The same scientists and engineers are our technology transfer agents at NIST. So, when industry comes to NIST with a problem to be solved, they may never talk with anyone from an office of technology transfer. Most likely, they will work hand in hand with a scientist or an engineer who is an expert in that particular field. We have learned also that good programs start with a thorough knowledge of industry's needs. Because our mission is to serve industry broadly, we start a program by first finding out what it is that industry needs. As a result of this early interaction, we know that as the project progresses, industry is waiting for the results, rather than picking through the offering of added-on technology transfer programs.

We have an extensive evaluation system unparalleled in the Federal laboratory system that provides for regular detailed oversight and review of our programs. This oversight is by senior executives from industry and academia. We have nearly 240 advisers on review committees so that there is one outside adviser or reviewer for every seven NIST scientists or engineers.

It is not in my statement, but I would like to note, we have a Statutory Visiting Committee on Advanced Technology made up primarily of industry people, and that committee has been doing a thorough review of our CRADA activities. Hopefully, next week when they meet, they will be adopting their report on a review of the CRADA Program at NIST. They have been actively involved in the program and in the design of it.

We have learned that not all firms can use technology fresh from the laboratory. We have also learned that the technology straight from the lab is not the only thing that industry needs. They need more than technology. The small- and medium-sized firms need to adopt commercially supported, off-the-shelf technology, in addition to the technical support, management development, education training programs, and training for their own workers, and even their financial consultants.

NIST is working with and enjoys the support of almost all the Federal agencies with an interest in science, technology, or manufacturing, and we see these relationships are mutually beneficial.

I am going to skip a whole portion of my formal statement. I just want to note, Mr. Chairman, that all of the DOE labs that are sitting at the table here, we at NIST have been working in collaboration with them for many, many years on many of the technical problems of mutual concern to their mission, and we have also been drawing on their expertise.

In fact, I just was talking to Dr. Narath before we sat down. We have our own people right now; in fact, I think they are on their way to Sandia to explore other ways of accelerating those efforts and drawing on each of our expertise technically and in the outreach arena.

NIST also has a special responsibility-I want to note this particularly because of your interest in small business, Mr. Chairman-we have a responsibility to promote quality and quality awareness, and the primary focus for this activity is the Malcolm Baldridge National Quality Award Program. The program has changed the way that American firms view quality.

Small business interests in the Baldridge Award and the use of its criteria has grown considerably. In 1988, 18 percent of the applicants for the program were small business. In 1992, approximately 50 percent of the applicants were small business. In 4 out of the 5 years that the award was given, small businesses have been winners of the award.

I will now just note very briefly some other programs we have going, and the details on them are included in my statement. Number one, we have an active interaction with the Small Business Administration. As a matter of fact, Mr. Chairman, the program you mentioned in your opening remarks, the Technology Access Program, the TAP Program, we have entered into an agreement and have been helping them carry out that program and have been instrumental in running that program that made the awards to Missouri, Oregon, Pennsylvania, Texas, Wisconsin, and Maryland.

We have also implemented with the Small Business Administration an agreement which brings our manufacturing technology centers into hand-in-hand operation with them so that small businesses can look pretty much to one-stop shopping for both technology and the financial assistance. Details on that are included in my long statement.

Our Research Associate Program started over 90 years ago. NIST had been successful in collaborating with industry principally through that program since we were organized, and since 1988, when the Technology Transfer Act authorized the use of the CRADA's, we began to use the CRADA as the instrument for the collaboration.

We did not start with the CRADA. We were in this business well before that. Once our scientists, engineers, and industry technical personnel decide there is a mutual need for a collaborative effort, we use a standard NIST agreement. We have our own standard FIST agreement, and we continue to revise it. It requires minimum legal involvement, and we can resolve differences very rapidly. Our average time for processing a CRADA is 2 months, and we have gotten some of them through in as short a time as 2 days.

NIST has active CRADA's with partners in 31 States, the District of Columbia, and Canada. Our CRADA's range from one-on-one collaborative efforts to the multiple party consortia. We have entered into 246 CRADA's. There is one active CRADA for every 10 NIST scientists, and about 40 percent of our CRADA's are with small companies.

When I say small companies, I am talking about companies where you can count the number of the people in the firm on the fingers of your hand, so, we are talking about really small companies that we are working with.

An example of one such CRADA is a CRADA involving a small business in the Portland, Oregon, area—your area, Mr. Chairman-Analogy, Inc., which incorporated a NIST developed model of a class of electronic components into computer software to market to circuit designers.

Our Automated Manufacturing Research Facility, although all of our NIST laboratory programs contributed one way or another to U.S. competitiveness, our AMRF, as it is referred to, is an example

how one agency works cooperatively with industry, other Government agencies, and universities. Since 1982, the Navy has provided a major support for the AMRF, and they have even designated the AMRF as a center for excellence in automated manufacturing.

I would just like to note, involved in that activity, AMRF, are 50 companies that have contributed guest research staff that worked side by side with our people, and more than 50 firms have loaned or donated equipment for this operation.

The Advanced Technology Program, which is unique to NIST, is authorized at NIST, focuses on projects that are potentially high payoff but too risky for individual firms, small firms especially, and sometimes even groups of companies to undertake. The ATP provides research and development grants in the form of cooperative agreements to individual companies, independent research institutes, or joint ventures. The projects supported by ATP involve R&D at a stage between basic research and specific commercial product development.

Small businesses are very successful in applying for and receiving funding of grants under the ATP Program. About 60 percent of all the applicants in the first two competitions were small businesses. A quarter of the joint venture applicants were led by small business, and in the two completed competitions, 20 of the 38 projects funded are led by small businesses.

Our Manufacturing Technology Center Program, another one that you are familiar with, sponsored by NIST in partnership with State and local organizations, is providing expert hands-on assistance to small- and mid-sized local manufacturers as they make their transition from yesterday's manufacturing operated equipment to today's computer-controlled manufacturing systems.

The MTC's concentrate their efforts on boosting the performance of small manufacturers. That is the group that we have incorporated into working with the SBA.

Mr. Chairman, there are numerous other examples of NIST collaborative efforts with industry and State and local governments that I could describe. Due to time limitations, I will not. I have attached to our testimony a list of various information sheets and other outlines. I will just note one in particular: A fact sheet on our cooperative research opportunities for industries at NIST which discusses the CRADA system at NIST. It also lists many of our industrial partners. I think you will see that spectrum of companies spans from the largest to the smallest.

With a cultural environment that has made working with industry a norm, we have these mechanisms that augment our normal work efforts through which NIST carries out its mission of helping U.S. industries improve it is processes and products. Mr. Chairman, I will stop there.

Chairman WYDEN. Very helpful. We appreciate all the coopera

tion.

[Dr. Kramer's statement, with attachments, may be found in the appendix.]

Chairman WYDEN. Let's move now to Dr. Narath.

TESTIMONY OF ALBERT NARATH, PRESIDENT, SANDIA
NATIONAL LABORATORIES

Dr. NARATH. Mr. Chairman, it is my pleasure to be here. This is a very significant period in our history. I can't think of any time when there has been a greater need to marshal all of the technical resources of our Nation and bring them to bear on the competitiveness issue. I will try to make my remarks as short as possible. I would like to say a few words about Sandia. You may know that we were established back in 1949, and, since 1979, we have been a multiprogram laboratory of the Department of Energy. Our budget is roughly $1.4 billion; it employs some 10,000 people, including onsite contract support.

We see our mission to be quite broad; it is in the area of national security, and it includes such items as military security, energy security, environmental integrity, and, very importantly for us in this period, competitiveness of the Nation.

It won't surprise you to hear me say that technology transfer, or more generally, support of U.S. industry has become a very rapidly growing activity at our laboratory based on a rather broad set of core technologies that have been developed over the years. As a matter of fact, our ability to contribute to U.S. competitiveness rests very firmly on a set of differentiating scientific and technological strengths. These lie in the area of advanced materials, microelectronics, photonics, high-performance computing and networking, engineering sciences, and pulsed power.

I want to remark that these competencies have been developed to a large extent under DOE defense program sponsorship. It goes back many years. But our recent technology transfer experience, I think, demonstrates very convincingly that these technologies are very generic significant, equally useful in the defense and civilian sectors of our economy.

We began developing CRADA's some 18 months ago. At that time, the necessary enabling modification of our contract was first executed. Over the 18-month period, with all the difficulties that have been laid before you today, we have managed to execute some 71 agreements. They have an aggregate value of almost $200 million; 62 percent of that support comes from industry in the form of cost-shared contributions. There is a graph that illustrates the growth.

I would be the first one to acknowledge that counting CRADA's is not the best metric, nonetheless, I think it is a start. It shows that we have developed some significant interests among our industrial partners. I must say that I have been gratified by the success that we have had. Many of our industrial partners have expressed their pleasure with the contributions that we have made.

Now, I am not surprised by our success. Ours is an industrial heritage, and, as a matter of fact, we have been involved in cooperative work with industry for some three decades, long before the CRADA mechanism was invented. We have learned over the years that it is helpful in achieving mission success at our laboratory to work cooperatively with industry and universities.

I might mention some notable examples of early technology transfers. We did invent the vertical laminar flow clean room tech

nology. We made contributions to polycrystalline drill bit technology, contributions in photovoltaic and solar thermal technologies, and, by the way, there is a clever mechanical switch, Rolamite, which is now finding application in the automobile airbags.

This gives you some idea of the breadths of the contributions we made, even before CRADA's became possible. Now our strategy for the 1990's and beyond is to carry out our core mission's responsibilities for DOE, but, at the same time, greatly expand our involvement in cooperative efforts with industry and universities. We want to be a significant factor in stimulating economic growth. I think that is something you would expect from a $1-billion plus laboratory of the Federal Government.

I believe the key to economic growth lies in revitalizing U.S. manufacturing, and, for this reason, we have identified advanced manufacturing technologies at our laboratory as a principal theme of our industrial outreach activity. We have established a center for advanced manufacturing technologies. It is supported by a number of activities, particularly in the area of microelectronics, metal forming, casting, and so on, and there is a great deal of industrial interest in these areas.

Let me turn very quickly to our involvement with small business. We have done some of that quite successfully. I think we enjoy a good report, as a matter of fact, in support of small business interests. I might mention that this year the Small Business Administration has selected Sandia as a finalist in the R&D category for the Dwight D. Eisenhower Award for Excellence in Small Business Contracting.

We do have some CRADA's in place that involve small businesses; three companies in particular, Oregon Cutting Systems, Radiant Technologies, and Permacharge. The last one is a small local business in our area which is now applying Sandia-developed microcellular foam to advanced commercial filtration systems. I recognize that although we have successful CRADA's with small businesses, there are many small businesses that simply can't afford to engage in CRADA activities.

I should also point out, however, that in our experience, the CRADA is in many of these cases not the appropriate mechanism, and that many times what small businesses really need is efficient access to information that already exists. As a result, we have designed and participated in quite a number of programs that facilitate small business access to Sandia-developed technology and information. By the way, DOE supports that effort very enthusiastically.

One program that has achieved quite a bit of success is our socalled Technology-Based Regional Economic Development Program, TRED, and quite recently we have expanded that program in collaboration with the Los Alamos National Laboratory. We now call it NSTEP, the National Small Business Technology Exchange Program. It has created a network which permits small businesses in our region to access the know-how that exists at these two institutions.

Let me conclude by saying that I am greatly encouraged by the progress that we at Sandia and other DOE laboratories have made in recent times, despite all of the difficulties. I think we have done