RECOMMENDATIONS

ISSUE DIRECTIVE LIMITING FOREIGN RESEARCH EXPENDITURES (Recommendation 1):

The Bureau of the Budget should forthwith issue a directive limiting foreign research expenditures causing a dollar drain to projects which:

1. Are urgently needed by the United States;

2. Cannot be carried on in the United States either by American or foreign scientists; and

3. Will not be financed by foreign countries despite specific efforts by the United States to obtain such alternate financing. Results. The Bureau of the Budget took the position that the recommended directive was not necessary since Federal agencies are already instructed by Circular A-58 "to terminate, consolidate, or restrict overseas activities wherever this can be done without damage to the national interest." The Bureau informed the subcommittee:

The agencies principally responsible for overseas research, as well as the Bureau of the Budget examiners who review those agencies' programs, understand that the general restrictions established by Circular No. A-58 apply fully to research, as they do to other Federal activities. We believe that the agencies are observing the requirements of Circular No. A-58 in such a way as to limit research support abroad to that which is in the national interest, taking into consideration the balance-of-payments situation and the needs of research and development programs. Nevertheless, as I indicated earlier, we do plan to communicate with the research agencies to reinforce overseas research restrictions.

PERIODIC REVIEW OF FOREIGN RESEARCH PROJECTS (Recommendation 2):

The Bureau of the Budget should periodically review foreign research projects causing dollar drain to determine whether these criteria are being met.

Results. The Bureau of the Budget disagreed with this recommendation, stating:

*** As noted in the Bureau's response of February 18, 1966, to the committee's questions, the Bureau of the Budget does not have the resources to review individual research projects supported abroad, although some large-scale projects are identified for consideration. We believe that, except for policy issues related to large-scale projects, decisions with regard to individual projects can only be made effectively by agency officials. The Bureau's function generally is to monitor the agency's system for insuring compliance with policy.

SET AGENCY FOREIGN RESEARCH EXPENDITURES CEILINGS IN ACCORDANCE WITH NEW TIGHTER CRITERIA (Recommendation 3):

The Bureau of the Budget should set fiscal 1967 ceilings on foreign research expenditures consistent with the new criteria set forth in the Bureau of the Budget directive, for each agency financing foreign research in dollars.

These ceilings should represent only maximum allowable foreign research expenditures consistent with the new criteria, and should not be considered to authorize expenditures equal to their amounts. They should cover all grant and contract obligations abroad, except those to be paid in U.S.-owned foreign currencies, whatever the country of research performance and irrespective of the nationality of the performer. Results.-The Bureau of the Budget advised the subcommittee:

In establishing the overall fiscal 1967 ceilings on agencies' dollar expenditures abroad, in accordance with Circular No. A-58, the Bureau of the Budget will bear in mind the committee's recommendations with regard to agencies financing foreign research in dollars. We believe it is quite clear to the agencies that the ceilings are maximum allowable amounts and that actual expenditures are to be held below the ceilings if possible.

LIMIT FELLOWSHIPS AND TRAINEESHIPS FOR STUDY OUTSIDE UNITED STATES (Recommendation 4):

Fellowships and traineeships for study outside the United States should be limited to those cases in which competent training is unavailable in the Untied States.

Both the Public Health Service and the National Science Foundation should adopt this criterion in awarding foreign fellowships and traineeships abroad.

The National Science Foundation should immediately seek an interpretation by the Attorney General of section 10 of the National Science Foundation Act of 1950 to determine whether this restriction can be placed upon the choice of institutions by applicants for National Science Foundation fellowships. If the Attorney General's opinion precludes the application of this criterion, the National Science Foundation should seek to amend section 10.

Results. The Bureau of the Budget agreed with this recommendation in stating:

As indicated by the committee's comments on fellowships and traineeships for study overseas, the main problem is in the interpretation of the applicable sections of the National Science Foundation Act. The Bureau agrees with the committee that a prompt resolution of this question is desirable. When the question has been resolved, we will consider whether a change in the act is necessary.

Public Health Service informed the subcommittee that PHS fellowships for study outside the United States:

* are considered in a separate category from those requesting support for training in U.S. institutions and, apart from the scientific merit of the candidate, are rigorously evaluated on the basis of the validity of the justification for training at the foreign institution proposed. Only if the reviewing committee is convinced that a meritorious candidate cannot receive training of an equivalent quality in the United States will a favorable recommendation be made.

The PHS attributed the low level of postdoctoral fellowships awarded for study abroad (10 percent) to this requirement.

National Science Foundation, which had been awarding 50 percent of its annual postdoctoral fellowships for study at foreign institutions, agreed to apply more stringent guidelines, aimed at reducing foreign tenure to a minimum. It determined that the new restrictions would be consistent with the intent of section 10 of the National Science Foundation Act.

The Bureau of the Budget reported to the subcommittee that the application of the recommended limitations for study outside the United States had reduced combined PHS and NSF expenditures for overseas training by nearly one-third, from $5.4 million in fiscal 1965 to $3.8 million in fiscal 1967.

CONSOLIDATE U.S. SCIENCE OFFICES OVERSEAS (Recommendation 5):

The Bureau of the Budget should undertake a thorough investigation of overseas science offices with a view to minimizing the dollar costs of these offices through consolidations.

Results. The Bureau of the Budget informed the subcommittee: **The need for individual overseas offices and the possibilities of consolidating such offices or eliminating them will be thoroughly examined in the current review of agency submissions pursuant to Circular A-58. We will follow up on the implementation by the Department of Defense of the planned consolidation of its offices in Europe.

GREATER U.S. EFFORTS TO URGE OECD COUNTRIES TO EXPAND THEIR RESEARCH FINANCING (Recommendation 6):

The Office of Science and Technology should make greater efforts to expand OECD financing of research, both in the developed countries and developing countries, and the financing of scientists coming to the United States to study or to perform research.

Results. The Office of Science and Technology responded that it would encourage increased support of research by the OECD countries while following a policy of reducing U.S. support of research in those countries.

INCREASE USE OF U.S.-OWNED FOREIGN CURRENCIES TO FINANCE FOREIGN RESEARCH (Recommendation 7): The agencies supporting foreign research should make increased use of excess currencies to finance foreign research projects. Results. The Bureau of the Budget advised the subcommittee:

We have sought by various means to maximize the use of excess currencies to finance activities abroad. We will continue to press this effort and we would hope that, where necessary, congressional authorization for the use of such currencies will be provided.

[H. Rept. No. 1664, 89th Cong., second sess.]

FEDERAL RESEARCH AND DEVELOPMENT PROGRAMS: THE DECISIONMAKING PROCESS

Thirty-Fourth Report by the Committee on Government Operations (Submitted to the Speaker June 27, 1966)

The report discusses the relationship between Federal R. & D. and the Nation's progress toward important national goals, and the need for a rational decisionmaking process in the allocation of Federal R. & D. funds. While the President and Congress make ultimate decisions on the Federal R. & D. budget, the report emphasizes the need for common procedures and criteria in antecedent stages of decisionmaking in all Federal agencies.

Based upon Federal agency responses to a subcommittee questionnaire and 3 days of subcommittee hearings, the report finds that the Federal Government has not in the past employed consistent criteria and procedures in undertaking research and development. In the case of the defense, space, and atomic energy programs, Federal R. & D. has been aggressively employed by farsighted decisionmakers, by establishing far-reaching program objectives, searching for new ideas and new technology to meet those objectives, and using systems analysis and systems engineering to match R. & D. to program objectives. In these programs, Federal R. & D. is not only vast in scale but highly purposive and directed toward increasing the effectiveness of the underlying programs. However, in three civilian programs examined in the report-urban transportation, housing and hospital construction. and water pollution control-Federal R. & D. is small in scale, piecemeal in approach, diffuse in character, largely nondevelopmental, and ineffective in improving operating programs.

Three main defects are pointed out in the report: Too few R. & D. initiatives on the part of the directors of some civilian programs; inadequate executive office initiatives to remedy R. & D. weaknesses at the program level; and insufficient cost-benefit comparisons on the part of the executive office in evaluating competing claims to Federal R. & D. The report finds that the Bureau of the Budget planning-programing-budgeting system will greatly improve the decisionmaking process

on Federal R. & D., but it also concluded that additional efforts will be needed to eliminate defects of the present Federal R. & D. decisionmaking process.

RECOMMENDATIONS

USE OF OUTSIDE EXPERT ANALYSTS FOR R. & D. PLANNING (Recommendation 1):

Both to identify and to suggest remedies for R. & D. deficiencies, outside expert analysts as well as those within the Federal Government should be regularly utilized to analyze Federal civilian sector areas of responsibility, to formulate alternative R. & D. plans, and to present information on their respective probable costs and benefits to Federal programs.

Results. The Bureau of the Budget agreed that:

*** the agencies should take advantage of independent in-
puts. Ideas and alternatives should be invited from many
sources other agencies, other levels of government where
appropriate, the private sector, and not-for-profit organiza-
tions.

*

*** the Bureau of the Budget would not hesitate to urge
agencies to look beyond their immediate resources for con-
structive ideas as a means for enriching the consideration of
alternatives.

In the period following the committee's recommendation, more frequent use of outside experts by Federal civilian sector program directors in planning research and development is evident. Major examples are the establishment of educational laboratories and universitydirected research and development centers by the Office of Education; planned use of a newly established urban institute by the Department of Housing and Urban Development; the use of a private nonprofit research organization to assist in planning a portion of the Federal air pollution R. & D. program; and solicitation by the Urban Mass Transit Administration of new urban transportation systems ideas from a broad group of universities, private nonprofit research organizations, engineering consultants, and equipment manufacturers.

NEED FOR EXECUTIVE OFFICE ACTION ON PROGRAMLEVEL R. & D. DEFICIENCIES (Recommendation 2):

The executive office should examine program-level R. & D. recommendations in order to eliminate gaps and duplications, to determine the adequacy of R. & D., and to initiate necessary remedial action. Results. The Bureau of the Budget commented as follows:

It is correct that the Executive Office is quite selective in injecting itself into agency decisions, for the reason that too