EI.Llii, ES TI hAlES AIlS AS DI IIIECEI-113E11 1982. SAMPLE IS 6985 INSTRUMENT SYS TENS.
PAGENO="0898"
892
*
TASLE.A-15
~E5EARCH FUNCTION OF IN-USE ACADEMIC RESEARCH INSTRUMENT SYSTEMS, DY FIELD 111
.
NUMBER AND FERctNT OF SYSTEMS
RESEARCH FUNCTION
DEDICATED GENERAL
TOTAL MODIFIED NOT MODIFIED PURPOSE
4OTAL~ SELECTED FIELDS 35768 7432 26014
- 1007. 21% 737.
.
FIELD OF RESEARCH
* AGRICULTURAL SCIENCE! 1602 64 316 1222
- 100% 47. 20% 767.
*
* .
BIOLOGICAL SCIENCES. TOTAL 14760 660 1935 12265
1007. 4% 12% 83%
.
.
GRADUATE SCHOOLS 6212 226 652 . 5334
100% 47. 11% 867.
.
MEDICAl. SCHOOLS . . 5048 434 1183. 6931
. . 1007. 5% . .14% 81%
ENVIRONMENTAL SCIENCES 2103 189 . 499- 1414
1007. 47. 24% 677.
PHYSICAL SCIENCES 8630 771 2604 5205
100% 207. 617.
ENGINEERING 6724 592 . 1896 4246
100% . 47. 28% 63%
**
COMPUTER SCIENCE 866 . 4 140 722
. . 1007. - 167. 93%
*
MATERIALS SCIENCE 637 36 . 95 506
100% 6% 157. 79%
INTERDISCIPLINARY~ N.E.C. 445 16 46 283
100% 4% 10% 867.
tI) ALL STATISTICS ARE NATIONAL ESTIMATES ENCOMPASSING THE l57 LARGEST P & 0
UNIVERSITIES AND THE 92 LARGEST P & B MEDICAL SCHOOLS IN THE NATION. FOR PHASE
Ii FIELDS (AGRICULTURAL~ BIOLOGICAL AND ENVIRONMENTAL SCIENCES~ ESTIMATES ARE
AS OF DECEMBER 1483. FOR ALL OTHER FIELDS~ ESTIMATES ARE AS OF DECEMBER 1992.
SAMPLE IS 6985 INSTRUMENT SYSTEMS.
A-19
PAGENO="0899"
OF IN-USE ACADEMIC F:ESEARCH INSTRUMENT
AND DY FIELD (1)
MEAN NUMOER OF RESEARCH USERS (2)
------------F:ESEARCH FUNCTION
DEDICATED - CENERAL
TOTAL MODIFIED NOT MODIFIED PURPOSE
7.5 6.4 16.6
TABLE A-b
MEAN NUMEER OF RESEARCH USERS
SYSTEMS, DY RESEARCH FUNCTION
TOTAL, SELECTED FIELDS
FIELD OF RESEARCH
AGRICULTURAL SCIENCES
BIOLOGICAL SCIENCES, TOTAL
GRADUATE SCHOOLS
MEDICAL SCHOOLS
ENVIRONMENTAL SCIENCES
PHYSICAL SCIENCES
EN G I NE ER I N C
cD
14.3
11.0
11.5
12.4
10.8
12.4
13.3
14.1
8. 1
7.9
11.0
6.3
7.7
6.3
6.6 12.0
6.6 12.4
6.5 13.1
6.7 11.9
6.1 13.3
8.0 20.6
00
6.3 10.8 16.8
COMPUTER SCIENCE 32.6 32.6 20.2 SB.B I
MATERIALS SCIENCE 24.3 27.0 6.8 27.5
INTERDISCIPLINARy, N.E.C. 13.0 19.3 16.6 14.8
(1] ALL STAT1STICS ARE NATIONAL ESTIMATES ENCOMPASSING THE 137 LARGEST R & D
UNIVERSITIES AND THE 92 LARGEST N & I) MEDICAL SCHOOLS IN THE NATION. FOR PHASE
II FIELDS (AGRICULTURAL, OIOLOGIc.AL AND ENVIRONMENTAL SCIENCES), ESTIMATES ARE
AS OF DECEMBER 1963. FOR ALL OTHER FIELDS, ESTIMATES ARE AS OF DECEMBER 1982.
SAMPLE IS 6963 INSTRUMENT SYSTEMS.
(23 FOR FHASE II FIELDS ESTIMATES ARE OF USERS DURING 1963; FOR PHASE I FIELDS,
ESTIMATES ARE OF USERS DURING 19O~.
PAGENO="0900"
894
APPENDIX B
DEPARTMENT/FACILITY QUESTIONNAIRE
B-i
PAGENO="0901"
895
Form Number 0MB No. 3145-0067
Expiration Date 9/30/85
NATIONAL SCIENCE FOUNDATION
DIVISION OF SCIENCE RESOURCES STUDIES
NATIONAL SURVEY OF ACADEMIC RESEARCH
INSTRUMENTS AND INSTRUMENTATION NEEDS
DEPARTMENT/FACILITY QUESTIONNAIRE
THIS REPORT IS AUTHORIZED BY LAW (P.L. 96-44). WHILE YOU ARE NOT
REQUIRED TO RESPOND, YOUR COOPERATION IS NEEDED TO MAKE THE
RESULTS OF THIS SURVEY COMPREHENSIVE, ACCURATE, AND TIMELY.
INFORMATION GATHERED IN THIS SURVEY WILL BE USED ONLY FOR
DEVELOPING STATISTICAL SUMMARIES. INDIVIDUAL PERSONS, INSTITU-
TIONS, AND DEPARTMENTS WILL NOT BE IDENTIFIED IN PUBLISHED
SUMMARIES OF THE DATA.
PAGENO="0902"
896
BACKGROUND AND INSTRUCTIONS
In recent years, widespread concern has developed about whether
university research scientists and engineers have sufficient access
to the kinds of equipment needed to permit continuing research at the
frontier of scientific knowledge. To assist the National Science
Foundation and other Federal agencies in setting appropriate equip-
ment funding levels and priorities, this Congressionally mandated
survey is intended to document, for the first time: (a) the amount,
cost, and condition of the scientific research equipment currently
available in the nation's principal research universities, arid (b)
the nature and extent of the need for upgraded or expanded equipment
in the major fields of science and engineering.
The survey is being conducted in two phases. The current phase
deals with research equipment in the physical sciences and engi-
neering/computer science. Next year, in Phase II, the emphasis will
be on the biological, environmental, and agricultural sciences.
This Department (or nondepartmental research facility) Ques-
tionnaire seeks a broad overview of equipment-related expenditures
and needs in this department (or facility). Items 1-10 (Parts A and
B) are factual in nature and maybe delegated to any person or persons
who can provide the requested data. In these sections, informed
estimates are acceptable whenever precise information is not avail-
able from annual reports or other data sources. Items 11-16 (Part
C) call for judgmental assessments about equipment-related research
needs and priorities of the department (or facility) as a whole and
should be answered by the department chairperson (or facility
director) or by a designee who is in a position to make such
judgments. We urge that particular attention begiven to item 16,
which asks for this department's (or facility's) recommendations
about needed changes in equipment funding policies and procedures.
This form should be returned by May 30, 1983. Your cooperation
in returning the survey form promptly is very important. Please
direct any questions about this form either to your university study
coordinator or to Ms. Dianne Walsh at Westat, Inc., the NSF con-
tractor for this study (301-251-1500).
PAGENO="0903"
897
PART A. DESCRIPTIVE INFORMATION
1. Institution name: _____________________________________
2. Department (or nondepartmental research facility)~ name:
3. This is a: (CHECK ONE)
I_I 1. Department (CONTINUE WITH ITEM 4)
I_I 2. Nondepartmental research facility (SKIP TO ITEM 6)
4. Number of doctoral degrees awarded in 1981-82 academic year to students in
this department:
5. Number of members of this department who participate in ongoing research projects
(do not include graduate students or postdoctorates):
________ Total number of persons (full-time and part-time)
________ FTE* nu~nber of persons
PART B. RESEARCH-RELATED FUNDING AND EXPENDITURES
6. Department (or facility) FY 1982 and anticipated FY 1983 expenditures for
scientific research equipment. [SCIENTIFIC RESEARCH EQUIPMENT IS ANY ITEM
(OR INTERRELATED COLLECTION OF ITEMS COMPRISING A SYSTEM) OF NONEXPENDABLE
TANGIBLE PROPERTY OR SOFTWARE HAVING A USEFUL LIFE OF MORE THAN TWO YEARS
AND AN ACQUISITION COST OF 5500 OR MORE WHICH IS USED WHOLLY OR IN PART FOR
RESEARCH. INCLUDE ALL SCIENTIFIC RESEARCH EQUIPMENT ACQUIRED IN THIS DEPART-
MENT (OR FACILITY) IN FY 1982, FROM ALL SOURCES -- FEDERAL, STATE, INSTITU-
TIONAL, INDUSTRIAL, ETC.)
$_________________ FT 1982 expenditures for scientific research equipment
$_________________ Anticipated FY 1983 expenditures for scientific research
equipment
*In computing number of FTE5 (full-time equivalents), persons employed in this
department on less than a full-time basis should be counted to reflect their
decimal fraction of full-time equivalency. Example: if a department employs
25 pertinent faculty members, 20 full-time and 5 with half-time appointments,
the FTE number is 20 + (5 x .5) = 22.5.
3
PAGENO="0904"
898
* 7. Please provide an approximate breakdown by source of funds for this department's
(or facility,'s) FY 1982 expenditures andestimated FY 1983 expenditures for
scientific research -equipment. (NOTE: ENTRIES IN EACH COLUMN SHOULD SUM TO 100
PERCENT; ESTIMATES ARE ACCEPTABLE.)
`
Source of funds
*
Percent of expenditures for
scientific research equipment
.
FY'1982 PT 1983
(anticipated)
a. Federal government
b. Internal university funds
c. State equipment or capital develop-
ment appropriations
d. Private nonprofit foundations!
organizations -
e. Business or industry
f. Other (SPECIFY)
-
.
.
S
- S
100 5 100 5
TOTAL, ALL FUNDING SOURCES
8. FY'1982 expenditures for purchCseof research-related computer.services at:
$____________ On-campus computing facilities
$___________ Off-campus computing facilities
9. FY 1982 expenditures for maintenance and repair of all scientific research
equipment in this department' (or facility):
$ - Service contracts or field service for maintenance and
repair of individual instruments
$____________ Salaries of university maintenance/repair personnel (pro-
rate if personnel do not work full-time in this department!
facility or on servicing of researcJ~ equipment) -
$___________ Other -direct costs of supplies-, euipment and facilities
for servicing of research instruments in this department!
facility
$ Total
1. Excellent
II 2. Adequate
I_I 3. Insufficient
I_I 4. Nonexistant
10. Are the instrumentation support services (e.g~, machine shop, electronics
shops) at this department or facility: (CHECK ONE)
4
PAGENO="0905"
899
PART C. ADEQUACY OF AND NEED FOR SCIENTIFIC RESEARCH EQUIPMENT
In terms of itscapability to enable investigators to pursue their major
research interests, is the research equipment in this department (or facility)
generally: (CHECK ONE IN EACH COLUMN)
*
-
Type of- investigator
- Tenured faculty t'rtenured faculty
(and equivalent (and equivalent
P.1. ~s) P.1. `5)
1. Excellent
- 1. (_) - 1. I_I
2. Adequate
- 2. (_( 2. I_I
3. Insufficient
- 3. (_( - 3.
12. Are there any important subject areas (e.g., recombitant DNA, microcircuitry,
plasma physics) in -which investigators in this department/facility are unable
to perform critical experiments, in their areas of research-interest due to lack
of needed equipment?
-1. Yes -~ 12a. What are the top priority subject areas
for expansion/upgrading of presently
available equipment? -(SPECIFY UP TO
- THREE AREAS) -
(_I 2. No -
13. Assuming future total Federal research support to your department/facility- -
remains roughly constant at present levels,- how - if at -all - would your department
(or-facility) redistribute its research funds. FOR EACH AREA, PLEASE INDICATE
WHETHER FUNDING SHOULD BE PROPORTIONATELY INCREASED, DECREASED. OR MAINTAINED AT
ABOUT THE PRESENT LEVEL. (NOTE: PROPORTIONATE INCREASES IN ONE OR MORE AREAS MUST
BE ACCOMPANIED BY CORRESPONDING DECREASES IN OTHER AREAS. IF THE CURRENT BALANCE
SHOULD BE MAINTAINED, CHECK "No CHANGE" COLUMN FOR ALL AREAS.) - - -
Area of -Federal support
Recommended
redis
-
tribution of research
- - -
fundi
1.
Increase
-
J 2. Decrease
3.
No change
a. Faculty salaries -
.
(_)
1
I_I
b. Postdoctorate salaries
(_)
-
f_I
,
f_f
-
c. Graduate student support *.
.
(_)`
-
f__I
d. Non-professional salaries
(_) - --
)_l
I_f
e. Equipping of startup labs
.
I.)
- 1_f -
f_I
f. Equipment purchases (other
than e. above)
f_I
- -
I)
-
I_I
g. Equipment maintenance
-
f_f
-
I_I
I_I
h. Other (SPECIFY) .
-
-
f__I
`I_f
f_I
-
5
11.
PAGENO="0906"
900
14. If greater Federal funding of research equipment were possible, in which area
would increased investment be most beneficial to investigators in this
department/facility? (CHECK ONE)
1. Large scale regional and national fE~ilities (large tele-
scopes, reactors, oceanographic vessels, high performance
computers, etc.)
2. Major shared access instrument systems (550,000-$l,000,000)
not presently available to department/facility members
3. Upgrading/expansion of equipment in$lO,000-$50,000 range
I_I 4. General enhancement of equipment and supplies in labs of
individual P.1. `s (items generally below $10,000)
5. Other (SPECIFY) ________________________________________
15. In the $10,000-$l,000,000 cost range, what three items of research equipment
(if any) are most neededat this time in this department/facility?
Item description Approximate cost
14. How could current Federal equipment funding policies-and/or procedures be modified
to better meet the research -needs of researchers in this department/facility?
17. Please note in the space below: (a) any additional information needed to
describe the research equipment and equipment-related needs in this department/
facility, or (b) any suggestions to -improve this survey questionnaire.
18. Person who prepared this submission:
- NAME AND TITLE - AREA CODE - EXCH - NO. - EXT.
19. How many person-hours were required to complete this form? - _______
- HOURS MINUTES
6
PAGENO="0907"
901
APPENDIX C
INSTRUMENT DATA SHEET
C-i
PAGENO="0908"
Number:
902
0MB No. 3145-0067
Expiration Date 9/30/85
NATIONAL SURVEY OF ACADEMIC RESEARCH INSTRUMENTS AND INSTRUMENTATION NEEDS
NATIONAL SCIENCE FOUNDATION AND NATIONAL INSTITUTES `OF HEALTH
INSTRUMENT DATA SHEET
This data sheet is part of a major national assessment of the
condition of academic research instrumentation. The data
sheet concerns a particular instrument or instrument system
component selected from university central inventory re-
cords as part of a national sample of research instruments
in your field.
The item described below (in ID BOX) is assumed to be an
instrument or instrument system component: (a) assigned to
this department or research facility and (b) used in 1983 for
original scientific research-as distinguished from teaching,
patient care or other nonresearch uses, or from inactive or
inoperable equipment not used at all in 1983. Please note in
the comm eats see lion (Question 17) if either assumption is
incorrect; however, please complete as much of this form as
possible.
We ask that the requested factual information (items 1-8)
and functional assessment data (items 9-16) be obtained
from the person or persons who ore most knowledgeable
about the history and current statns of this instrument.
Where enact cost (or other) data are sot available, eslimotes
are acceptable. Your estimates will be better thus oars.
This study is authorized by law (P.L. 96-44). While you are
not required to respond, your cooperation is seeded In make
the results of this survey comprehensive, accurate, and
timely. Information gathered in this survey will be used
only for developing statistical summaries. Individual per-
sons, institutions, and departments will not be identified in
published summaries of the data.
Your cooperation in returning the survey form promptly is
very important. Please direct any questions about this form
either to'your university study coordinator or to Ms. Dianne
Walsh at Westot, Inc., the NSF/NIH contractor for this study
(301-251-1500).
DEFINITiON OF KEY TERMS
INSTRUMENT PURCHASE PRICE (initial value)
The original price of the instrument (or its components, if
built locally) at time of original purchase from the mona-
factarer. Do not include Cost of separately parchased
accessories; do not subtract any discount (e.g.. for trade-in)
which may hove been received. Please estimate if original
records are not available.
ACQUSSrIION COST
The actual cost of this instrument when acquired at this
institution. If purchased new by this university, acquisition
cost = purchase price, less discount from manufacturer, if
applicable. If built at this institution, acquisition cost =
cost of parts v estimated cost of labor. If purchased used,
acquisition cost = price paid to seller. If donated or loused
(e.g.. by industry) or obtained at so cost from government
surplus, acquisition Cost = SO.
REPLACEMENT COST
The estimated cost to purchase this instrument (or its
components, if bout locally) or one of roughly eqaivolent
function and capability, at todays prices.
DEDICATED ACCESSORIES
Separately acquired "add-oss" to or components of the
instrumentation system of which the instrument described
below is the principal element. This includes accessories
that are presently dedicated solely for use with the
reference instrument but are sot included in its purchase
cost (in item G, below). Examples: specimen preparation
and photographic accessories for a particular e(ectrnn
microscope; oscilloscope, microprocessor, (PLC, or dots
syslem accessories for a particular spectrometer; key entry.
disc drive, printer or plotter accessories for a particular
microcompaler.
YEAR OF PURCHASE
The calendar year when this instrument (or its principal
companents( was originally purchased from the manafuc-
A. Institution
B. Deportment or Facility
C. Instrument Description
D. Centrul Records ID C
E. Locution:
ID BOX - INSTRUMENT IDENTWYING DATA
Year of Purchase: 19
C. Instrument Purchase Price:
PAGENO="0909"
903
Please review the identifying data (from your institution's central inventory records) in the page..l ID BOX and make any
needed corrections or additions, with special attention to items F (YEAR OF PURChASE) and C (INSTRUMENT PURCHASE
PRICE). -
SEE PAGE 1 FOE DEFINITION OF ALL BOLDFACE TERISS
2. Where was this instrument located during 1983 when is use? (CHECK ONE)
(I I Inactive or inoperable throughout 1983 (SKIP TO ITEM 17)
2 Lab or facility used almost exclusively for undergraduate instruction or other nonresearch activity (SKIP TO
ITEM 17)
I,,,,) 3 National, regional, or interuniversity research instrumentation lab (CONTINUE TO ITEM 3)
I_I 4 Nondepartmental research facility (CONTINUE TO ITEM 3)
I_I 5 Department-managed common lab or research instrumkntatihn facility (CONTINUE TO ITEM 3)
(I 6 Within-department research lab of principal investigator (CONTINUE TO ITEM 3)
I_I 7 Other (SPECIFY) ________________________________________________________________________
Does this instru
BOX. item Cl?
ment hove any DEDICATED ACCESSORIES not included in the INSTRUMENT PURCHASE PRICE (from ID
(See page 1 definitions of key terms)
I 1 Yes
-~" 3a. Estimated aggregate purchase price of all DEDICATED
ACC~ORIES not included in ID BOX item C. S___________
I 2 No
3b. Please describe and estimate the purchase price for each separately purchased DEDICATED
ACCESSORY costing $19,000 or more. (If additionat space is needed, continue in
Question 17 or attach a separate continuation sheet.)
Description of accessories $10,000 or more Purchase cost
1. S_______________
2.
3.__________________________________________________ 0
4. S______________
4. Year instrument acquired at this institution:
19
~
5. ACQU~ITION COST for this instrument and its
accessories (see page 1 definition):
S_____________ Instrument acquisition cost
6. Estimated REPLACEMENT COST for this instrument
and its accessories (see page 1 definition):
$_____________ Instrument replacement cost
S_____________ Accessory replacement cost
0 Total
$_____________ Accessory acquisition cost
S_____________ Total
.
PAGENO="0910"
904
7. How was this instrument acquired at this institution?
)CIOECI< ONE)
() 2
I) 3
I) 4
I) S
I) 6
I) 7
() 8 _____________
Purchased new
Purchased used
Locally built (at or for this institution)
Transferred from another institution, e.g.. by
incoming faculty member 1SKIP TO ITEM 9)
Government surplus (SKIP TO ITEM 9)
Donated new (SKIP TO ITEM 9)
Donated used (SKIP TO ITEM 9)
Other (SPECIFY) _______________________
8. Source(s( of funds for acquisition of this instrument
(and accessories) at this institution. (SPECIFY AP-
PROXIMATE PERCENTAGE CONTRIBUTION TO
TOTAL ACQUISITION COST FOR EACH APPLICABLE
SOURCE.)
Funding
contribution
(percent) _______________
Funding source
Federal sources:
NSF (National Science Foundation)
NIH (National )nstitutes of Health)
DOD (Deportment of Defense)
DOE (Department of Energy)
USDA (Department of Agriculture)
Other Federal sources (SPECIFY):
Nan-Federal sources:
Institution or department funds
State grunt or appropriation
Private nonprofit foundation
Business or industry
Other (SPECIFY) ________________
9. How much was spent for maintenance and repair (not
far operation( of this instrument and its accessories
in 1983?
10. Means of servicing (maintenance/repair) this instrument
during 1903: (CHECK ALL THAT APPLY)
),__) 1 None required
)_) 2 Service contract
(_) 3 Field service, as needed
(_) 4 Institution-employed maintenance/repair staff
)_( S Research personnel (faculty, students,
past-does)
)_( 6 Other (SPECIFY) _____________________
11. Instrument's general working condition daring 1903:
(CHECK ONE)
)) 1 Excellent
2 Average
)_) 3 Poor (e.g., unreliable, frequent breakdowns.
difficult to maintain or service)
)_) 4 Inoperable entire year
12. Research function of this instrument during 1903:
(CHECK ONE)
1 Most advunced instrument of its kind that
- is accessible to those who use it in their
I 2 Used for research; more advanced iustru- -
ments are available to users when needed
3 Not used for research during 1903
13. Technical capabilities of this instrument (i.e., the base
inslrament. excluding accessories) (CHECK ONE)
(I I State-of-the-art (mast highly deve)oped and
scientifically sophisticated instrument avail-
able)
2 Adequate to meet researcher needs
() 3 taadequate for research (PLEASE EXPLAIN):
100% Total
PAGENO="0911"
14.
~
Techni
sories.
(_(
cal capabilities of instrument's current acres-
(CHECK ONE)
~
1 Not applicable Instrument does not have
IS..
*
In 1983, was this a general purpose instrument within
an area of research or was it dedicated for a partic-
aim experiment or series of experiments? (CHECK
ONE) -
.
~
1_I
I__I
-
2 State-of-the-art (most highly developed and
scientifically sophisticated available)
3 Adequate to meet researcher needs . .
4 I ad q I I ese h (PLEASE EXPLAIN)
*
I General purpose (SKIP TO ITEM 16)
-
II 2 Dedicated
~
15 Dd ttu lype
unsuitable for general purpose use?
(CHECK ONE)
(I 1 Yes
I_I .2 No
.
.
16. How many research investigators made use of this instrument for research purposes during 1983: (ESTIMATE
APPROXIMATE NUMBER IN EACH APPLICABLE CATEGORY) .
1 Faculty, and equivalent nonfaculty researchers, this department/facility .
2 Gruduateand medical students'and postdoctorates. this deportment/facility
3 Faculty and equivalent nonfaculty researchers, other departments, thin university
4 Gruduate and medical students und postdoetorutes, other departments, this university
S Researchers from other universities
6 Nonacademic researchers
7 Other (SPECIFY) ______________________________________________________________________
Total number of research users
iSa. Instrument's principal field of resqurch use in l9C3 (e.g., geology, biophysics, plant pathology, pharmacology):
17. Please note in space below: (a) Any additional information needed to clarify the nature, function and quality of this
instrument, or (b) any suggestions tu improve this questionnaire or its instructions.
905
18. Person who prepared this submission:
NAME AND TITLE AREA CODE - EXCH - NO - EXT
19, (low many person-hours were required to complete this form?
((OURS
tIlt-JUTES
PAGENO="0912"
906
APPENDIX D
ADVISORY GROUP, PHASE II SURVEY
D-1
PAGENO="0913"
907
Phase II Advisory Group-
Dr. Michael Beer
Department of Biophysics
Jenkins Hall, Rn. 416
The Johns Hopkins University
Charles and 34th Streets
Baltimore, MD 21218
Dr. Elkan R. Blout
Professor of Biological
Chemistry
Department of Biological
Chemistry
Harvard Medical School
Boston, MA 02115
Dr. Cohn Bull
Dean, College of Mathematical
and Physical Sciences
Ohio State University
Columbus, OH 43210
Dr. Brian Chabot
Associate Director
Office for Research
Agricultural Experiment
Cornell University
292 Roberts Hall
Ithaca, NY 14853
5~...277 (915).
Dr. Murray Eden
Chief, Biomedical Engineering
and Instrumentation
National Institutes of Health
Bldg 13
3W13
Bethesda, MD 20205
Dr. Larry Vanderhoef
Office of the Chancellor
573 Mrak Hall
University of California - Davis
Davis, CA 95616
Dr. John Williamson
Professor of Biochemistry
and Biophysics
B601 Biology Building/G2
University of Pennsylvania
Philadelphia, PA 19104
Dr. Ian Jardine
Department of Pharmacology
Mayo Foundation
Station 200 1st Street, S.W.
Rochester, MN 55905
o~
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