NBS also has an active and well received program developing standard reference materials for the clinical laboratory. The measurement services could be effectively used by industry now. Question. Section IV of the Bureau's proposal lists numerous (19) "near-term measurement objectives." Is the Bureau being realistic in its expectations of studying this large number or projects, or should the Bureau attempt to be more focused? Answer. NBS has correctly identified important near-term measurement objectives. Whether they can all be accomplished turns on funding and research cooperation. Depending on them, a narrower focus may well be necessary. The needed priority setting should be done with input from industry and academia and our industry looks forward to cooperating with NBS in identifying the most important measurement objectives. Senator GORTON. Mr. Samuel, what would you describe as the special or unique services, equipment, personnel expertise, et cetera, of the National Bureau of Standards which can help the biotechnology industry solve its measurement problems? Mr. SAMUEL. I think that probably one of the things that is most needed is process technologies, and NBS has expertise in this area. They have developed that in other areas, and we think that some of that would be applicable here. NBS has engineering capacities, and they are very good at helping us develop some of the things that would enable us to transfer research processes into industrial processes. We think they could be helpful by virtue of NBS's unique interdisciplinary approach. NBS's bridges to industry and academia give NBS widespread credibility and will speed the diffusion of technology. I must say that looking over the possible list of things that NBS could be involved in, I find it a rather long menu. I think some priority setting would be necessary, and that is one area in which I think industry and academia can cooperate with NBS in setting those priorities and making sure that they bring the right kind of personnel to bear on our problems. Senator GORTON. The next question is for both Mr. England and Mr. Hume. I would like to have each of you comment or extend your comments about the deterioration of the Bureau's maintenance and dissemination of measurement services. Could either or both of you give an example of a deficiency in the measurement services of the Bureau at the present time and what the cause of this deterioration has been? Mr. ENGLAND. Mr. Chairman, one area that I could address as an example, I suppose, would be the area of microwave and millimeter wave technology, which we feel has been seriously neglected by the Bureau, and to such a degree that recently-within the last several months-the IEEE organization put together a special committee, and we are as an organization-cooperating with that committee which is identified as Promote National Microwave Standards, PNMS. They are trying to focus in on this particular critical issue of not having adequate standards for millimeter wave technology, which is, of course, a much needed area. In this particular area, the people that have been investigating this are indicating to me and to others that they feel that the amount of money needed right now just to cover this one critical area of millimeter wave technology is $5 to $6 million each year for the next 5-year period. That is also part of my written record. A week ago, just before I came to Washington, I was informed by some members of that particular committee that they have now reestimated or reprojected that number to be $8 million per year over the next 5-year period, which would just cover that one area of millimeter wave technology standards and the dissemination of that technology back to industry. The development of standards, in my opinion, and certainly a lot of those that have worked in measurement science, is certainly a scientifically intensive activity. It has to be parallel with the development of new technology. And if you are trying to play a catchup role in that area, it is very difficult. It has to be almost concurrent, and most projections would indicate that the leadtime for that development at the Bureau typically has run between 3 and 6 years, more like 5 in this particular example that I gave you. Thank you. Mr. HUME. Senator, I have a couple of examples I would like to share with you. Most recently, the National Bureau of Standards is contemplating the change in the value of the U.S. legal volt by some nearly nine parts per million. Now, that change would certainly in one sense be beneficial to this country because it would bring us more in line in terms of the value of the volt with other major European trading partners and Japan. But the fact that we would have a shift of nine parts per million in that value is a pretty clear indication that there is a lot of room to be improved in maintaining the values of the basic standards that the measurement systems, the standards for our products are based on. There is considerable room for improvement in those standards. And as we look over the last 10 or 15 years, we see tremendous improvement in the industrial capability, but the capability at NBS with the services that it is offering have been relatively flat in terms of any improvement in the performance level. So now, when we talk about a change in the value of the volt of nine parts per million, it affects the number of instruments which industry has out that are presently calibrated that have to be recalibrated based on that change of nine parts per million by a significant amount. We have somewhere over 100,000 products in the marketplace today that are installed in customers' facilities that will require recalibration based on the change in the value of the volt. And that is a fairly significant change, and we believe there needs to be considerably fundamental more attention placed in this basic area of measurement standards. Another I think good example is the fact that we are still in the process of taking our manufacturing systems apart and submitting the pieces essentially of the manufacturing process into a calibration lab for calibration. And now we know as we get more capable and more capable all the time it is impossible to characterize the performance of any one of the pieces independent of other elements of the manufacturing system. So we really need the capability to measure and test those manufacturing systems in site or in place, in location in the operating environment in which it is to be used. And we do not currently have that capability except in some very limited areas from NBS. Senator GORTON. Thank you. Senator Gore, I have a markup of the Small Business Committee. Could I ask you to take over for any questions which you or Senator Rockefeller might have, and offer Senator Rockefeller the opportunity for an opening statement as well. Senator GORE. Mr. Chairman, I would be glad to. I will, in light of the time, simply submit my questions in writing. If these gentlemen would be so kind as to respond in writing, I would appreciate it. Senator Rockefeller. Senator ROCKEFELLER. I have neither an opening statement nor do I at this time have questions, Mr. Chairman. Senator GORTON. Well, thank you both very much. I also will have additional questions to submit to each of you in writing with hopes that you can help us with this authorization bill. Thank you all for coming. We are adjourned. [Whereupon, at 11:18 a.m., the hearing was adjourned.] ADDITIONAL ARTICLES, LETTERS, AND STATEMENTS STATEMENT OF D. BRUCE MERRIFIELD, ASSISTANT SECRETARY OF COMMERCE, Mr. Chairman, we are proposing authorization for the Office of Productivity, Technology, and Innovation, or OPTI, of $1,762,000 in FY 1986, compared to $2,335,000 in FY 1984 and $2,460,000 in FY 1985. The money for fiscal 1986 is to be used for a phase out of OPTI to a small executive staff of about three people beginning in fiscal year 1987. We believe that termination of OPTI is appropriate now since it has successfully competed its major tasks, specifically: By the passage of the National Cooperative Research Act of 1984, a major antitrust barrier to cooperation in R&D among U.S. companies has been removed; OPTI's Industrial Technology Partnerships Program has helped to stimulate over $2 billion of private sector R&D financing through the use of research and development limited partnerships (RDLPs) in the last three years, compared to only $200 million in 1981; and OPTI's Federal Technology Policy program succeeded in drafting and obtaining approval of a Presidential Memorandum that makes contractor ownership of inventions government-wide policy. OPTI also helped to draft provisions that were included in P.L. 98-620, which extends the principle of contractor ownership to some of the largest government-owned, contractor-operated laboratories. I will continue to work to strengthen the contribution of technical innovation to U.S. competitiveness, economic growth and new job formation. Following are some examples of specific activities that we would expect to continue within the limits of my resources: we will function as the Department's focal point and advocate on policy matters involving productivity, technology and innovation; we will assist the private sector to form cooperative R&D ventures, especially in leapfrog technologies where the R&D efforts cut across traditional industry lines and where Federal laboratories can contribute expertise; and we will continue to foster international cooperative R&D ventures between U.S. developing nation companies based on the very successful BIRD Foundation model with Israel. The National Technical Information Service (NTIS) will continue to report to me. Self-funding, information clearinghouse activities facilitate the transfer of technology to U.S. firms and are of crucial importance in enhancing the ability of U.S. business to compete more effectively in world markets. Dr. Caponio, the Director of NTIS, will describe several proposals for technical changes to the NTIS organic legislation which will permit it to be even more efficient and effective in carryout out its important mission. In conclusion, Mr. Chairman, I would like to emphasize that this Nation's continued leadership in the field of technological innovation is critical to our economic growth, the development of sustainable new jobs, and the competitiveness of our industry internationally. We must recognize that more than two-thirds of U.S. industries-whether actually involved in exports or not-now compete in world markets. A simple, yet often overlooked, point is that when a U.S. manufacturer sells his product to someone in the U.S., he is, in fact, competing not just in the U.S. market but in the world market. To regain and maintain world leadership, the United States_must_capitalize more effectively on its natural advantages, especially its great breadth and depth of scientific research and its unparalled entrepreneurial culture. To do this, we must continue to remove barriers and provide incentives for increased productivity and innovation, and to catalyze cooperate efforts. Thank you, Mr. Chairman. STATEMENT Of Joseph F. Caponio, Director, NationAL TECHNICAL INFORMATION SERVICE, Department of COMMERCE Mr. Chairman and members of the Subcommittee, thank you for this opportunity to discuss the programs of the National Technical Information Service (NTIS), to request the authorization of appropriations for NTIS for fiscal years 1986 and 1987, and to request changes to our organic legislation. The NTIS enabling legislation, which was passed in 1950, (15 U.S.C. 1151–1157) directs the Secretary of Commerce to establish and maintain within the Department of Commerce a clearinghouse for the collection and dissemination of scientific, technical and engineering information. Section 3 of the Act requires that costs of the clearingshouse be paid from sales income, not from tax-supported Congressional appropriations. In 1970, NTIS was established as a primary operating unit of the Department to serve as that clearinghouse. NTIS makes domestic and foreign Federal technological, scientific, economic and engineering information accessible to business, industry, government, and other interested individuals and organizations. Use of the technological information that NTIS disseminates serves to: improve the economic health and growth of U.S. business and industry; increase productivity and innovation in the U.S.; improve the competitive position of U.S. firms in the world marketplace; and promote the use of foreign research results by U.S. industry. NTIS serves as the primary source for the public sale of Government-sponsored research and engineering reports, reports on Federally-sponsored research in progress, machine-processed data files, and computer programs. As this central source, NTIS provides a full array of information products and services designed to encourage wider use of technology. In FY 1984 NTIS: Acquired and made available approximately 72,000 (including 21,000 foreign) new Government-sponsored research and engineering reports. Sold approximately 490,000 copies of documents in paper form and 2,500,000 in microfiche. Fully recovered by revenue from sales the costs of providing information products and services which were in excess of $30,000,000. Mr. Chairman, the NTIS clearinghouse operations are 100 percent self-supporting. However, there is one program within NTIS that receives appropriated funds. PATENT LICENSING Our Patent Licensing Program is the Government's most active patent licensing program in terms of numbers of licenses and royalties received. We evaluate new technology developed within Federal laboratories to identify inventions with possible commercial potential and promote selected inventions to U.S. industry. Our foreign filing activity assures the protection of U.S. Government-owned technology from unrestricted, uncompensated use by foreign competitors of U.S. industry. In FY 1984 the program successfully: Negotiated 36 patent licenses including 14 exclusive licenses. Paid cash incentive awards to 96 Federal employee-inventors. The program has demonstrated that patent licensing is an important mechanism for transferring technology from Government laboratories to the private sector. Under licenses granted, licensees pledge millions of dollars of private investment in R & D and new plant construction, creating new products, businesses and jobs. Receipts collected under patent licensee currently exceed the cost of the licensing activity. Although NTIS charges and retains fees to partially cover the direct cost of licensing, royalty receipts (of $834,000 in 1984) are returned to the U.S. Treasury. Therefore an annual appropriation is required to partially fund the program. Appropriated funding for the program was $502,000 in FY 1984 and $545,000 in FY 1985. For FY 1986 we request an authorization of $537,000. CHANGES TO ORGANIC AUTHORITY Mr. Chairman, I would like to discuss two requested changes in NTIS' enabling legislation as presented in the NBS Authorization Bill submitted by the Administration for FY 1986 and FY 1987. Section 4(a) of the proposed legislation would permit NTIS to obtain printing services at the most economical rates possible. While we envision most of NTIS's printing requirements would still be met through the Government Printing Office, the proposal would offer the flexibility of having printing done elsewhere. The result would be improved control for NTIS over scheduling of production, better quality control, and lower costs. The result for the NTIS customer would be a more timely, higher quality product at lower prices. Section 4(b) of the proposed legislation would give NTIS explicit authority to acquire capital equipment and inventories from receipts. In a recent review by the General Accounting Office, e were advised that our current authority does not specifically permit the acquisin of capital assets (equipment and inventories). NTIS' current authority (15 S.C. 1153) stat the services and functions provided therein shall be |