FY 2001 Budget Highlights

(February 2000)

• Technology Administration Summary
• Office of the Under Secretary/Office of Technology Policy Budget Highlights
• National Institute of Standards and Technology Budget Highlights
• National Technical Information Service Budget Highlights
• Budget Highlight Archives

Technology Administration Budget Highlights

Since the early 1990s, the U.S. economy has been riding a wave of innovation that began building more than half a century ago. The invention of the transistor and, later, of the integrated circuit set in motion early ripples that would eventually become a global surge of information technologies. Today, the U.S. information technology industry is the nation's largest—in terms of revenues as well as manufacturing employment. And its products are fundamental to the workings of nearly every other sector.

Technological progress and the processes that underpin it are recognized as key ingredients of economic and productivity growth and, consequently, the nation's ability to sustain a rising standard of living. Worldwide, the growth-priming effects of innovation and technology are fully appreciated. Since 1980, the global market for products manufactured by research-intensive, high-technology industries has been growing twice as fast as the market for other kinds of manufactured goods. Not surprisingly, most developed countries have been increasing the research intensity of their economies and the size of their R&D workforces.

At the same time, the increasing multidisciplinary complexity of advanced technology—epitomized by ever-expanding, ever-diversifying information networks—can impede major, leap-ahead advances in products, services, and processes. The scope of R&D efforts required to achieve such advances exceeds both the capabilities and the cost and risk thresholds of individual firms.

The Clinton Administration has sought to address these economic and competitive realities by developing, in partnership with American industry, policies and programs that enhance U.S. competitiveness in the global marketplace and maximize technology's contribution to national economic growth, job creation, and quality of life. A focal point for these efforts is the Technology Administration (TA), the premier civilian technology agency working with industry to improve U.S. competitiveness. TA serves as an advocate for U.S. innovation and industrial competitiveness within the Department of Commerce, with other federal agencies, and in national and international fora. It carries out this role through:

• the leadership of the Under Secretary;

• the Office of Technology Policy's analysis, formulation, and advocacy of policies to maximize the contribution of technology to economic growth;

• the technology development, diffusion, and commercialization programs of the National Institute of Standards and Technology; and

• the dissemination of technological information by the National Technical Information Service.

In fiscal year (FY) 2001, the Technology Administration will use its industry-led technology partnerships to actively address today's gaps in private R&D investment. While continuing to advance the cause of U.S. competitiveness, TA will disseminate scientific, technological, and business information to U.S. firms through focused initiatives and programs.

To continue the successful implementation of this civilian technology agenda in FY 2001, the President requests:

Office of the Under Secretary/Office of Technology Policy
Total funding requested: $8.7 million

National Institute of Standards and Technology
Total funding requested: $713 million

National Technical Information Service
The Department of Commerce has proposed legislation to close NTIS in FY 2000.

Specific budget proposals are described below.

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FY 2001 US/OTP Budget Highlights

Summary and Justification
President Clinton requests $8.7 million for the Office of the Under Secretary for Technology and the Office of Technology Policy (US/OTP). This request supports US/OTP in its work with the private sector to analyze, develop, coordinate, and advocate national policies that maximize technology's contribution to U.S. competitiveness, economic growth, the creation of high-wage jobs, and improvements in living standards for all Americans. More than ever before, technological leadership is vital to the U.S. national interests. The country's national prosperity, security, and global influence depend largely on America's ability to harness the power and promise of leading-edge advances in technology.

The request, an increase of $771,000 over the FY 2000 appropriation, will support the Under Secretary in overseeing the Technology Administration's operating units, coordinating several interagency civilian technology efforts, and providing analysis and leadership in other important technology-related domestic and international activities. The US/OTP budget also supports the Office of Space Commercialization (OSC).

In FY 2001, US/OTP will continue to provide leadership and analytical activities—in close partnership with U.S. industry, federal research agencies, and the national laboratories—to maximize taxpayers' return on their investment in federal research and development. The FY 2001 proposed budget increase would strengthen US/OTP core programs, enabling TA to:

• respond to Congressional mandates to increase space market analysis by the Office of Space Commercialization;

• develop an economic roadmap for accelerating commercialization of Partnership for a New Generation of Vehicles (PNGV) technologies expected to lead to clean and efficient new vehicles;

• improve monitoring and assessment of the results of government-industry research partnerships; and

• increase the visibility and impact of the National Medal of Technology program.

US/OTP Performance
Research sponsored by the federal government has given birth to new industries and propelled U.S. firms into leadership positions in other industries, but technological innovation and industrial competitiveness depend on a supportive policy environment to overcome market inefficiencies in innovation, investment, and competition. As global competition has increased, US/OTP has forcefully advocated improvements in laws and regulations governing commercialization of federal research. These efforts focused on removing barriers to government-industry cooperative research; increasing incentives for federal scientists, engineers, and laboratories to work with the private sector to move their innovations to the marketplace; improving the speed, flexibility, and predictability of the federal government as a research partner with industry; and ensuring the effective protection of intellectual property.

Recently, PNGV successfully met its second major program milestone with the unveiling of PNGV concept cars by Ford and General Motors at the North American International Auto Show. Both companies introduced diesel-electric hybrid versions of their concept cars, the Ford Prodigy and the GM Precept, incorporating lightweight materials (including extensive use of aluminum, as well as carbon fiber composites, magnesium, and titanium), aerodynamic designs, regenerative breaking (to capture kinetic energy usually lost as heat through braking), automatically shifted manual transmissions, nickel-metal-hydride batteries for energy storage, and a host of other leading-edge technologies developed under the partnership. The Prodigy has a fuel economy of 70 miles per gallon in the combined federal city-highway drive cycle, while the Precept achieves 80 miles per gallon. GM also unveiled a fuel cell-electric hybrid version of the Precept, projected to attain a fuel economy rating of 108 miles per gallon. Daimler-Chrysler is expected to unveil its 2000 concept car in late February or early March.

In June 1999, OTP released The Digital Work Force: Building Info Tech Skills at the Speed of Innovation, reporting on a challenge that is among U.S. business's highest priorities. This in-depth look at the information technology (IT) work force includes groundbreaking analysis on qualitative factors affecting this critical U.S. labor market and reports on a year-long national dialogue about meeting the nation's IT skill needs. Conducted at more than a dozen Commerce Department-sponsored town meetings and other fora held across the country, the national dialogue offered thousands of participants the opportunity to share knowledge and express their views on topics related to IT work force development. The report summarizes the findings from this process, shares innovative practices from around the country, and lays out some options for government, employers, and educators. The Digital Work Force has reached an audience of more than 16,000 and was well received by both the business and worker communities. OTP's work in this area has inspired several promising private sector-led IT work force initiatives.

Program Descriptions
The FY 2001 budget request supports the Under Secretary's participation in the Committee on Technology of the President's National Science and Technology Council. Through this committee, the Under Secretary helps to establish clear national goals for federal science and technology investments and to ensure that federal civilian R&D priorities reflect the requirements of industry customers. The Committee on Technology currently is coordinating several major initiatives in materials, construction and building, manufacturing infrastructure, electronic, and automotive technologies. The Under Secretary also is the principal U.S. government representative for technology in discussions with counterparts in developed and emerging markets.

In addition, the Under Secretary will continue to chair the high-level committee overseeing the PNGV initiative, a partnership of seven federal agencies, 19 national laboratories, the nation's automakers, and more than 300 suppliers and universities. PNGV is working to achieve R&D goals in three areas: advanced manufacturing methods; technologies that can lead to near-term improvements in automobile efficiency, safety, and emissions; and research that could lead to vehicle prototypes with a threefold improvement in fuel efficiency. US/OTP supports the operations of the PNGV secretariat, which is responsible for technical coordination of the participating federal agencies, liaison with USCAR (which represents the auto industry in the partnership), and basic record keeping.

Among other activities, the FY 2001 budget supports US/OTP's administration of the National Medal of Technology, the nation's highest award for technological achievement that helps to increase public understanding of the essential role that technology plays in the global economy. The budget also supports OSC's continued role in developing a new national space policy and in conducting a comprehensive market analysis of the space commercialization industry. In addition, it funds the Commerce Science and Technology Fellowship Program, which will place about 20 senior government technologists and technology managers in other agencies to promote understanding of the scope of federal R&D and policy activities.

In FY 2001, OTP will continue to administer grants of the Experimental Program to Stimulate Competitive Technology (EPSCoT) that foster development of indigenous technology assets in states and regions traditionally under-represented in federal R&D funding in order to stimulate technology-based regional economic growth. Two competitions for EPSCoT grants have been conducted, and most projects funded under the first grant competition will be complete or nearly complete. A full-scale program evaluation to assess the management, direction, and effectiveness of the program was begun in FY 2000.

Program Changes
The President requests an additional $500,000 to strengthen and expand US/OTP policy, evaluation, and outreach in four areas. First, the Office of Space Commercialization will respond to Congressional mandates to increase its space market analysis by compiling and analyzing a comprehensive database of space industry statistics and trends, developing trends forecasts, and disseminating this data to government policy makers and the public. OSC also will identify areas where commercially available technologies can be applied to government activities to boost productivity and increase efficiency.

Second, the Office of the Under Secretary will develop an economic roadmap identifying actions needed to accelerate commercialization of PNGV technologies while minimizing local economic impact as automotive production shifts to advanced automotive technologies. TA will study expected "new" and dislocated manufacturing processes, conduct fora of interested parties, and reach out to state and local governments, U.S. automotive suppliers, fuel suppliers, and other key businesses to help plan for anticipated business and technology changes.

In a third area, US/OTP will improve its monitoring of the results of government-industry research partnerships by expanding the breadth and depth of its reporting on agency technology transfer activities to include measurements that help to characterize laboratory management of intellectual property and Cooperative Research and Development Agreement activity.

Finally, with the additional funding, the Office of the Under Secretary will aggressively promote the National Medal of Technology program through its nationwide contacts in industry, federal R&D agencies, and state and local governments to increase the number of high-quality medal nominations. It also will extend outreach to under-represented communities and expand media interactions to advance public understanding of technology.

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FY 2001 NIST Budget Highlights

The Technology Administration's National Institute of Standards and Technology (NIST) will celebrate its centennial in 2001. Over the past century, NIST has helped to ensure America's technological superiority and economic prosperity through myriad achievements that have advanced the measurements, standards, and technology needed by U.S. industry to make world-class products. (See example in "Research Investments Pay Off in Time.) The budget requested for fiscal year (FY) 2001 will enable NIST to work on the cutting-edge science and technology infrastructure needed to strengthen and safeguard America's prosperity and ensure its industrial competitiveness in the 21st century.

Summary
The Administration's FY 2001 budget request to Congress includes $713* million for NIST, an increase of about 12 percent over its FY 2000 budget of $636 million.

The NIST FY 2001 budget request is divided into three appropriations:

• $337 million for Scientific and Technical Research and Services, including $332 million for the Measurement and Standards Laboratories and $5 million for the Baldrige National Quality Program (BNQP);

• $340 million for Industrial Technology Services, including $175 million for the Advanced Technology Program (ATP), $114 million for the Manufacturing Extension Partnership (MEP), and $50 million for a major initiative to establish an Institute for Information Infrastructure Protection (IIIP); and

• $36 million for critical repair, maintenance, and safety upgrades of NIST's facilities.

NIST's interrelated programs—Measurement and Standards Laboratories, ATP, MEP, and BNQP—are merit based and carried out in close cooperation with industry. Together, these programs help to provide the basic technical infrastructure needed by industry to transform scientific and technological advances into new jobs, products, profits, and services that fuel the economy and improve the quality of life for all Americans. Many of the technologies driving today's economy are the result of earlier government investments.

NIST's products and services foster private-sector commercialization of one of the nation's key advantages—the best science and innovation in the world. To meet U.S. industrial needs now and in the future, the FY 2001 budget proposal includes the following increases:

• $60 million to protect the nation's critical information infrastructure;

• $14 million to help to accelerate the transition to electronic commerce;

• $46.3 million to expand the technology horizon by developing the measurements and standards needed to exploit nanotechnology and speed the application of combinatorial methods and by co-funding development of high-risk, broadly enabling technologies; and

• $15.5 million to strengthen the science and technology infrastructure.

The budget proposal also requests elimination of the $1.4 million disaster research program on the effects of windstorms and a decrease of $6 million in MEP base funding due to a redirection of funds to support e-commerce outreach to small and medium-sized manufacturers.

Background and Justification
NIST promotes U.S. economic growth by working with industry to develop and apply measurements, standards, and technology. This work is increasingly important to the nation for a number of reasons.

First, globalization of markets is creating an urgent need to harmonize divergent national systems of measurement, standards, and assessment of how products and services conform to standards. It also heightens the importance of maintaining a technical infrastructure that supports the rapid development and diffusion of new technologies.

In addition, rapid technological change is increasing the need for new standards in emerging industries and ever more precise measurements in all sectors.

Third, technology development today requires a great breadth of scientific and technical competencies. Industry must rely on external sources of advanced measurement and standards technology and expertise. NIST's Measurement and Standards Laboratories lead the way in meeting national needs in these first three areas.

Fourth, U.S. firms invest heavily in R&D but seldom focus on infrastructure or multiuse technologies or projects requiring long-term investments. Furthermore, in nascent technology areas, the cost, technical complexity, and risks of R&D increase the need for collaboration. NIST's ATP helps address these needs by sharing the risks and costs of challenging research and by promoting partnerships.

Fifth, although small firms are critical links in supply chains and generate large numbers of jobs (nearly two-thirds of the manufacturing workforce), their productivity often is limited by technical and cost barriers to technology adoption. The MEP helps small and medium-sized companies overcome these
barriers.

Finally, technology has the greatest positive effect on organizations when it is complemented by quality management practices, which enhance performance and productivity. The BNQP recognizes performance excellence by U.S. firms and education and health care organizations and disseminates criteria to guide improvement efforts.

NIST Program Performance

NIST programs are rigorously evaluated to ensure that industry and taxpayers are receiving the greatest possible return on their investment. For example, a permanent Visiting Committee on Advanced Technology meets quarterly to review and assess NIST's overall programs and priorities. In addition, diverse and complementary sources of performance data are used to evaluate NIST's effectiveness and expertise. Results consistently show that NIST's infrastructural technology and technical services have a powerful positive impact on U.S. firms and the overall economy.

A comprehensive evaluation system for the Measurement and Standards Laboratories is based on a combination of direct feedback from industrial customers, external peer review augmented by benchmarking to other national metrology institutes, quantitative performance measures, and microeconomic studies to assess the impact of specific programs. The National Research Council manages panels of industry, academic, and government experts who annually review NIST laboratory programs. The most recent review states that "the technical merit and the appropriateness of the work in all of the laboratories continues to be very high. The staff represents one of the world's finest assemblages of scientific and engineering expertise."

To ensure that its laboratories provide technical leadership for the nation's measurement infrastructure, NIST compares its capabilities to those of other national metrology institutes. The most recent of these benchmarking efforts show that NIST is the best in the world in measuring impedance, voltage, amounts of substances, temperature, humidity, air speed, ultrasonic power, and certain ranges of length, mass, force, pressure, and vacuum—all fundamental to leading-edge scientific and industrial pursuits.

Quantitative performance measures reflect the laboratories' technology transfer activities and the usefulness of their products and services to industry. For example, in FY 1999, NIST calibrated more than 3,100 items, providing quality assurance for an even larger private-sector activity that disseminates standards traceable to the national and international measurement systems. In addition, in FY 1999 NIST sold more than 33,000 units of Standard Reference Materials—certified "rulers" that companies, government agencies, and others use to check the accuracy of their most exacting measurements. NIST also distributed about 4,900 standard reference database units, which provide evaluated, high-quality data used by scientists and by many industries for applications such as improving the design of industrial processes, the quality of materials, and the performance of advanced information technology systems.

Economic impact studies of NIST's laboratory programs show high rates of return and important benefits to industry. For example, according to a 1999 study, a program on semiconductor power device modeling has a benefit-to-cost ratio of 23 to 1 and a significant impact on industrial development of modeling tools. In turn, these tools enable improvements in automobile ignition systems, appliances, and other products. Another study, on a NIST system used to identify economical fire safety retrofits, showed savings of $550 million in hospitals and nursing homes from a research investment of $4.5 million. A 1999 study on NIST cybernetic building systems research found a benefit-to-cost ratio of almost 8 to 1, with benefits that include cost savings in office buildings.

The ATP has developed a multifaceted evaluation strategy that includes statistical profiling of projects, real-time monitoring of project developments, microeconomic case studies that detail outcomes over defined periods, and macroeconomic projections of long-term program and project impacts. Evidence shows that the ATP program is working well. The program has accelerated R&D cycles and reduced time to market by an anticipated 2 years for 62 percent of planned commercial applications. Approximately 120 new technologies have been commercialized as products, processes, or services; of the first 38 completed projects, 24 have a new product, process, or service in the marketplace.

It can take many years for early-stage technology research to percolate through the economy, but the ultimate payoff can be huge. Studies estimated that potential economic benefits from just three ATP projects could exceed the total costs of the program to date. In one study, a model was developed for predicting the long-term social benefits of ATP's investment in medical technologies. The model was applied in a preliminary analysis of seven tissue engineering projects; it was estimated that ATP's investment of $15.5 million may result in societal benefits worth billions of dollars.

ATP also is reviewed by an advisory committee of national experts.

The MEP pursues extensive evaluation and assessment activities to assure effective management and performance and demonstrate program benefits. An MEP National Advisory Board composed of leaders from industry, state and local governments, academia, and labor independently assesses programs, plans, and policies. In addition, independent, detailed reviews, using criteria adapted from the BNQP, assess individual MEP center operations and outcomes. These reviews rely on a variety of metrics, including interim impacts on client competitiveness (e.g., increased sales, cost savings, capital investment, and inventory savings) based on regular surveys by the Census Bureau.

Census surveys indicate that manufacturing extension centers are fostering significant improvements in manufacturing and business performance. For example, based on a sampling of 2,852 client companies, MEP estimates that in FY 1998 alone MEP services generated at least $327 million in new sales, $33 million in labor and material savings, and $24 million in inventory reductions, while also leveraging approximately $266 million in additional capital investment by client firms.

The BNQP is evaluated by a Board of Overseers, a prestigious group of national quality and business experts. The BNQP also uses an improvement questionnaire and other means to respond to priorities of U.S. industry and business. Ultimately, the program can be judged by the performance of companies that follow its lead. A NIST stock investment study shows, for the fifth year in a row, that quality management can result in impressive returns. When a hypothetical $1,000 was "invested" in the Standard and Poor's (S&P) 500 and in a group of 23 companies that have won the Malcolm Baldrige National Quality Award, the winning companies' stock outperformed the S&P 500 by about 2.5 to 1. This comparison suggests that successful companies, from the market's standpoint, tend to be those that implement quality and performance management practices.

Since 1988, more than 1.7 million copies of the Baldrige criteria for performance excellence have been distributed. The criteria, which are reviewed annually to ensure continual improvement, have been described by the head of a prominent research firm as "probably the single most influential document in the modern history of American business." A 1998 survey of chief executive officers found that 79 percent believe the Baldrige criteria and awards are extremely or very valuable in stimulating improvements in quality in U.S. companies. Two-thirds of the CEOs said the criteria and awards are extremely or very valuable in stimulating improvements in the competitiveness of U.S. business. To more rigorously assess the effect of the BNQP on corporate performance, a formal economic impact study was initiated recently.

Program Descriptions

Measurement and Standards Laboratories

"NIST laboratories address basic technology needs that are vital throughout the product development cycle, from research and development to manufacture and quality assurance and after-sale support. The laboratories' uncompromising technical excellence, objectivity, and neutrality are highly valued by American industry." – American Chemical Society, Policy Statement

The NIST laboratories provide industry and the science and technology community with the measurement capabilities, standards, evaluated reference data, and test methods that together constitute the equivalent of a common language needed at nearly every stage of a technical activity. NIST's products and services support innovation, improve quality, and lower transaction costs in virtually all technology-intensive sectors of the economy. In addition, U.S. scientists rely daily on NIST's evaluated data services and measurement expertise for a host of basic and applied research activities. Other key measurement and standards functions, such as the development and maintenance of accurate weights and measures, enhance economic efficiency and lower costs.

NIST laboratories perform a multitude of essential functions. For example, NIST's measurements help to advance the growing $467 billion electronics sector, providing the tools essential to semiconductor manufacturing, satellite communications, high-density information storage, and a range of other products and systems. In these applications and industries, NIST measurement services are as basic as the NIST-supplied national reference standards that ensure the accuracy of the electric power meters in every U.S. home and business. NIST also provides test and measurement methods, calibration standards, reference data, and a technical research base for standards that facilitate interoperable manufacturing systems for the automotive, aircraft, machine tool, and other industries.

NIST also develops and disseminates national standards for time and frequency to meet critical needs in telecommunications, transportation, and positioning (including support for the Global Positioning System). Each day, NIST receives more than 15 million automated requests for time over the Internet. NIST laboratories provide chemical, biochemical, and chemical engineering measurements; standards; data; calibrations; and predictive methods and models to support industries and programs ranging from chemical processing to environmental monitoring to biotechnology and health care. As the global market demands ever higher quality, U.S. industries depend on NIST for calibration services that ensure dimensional compatibility of items manufactured at different sites and satisfy requirements for traceability to national standards.

In addition, NIST provides national standards for the 11,000 U.S. mammography facilities, helping to assure the effectiveness of 26 million diagnostic mammograms annually; the national photometric standards for anticollision lighting on commercial aircraft; and standards for exposure quality in the $11.4 billion U.S. photographic and X-ray film industry. Each year, more than 1,400 researchers from over 50 U.S. companies, 90 universities, and 30 other government agencies participate in research at the NIST Center for Neutron Research, a world-class facility where unique instruments reveal the inner structure and dynamics of virtually any material. NIST operates the foremost U.S. fire research laboratory and is the principal R&D agency working to reduce earthquake hazards through improved building codes, standards, and practices for structures and lifelines. NIST also supports the U.S. information technology (IT) sector by developing test methods, computer science and engineering tools that underpin metrology, and open testbeds for industrial collaboration on standards and next-generation information technologies. Privacy, security, encryption, and network reliability are among NIST's major IT thrusts.

In addition to its internal research, in FY 1999, NIST worked on about 260 Cooperative Research and Development Agreements (CRADAs) involving collaborative R&D of mutual interest with for-profit organizations, non-profit organizations (including universities), public and private foundations, state and local governments, and individuals. Since 1988, NIST has signed more than 900 CRADAs.

The FY 2001 appropriation for the Measurement and Standards Laboratories will support further development of critical measurement technologies, methods, and services needed by the United States to promote technological progress, improve products and services, and enhance international competitiveness. For example, the NIST laboratories plan to:

• assist the semiconductor and electronics industries by developing new measurement techniques, instruments, and standards to increase efficiency in the manufacture of compound semiconductor devices; by developing and disseminating atom-based dimensional standards and measurement procedures for R&D and fabrication of next-generation micro- and nanoelectronic devices; and by commissioning a nanoscale physics facility for characterizing the properties of quantum-electronic devices for use in next-generation integrated circuits;

• assist U.S. manufacturers' efforts to develop faster, more efficient inspection systems needed to improve products and lower costs; and advance the science and application of manufacturing simulations by means of remotely accessible testbeds for defining languages, visualization techniques, data models, and test methods for representing manufacturing systems and components;

• remove trade barriers by initiating the establishment of an international structure for comparing chemical measurements through international determinations of clinically significant constituents in blood, studies of various methods used to assess compounds, and collaborations with other national metrology institutes in a pilot effort to develop reference materials for gas mixtures;

• assist the rapidly emerging biotechnology industry, particularly pharmaceutical development and biomanufacturing, by establishing a focused bioinformation program to meet data and measurement needs; and by developing measurement and modeling techniques for characterizing enzymatic transformations that are important to industrial applications of biocatalysis and metabolic engineering;

• provide the foundation for new measurement science by laser cooling and trapping of atoms and ions for new frequency standards, laser manipulation of atoms to produce nanostructures for semiconductor metrology, and production of quantum states for research into quantum computing;

• assist the U.S. automotive industry in the cost-effective use of lightweight materials for the next generation of energy-efficient vehicles through measurement, modeling, and standards activities;

• foster introduction of advanced technologies into the U.S. construction industry by demonstrating cybernetic building system technologies in the largest federal building west of the Mississippi; and by developing and validating a computer model for predicting the thermal and electrical performance of photovoltaic systems integrated into buildings;

• enhance digital information security by publishing an advanced encryption standard and guidance for federal agencies on its use; by extending the public key infrastructure testbed to support industry development of interoperable digital signatures and encryption applications; and by developing, extending, and disseminating standard reference guidelines for emerging biometric authentication techniques; and

• support business use of electronic commerce by developing and disseminating a software translator that will convert a company's internal dictionary of product terminology into the industry-standard format, thus enabling engineers and designers to compare products and check their compatibility.

Baldrige National Quality Program

"The Baldrige public/private partnership has accomplished more than any other program in revitalizing the American economy." – Barry Rogstad, President, American Business Conference

The BNQP helps U.S. businesses and other organizations continuously improve their competitiveness and productivity by adopting performance and quality management practices. The program helps many types of companies and organizations deliver ever improving value to customers, while improving overall organizational effectiveness. It creates a performance excellence standard that fosters communications and sharing in the private sector, building networks to deliver performance and quality management information and services and to share lessons learned with other economic sectors.

Baldrige Award applicants receive 300 to 1,000 hours of review by at least six experts on the board of examiners, which gives them valuable insights. The experts provide a detailed feedback report on the organization's strengths and opportunities for improvement. Since 1988, 37 companies have received the Baldrige award, which is given in the categories of manufacturing, service, and small business and, beginning in 1999, education and health care. Many thousands of organizations use the Baldrige criteria internally to assess and improve their performance.

The BNQP has stimulated high levels of interest in performance improvement, excellence, sharing and cooperation, and the creation of new information networks within the business and public sectors. Collectively, Baldrige Award recipients, examiners, and NIST staff have given more than 40,000 presentations at conferences worldwide. With a relatively small federal investment, the Baldrige program leverages over $100 million of in-kind contributions from the private sector and state and local organizations.

The proposed FY 2001 appropriation of just over $5 million will be used to manage the annual award competition, conduct a conference at which Baldrige award winners will share their performance excellence strategies, maintain a comprehensive database on state and local quality awards, continually improve the performance excellence criteria that serve as the national standard, and facilitate information sharing among all sectors of the U.S. economy.

Advanced Technology Program

"Our companies feel government support for technology research and development is especially critical for projects involving long-term, high-risk, precompetitive initiatives where the initial investment will not be recovered for several years or even decades.... For industry to continue to remain competitive in the global market, an adequate level of funding must be maintained for technology initiatives like the Advanced Technology Program." – American Electronics Association

A high rate of innovation in American industry is crucial to sustaining U.S. global competitiveness, and innovation depends on continued investment in long-term, high-risk research. By co-funding projects, the ATP encourages timely private investments in innovative technologies that have the potential for broad national benefit that otherwise would not be developed in time to be competitive in world markets, because the benefits are too widely spread, the risks are too high, or the research is too costly and complex for any single company to address on its own. The ATP also promotes partnerships among companies of all sizes, universities, and other organizations to undertake such high-risk research.

The ATP has developed a strict selection process, which industry enthusiastically supports. The awards are made on the basis of a strict competitive procedure that considers the scientific and technical merit of each proposal and its potential benefits to the U.S. economy. Each year, the ATP conducts a general competition open to proposals involving any area of technology. The evaluation process begins during the first year of each award and continues for six years beyond the completion of the project.

The ATP conducted 40 competitions from 1990 to 1999. Through 1999, the ATP had selected 468 projects for funding, including 157 joint ventures. More than 1,000 formal participants, including more than 140 different colleges and universities, have been involved, along with 1,000 subcontractors. About 55 percent of all ATP projects are led by small businesses. The awarded projects involve a commitment of over $1.5 billion in NIST funds and $1.5 billion in private-sector funds over their lifetimes. By creating opportunities for new, world-class products, services, and processes, the ATP benefits not only individual project participants but also other companies and industries and, ultimately, consumers and taxpayers.

Manufacturing Extension Partnership

"The National MEP Program is filling the need to strengthen the global competitiveness of America's smaller manufacturers ... the MEP program is a great example of a program that works—a program that transfers manufacturing technology at low cost." – Dean Garritson, Vice President, Small and Medium Manufacturers, National Association of Manufacturers

The MEP strengthens the technological capability, productivity, and global competitiveness of small and medium-sized U.S.-based manufacturers by providing access to industrial resources, services, and expertise. Centered on best practices, manufacturing methodologies, and training, these resources, services, and expertise are provided through a nationwide network of manufacturing extension centers. More than 400 MEP centers and field offices nationwide are cost-shared, cooperative efforts of NIST, state and local governments, and local extension service providers. Each center uses the network to provide cost-effective services that are responsive to the needs of local manufacturers.

The MEP has the only nationwide service delivery system of its kind, public or private. The partnership has demonstrated the capability to transfer technologies and techniques to small and medium-sized manufacturers, as well as the capability to link these manufacturers with organizations that provide essential services. The MEP also has developed a tradition of partnering with other government agencies. For example, the MEP partnered with the U.S. Department of Agriculture (USDA) and Small Business Administration (SBA) to distribute an extremely successful Y2K tool kit to small manufacturers, farmers, and other small businesses.
The MEP has succeeded in its initial goal of placing critically needed extension services within reach of small and medium-sized manufacturers in all 50 states, the District of Columbia, and Puerto Rico. In 1999, the network's more than 2,000 manufacturing engineering, and other specialists provided services to more than 26,600 enterprises.

With its FY 2001 base funding, MEP will work to increase the capabilities and effectiveness of MEP centers, collect and evaluate performance and impact data, and further develop the electronic networking and information capabilities of the MEP system to strengthen communications. The FY 2001 budget request includes a $6 million reduction in MEP base funding, reflecting a redirection of funds into new program areas supporting e-commerce outreach to small and medium-sized manufacturers. NIST will continue to maintain the appropriate level of matching funding for the MEP centers.

Initiatives

Protecting the Nation's Information Infrastructure

The nation's growing economy is driven in large part by recent advances in IT, which today provides an essential foundation for military security, financial transactions, utilities, timely communications, and many other critical functions. Yet, this sophisticated IT infrastructure also leaves the nation particularly vulnerable to disruptions caused by natural disasters, human error, equipment failures, and purposeful attacks. To address this vulnerability, the President recently launched a National Plan for Information Systems Protection. NIST, which has a legislated mandate for computer security, will carry out several key elements of the plan through $60 million in initiatives.

The initiatives increase the protection and reliability of essential national services, ensure public health and safety, support essential government programs, and help avert the failure of critical national infrastructures.

Institute for Information Infrastructure Protection
In a $50 million initiative, the Institute for Information Infrastructure Protection (IIIP) will be established to support research and technology development to protect critical information and telecommunications infrastructures from attack or other failures. The IIIP will lead a partnership of industry, academia, and government to develop the requisite knowledge and common technology base. In doing so, the institute will fill a vacuum in the IT community: No technical organizations are currently dedicated to developing these resources, and the private sector lacks market incentives to fully address these security issues on its own.

The IIIP will support R&D for the generation of new computer security technologies to protect the nation's critical information infrastructures. Of the requested funding, $46 million will be allocated for research grants to be awarded to universities, industry, and government agencies and $4 million for administration. The range of potential R&D is very broad.

Critical Infrastructure Protection (CIP) Research and Development
In a $5 million initiative, NIST will develop new measurements, standards, test methods, and guidelines to better protect IT elements of the nation's critical infrastructures. NIST will focus on future IT security management, including security engineering and system architecture; advanced cryptography, including the specification and assessment of a model incorporating good security; development and dissemination of best security practices for both the public and private sectors; and development of measurements, standards and best practices, and an enhanced testbed for ensuring the security of supervisory control systems, which are used to monitor and control manufacturing, utilities, and building environments.

CIP Expert Review Team
This $5 million initiative will enable NIST to strengthen security of federal computer systems to better resist attempted cyber-terrorism or quickly recover from security breaches. NIST will establish and field a team of computer security experts to help federal agencies identify and fix existing vulnerabilities in information systems while helping them to prepare for future security threats. Very few government agencies have the resources to evaluate fully the vulnerabilities of their IT systems to attack or disruption and to implement appropriate preventive measures. The Expert Review Team (ERT) at NIST will serve a government-wide need for state-of-the-art vulnerability assessments and advice on improving IT security. The ERT will draw on NIST's existing expertise in IT security and infrastructure protection and will exchange information and best security practices among government agencies and between government and the private sector.

Accelerating the Transition to Electronic Commerce
Current industry forecasts indicate that business-to-business e-commerce transactions will continue to grow rapidly and may approach $3 trillion per year by 2003. This trend promises to have broad economic impact by lowering production costs and raising productivity throughout the economy. Businesses increasingly are using e-commerce for a wide range of critical processes throughout the supply chain, from exchanging product design data to conducting financial transactions. The continued growth and efficient adoption of these practices require new infrastructural tools and capabilities. NIST's FY 2001 budget proposes $14 million in new funding to collaborate with the private sector to build the new infrastructure for the new economy.

E-Commerce
One of the biggest challenges now is to help small businesses acquire the resources and expertise needed to adopt e-commerce business practices. Most businesses that lack e-commerce capabilities will not survive, let alone prosper, in the new century.

The FY 2001 budget request includes a $9 million initiative which will enable MEP to work with the USDA and SBA on an e-commerce outreach program. The MEP will develop, produce, and distribute an e-commerce Jump-Start Kit and training curriculum; develop and test an e-commerce assessment tool and other materials; and begin work on e-commerce adoption kits. These materials will be designed to promote initial e-commerce awareness and assessment, planning for e-commerce adoption, identification of necessary resources, and completion of e-commerce implementations.

The initiative will rely on the interagency Y2K outreach model, and field staff will be trained using the same train-the-trainer workshop model. Continued funding will be provided for about 200 IT professionals who were added by MEP centers to work on Y2K outreach. They will assist with e-commerce planning and strategy development, architecture assessment and design, Internet design and development, systems integration and implementation, and security. This initiative will increase the number of small manufacturers using e-commerce technologies, increase the survival and competitiveness of small businesses in manufacturing supply chains, reduce costs, and increase supply chain efficiency. It will make maximum use of, and leverage, private-sector resources in e-commerce.

Manufacturing Interoperability
Electronic data exchange among businesses is becoming more common, especially as major manufacturers outsource more and more of the work they had once done "in house." But the process remains far from smooth. Imperfect interoperability imposes huge costs on U.S. industry—at least $1 billion per year in the automotive supply chain alone. For example, although e-commerce between businesses will be essential to prosperity in the new century, the more than 100 e-commerce related standards currently under development threaten to further fragment the market with incompatible and competing standards.

Industry is often reluctant to invest in interoperability standards and software because the benefits would be too widespread and the technical and market risk too high. Accordingly, in a $4 million initiative, NIST will provide the leadership and technical expertise required to harmonize standards and provide the infrastructure required for continued U.S. preeminence in e-commerce. NIST will work with industry to develop the enabling standards, software conformance testing metrics, tools and methods, and a software interoperability testbed.

NIST's role is a natural extension of its history of providing standards and measurement technologies for emerging products and processes. This initiative will promote the efficiency and interoperability of product data exchange, increase the number of small and medium-sized firms participating in business-to-business e-commerce and IT-integrated supply chains, reduce industry costs and improve productivity, and bring products to market more quickly.

Information Technology for the 21st Century
Information technology is already critical to the U.S. economy, and its importance will grow as computers become smaller, less expensive, and more prevalent and powerful. The transition from IT technology based on desktop personal computers to ubiquitous systems of networked computers connected by wireless links will create new ways of doing business in myriad fields, from health care to law enforcement to manufacturing. Unimagined e-commerce applications will emerge when IT devices need not be tethered to wired and fiber-optic networks, which can impose restrictions on user mobility, network accessibility, and bandwidth.

In a $1 million initiative designed to promote this transition, NIST will provide measurement techniques for characterizing antennas and microcircuits, standards to ensure interoperability, and test methods to accelerate the development and assure the quality of new wireless products and services, such as mobile Internet access, multimedia cellular phones, and remote medical treatment. NIST also will build industry consensus for common interface standards, thus helping U.S. industry compete in a marketplace now dominated by the European standard for wireless communications.

Expanding the Technology Horizon
In today's global marketplace, new products can become obsolete in months. Companies are compelled to innovate continuously. As a result, private-sector spending for applied research and development is growing steadily. At the same time, industry's research horizons increasingly are shorter-term.

Although the particular paths of scientific and technological progress defy easy prediction, future breakthrough advances will redefine markets and change the terms of industrial and international competition. NIST's proposed budget contains funding to promote active pursuit of long-range opportunities, measurements, standards, and data crucial to ensure that the U.S. economy will benefit from the next major wave of technology advances.

Open to all areas, cost-shared, risk-lowering support from the Advanced Technology Program encourages companies to look beyond the next few product cycles and to survey the entire horizon for the market-defining technologies of tomorrow. In addition to funding a new round of ATP awards, NIST's budget proposal would fund initiatives in nanotechnology and combinatorial science—two areas with bright prospects for rapid progress and the potential to deliver significant returns to U.S. industry and the national economy.

Advanced Technology Program
The proposed FY 2001 budget includes $31.8 million in new funding to enable the ATP to expand its efforts while continuing multiyear projects selected in previous years. The new funding, when combined with anticipated carryover and prior year recoveries, will provide $65 million for new awards, enough for roughly 65 new projects. To select projects, the ATP will conduct at least one peer-reviewed competition spanning all areas of technology during FY 2001.

The funding increase addresses a principal goal of the Department of Commerce and the Administration: to accelerate the development of innovative technologies for broad national benefit through partnerships with the private sector. The increase also responds to the President's technology policy, which states that "the nation urgently needs improved strategies for government/industry cooperation in the support of industrial technology." With additional resources, the ATP can leverage more private R&D dollars and broaden its impact on the economy across a greater spectrum of technologies.

Nanotechnology
Nanotechnology—the science and technology of the tiniest objects made by humans—will be a dominant force in the 21st century, with an impact expected to exceed that of 20th-century technologies. In this emerging field, scientists create new devices and materials by manipulating atoms and molecules— individually or in small groups. These "nanodevices" or "nanomaterials" often have unique properties. The future could bring advances such as microscopic robots—about the size of human blood cells—that travel through the body to deliver drugs only where they are needed. Also anticipated are new classes of computer chips capable of storing on a pinhead-sized device trillions of bits of information—the equivalent of thousands of volumes of a printed encyclopedia.

Nanotechnology will make possible brand new opportunities in manufacturing, materials, health care, electronics, and other sectors of the economy. Although the United States currently conducts a substantial amount of nanotechnology R&D, the commitment must be boosted to ensure world leadership and to reap the many benefits of further miniaturization. Europe and Asia already support strong nanotechnology R&D efforts. As part of a multiagency effort, NIST will carry out a $10 million initiative to help U.S. industry accelerate the commercialization of new discoveries in this field.

NIST is a world leader in nanotechnology, having funded and performed pioneering research on topics such as quantum electron counters for electrical calibrations, giant magnetoresistance for magnetic data recording, "DNA chips" (miniaturized laboratories) for health care, and atomic-scale imaging. NIST also has experience in working with the breadth of industries affected by nanotechnologies. It is, therefore, strategically positioned to respond to industrial needs for measurement capabilities that are accurate at the atomic scale and for standard materials and data that will enable industry to design, manufacture, and assure the quality of their products.

To support both near-term and long-range applications, NIST will develop measurements and standards for nanodevices, nanomagnetics, nanomanipulation, and nanocharacterizations. NIST will develop measurement methods for analyzing the physical and chemical properties of nanoscale devices; calibration systems; and standard reference materials for assessing features, components, and properties of nanotechnologies.

In addition, NIST will develop standards to aid atom assembly processes; methods for investigating molecular transport in manufacturing processes; and methods for characterizing the properties, reactivity, and behavior of molecules in complex systems. It also will work on tools for interpreting images to promote understanding of the chemical, physical, and dimensional data from these new technologies, as well as tiny probes for sensing electronic, magnetic, chemical, and biological properties.

Combinatorial Methods
New techniques are dramatically accelerating the pace of R&D and testing of new materials by enabling scientists to conduct a large number of experiments simultaneously. In these experiments, important parameters (such as temperature and chemical concentration and composition) are varied systematically and the effects quickly determined. These "combinatorial methods," which combine advances in information technology and automation, are so much
faster than traditional, sequential methods that they open up entire new areas of investigation.

Combinatorial methods, or combi methods are used, for example, to explore the properties of new pharmaceuticals by enabling hundreds or thousands of experiments to be conducted in parallel rather than one after another. These methods have been used successfully in the pharmaceutical industry but have yet to be broadly adopted in other fields, such as materials science, chemical synthesis, and biotechnology, where they have great potential to hasten the discovery and development of new products and processes. For instance, the $400 billion U.S. chemical process industry supports downstream applications in communications, electronics, photonics, structural composites, and advanced packaging. Research funding has been flat in the chemical industry over the past decade but could produce more and faster results through the use of combi methods, which are expected to cut the time required to create a useful new material from three years to less than one.

In this $4.5 million initiative, NIST will develop measurement and test methods, standards, and data management and mining methods to support the use of combi methods by U.S. industry, universities, and other government agencies, as well as in NIST metrology research. NIST will establish a testbed for use in developing combi methods, tools, and samples; develop combinatorial synthesis methods, automated techniques for rapidly characterizing microscopic samples, and tools and robotics for accurate atomic-scale 3D metrology; and publish on the web a universal metrics system to capture the complex information generated and archived using combi methods. In addition to assisting industry, this work is expected to accelerate NIST research and metrology in chemistry, materials science, physics, and other areas.

Strengthening the Science and Technology Infrastructure

A continuous supply of technical expertise, well-trained people, and state-of-the-art facilities are vital for the development of new high-tech industries. Through $15.5 million in initiatives, NIST will use a three-pronged approach to help to increase the number of highly skilled scientists and engineers and to improve its facilities to better provide the technology infrastructure industry requires to compete successfully in the new global economy. Specifically, NIST will increase its partnerships with minority-serving institutions (MSIs), expand the NIST/National Research Council Postdoctoral Research Fellowship Program, and address some of NIST's critical construction needs.

Partnering with Minority Serving Institutions
In an $8 million initiative, NIST will seek to broaden the nation's pool of science and technology talent and to foster full participation of all Americans in the technology-driven economy. Major emphasis will be placed on enhancing research and teaching capacity in minority serving institutions (MSIs), which will help NIST to meet long-term needs for highly trained technical staff.

Along with the rest of the science and technology community, NIST will need to identify new sources of technical staff as the demographics of the nation shift substantially—with Hispanics, African Americans, Native Americans, and Asians projected to comprise about half the U.S. population by 2050. MSIs educate a disproportionately large number of the nation's minority scientists and engineers, so these institutions must be a focus of forward-looking efforts to ensure an adequate science and technology workforce and to remain competitive in the global economy.

New collaborations, involving MSIs, NIST, and other top-tier institutions, will improve the quality of MSI graduate programs and research facilities, and they will encourage publication in professional journals as well as technology transfer activities. In addition, NIST will provide opportunities for MSI faculty members to work at NIST during sabbaticals. Students and postdoctoral fellows will receive financial assistance and conduct some of their work at NIST. NIST also will work with MSIs to develop new electronic training methods for metrology, using the Institute's expertise to provide content and MSI expertise to develop and disseminate the courses to reach target audiences nationwide. This part of the initiative will remove the constraints of traditional classrooms and increase participation by students and others in NIST metrology courses.

Postdoctoral Fellowship Program
Skilled scientists and engineers are in short supply nationwide in many critical fields, including IT, electronics, and materials science. NIST competes with the private sector to attract and retain the most talented scientists and engineers and usually cannot match industry salaries inflated by labor shortages. A valuable incentive is provided by the NIST/National Research Council Postdoctoral Fellowship Program, which provides two-year appointments to the best young scientists, mathematicians, and engineers to participate in state-of-the-art research at NIST, while at the same time bringing with them the latest ideas and skills from academia. About one-third of the fellows join the NIST staff permanently. Fellows who leave help transfer to industry their NIST training and experience, thus assisting NIST in fulfilling its mission of supporting U.S. industry.

A $3 million initiative will expand the number of postdoctoral fellows sponsored from 90 to 112. The expanded program, coupled with increased NIST efforts to encourage and mentor minority applicants, will help increase the number of minority hires at NIST, give NIST greater flexibility to respond to changing industry measurement needs, and likely increase the total number of conversions to permanent NIST staff. This initiative will further NIST's efforts to build stronger relationships with MSIs.

Construction Needs

NIST maintains about 50 specialized laboratory, office, and support buildings on campuses in Gaithersburg, Md., and Boulder, Colo. The great majority of these buildings are 30 to 45 years old and are deteriorating at an accelerating rate. NIST has designed a master facilities plan to guide the replacement, renovation, or repair of these buildings so that NIST can continue to provide U.S. industry and science with the best possible measurement and standards system.

An economic analysis by Booz-Allen & Hamilton concluded that, "without intervention, the performance deterioration caused by the facilities' inadequacies will impede, if not invalidate, NIST's ability to maintain standards in weights and measures, and to facilitate the development and application of new technology."

Facilities-related problems at the Boulder campus include severe temperature fluctuations and power interruptions that often threaten the quality of NIST data, and power outages, spikes, and brownouts that damage sensitive equipment. Thousands of dollars are spent annually to replace equipment damaged by power problems. The requested FY 2001 appropriation of $36 million includes $500,000 to design a new primary electrical service for the Boulder campus that will largely alleviate problems with inadequate power supplies. NIST plans to construct a conduit for a new set of power cables from a power substation less than 2 miles away; the new funding would support the design work.

In addition, $4 million is requested to increase the base funding for safety, capacity, maintenance, and major repairs to keep pace with tightening federal, state, and local health and safety regulations and more stringent science and engineering programs, and to keep the existing buildings in reliable working order. The need for increased funding has been verified by several recent studies by contractors, and the backlog of required building modification and improvement projects continues to grow.

Research Investments Pay Off in Time

NIST recently inaugurated NIST F-1, a laser-cooled atomic fountain clock that will neither gain nor lose a second in nearly 20 million years. NIST F-1 is three times more accurate than the time standard it replaces and shares the distinction (with a similar device in Paris) of being one of the most accurate clocks in the world. The design of the fountain clock—which keeps time based on a fountain-like movement of cesium atoms—is based on the science and technology of laser cooling and trapping of atoms, much of it pioneered at NIST. None of this was imagined in 1904, when the first NIST time standard, the pendulum clock, kept time to within 0.3 seconds per year, or in 1949, when NIST produced the world's first atomic clock, which was accurate to within 1 second per 300 years. The advent of precision timekeeping made possible all kinds of modern technologies, such as global positioning systems. More than 15 million automated requests for time are received by NIST over the Internet each day. For example, NIST time is used in hundreds of billions of dollars of daily financial transactions.

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NTIS Budget Highlights

Summary
The Department of Commerce has proposed legislation to cease operations of NTIS by the end of FY 2000. This legislation would maintain the NTIS collection of scientific and technical information by transferring the collection to the Library of Congress, effective Oct. 1, 2000. In FY 2000, the Administration is requesting a supplemental transfer from NIST of $4.5 million for closure costs.