jobs, products, and processes, we will have lost a significant opportunity for improving this nation's economic position.

The FTTA was enacted in response to these concerns. This law, along with former President Reagan's multi-phased program for improving access to federally funded research contained in Executive Order No. 12591, charged Federal agencies with linking their government-owned, government-operated (GOGO) laboratories to the private sector. This report summarizes how agencies have prepared to meet these challenges in the more than two years that have passed since the FTTA became law.

Most federal agencies have now completed, or are close to completing, the internal administrative arrangements necessary for managing programs of cooperative research with the private sector, universities, and state and local governments under the Act. Many have begun to negotiate agreements and a number of these have already been put into effect.

Now

In general, agencies have made substantial progress and have developed firm foundations for successful technology transfer operations. By necessity, they concentrated first on resolving sensitive internal questions of control and accountability. they are addressing the practical problems of attracting the interest of the private sector and designing appealing arrangements.

To help them accomplish this and to ensure that Congress is kept fully informed on their progress, the FTTA required the Secretary of Commerce to (a) report to Congress every two years on how agencies are using their new authorities, (b) report to Congress on barriers to the commercialization of computer software and on the feasibility of maintaining an inventory of federally funded training software, and (c) provide agencies with model cooperative research and development agreements and other appropriate technical assistance.

Taking these in order, this report is the first of the biennial reports required by the FTTA. It is based on information provided to the Department by agencies represented on the Interagency Committee for Federal Technology Transfer, a forum established by former Secretary of Commerce Malcolm Baldrige to provide a continuing high level mechanism for addressing problems in implementing the Act and developing solutions. It is also based on follow-up questions and discussions within the Committee's Executive Working Group, a forum of senior headquarters and laboratory personnel which meets on a regular basis and which has become an important support network for addressing the practical problems agencies face in implementing the law and Executive order.

Major agencies providing information included the Departments of Agriculture (including the Forest Service and the Agricultural

Research Service), Commerce (including the National Institute of Standards and Technology, the National Oceanic and Atmospheric Administration, and the National Telecommunications and Information Administration), Defense (including the individual military departments), Energy, Health and Human Services (including the Public Health Service agencies), Interior, Transportation, and Veterans Affairs, as well as the

Environmental Protection Agency and the National Aeronautics and

Space Administration.

The report on barriers to commercialization of software

and on federal training software was submitted in May, 1988. These barriers are discussed in this report in Section 9.a.

As to technical assistance, the Department has provided agencies with draft model agreements and continues to work with them on technical issues through the Interagency Committee and its Executive Working Group. This Group has met 13 times. In addition to the development of model agreements for working with industry, the Group has addressed model delegations of authorities for federal laboratories, employee conflict of interest issues, impact of the Freedom of Information Act, access by foreign companies and scientists to federal laboratories, protection of intellectual property in international science and

software, and training laboratory personnel in technology transfer.

But the real credit goes to the individual agencies. Their

accomplishments have been particularly gratifying, given the many obstacles that had to be overcome before the FTTA could be

successfully implemented. These obstacles must be understood if progress to date is to be evaluated properly.

First, the FTTA challenged the status quo. As a general observation, the FTTA forced many agencies to confront and reassess long-held attitudes with respect to:

the role of federal laboratories and scientists in promoting joint R&D with industry and transferring the results to the marketplace,

the necessary methods and incentives for accomplishing this, and

o the relationship between the laboratories and their parent

organizations.

These various factors are discussed more fully in the pages that follow. Evidence has shown to date that most agencies

are taking advantage of the opportunities the new law afforded

them. Agency personnel at headquarters and in the laboratories are making sincere efforts to implement the new law as the

President and Congress intended. Many practical problems have been resolved.

In short, federal technology transfer has gotten off to a good start and can look forward to a very promising future.

2. Technology Management Principles and the FTTA:

The fundamental objective of the FTTA is to promote U.S. competitiveness by allowing the private sector to pursue original R&D with our public research institutions, and by adapting the fruit of that research to the marketplace.

By 1986, Congress began to examine how the U.S. could reap substantial commercial returns on the $52 billion (now up to $63 billion) annual federal investment in research and development. A common complaint heard was that the U.S. wins Nobel Prizes while other countries walk off with the markets.

The designers of the FTTA responded by building upon certain fundamental principles.

First, the federal government will continue to underwrite the cost of much important basic research in scientifically promising areas that takes place in the United States.