AIP FYI #71: Looking Ahead to FY 2004: OMB Directive and PCAST

The budget process can be confusing. The federal government
is currently operating with FY 2002 funding. Congress is
drafting the FY 2003 appropriations bills. And the Bush
Administration is beginning work on the FY 2004 budget
request.

Budget-forecasting often involves looking for clues in the
pronouncements of key Members of Congress or senior
Administration officials. Occasionally a document becomes
available that makes the outlook clearer. That is the case
with a May 30 White House memorandum from OSTP Director John
Marburger and OMB Director Mitchell Daniels entitled “FY 2004
Interagency Research and Development Priorities.”

This 14-page memo to the heads of executive departments and
agencies “provides guidance on the types of R&D programs the
Administration will favor when making fiscal year 2004
investment decisions, identifies priority activities requiring
significant interagency coordination, and sets forth R&D
investment criteria that departments and agencies should
observe and implement.” It lists the Administration’s six S&T
priorities and later spells out three “tests” that R&D
managers should apply to their programs. Notably, it does not
provide the “guidance levels” that OMB gave these S&T managers
about the parameters of the budget request they will submit to
Congress in early 2003.

While the list may change, and is not necessarily all-
inclusive, the six interagency R&D budget priorities listed in
this memo are:

• Homeland Security and Antiterrorism R&D
  
• Networking and Information Technology R&D
  
• National Nanotechnology Initiative
  
• Molecular-level Understanding of Life Processes
  
• Climate Change Science and Technology
  
• Education Research
  

Not included in this list are those “priorities that fall
within the purview of a single agency. Agencies with
responsibilities for specific fields of science and
engineering should consider the impact of their research
investments on the sustained viability of these disciplines
for national priorities.” Also, “OSTP . . . will evaluate how
best to ensure the availability of instrumentation and
facilities for priority science and technology needs.”

The major portion of the memo is devoted to Research and
Development Investment Criteria. “One way the Administration
intends to improve R&D program management and effectiveness is
through the application of explicit R&D investment criteria,
as directed by the President’s Management Agenda,” is how the
memo introduces this concept. The focus is not to be on how
much money an agency is spending, “but rather on what we are
getting for our investment.” The memo provides considerable
detail about three tests, initially described as follows:

“Relevance. R&D programs must be able to articulate why this
investment is important, relevant, and appropriate. Programs
must have well-conceived plans that identify program goals and
priorities and identify linkages to national and ‘customer’
needs.”

“Quality. R&D programs must justify how funds will be
allocated to ensure quality R&D. Programs allocating funds
through means other than a competitive, merit-based process
must justify these exceptions and document how quality is
maintained.”

“Performance. R&D programs must have the plans and management
processes in place to monitor and document how well this
investment is performing. Program managers must define
appropriate outcome measures and milestones that can be used
to track progress towards goals, and assess whether funding
should be enhanced or redirected.”

There has been considerable discussion how the investment
criteria would be applied to basic research programs. The
memo addresses these concerns, and states, “The Administration
expects agencies to focus on improving the management of their
research programs and adopting effective practices, and not on
predicting the unpredictable.”

The entire text of this memorandum may be viewed at:
http://www.ostp.gov/html/ombguidmemo.pdf

Federal investment in R&D was a topic of discussion at this
week’s second open meeting of the President’s Council of
Advisors on Science and Technology. Several PCAST members
have formed a panel to examine the U.S. R&D portfolio over the
last twenty-five years. This panel, chaired by G. Wayne
Clough, President of the Georgia Institute of Technology, will
examine both federal and non-federal investment in R&D,
including changes in its size, composition, and trends.
Workforce issues and the position of the U.S. as compared to
other nations will also be examined. The panel wants its
report to impact the FY 2004 budget request, and so will
complete its work by November. The RAND Corporation has been
contracted to write the actual report, with input to be
provided through meetings and hearings with industry,
universities, federal agencies, and other parties. AAAS will
also be involved in the production of the reports. Other
PCAST panels are working on broadband communications, energy
efficiency, and counter-terrorism.

A FINAL NOTE: We will soon compile the responses from our FYI
readership survey. If you have not completed this survey,
please do so. It is important that we hear from as many
readers as possible. You can find the survey at
http://www.aip.org/statistics/fyi/ Thank you.

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Richard M. Jones

Media and Government Relations Division

The American Institute of Physics

fyi@aip.org

(301) 209-3095

http://www.aip.org/gov

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