[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT AND MANAGEMENT OF
DEPARTMENT OF ENERGY NATIONAL
LABORATORIES AND SCIENCE ACTIVITIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JULY 11, 2013
__________
Serial No. 113-41
__________
Printed for the use of the Committee on Science, Space, and Technology
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR., DANIEL LIPINSKI, Illinois
Wisconsin DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
PAUL C. BROUN, Georgia DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi ALAN GRAYSON, Florida
MO BROOKS, Alabama JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois SCOTT PETERS, California
LARRY BUCSHON, Indiana DEREK KILMER, Washington
STEVE STOCKMAN, Texas AMI BERA, California
BILL POSEY, Florida ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky MARK TAKANO, California
KEVIN CRAMER, North Dakota ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
------
Subcommittee on Energy
HON. CYNTHIA LUMMIS, Wyoming, Chair
RALPH M. HALL, Texas ERIC SWALWELL, California
FRANK D. LUCAS, Oklahoma ALAN GRAYSON, Florida
RANDY NEUGEBAUER, Texas JOSEPH KENNEDY III, Massachusetts
MICHAEL T. McCAUL, Texas MARC VEASEY, Texas
RANDY HULTGREN, Illinois MARK TAKANO, California
THOMAS MASSIE, Kentucky ZOE LOFGREN, California
KEVIN CRAMER, North Dakota DANIEL LIPINSKI, Illinois
RANDY WEBER, Texas EDDIE BERNICE JOHNSON, Texas
LAMAR S. SMITH, Texas
C O N T E N T S
Thursday, July 11, 2013
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Cynthia Lummis, Chairman,
Subcommittee on Energy, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 10
Written Statement............................................ 10
Statement by Representative Eric Swalwell, Ranking Minority
Member, Subcommittee on Energy, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 11
Written Statement............................................ 11
Witnesses:
Mr. Matthew Stepp, Senior Policy Analyst, Information Technology
and Innovation Foundation
Oral Statement............................................... 13
Written Statement............................................ 15
Mr. Jack Spencer, Senior Research Fellow, The Heritage Foundation
Oral Statement............................................... 19
Written Statement............................................ 22
Joint Written Statement of Mr. Matthew Stepp, Senior Policy
Analyst, Information Technology and Innovation Foundation,
and Mr. Jack Spencer, Senior Research Fellow, The Heritage
Foundation................................................. 28
Dr. Thom Mason, Director, Oak Ridge National Laboratory
Oral Statement............................................... 61
Written Statement............................................ 63
Dr. Dan Arvizu, Director, National Renewable Energy Laboratory
Oral Statement............................................... 70
Written Statement............................................ 72
Discussion....................................................... 81
Appendix I: Answers to Post-Hearing Questions
Joint responses from Mr. Matthew Stepp, Senior Policy Analyst,
Information Technology and Innovation Foundation, and Mr. Jack
Spencer, Senior Research Fellow, The Heritage Foundation....... 96
Mr. Jack Spencer, Senior Research Fellow, The Heritage Foundation 102
Dr. Thom Mason, Director, Oak Ridge National Laboratory.......... 105
Dr. Dan Arvizu, Director, National Renewable Energy Laboratory... 111
Appendix II: Additional Material for the Record
Submitted letter for the record from the Secretary of Energy, Dr.
Ernest Moniz................................................... 118
OVERSIGHT AND MANAGEMENT OF DEPARTMENT
OF ENERGY NATIONAL LABORATORIES
AND SCIENCE ACTIVITIES
----------
THURSDAY, JULY 11, 2013
House of Representatives,
Subcommittee on Energy
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittee met, pursuant to call, at 9:56 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Cynthia
Lummis [Chairman of the Subcommittee] presiding.
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Chairman Lummis. Well, we are, as I said, going to dispense
with some of the formalities. The Ranking Member just walked in
and we are delighted you are here this morning.
Welcome to today's Energy Subcommittee hearing entitled
``Oversight and Management of Department of Energy National
Labs and Science Activities.'' Last month, we held a Full
Committee hearing with our new Energy Secretary Ernest Moniz.
At the hearing, Secretary Moniz announced that he would be
undertaking a number of management and performance reforms
aimed at enhancing the Department's organizational
effectiveness and programmatic oversight and accountability.
So we are really excited about this undertaking, and the
primary purpose of today's hearing is to receive testimony on
the specific reforms that Congress and the Administration may
be able to work together to advance.
I am going to take the remainder of my opening remarks and
submit them for the record and waive the remainder of my
opening remarks for the record and ask our Ranking Member, Mr.
Swalwell of California, if he has any opening remarks and then
we can get right into your testimony so we don't get
interrupted by our next round of votes. Mr. Swalwell?
[The prepared statement of Mrs. Lummis follows:]
Prepared Statement of Subcommittee Chairman Cynthia Lummis
Good morning and welcome to today's Energy Subcommittee hearing
entitled Oversight and Management of Department of Energy National
Laboratories and Science Activities.
Last month, we held a Full Committee hearing with newly minted
Energy Secretary Ernest Moniz. At the hearing, Secretary Moniz
announced that he would be undertaking a number of management and
performance reforms aimed at enhancing the Department's organizational
effectiveness and programmatic oversight and accountability.
We very much welcome this undertaking, and the primary purpose of
today's hearing is to receive testimony on the specific reforms that
Congress and the Administration may be able to work together to
advance.
On the same week of Secretary Moniz's announcement, three think
tanks--the Information Technology Innovation Foundation, the Heritage
Foundation, and the Center for American Progress--released a report
entitled Turning the Page: Re-imagining the National Labs in the 21st
Century Innovation Economy. Perhaps ironically, one does not have to
turn a single page to be intrigued by this report. The simple fact that
the Heritage Foundation and Center for American Progress were able to
agree on anything, much less a detailed 70-page report, is a pleasant
reminder that even in the current polarized environment, opportunities
for bipartisan policy improvements exist.
The Reimagining report includes a bevy of bold recommendations,
including ideas to reduce bureaucracy and micromanagement, enhance
technology transfer, and change DOE's organizational structure and
fundamental relationship with the National Labs. The national
laboratories collectively manage more than $10 billion of scientific
and national security activities, and major changes such as those being
proposed by outside stakeholders as well as the Obama Administration
warrant complete and thoughtful consideration.
Beginning with their roots in providing the scientific foundation
upon which America won World War II and the Cold War, the national labs
have a rich and often underappreciated history. Today, the labs' role
in sponsoring cutting-edge basic research and managing world-class user
facilities is a driving force behind the United States' global
scientific leadership and economic competitiveness. I look forward to
learning how we can best sustain and advance their important
contributions to the country.
To this end, Ranking Member Swalwell and I wrote Secretary Moniz
requesting his feedback on the recommendations of the Reimagining
report. We received his response last night, which I would like to
enter into the record [without objection]. I want to commend the
Secretary for his prompt response, and note that we also look forward
to hearing his own forthcoming reform ideas.
Ultimately, it is my hope that through our discussion today and in
the coming weeks, we can begin to identify areas of agreement that will
positively benefit DOE's science enterprise.
Thank you and I yield back.
Mr. Swalwell. Sure. Thank you, Chairman Lummis, for holding
this hearing today. And I want to thank our witnesses for being
here.
I represent a district in northern California that has two
national laboratories, Sandia and Lawrence Livermore, and also
my colleague Ms. Lofgren from the Silicon Valley area also just
outside her district but has been a faithful advocate for those
laboratories as well, which I am always grateful to have an
ally as a neighbor.
And just want to highlight that these laboratories employ
many of our country's brightest minds in science and
engineering and they continue to inspire, train, and support
new generations of American researchers and industry leaders.
They also serve as an important path by which new technologies
can move to market in ways that benefit its public and private
partners alike and in turn the American taxpayer.
And while it is important to recognize the great work being
done across the country by our national labs, as other
researchers supported by the Department of Energy programs, it
is equally important to consider what opportunities exist to
make improvements. And that is why I look forward to today's
hearing and for one example I wanted to highlight was the
recommendation in the report to merge the Department's Under
Secretary for Energy and Under Secretary for Science into a
single Under Secretary for Science and Technology, which I
believe makes a lot of sense as it would finally establish a
single individual in DOE with both the sole responsibility and
authority to advance new energy technologies from basic
research through commercialization activities.
This report also recommends a number of interesting ways
that we may be able to accelerate technology transfer and
improve the efficiency and effectiveness of our labs and I look
forward to exploring these ideas further with our DOE
laboratory witnesses shortly. And also just about a three iron
outside my district is the Berkeley National Lab--Lawrence
Berkeley National Laboratory as well and I appreciate their
staffs' effort to continue to update and educate me on the
great work they are doing there.
So thank you for holding this hearing, Chairman Lummis. And
with that, I yield back the balance of my time.
[The prepared statement of Mr. Swalwell follows:]
Prepared Statement of Subcommittee Ranking Member Eric Swalwell
Thank you Chairman Lummis for holding this hearing today, and I
also want to thank the witnesses for being here.
It is no secret by now that I am a major supporter of the
Department of Energy's national laboratories, even a few of the ones
that aren't in my District. These labs carry out world-class research
on issues of national and global importance, they employ many of our
country's brightest minds in science and engineering, and they continue
to inspire, train, and support new generations of American researchers
and industry leaders. They also serve as an important path by which new
technologies can move to market in ways that benefit its public and
private partners alike, and in turn, the U.S. taxpayer.
While it is important to recognize the great work being done across
the country by our national labs as well as other researchers supported
by Department of Energy programs, it is equally important to consider
what opportunities exist to make improvements.
That is why I am excited to learn more about these ideas and
opportunities at today's hearing. For example, one of the
recommendations in this report is to merge the Department's Under
Secretary for Energy and Under Secretary for Science into a single
Under Secretary for Science & Technology, which I believe makes a lot
of sense as it would finally establish a single individual in DOE with
both the sole responsibility and authority to advance new energy
technologies from basic research through commercialization activities.
The report also recommends a number of interesting ways that we may be
able to accelerate technology transfer and improve the efficiency and
effectiveness of our labs, and I look forward to exploring these ideas
further with our DOE laboratory witnesses shortly.
Chairman Lummis. Thank you. If there are any other Members
who wish to submit additional opening statements, your
statements will be added to the record at this point. Anyone?
Chairman Lummis. Thank you. Well, now, we will introduce
our witnesses. Our first witness today is Mr. Matthew Stepp,
Senior Policy Analyst with the Information Technology and
Innovation Foundation. Mr. Stepp previously served at the
Breakthrough Institute, a think tank focusing on political
thinking in the 21st century. In 2009 Mr. Stepp was a Fellow at
the National Academies of Science where he worked on the
Transportation Research Board. He earned his master's from
Rochester Institute of Technology.
Our second witness is Mr. Jack Spencer, Research Fellow at
the Heritage Foundation's Roe Institute for Economic Policy
Studies. Previously, he served at the Babcock & Wilcox
companies where he worked on commercial, civilian, and military
nuclear energy issues. Prior to this, he worked at the Heritage
Foundation as an analyst for defense and national security. Mr.
Spencer earned his master's from the University of Limerick in
Ireland.
Our third witness is Dr. Thom Mason, Director of Oak Ridge
National Laboratory. Dr. Mason joined Oak Ridge in 1998 as
Science Director of the Spallation Neutron Source Project and
was named Associate Lab Director in 2001. Before Oak Ridge, Dr.
Mason was a member of the physics faculty at the University of
Toronto. He earned his doctorate in condensed matter sciences
at McMaster University.
Our final witness is Dr. Dan Arvizu, Director at the
National Renewable Energy Laboratory. Dr. Arvizu was appointed
Director in 2005 and was reappointed another six-year term in
2011. Prior to that, Dr. Arvizu was an executive with Sandia
National Labs and began his career at AT&T Bell Telephone Labs.
He earned his Ph.D. in mechanical engineering from Stanford.
Welcome, one and all.
As our witnesses should know, spoken testimony is limited
to five minutes each, after which the members of the committee
will have five minutes each to ask questions.
Before recognizing our first witness, I would like to take
a moment to explain how our first two witnesses will proceed.
The report these witnesses are testifying about was a joint
effort between the Heritage Foundation and the Information
Technology and Innovation Foundation, which is fabulous because
they tend to be on opposite sides of the political spectrum.
They have submitted joint testimony for today but will each be
given five minutes for oral testimony. So we are just thrilled
that you are working together.
And I now recognize Mr. Stepp for five minutes to present
his testimony.
TESTIMONY OF MR. MATTHEW STEPP,
SENIOR POLICY ANALYST,
INFORMATION TECHNOLOGY AND INNOVATION FOUNDATION
Mr. Stepp. Thank you. Chairman Lummis, Ranking Member
Swalwell, and the Committee, I want to thank you and appreciate
the opportunity to appear for you--in front of you today. I
think this is a particularly important topic because Congress
has an enormous opportunity to turn the national labs into
engines of innovation and economic growth with minimal budget
impact.
My name is Matthew Stepp. I am the Senior Policy Analyst at
ITIF where I direct its Energy Innovation Program. And from my
point of view, the national labs are one of the single most
important public institutions in the Nation's innovation
enterprise and they can serve as a central tool for boosting
job growth, creating regional economic development, and
supporting America's national research goals. So I think just
like Federal investments in research and development writ
large, the national labs are fundamentally important to America
and America's future.
But, however, the lab system as it is currently managed and
organized is falling short of its innovation potential and
ultimately this is why ITIF spearheaded the nonpartisan effort
along with colleagues from the Heritage Foundation and the
Center for American Progress to try to find some common ground
for reform.
And there are really three principal causes that we focus.
First is that there is bureaucratic micromanagement at the labs
that muddles and slows the research process; two, the lab
research is funded by small technology-centered grants rather
than funding long-term research outcomes such as those
developed at the DOE's innovation hubs and ARPA-E; and three,
the labs' relationship with industry is often weak restricting
the appreciable economic outcome of the research and limiting
potential industry partnerships, particularly with small
businesses.
And so although my written testimony takes a deeper look at
over a dozen policies, I just want to highlight three I think
that are maybe the most important. First, Congress should
devolve the management of the labs from centralized DOE control
to a more pure version of the GOCO model where contractor
accountability is the chief method of oversight. So Congress
could do this by creating a task force consisting of the labs,
DOE, industry, and academic stakeholders to target duplicative
regulations that DOE must eliminate or change.
So, for example, one area of reform is the size of and the
extent of the DOE's site offices and the extent that those site
offices are involved in the day-to-day decision-making labs,
which is currently dictated from Washington.
Second, Congress should provide the labs better incentives
and more flexibility to partner with industry to spur
technology transfer. And so the current system of agreements is
complex and oftentimes onerous to navigate, so one way Congress
can do this is amend the Stevenson-Wydler Innovation Technology
Act of 1980 to allow the labs to conduct collaborative, non-
national security-related research with third parties without
DOE sign off. And obviously, this could be implemented on a
pilot basis at first and it would still require annual review
and oversight. But I think it would greatly accelerate the
process of creating industry lab partnerships and accelerate
the process in moving research from the lab market.
And third, I think Congress should begin implementing the
important process of reforming the Department of Energy, as
Ranking Member Swalwell indicated, and I think the key point
here is that they should do so around encouraging innovation
rather than the stovepipe basic versus applied research
programs or the technology programs that we see today. And
there is many steps to this.
I think the first and most important, as was stated, is
combining the Office of Science and the Office of the Under
Secretary of Energy into one streamlined Office of Science and
Technology. This would take--effectively put all non-NNSA labs,
the 13 of the 17 national labs, under one single leadership,
which I believe would create better research coordination, more
productive funding, as well as opportunities for long-term
planning.
So in conclusion, I think what is important to state here
is that as the United States faces new and intense competition
for global innovation leadership, the labs can certainly serve
as national--as a national competitive advantage. And it fact,
they fundamentally must do so if we want to continue to lead
the world in innovation, but it can only do so if it is
reformed into a more nimble research system which doing so
requires starting at the top with changes that don't just
tinker around the edges and reform the system as a whole.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Stepp follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Lummis. Thank you, Mr. Stepp, for those really
specific recommendations.
Mr. Spencer, you will have five minutes.
TESTIMONY OF MR. JACK SPENCER,
SENIOR RESEARCH FELLOW,
THE HERITAGE FOUNDATION
Mr. Spencer. Thank you, Mrs. Chairman, Ranking Member
Swalwell, and Members of the Committee.
The submitted remarks, the report, as you know, is a
document where we all agree. What I am going to do is move away
from that just slightly not into areas that we don't agree on
but rather focus my comments into how these recommendations in
this report fits into more of a conservative free-market vision
and why this fits into Heritage's vision of how Federal
research should move forward.
My name is Jack Spencer and I am a Research Fellow at the
Heritage Foundation. The views I express in this testimony are
my own and should not be construed as representing any official
position of the Heritage Foundation.
The work that ultimately became the Reimagining Report
began some three years ago. At Heritage we were becoming
concerned that America's government research enterprise was
getting off track. We felt that it was quickly becoming a
mechanism to subsidize the private sector, to advanced fleeting
political agendas, or even sometimes used to pay back special
interests. So some colleagues and I decided to take a detailed
look at the Department of Energy spending. We quickly began
identifying significant problems throughout the budget.
The problems roughly fell into four categories: too much
focus on commercialization, too much programmatic duplication,
too much political influence, and too many subsidies. Simply
creating a list of programmatic reductions, however, was not
enough. What we found we needed was real reform, and the
Reimagining Report puts forth that reform.
Though reimagining is decidedly nonpartisan and
unapologetically appeals to stakeholders across the ideological
spectrum, in developing the court, my objective was to ensure
that its recommendations were consistent with a conservative
free-market vision. Ultimately, we determined that many of the
problems facing the Nation's research establishment emanated
from an overbearing, Washington-generated bureaucracy that was
driven more by politics and a desire to control than by
science, markets, or good governance rate. Thus, we focused on
recommendations that broadly decentralized authority, realigned
incentives to be consistent with more desired outcomes, and
that harnessed the power of markets.
To achieve this, first, we reorganized the Department of
Energy research bureaucracy into a single unified Office of
Science and Technology. This is critical from a conservative
limited market perspective. Roughly speaking, the bureaucracy
currently consists of separate entities that conduct basic
research and those that conduct applied research. The applied
research generally includes activities that are further along
the technology development spectrum and are theoretically
closer to commercialization. This is the type of research that
the private sector should shoulder from our estimation. By
removing the bureaucracy created specifically to support those
activities, we begin to diminish the institutional bias towards
it. Now, this does not eliminate applied research from the
Department of Energy. Indeed, those of us who oppose it must
continue to fight that fight on program-by-program basis.
Secondly, we drastically reduced Washington micromanagement
of the labs. Currently, lab managers must follow arcane
bureaucratic rules that drive up costs, increase bureaucracy,
and perpetuate general inefficiency. We recommend a
performance-based contracting system where the contractors are
free to meet their contractual obligations largely as they see
fit rather than by prescriptive oversight by the DOE.
And finally, we free lab management contractors to engage
with the private sector, universities, or other agencies based
on market demand and allow them to keep a portion of the
revenues as part of their management fee.
The Federal Government today largely pushes research into
the market. Our approach creates a market incentive for--to
transfer technology out of the labs. For conservatives, it
promotes near-term spending cuts by removing the temptation for
government to use taxpayer funds to fund research facilities
used by non-federal government entities. We create a system
where such users pay directly for those services. This
eliminates any justification for taxpayers to fund it. It also
sets the stage potentially for shrinking the size of
government. Ultimately, if a facility attracts no funding, then
it should be eliminated. If it attracts adequate third-party
funding, that maybe it should be privatized.
By implementing these reforms, we believe that we can
achieve five distinct outcomes. We can rationalize the lab--
rationalize the size of the lab infrastructure; we can better
focus taxpayer resources on those things that really advance
the national mission; we can efficiently move--more
efficiently, I should say, move commercially attractive
technology into the marketplace; we can yield less government
waste and more efficient operations; and finally, we can allow
technology to be pulled by markets, not pushed by government.
In conclusion, the Nation can benefit from federally funded
research. We see it every day in the realm of national security
to give an example. The government gets off track, however,
when it attempts to directly intervene in the commercial
sector. Like it or not, the Federal Government is a horrible
venture capitalist. This is not to suggest, however, that the
government--that government-funded research cannot lead to
commercial success. Who doesn't use the internet or GPS? And
the model for translating government spending into commercial
success is not to build a program for the purpose of
commercialization. After all, GPS was not the result of a
government program to yield some commercial product but rather
was developed to meet a national security need.
The key is to develop a system that ensures the taxpayer
research dollars are focused on meeting the Nation's research
needs first, then encourage interactions with third parties
should this research activities yield something that has
commercial application. Our recommendations do precisely that.
Thank you for your time today. I look forward to answering
any questions you may have.
[The prepared statement of Mr. Spencer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[The joint statement of Mr. Stepp and Mr. Spencer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
(Access the full report at http://www.americanprogress.org/
issues/green/report/2013/06/20/67454/turning-the-page-
reimagining-the-national-labs-in-the-21st-century-innovation-
economy/)
Chairman Lummis. Thank you, Mr. Spencer. I now recognize
Dr. Mason for five minutes.
TESTIMONY OF DR. THOM MASON,
DIRECTOR, OAK RIDGE NATIONAL LABORATORY
Dr. Mason. Chairman Lummis, Ranking Member Swalwell, and
Members of the Committee, thank you for the opportunity to
address you today. My name is Thom Mason. I am the Director of
the Department of Energy's Oak Ridge National Laboratory and I
also serve as a member of the National Lab Directors' Council.
The Council is concerned about many of the issues being
considered at this hearing, so I would like to thank the
Information Technology and Innovation Foundation, the Center
for American Progress, and the Heritage Foundation for
stimulating this broader discussion.
As context for my remarks, I would like to briefly describe
Oak Ridge National Lab. As DOE's largest science and energy
lab, ORNL has an R&D portfolio that spans the range from
fundamental science to demonstration and deployment of
breakthrough technologies for clean energy and national
security. Our mission includes both scientific discovery and
innovation. So we place a high value on what we call
translational R&D, coordinating basic research and applied
technology to solve compelling problems.
Work with industry is a key part of this process and we
have several tools for engaging with the private sector: The
Department's Work for Others program; Cooperative R&D
Agreements, or CRADAs; and the new Agreements to Commercialize
Technology, or ACT; as well as user facility agreements that
provide industry with access to powerful tools for R&D.
Building and operating user facilities is a signature role
for the national labs. These facilities and their associated
research programs add value to the innovation process. For
example, at ORNL we have combined CRADAs and cost-share
agreements to work with Caterpillar and Honeywell on a new
alloy that is now in commercial use. This work has been
advanced by neutron scattering measurements made at the High
Flux Isotope Reactor. And we are helping large and small
companies exploit the world's second-most powerful
supercomputer to develop new energy technologies.
Other nations recognize the value of this model. Not long
ago, the Director of the Institute of Policy and Management of
the Chinese Academy of Sciences said that China is making
progress in stimulating industrial innovation and beginning to
build world-class universities but does not yet have an
equivalent of the U.S. national labs. However, they are working
on it. They are planning to move the world's most powerful
supercomputer--you will note I said we were the second most
powerful--from Guangzhou to Dongguan where the China Spallation
Neutron Source is being built, and consideration is being given
to shifting several major research institutes to an area north
of Beijing where they can take advantage of a new synchrotron.
I think this demonstrates that the U.S. model remains
valid, but nevertheless, we should always be looking for ways
that we can improve.
You asked about potential improvements to the DOE, lab
relationship, management practices, and oversight functions,
and I believe that the GOCO, the government-owned contractor-
operated lab model, has served the Nation well. Its flexibility
has allowed the labs to respond to changing national priorities
and issues. At Oak Ridge we recently used this flexibility to
right-size our workforce, update employee benefits, and
streamline our operations. We recognized the budget pressures
that we all face. We benefited from having the kind of
relationship with DOE that was specified in the early
management and operation contracts which called for ``a spirit
of partnership and friendly cooperation.''
But as the working group found, the GOCO model can
certainly be updated and improved. The working group's
recommendations fall into three categories. With regard to the
first, transforming lab management, work to build a robust
Contractor Assurance System has laid a solid foundation for a
new look at stewardship.
The second set of recommendations speaks to DOE's
organizational structure. Secretary Moniz has made a commitment
to integrate the science and energy missions, and I believe
that is an excellent move. He clearly understands the need to
expand the kind of synergistic interaction between basic and
applied research that already takes place at the laboratory
level. And by combining at the Under Secretary level the R&D
programs managed by the Office of Science and the energy
offices under one Under Secretary, I believe that can be
further advanced.
It would also allow for the extension of some of the best
practices developed by the Office of Science in Laboratory
Management and strategic planning to the energy programs.
The last set of recommendations on moving technology to the
market, I think expanding the ACT mechanism would help the labs
work with a wider variety of partners. It could provide a
pathway to flexible pricing for proprietary R&D, which was
another recommendation. And for labs whose R&D portfolios
intersect the commercial world--which is not all of them, I
might point out--adding weight to tech transfer in our
performance plans would increase emphasis on this activity,
particularly if we also gain flexibility in establishing and
executing partnerships.
New metrics should address multiple aspects of industry
engagement, not just licensing deals and revenue, however. And
these metrics will need to take into account the high failure
rate for all new technology ventures. It would also be helpful
if our laboratory-directed R&D funds could be used to support
tech maturation.
In closing, the working group's goal of ensuring that
national labs remain effective and continue to deliver national
benefits to the taxpayers is one we all share. I look forward
to participating in a broad discussion of how we can best
obtain it.
Thank you again for this opportunity to testify.
[The prepared statement of Dr. Mason follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Lummis. Thank you, Dr. Mason. And now, we will
wrap up with Dr. Arvizu. You are recognized for five minutes.
TESTIMONY OF DR. DAN ARVIZU, DIRECTOR,
NATIONAL RENEWABLE ENERGY LABORATORY
Dr. Arvizu. Thank you, Madam Chair.
Ranking Member Swalwell and Members of the Committee, thank
you for this opportunity to discuss the importance of the
Department of Energy's national labs and the recent Reimagining
National Labs Report.
I am Dan Arvizu, Director of the National Renewable Energy
Laboratory in Golden, Colorado. I have been associated with
Federal research in the national laboratory system throughout
my mostly four decades' professional career. I started with
Bell Labs. I worked 20 years at Sandia National Laboratories,
and I have been at NREL for the past 8 1/2 years. I have also
spent time in the private sector. I am currently Chairman of
the National Science Board as well.
I am pleased that the Reimagining National Labs Report is
drawing attention to this critically important item of high-
impact research that can't or won't be supported solely by the
private sector. The report certainly does make a number of
sound and valuable recommendations, which is all the more
impressive given the distinct ideology and political
differences between the three organizations that sponsored it.
At the same time, the report readily concedes that the
three sponsors did not achieve agreement on the three
fundamental issues of the questions of funding levels, funding
priorities, and the role of government. So while the report
does offer a number of beneficial recommendations and I am very
pleased to discuss those, we should not lose sight of the fact
that we simply will not be able to optimize the impact of the
national laboratories without also addressing these key
questions of funding, priority and roles.
We shouldn't also overlook the fact that the overarching
missions of the national laboratories are a key strength of the
entire complex. The four DOE missions--national security,
science, energy, environmental management--remain as vital and
relevant to our Nation today as they ever have in our history.
I strongly believe that these missions should continue to be
the driving force in the continuing oversight and management of
our laboratories and an essential element in any management
reform efforts as well.
National security, science, energy, and environmental
management have determined the core competencies and defined
the key capabilities for the complex as a whole and each
laboratory individually. And these long-identified and well-
understood missions ideally should be the prism through which
Congress, the Department of Energy, and the labs themselves
make decisions on moving forward.
Let me take a moment to explain why the national labs, as
unique national assets, should be nurtured with robust and
continued investment. First, DOE laboratories are addressing
critical national security, energy technology, and fundamental
science. They conduct the world's leading scientific research;
ensure that America will have an abundant, affordable, clean
and reliable energy future; and protect the Nation by keeping
our nuclear deterrent reliable and safe.
Our national labs are the homes of scientific and
engineering capabilities that are the engines of innovation and
allow us to compete in a rapidly evolving global economy. These
capabilities tackle our long-term problems but also our near-
term emergencies such as the labs' responses to events like the
Gulf oil spill and the 9/11 attacks, and Hurricane Katrina, and
Super Storm Sandy.
Our national labs design, build, and operate unique
scientific instrumentation and steward research and user
facilities serving tens of thousands of scientists and
engineers from both the private sector and academia.
With respect to the report conclusions, I would strongly
agree that there is no bright line between basic and applied
research. If you want to be market-relevant, you can't separate
the crucial role played by applied research working in concert
with more fundamental research, as is frequently practiced
within our national laboratories.
Additionally, to further grow U.S. competitiveness, I can
clearly report that we should accelerate commercialization by
putting more emphasis on tech transfer in the context of the
mission objectives.
One of the principal conclusions of the report is that the
historical model of organizing and managing national labs as
government-owned, contractor-operated facilities is
fundamentally sound, but has eroded over time. I agree. The
Department and the lab complex should work together to
recapture the best elements of the original GOCO model, with
the Department giving laboratories direction on what needs to
be done and the laboratories being able to decide how to do it.
I am pleased to say Secretary Moniz is working to that end.
Additional flexibility and accountability are key to achieving
that objective.
Finally, the inconsistency of funding different labs,
different lab functions, and maintaining lab infrastructure is
a systemic problem that must be addressed. Apart from
designated user facilities, the reality is that labs don't
often receive the funding they need to adequately steward the
national capabilities on their campuses. This results in
inconsistent performance across the complex and it means that
industry and universities face obstacles and considerably
higher costs in partnering with laboratories.
In conclusion, I applaud the authors of the report for
underscoring a very important question, and that is how can we
best martial our national research resources to surmount the
critical challenges of our time and the uncertain challenges of
our future.
Thank you for your attention. I look forward to answering
any of your questions.
[The prepared statement of Dr. Arvizu follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Lummis. Thank you, Dr. Arvizu. And thank all of
you for being available for questioning today.
I am reminding Members that the Committee rules limit
questions to five minutes. The Chair will, after one other
housekeeping matter, start the opening round of questions.
I do, before we begin that, ask unanimous consent to enter
into the record a letter from Secretary of Energy Ernest Moniz
responding to a letter Ranking Member Swalwell and I sent him
in late June of this year regarding the national labs. And I
say that because it has only been two weeks since we sent him
the letter and we have already gotten a response. So we are off
to a great start in terms of our working relationship with the
Secretary and I want to compliment him on his prompt response.
Without----
Mr. Swalwell. Still hopeful he will take us up on our offer
to visit Wyoming and California.
Chairman Lummis. Indeed. And we are really looking forward
to a positive working relationship with the Secretary.
So without objection, so ordered.
[The information appears in Appendix II]
Chairman Lummis. And without further ado, the Chair
recognizes herself for five minutes in this first round of
questioning.
The Reimagining National Labs Report is primarily focused
on the structure of the 16 government-owned, contractor-
operated labs. However, there is this unique critter in the DOE
lab system. It is a government-owned, government-operated lab,
the National Energy Technology Lab, which conducts fossil fuel
R&D. I would like to ask each of you is there any reason that
the fossil fuel lab should not also be contractor-operated
empowering it to take advantage of the operational efficiencies
and flexibilities associated with private management and the
report's recommendations? When any of you like to respond to
that question?
Mr. Stepp, thank you.
Mr. Stepp. I will just jump in and say there is no
management operation or scientific reason why it shouldn't be
contractor-operated. I think maybe the lab directors can
provide more of a history and why NETL was--remains a GOGO, but
I think the recommendations we outlined in the report are fully
applicable to NETL moving forward in addition to making it a
contractor model rather than a government operation model.
Chairman Lummis. Mr. Spencer?
Mr. Spencer. Yes, I would certainly agree with that. If you
look at what NETL does, where its funding comes from, its
missions, to me it is unclear why the government is involved in
any of those things at all for the conventional fuels industry.
So at a minimum I think it is appropriate to make it a GOCO,
and one may make a strong argument for going even beyond that.
Chairman Lummis. Dr. Mason?
Dr. Mason. I could maybe offer a bit of a historical
perspective on that distinction because it does stand out as a
bit of an anomaly. It has its origins in the way that DOE was
created in the '70s in response to the Arab oil embargo when
the Atomic Energy Commission was broken apart into a regulatory
component, the NRC, and something that became the Energy
Research and Development Agency and ultimately DOE that
incorporated elements from other government agencies like
Interior.
And NETL came from that side of the equation, the Interior
side of the equation, so it had been operated as a government-
operated entity whereas the Atomic Energy Commission had the
GOCO tradition going back to the Manhattan Project. And I think
the reason it persists is because of the difficulty of the
transition, and that is really the challenge. It would be
complicated to do and, you know, there are lots of stakeholders
involved, and sometimes these things are hard to get to.
Chairman Lummis. Dr. Arvizu?
Dr. Arvizu. Yes. And that, by the way, would be a great
question to ask Secretary Moniz.
Chairman Lummis. Okay.
Dr. Arvizu. I think he clearly has some history with this
and I believe there has been evaluation of making that
conversion in previous times. And I think it would have to be
carefully considered based on mission objectives and things
that are part of that. But I agree with what my colleagues have
said.
Chairman Lummis. Thank you. While you have the microphone,
Dr. Arvizu and Dr. Mason, about how many of the WFO, CRADA, and
ACT agreements are your labs partner to would you guess?
Dr. Arvizu. Total number of agreements?
Chairman Lummis. The agreements for commercializing
technology, how many of those have you used roughly? I mean
very roughly.
Dr. Arvizu. Yes. I will give you a crisp answer, we have
over 130 active Cooperative Research and Development
Agreements. We have a total of 400 and change number of
agreements that relate to Work for Others, Technical Services
Agreements, and other forms of relationships that we have with
industry. It is part of our mission to work with industry. And
as a consequence, I think we probably have the lion's share of
those relative to other national labs.
Chairman Lummis. Okay. Dr. Mason?
Dr. Mason. I don't have the exact numbers but I do know
that we interact with close to 1,000 companies through a
variety of different mechanisms like the CRADAs, Work for
Others, and user agreements. ACT is a new mechanism. We
received approval to participate in the pilot for that earlier
this year, and so we are just in the process of negotiating the
first ACT agreements.
Actually, interestingly, one of the first ones may be with
our state government who found that the flexibilities embedded
were equally important to them although it was originally
imagined that it would be most valuable for industry.
Chairman Lummis. Thank you, Mr. Mason.
I now recognize Mr. Swalwell for five minutes.
Mr. Swalwell. Thank you, Chairman Lummis.
And I wanted to first start with Dr. Mason, and I
appreciate you appearing today as the minority witness.
I want to take a minute to touch on a critical part of the
laboratory workforce that may often be overlooked, and that is
the construction and maintenance workers. And it is essential
to have dedicated, trained maintenance workers who understand
the challenges of a day-to-day work that is conducted at our
national laboratories. And my question for you, Dr. Mason, is
what you can tell me about what we can do to ensure that we are
protecting these valuable employees and ensure that they are
paid a prevailing wage and that laboratories are not going
around Davis-Bacon requirements or using temporary workers to
not have to comply with prevailing wage laws?
Dr. Mason. Well, you know, first, any construction project
that we undertake is subject to Davis-Bacon, and so we go
through the Davis-Bacon determination to determine what is
covered work and then the covered work is subject to the
prevailing wage requirement. So that is built into how we do
construction projects.
In terms of the ongoing maintenance, which is not Davis-
Bacon, I can speak to Oak Ridge. Maybe my colleague can speak
to how things are at NREL. But about 15 percent of our
workforce is the crafts, and they are represented by the Atomic
Trades and Labor Council. We have a collective bargaining
agreement with them. And in fact the wages that we pay are in
fact probably slightly above the prevailing wage level that
would apply if it were Davis-Bacon work, as in the case of a
construction project.
And you are absolutely right. Every element of our
workforce is critical to getting the job done. And I would note
that, as I mentioned, in preparing to deal with budget
constraints, we have been looking hard at our wages and our
benefits, and in fact as all of the labs went through this
period with the pay freeze that has been experienced in the
Federal system, of course that did not apply to collective
bargaining agreements but we were able to reach agreement with
the ATLC where they undertook exactly the same austerity
measures that applied to all of the other staff because of the
recognition that it was important to protect jobs.
So I think we have a very strong relationship and all our
employees are paid at rates that are market-competitive. That
is actually one of the benefits of the GOCO model.
Mr. Swalwell. Great. Thank you, Dr. Mason.
Also, for Dr. Arvizu, how are the national laboratories
working with private industry? And what I mean is can you
describe the process for a private company to begin working in
an unclassified way with a national laboratory and what can we
do to expedite this process to increase the technology
transfer?
Dr. Arvizu. So there are a number of mechanisms that we use
and Dr. Mason has mentioned a few of those. The one that we use
mostly is the Technical Services Agreement because they are
very, very quick and they allow us to essentially put
agreements in place in less than two weeks and essentially that
is what we do.
They are--those are agreements that don't have intellectual
property sorts of expectations and so that doesn't need to be
negotiated necessarily.
The workhorse of our agreements though is the Cooperative
Research and Development Agreement, and we have a number of
those. The way industry comes in is they can come in under a
number of different pathways. They can cost-share research with
us. They can do a total funds and research opportunity. They
can be part of a DOE solicitation program that ultimately ends
up in a cooperative agreement. But we have standard agreements
that can be executed very quickly. We have others that if there
needs to be tailored negotiation terms, it takes a bit longer.
So it is in that method of trying to get to the most flexible
items possible that there is opportunity for improvement.
Mr. Swalwell. Great.
Dr. Arvizu. And so the ACT is one of those.
Mr. Swalwell. Thank you, Dr. Arvizu.
And, quickly, Mr. Stepp, one of the recommendations is that
Congress allow the labs to charge a market rate, which I think
is an interesting idea, but I am concerned that this could
crowd out smaller, more innovative ideas that don't necessarily
have funding behind them, users that don't have the funding
behind them. And do you fear that unintended consequence or
intended consequence? I hope not but----
Mr. Stepp. No, I don't think that is an unintended
consequence. No, I don't necessarily fear. I think there is a
concern--a larger concern that, say, smaller businesses are
currently unable to work with the labs in a large way, and so I
think what the--charging a market rate allows is actually
provides an incentive for the labs to do more of this type of
collaborative work with industry so they will have more of an
opportunity to work with those smaller entities. I think there
are other recommendations in the report and elsewhere that
would actually help smaller entities work with the labs. I
think that is not a one-size-fits-all. I think that--adding
that market incentive broadens the ability of the labs to work
with them, but there has to be complementary policies that go
along with it to help the smaller entities.
Mr. Swalwell. Great. Thank you, Chairman Lummis.
Chairman Lummis. I thank the Ranking Member and now yield
to the gentleman from Illinois, who is always at these
hearings. We so appreciate your valuable attendance. The Chair
now recognizes Mr. Hultgren.
Mr. Hultgren. Thank you, Madam Chair. Appreciate all you do
as well. Thank you for doing this. Thank you all for being
here. I do think this is a really important discussion and
appreciate each of you, the work that you have done in
different areas, specifically in the labs or even just helping
us figure out the future of our laboratory system.
I love serving on the Science Committee. I am very proud of
the new bipartisan National Science and Laboratories Caucus
that is growing and active. I absolutely believe in our
laboratories and am so proud of what is happening in our
laboratories and I know what is going to happen in our
laboratories.
So I think this is a very important discussion to be having
of what does the future look like? And I agree with many of the
conclusions that were set out in the study and--of giving some
more flexibility, getting less micromanagement from top-down,
making sure that we are protecting from pushing agendas through
our labs but instead allowing labs to do research.
For me, it really goes back to a core fundamental belief
that I have as a conservative is that government has to do what
the private sector can't do, and whatever the private sector
can do, we shouldn't do. And whenever--you know, there are
balances there. Certainly, when it is technology transfer, that
is where we struggle and figure out what is that line that we
should do and the labs should do and what should private sector
do.
I don't think there is any question or not much question at
least when it gets to basic scientific research. That is very
difficult if not impossible to put together a business plan to
sell to shareholders to do basic scientific research. And that
is something we have to do. So one of my frustrations and I
guess a challenge I would make as a follow-up to the study or
kind of next steps of the study is really recognizing--I think
we have wonderful lab system but also very diverse. You
mentioned it a little bit in the study but I think we have to
recognize that there are some labs that aren't positioned to
provide tech transfer. There are some labs that absolutely are
and should be kind of on the forefront of making the connection
with private sector. There are others who are doing the work
that our private sector can't do. And we need to keep doing
that.
So that is something I want to ask you about specifically
with laboratories. I am passionate about Fermilab that is in my
district. I am open about that, but other laboratories as well.
You know, I know Princeton Physics Lab, Thomas Jefferson
National Accelerator Lab, these other laboratories also have a
very specific mission that doesn't necessarily lend itself to
tech transfer but does absolutely have a vital role of basic
scientific research.
So just want to get your response on that of how you see
that fitting of those very focused mission labs. How does that
interact with your report, specifically Mr. Spencer and Mr.
Stepp?
Mr. Stepp. I will start with that. I think that is a really
great question. It is a key issue. It is one that we were very
careful to address in the report. In fact, we didn't propose
any reforms that were kind of a blanket approach, a one-size-
fits-all. For--I will give you an example. We want to make
technology transfer a bigger part of the annual evaluations of
the labs but we were careful not to specifically say what the
weights and how specifically that should be done because we
recognize each of the labs are different.
So in fact we really hoped that DOE and individual labs
would negotiate what those weights and so forth would be
recognizing that labs like Fermi are going to do less
technology transfer just inherent to the science than say an
NREL would actually do. So I think that is a key question. I
think that is built into some of the recommendations I would
make.
Mr. Spencer. Yes, that is a great question, and it is a
concern that has been brought up by a number of folks. There is
nothing in the report that prohibits funding for discrete
projects. So the way we would look at this is we are going to
continue to debate amongst us all what the--what should be
funded through the labs, what we decide are core government
missions. And these are the types of things that you are
talking about. So there is nothing in the report that prohibits
any of that or increases it.
What we are talking about is once we have a debate and you
have that funding in place, there is other stuff. What are the
mechanisms to better rationalize the lab infrastructure that is
left over? What are the mechanisms that we can put in place
that even on the basic science piece that we can help identify
earlier on what might be market--interesting in the
marketplace. So that is really where our recommendations focus
on, not on that core function. So all of those things that you
are talking about will still be there, assuming you win the
debates and the--you know, during the funding process.
Mr. Hultgren. Yes. Well, that is the challenge and I want
to be engaged in it. You know that. The people on the committee
know this that this is important. And I will close with this--
and you all know this as well. But one of my physicists, a lot
of my constituents are much smarter than I am, which I am
thankful for, but especially my physicist constituents. But one
of them said something that there is really two kinds of
science: Newtonian science and Edisonian science. The market is
excellent at the Edisonian science of taking great ideas, new
discoveries, and applying them to make our lives better and
make a profit, a good thing for everybody. Newtonian science,
the basic fundamentals of what makes something work, the market
has a trouble doing that type of research.
And so I just want to make sure as we are going through
this--and again, I will spend some more time going through the
research and would love to sit down with you more directly on
this and maybe even have something with the caucus or follow up
with the Committee to talk further on that, but just to make
sure again that if all else fails we are still doing the
Newtonian science, the new discovery, the things that are going
to inspire young people to want to join in and study STEM
education.
And I think that is going to be a really important thing
that I would also--and I am sorry I am going over, but real
quickly, that STEM education is so important and our labs are a
key part of STEM education. We need to be talking about that.
Kids are smart in the 7th and 8th grade. They are going to see
if we don't believe in science as a country, they are going to
choose to go into law or finance or something else. We need to
make sure that they see that there is an opportunity for them
to do research and discovery right here in America and our labs
are an important part for that to happen.
So thank you. Thank you for your generosity and time, and I
yield back.
Chairman Lummis. The Chair just isn't going to interrupt
that kind of passion and enthusiasm. Thank you very much, Mr.
Hultgren.
The Chair now recognizes the gentlewoman from California,
Ms. Lofgren.
Ms. Lofgren. Well, thank you very much.
And it was wonderful to hear Mr. Hultgren's comments and it
reminds me of the long-standing bipartisan support we have in
the Congress for basic research. It is good that we reiterate
that because, you know, we have had little dustups on other
things, but if we continue to have that solid support across
the political spectrum, I think our country's future will be
much brighter and it was good to hear a reaffirmation of that.
I wanted to talk a little bit about--I realize that the
focus really has been on Office of Science research, but
looking at the report on page 40 and 41 on the NNSA, it seems
to me--I mean over the years I have heard some concern
expressed on Office of Science management, and I am sure that
there can be improvements made. But it pales compared to the
criticism I have heard from--about NNSA management.
And as you point out on page 41 NNSA does have a national
weapons focus, but they also fund science. And I think if we do
not focus on the outrageous mismanagement at NNSA with the--
most of the money is there, and tie in the reform effort
because they have a huge role to play in science, as well as
weapons security that we are going to miss a big bet.
Now, I realize Armed Services also has--Committee has some
jurisdiction but we do, too, in terms of the science issue. And
I am wondering, Mr. Stepp and Mr. Spencer, I realize that
wasn't the focus of the report, but if you think that some of
the recommendations made--well, I will just give you an
example.
NNSA headquarters made a budget finding about Lawrence
Livermore National Lab in terms of what they could yield on
user fees that was completely made up. They never consulted
with the lab. They never investigated whether there were any
customers other than Russia or China, which for security
reasons would be problematic, and they just put a number in
there, which since it is--cannot be done, will result in the
layoffs of hundreds of physicists at the lab, which will
critically impact our ability to even run the Stockpile
Stewardship Program. Do you have a comment on that?
Mr. Stepp. Sure, this received significant debate over the
year-and-a-half we spent doing this project, and I will give
you my personal opinion. There is not one recommendation in the
report that I think shouldn't be applied to the NNSA labs. I
think ultimately we decided that because Congress is taking a
very unique and special look at NNSA and there is now a task
force that came out of NDAA and what they are going to propose,
that given all those complexities, we didn't want to get these
recommendations wrapped up in those things, but we do make the
comment in the report that ultimately spurring more technology
transfer, more efficient management, all of those principles
should be taken at NNSA and ultimately whether or not Congress
decides to reform the NNSA management structure, give it back
to DOE, do whatever it is, I think those principles hold for
whatever the new structure is going to be.
And ultimately, my personal view is that at the end of the
day all of the labs would be under unified leadership and we
wouldn't have to split non-NNSA and NNSA labs up as we
proposed. But I think we are happy to at least get 13 of the
labs under one unified leadership----
Ms. Lofgren. No, I understand.
Mr. Stepp. Right.
Ms. Lofgren. Are there other witnesses who want to comment
on that?
Dr. Mason. Well, certainly, you know, the NNSA labs do
contribute a lot to both the science and the energy missions,
and similarly, actually, you know, at my lab we do a lot of
work in support of nonproliferation programs for NNSA. And in
fact there is a very healthy interaction between some of the
technologies developed.
Dr. Mason. And so as Mr. Stepp said, although in areas of
national security, there are some things that you stay away
from tech transfer because----
Ms. Lofgren. Sure.
Dr. Mason. --you know, we call that espionage. There are a
lot of innovations that have flowed out of the national
security missions, just as was the case with GPS.
Dr. Arvizu. And if I could add to that, having spent 20
years in a national security laboratory, there is great synergy
between what the NNSA labs and the bulk of the national labs
do. The value and strength of the national labs is in their
cohesive interaction and we do a lot of work with Sandia as a
consequence of that.
Ms. Lofgren. Madam Chairman, I think this is such an
important issue in its joint jurisdiction between our committee
and Armed Services, and maybe we could discuss doing something
with Armed Services to take a look at this because I think if
we don't, the science mission gets lost in the shuffle and that
would really impair our Nation's future. So I thank you for
allowing me to ask these questions.
Chairman Lummis. I thank the gentlelady. The Chair now
recognizes the gentleman from Illinois, Mr. Lipinski.
Mr. Lipinski. Thank you. I would like to start off by
commending the authors for all the great work that went into
preparing this report. The fact that the report is co-authored,
as the Chairwoman said, is co-authored by experts from think
tanks across the ideological spectrum as well as the ITIF is
really a testament to the wide appeal that I think a lot of
these recommendations are going to have, and I certainly think
there are a lot of very appealing recommendations in there.
I am especially interested in the recommendations regarding
technology transfer at the labs. I have long been a proponent
of facilitating technology transfer from all federally funded
scientific research which goes on at research universities and
also the DOE national labs because they are a very important
part of that. And I think we have in the past overlooked that.
I think our labs do a wonderful job and I am not just saying
that because Argonne National Lab is in my district, but we
should always look for ways to make their work on technology
transfer easier.
As I said, when the report came out, I intend to work with
the authors to implement some of the recommendations in the
report.
I want to start out and ask--talk about the ACT agreements.
I know there has been some talk about that already, but I know
that these agreements are intended to provide a flexible
framework for negotiations of intellectual property rights to
facilitate the technology transfer moving from the lab to the
marketplace. Right now, it is a pilot program established last
year by DOE and I understand only a few labs are able to enter
into ACT agreements at present. So I wanted to hear from the
panel both from Mr. Stepp and Mr. Spencer, also from the
national lab perspective, from Dr. Mason and Arvizu, do you
think that the ACT agreements could be utilized by all DOE labs
through--to facilitate technology transfer? Let's start with
Mr. Stepp.
Mr. Stepp. Absolutely, yes. I think ultimately as a group
when we were discussing what our ideal collaborative agreement
will look like, ACT comes relatively close in terms of its
flexibility, so I see no reason why all the labs can't use it.
Mr. Spencer. Yes, I would just add to that that as that
expands, however, we need to make sure we put a premium on
transparency. That is going to be really important if what we
recommend is implemented and we give a lot of flexibility to
how these interactions take place. It is going to be really
important that we are able to see from an oversight perspective
exactly what is going on there, so we need to make sure we
couple the additional flexibility with maximum transparency.
Mr. Lipinski. Thank you. Dr. Mason?
Dr. Mason. As you know, ACT is currently a pilot and that
is partly because it is a new thing, and I think there are some
labs who elected not to participate in the pilot not because it
would be impossible for them to implement but just simply
because they wanted to wait and see how it worked out. So my
expectation is that if the initial feedback is positive in
terms of fundamentally faster time to agreement, and that is
really what ACT is about, then that will encourage some of the
labs who haven't participated in the pilot to join in.
You know, in the end, the way that ACT works is it allows
the contractor who operates the lab to serve as a buffer
essentially between what looks like a more normal business-to-
business agreement and the requirements of dealing with the
Federal Government. And so the contractor managing the lab has
to be willing to serve as that buffer. That involves
shouldering some risk and so I think that is why in some cases
some of the labs have chosen to sort of wait and watch and see
how the pilot goes.
Dr. Arvizu. And I agree certainly with what has been said.
In addition, I think it is another tool in the toolbox. I think
the more tools we have, the flexibility we have, the better it
is. Even in the pilot there are some provisions that probably
need to be revisited, one of which is that we cannot do an ACT
agreement with an entity that is receiving government funding.
And so we need to do something to relieve that constraint
because that really eliminates a great deal of companies, Small
businesses that have an SBIR (Small Business Innovation
Research) report--have an SBIR grant, for instance, cannot
participate in the ACT. It eliminates that as a particular tool
for that group of companies and entities.
So there are ways to improve it but overall I think there
is no reason why this can be expanded to all the national labs.
Mr. Lipinski. Thank you. Mr. Spencer?
Mr. Spencer. It is worth mentioning that we addressed some
of those--that thing specifically in the report, and it is
also--I would like to just throw out there that, you know, we
think it is really important to introduce that those market as
well in terms of fee bonuses and setting prices and that sort
of thing to help facilitate these sorts of interactions.
Mr. Lipinski. Thank you. I would just throw out and put in
a question for the record asking about increasing the
importance of the weights put on technology transfer in the
report cards for DOE labs. But I know my time is expired, so I
yield back.
Chairman Lummis. Thank you, Mr. Lipinski. We do have time
for a lightning round, and since there is interest among
members of the committee, we will do that now. Each Member will
have three minutes, so if the clerks will set the clocks for
three minutes, I will begin.
And in my first question is a segue from Mr. Lipinski's
questions. Can you tell us how the ACT model is--gives you more
flexibility or is a little different from CRADAs and other
models that you have used in the past?
Dr. Mason. In a Work for Others agreement, which ACT is
fundamentally an alternative to, there are a number of
provisions that are required because even though the labs are
operated by contractors, they are government labs. And so one,
for example, is that essentially the government always has to
be in a zero-risk position financially so that if there was a
cost overrun on a privately funded project and you did not have
funds in hand to cover it, that would be an anti-deficiency,
which is obviously not a good thing. Someone can go to jail and
so forth. So we require payments in advance, 90-day payments in
advance. We cannot provide any performance guarantees.
So the contract that we would propose to a private sector
entity is: pay us in advance, we will do the best we can, and
if we can't get it done, you are out of luck. It doesn't
resemble what looks like a normal business contract where you
might guarantee a price and a deliverable. ACT allows us to
sign that kind of contract because the contractor will shoulder
that risk. So the government is still protected. There will be
no anti-deficiency. If it takes longer, if it costs more, the
contractor will shoulder that burden.
In return, the contractor is allowed to charge an increment
on the cost of the work to cover that risk, and that gets to
the incentive that Mr. Spencer recognized. So the contractor
will have an incentive to go into those sorts of contracts but
the government will always be held harmless. The hope is that
allows us to reach agreement quicker because private sector
companies will look at a contract that looks like it has a
deliverable, it has a price, and then we have more flexibility
in IP as well.
Chairman Lummis. They just called votes in a complete
surprise to us. So I am going to give it--but we do have time
for each Member to ask one question. So I will yield the
questioning to Mr. Swalwell.
Mr. Swalwell. Great. Thank you, Chairman Lummis.
Dr. Mason, other government agencies, universities,
industrial laboratories are regulated under OSHA as far as
workplace health and safety conditions, and DOE is unique and
maintaining its own environmental safety and health
infrastructure for its national laboratories. Do you believe
that the safety and productivity of DOE's national laboratories
may be better served by shifting and moving the labs to OSHA
regulation rather than regulation by the Department itself, and
if so, why?
Dr. Mason. This is actually a topic that the National Lab
Directors Council has looked at in the past, and we have
recommended that this should be something the Department
seriously consider because we do believe there is an
opportunity for cost savings. And I think that the thing that
one needs to be very clear on is we are absolutely committed to
world-class safety performance in our institutions. So we are
not talking about backing away from safety or watering down
requirements. It is really a question of what is the most cost-
effective way to achieve that safe workplace.
And, you know, if you look at many of the safest places to
work in America today, our top-performing companies that are
regulated by OSHA, I believe there is no reason that we can't
achieve that same thing just as we do now in the current self-
regulated environment that DOE operates.
Mr. Swalwell. Great. Thank you, Dr. Mason. Thank you.
Dr. Arvizu. May I ask at a little preamble to that or
postamble to that, we have looked at that problem before is
that OSHA will not take on that responsibility without the
facilities of the DOE being in compliance with their
requirements. And when it was examined last time, it was over
$100 million of investments required in order to get into
compliance so that could actually happen. So we need to be
cognizant of the fact that that is a barrier to actually
implementing that particular type of a structure, which I agree
with. It is just hard to do unless we have the infrastructure
investments required to bring our facilities up to compliance
conditions.
Mr. Swalwell. Thank you.
Chairman Lummis. Thank you. And Mr. Hultgren?
Mr. Hultgren. Thank you. Real quickly, I know Secretary
Moniz had sent a letter to the Chairman and Ranking Member and
in the letter had referenced the national laboratory directors
identifying 20 specific areas for improvement. Department--it
went on to say that the Department had taken action on 14 of
those, action still pending on two, agreement to defer for four
remaining items. I wonder if you could talk briefly about that
or if you could kind of get us some information specifically on
those 20 areas. I know I haven't seen those. I am not sure if
other Members have seen those. So I wonder if you can comment
on that and maybe also follow-up in writing for us of some
specific areas of improvement that have been identified by lab
directors.
Dr. Mason. Yes, we will be happy to provide that
information.
Just a very quick comment, this came out of an exercise
that we called the Burdensome Policies White Paper that we did
a couple years ago at the request of Secretary Chu. I think he
was a little bit tired of lab directors coming in and
complaining that it was too hard and too expensive to get our
jobs done. And he said, ``I need specifics. I need specific
examples of things that I can work on.'' And so, as a group, we
collected ideas and synthesized them into this burdensome
policies document, which we will share with the Committee. And
DOE has begun working on those and in fact--you know, not in
the government transformation or changing things, but many of
the reasons that we feel frustrated in terms of effectiveness
and cost are not because of big things. It is a layering over
decades of a whole bunch of small things and we have got to
work them away. So we will provide that to you.
Mr. Hultgren. Thank you. I yield back.
Chairman Lummis. I think the idea of a burdensome practices
memo would be good for our leadership as well. I--Mr. Lipinski.
Mr. Lipinski. Thank you. I will get back to what I had--was
talking about at the end of my first round there. I will just
briefly say right now technology transfer activities usually
account for about--for less than five percent of the overall
grade for a lab on report card, and--but the report advocates
raising the priority of technology transfers to the same level
of importance as other items like business systems and
laboratory leadership. So I just wanted to ask Dr. Arvizu and
Dr. Mason about the report's recommendations about raising the
weight that technology transfer is given on these lab report
cards, what your thoughts are on that. Dr. Arvizu?
Dr. Arvizu. Yes, so the first thing I would say is that not
all labs are the same and Dr. Mason can talk about the Office
of Science labs. Certainly in the case of NREL, we have had as
a--essentially one of the major elements of our Performance
Evaluation Management Plan a topic called Accelerating
Commercialization and Increasing Deployment. So it started off
three years ago. It was 25 percent of our grade. Last year, it
was ten percent of our grade. This year, it is 15 percent of
our grade, so it is kind of moving around a little bit, but
there is actually a line that does that. I think it really
depends on the mission of the specific grading entity. In our
case it is EERE. This is what they care about and it is part of
our grade, but it is not true and uniform across the other
labs.
Dr. Mason. Yes, I think it does--and I think it is noted in
the report--need to be varied depending on the nature of the
mission and the lab, but I think overall the reality is that if
you place a high priority on something, that is what will
happen. And in many cases I think there would be an advantage
to elevating the priority.
Recognizing that it is not just about licensing agreement,
there are many different ways we can interact with industry
through our user facilities and even in the fundamental science
labs like Fermilab, you know, picking up on the remarks from
Representative Hultgren. You know, there are things that
Fermilab has done to support the development of proton therapy
for cancer therapy that have a tremendous impact, it may not
take the form of a licensing agreement with industry but there
are now proton therapy centers being built around the country
modeled on Loma Linda. There was a key role that Fermilab
played in putting it together.
So there are many different ways to measure it, but I think
if you do elevate the priority, it will get more focus at the
labs.
Mr. Lipinski. Thank you. And I want to thank the Chair for
holding this hearing. I think it is very important that we look
at this report and follow up also on some of the
recommendations. So thank you.
Chairman Lummis. I thank every member of this committee and
our staff. I thank our witnesses.
It is really encouraging that the same week of Secretary
Moniz's announcement the think tanks released a report entitled
``Turning the Page: Reimagining the National Labs in the 21st
Century Innovation Economy,'' particularly encouraging because
you put out a 70-page detailed report. It is a reminder that we
can do things on a bipartisan basis where we see opportunities
for policy improvement. The report included a bevy of bold
recommendations including enhanced technology transfer,
reducing micromanagement and bureaucracy, changing the DOE
organizational structure and fundamental relationships with the
national labs. Since collectively they manage more than $10
billion worth of scientific and national security, it is
important that we give thoughtful consideration to these
issues.
We recognize that the labs sponsor cutting-edge basic
research and manage world-class user facilities. And it is a
driving force behind the U.S. global scientific leadership and
economic competitiveness. So we are looking very forward to
continuing these discussions. We thank Secretary Moniz for his
response to our letter so promptly. We are delighted with the
work you have been doing to advance a more robust scientific
exploratory environment in a way that unleashes the American
competitiveness.
I thank the witnesses for their valuable testimony and the
members for their questions. The members of the committee may
have additional questions for you, and we will ask you to
respond to those in writing. The record will remain open for
two weeks for additional comments and written questions from
the members.
Again, with our considerable thanks, the witnesses are
excused and this hearing is adjourned.
[Whereupon, at 11:05 a.m., the Subcommittee was adjourned.]
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