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NATIONAL SCIENCE FOUNDATION AND OFFICE OF SCIENCE AND

TECHNOLOGY POLICY

ACCOMPANYING REPORT OF THE NATIONAL PERFORMANCE REVIEW

Office of the Vice President

Washington, DC

September 1993


This accompanying report, prepared by the staff of the National Performance Review (NPR), laid the groundwork for the recommendations in the NPR report "From Red Tape to Results: Creating a Government that Works Better and Costs Less," released on September 7, 1993. This report is based on the best information available at that time. The specific recommendations within these reports have been and will continue to be given priority as part of the FY95 Budget, legislative proposals, or other Administration initiatives, as appropriate.


CONTENTS

Executive Summary...................................1

Recommendations and Actions

NSF01: Strengthen Coordination of Science Policy....5

NSF02: Use the Federal Demonstration Project to Increase Research Productivity.....................11

NSF03:Continue Automation of NSF Research Support Functions..........................................15

Agency Reinvention Activities......................19

Summary of Fiscal Impact...........................21

Appendix

Accompanying Reports of the National Performance Review.............................................25


Abbreviations

EHR Directorate for Education and Human Resources, National Science Foundation

EXPRES Experimental Research in Electronic Submission

FACA Federal Advisory Committee Act

FCCSET Federal Coordinating Council for Science, Engineering and Technology

FDP Federal Demonstration Project

GAO General Accounting Office

GSA General Services Administration

IAC Interagency Assessment Committee

NPR National Performance Review

NSF National Science Foundation

NSTC National Science and Technology Council

OMB Office of Management and Budget

OSTP Office of Science and Technology Policy

PATG Productivity/Assessment Task Group of the Federal Demonstration Project

PI Principal Investigator

R&D Research and Development

S&T Science and Technology

STIS Scientific and Technical Information System


EXECUTIVE SUMMARY

Advancement in science and technology is a key element of national economic success. Investments in research and development (R&D) tend to be the strongest and most consistent positive influence on productivity growth. New developments in fields such as telecommunications and information technology are expected to affect the way we work and the way our children learn. New materials and manufacturing processes can make the United States more competitive in world markets. Investments in basic science ensure the availability of scientists who can forge new understandings of mechanisms that affect our health and our environment. Determining how best to invest federal research dollars to meet national goals is an important element of federal policy. Delivery of resulting technological advances to business and industry is a major challenge for the federal government.

A look at agencies with major responsibilities in science and technology reveals that they have many issues in common. This report suggests a structure for addressing R&D priorities as well as matters of research administration which are relevant to the wider federal R&D community. This structure involves the President's Office of Science and Technology Policy (OSTP).

OSTP was created by the National Science and Technology Policy, Organization, and Priorities Act of 1976 to provide advice to the President on issues relating to science and to coordinate federal efforts in science and technology. The Act also established the Federal Coordinating Council for Science, Engineering and Technology (FCCSET). FCCSET, with representation from all agencies with significant scientific research activities, coordinates selected interagency research initiatives.

In addition, although many agencies have significant roles in federal R&D, the focus and coordination of the federal R&D effort have particular impact on the National Science Foundation (NSF) with its mandate to strengthen the nation's overall potential in science and engineering. NSF, with a budget of approximately $3 billion, funds research and education in most fields of science and engineering through grants, contracts, and cooperative agreements to colleges, universities, and other institutions across the United States. Of NSF's approximately 1,200 staff members, about one-third are Ph.D. scientists, engineers, or educators who are familiar with functioning in a technologically sophisticated environment. NSF has committed to using technology in order to improve the effectiveness of its operations and services.

NSF has been instrumental in developing streamlined methods for research administration and has had a significant role in efforts to coordinate interagency research activities. NSF is a major participant in the activities of the Office of Science and Technology Policy and also participates in the Federal Demonstration Project (FDP), a group formed by federal agencies and universities interested in streamlining research administration.

The issues identified by the National Performance Review emphasize policy formulation and research administration: how to set priorities, promote efficient evaluation, and eliminate activities that distract from research efforts.

Because of the importance of R&D to the nation's progress, the productive use of R&D funds is critical. This requires management mechanisms that focus agencies' efforts on important national priorities and reduce administrative overhead. To enhance policy development and implementation, a national policy council to facilitate formulation of a coherent national science and technology policy and provide a mechanism to address important issues as they emerge is needed.

Making use of technological advances to streamline the administrative aspects of research management is an important part of empowering government research managers to manage for results. NSF's effort to automate grant management activities is presented as an example of an effective way to keep up with increasing workload by handling program administration more efficiently.

Removing red tape that distracts from research activity is an important way to ensure that more research funds are directed to productive research. FDP has found examples of administrative requirements placed on universities that can be eliminated without compromising financial accountability. A more formal relationship between FDP and the federal government is proposed so that its documented findings can be brought to bear on government regulations.

The issues presented in this report support the evolution of a scientific research program focused on national priorities with each science agency having a well-defined role that complements the total effort.


RECOMMENDATIONS AND ACTIONS

NSF01:

Strengthen Coordination of Science Policy

BACKGROUND
The federal government will spend $76 billion in fiscal 1994 for research and development (R&D). At least a dozen separate federal departments and agencies have significant research initiatives covering basic and applied fields of science and technology. The President and Vice President have repeatedly cited technological innovation as a key to economic growth and the creation of new markets and high-wage jobs. Because scientific research is so essential to these national goals, efficient use of federal resources for R&D is vital. Current organizational structures do not provide for the necessary coordination.

The Office of Science and Technology Policy (OSTP) was created by the National Science and Technology Policy, Organization, and Priorities Act of 1976 to provide advice to the President on issues relating to science and technology and to coordinate federal efforts in science and technology. The Act also established the Federal Coordinating Council for Science, Engineering and Technology (FCCSET). FCCSET is chaired by the Director of OSTP and includes cabinet members or their deputies from 12 departments, heads of other agencies involved in science and technology, and representatives from the Office of Management and Budget (OMB). It is charged by the legislation with:

--providing more effective planning and administration for federal scientific, engineering, and technological programs;

--identifying research needs;

--using the science and technology (S&T) resources and facilities of federal agencies more effectively, including eliminating unwarranted duplication; and

--furthering international cooperation in science, engineering, and technology.

In the Reorganization Plan of 1977, President Carter abolished FCCSET and reconstituted it by Executive Order 12039 to advise and assist the Director of OSTP.

FCCSET operates through committees, subcommittees, and working groups and is currently focusing on six budget initiatives: Advanced Manufacturing Technology,High Performance Computing and Communications, U. S. Global Change Research, Advanced Materials and Processing, Biotechnology Research, and Science, Mathematics, Engineering and Technology Education. These initiatives have evolved over time in response to administration priorities, council interests, and outside interests.

Participation in FCCSET initiatives is voluntary. Agencies that are interested in a particular initiative may commit agency funds to that initiative. The way the funds are used is also ultimately the decision of the participating agency. According to FCCSET procedures, once an agency commits funds it is not expected to reduce or withdraw them regardless of how appropriations change. However, FCCSET itself has no authority to redirect funds or to withhold funds for any reason. Each initiative has assigned to it one or two OMB budget examiners who provide advice, but authority for budget decisions rests with the agency head. There is agreement among experts in OMB, the General Accounting Office (GAO), and OSTP that FCCSET does not have the authority to establish priorities, direct policy, or participate fully in the budget process.

The need for "one-stop shopping'' for federal science and technology policy has been broadly recognized. For example, a report from the National Science Board Commission on the Future of the National Science Foundation states, "The United States should have a stronger and more coherent policy wherein science and engineering can contribute more fully to America's strength.''[Endnote 1] In addition, a 1992 report of the Carnegie Commission on Science, Technology, and Government concluded: "With OSTP leadership the Federal Coordinating Council on Science, Engineering, and Technology (FCCSET) should extend its promising efforts in shaping long-term S&T goals involving more than one federal agency and emphasize the articulation of specific long-term goals through a more explicit planning process.''[Endnote 2]

Other evidence of concern about policy coordination comes from Congress and GAO. Recognition by some members of Congress that there is inadequate coordination of federal activities in science and technology has led to a proposal for a separate cabinet-level Department of Science, Space, Energy and Technology.[Endnote 3] GAO, in a May 1993 report, states that the Advanced Research Projects Agency, a principal participant in the High Performance Computing Initiative (a FCCSET initiative), needs to improve dissemination of its research information to the other agencies involved.[Endnote 4] This finding, in conjunction with concern from Congress, has instigated further investigation by GAO.

In addition to FCCSET, there are two other councils in the Executive Office of the President established by legislation to deal with specific aspects of science and technology policy. The National Space Council is currently headed by the director of OSTP and no longer functions separately. The National Critical Materials Council, whose charge to coordinate matters relating to materials policy and research overlaps with a FCCSET initiative, had a 1993 appropriation even though its authorization had expired.

The current director of OSTP is attempting to increase policy coordination through a Science and Technology Deputies Group composed of individuals from each agency who have access to that agency's secretary and can make commitments for the agency. The members are the points of contact in each agency responsible for implementation of cross-cutting initiatives in science and technology.

Under the current structure, FCCSET does not have the authority to bind agencies to policy decisions or budget allocations. In addition, FCCSET does not currently encompass most of the federal effort in science and technology. The six FCCSET initiatives account for only a limited portion of the fiscal 1994 federal R&D budget.

FCCSET has generated an elaborate structure of committees, subcommittees, and working groups, three of which were established by legislation. There are 54 identified on a list that is still being updated. A review of membership lists in FCCSET publications shows group sizes ranging from eight to 39 members, with most having between 12 and 20 members. A June 1993 list of the committee and working group meetings already scheduled for the period between June 23 and Christmas contained 76 meetings. More are likely to be scheduled for the latter months.

According to its procedures manual, the process for selecting FCCSET initiatives involves four stages of review by the full FCCSET and three referrals to committee for information or planning.[Endnote 5]

Despite its complex structure, FCCSET has fostered valuable communication among participants. Coordination and information exchanges are occurring around the initiatives, and professional staff have formed subgroups to share technical information. Many of the FCCSET meetings do result in constructive communication and coordination among agency representatives; however, an effective policy council must do more than promote exchange of technical information.

In this time of declining federal resources, it is imperative that goals and priorities for science and technology be well-defined and that resources be directed to meeting those goals. To achieve the necessary focus, the responsibility for science and technology policy in the executive branch must rest in a single organization. It must be accompanied by the authority to ensure that policies are implemented and the authority to work with OMB, OSTP, and the federal agencies to develop budgets that reflect those policy initiatives.

ACTIONS

  1. Modify the current FCCSET structure and reconstitute the organization as the National Science and Technology Council (NSTC), to coordinate the development and implementation of science and technology policy.

This change should be achieved through the implementation of the following measures:

--A senior policy council should be constituted and named the National Science and Technology Council. Members would be the President and/or the Vice President; the Assistant to the President for Science and Technology Policy; cabinet secretaries and agency heads from departments and agencies having major roles in research, development and or use of science and technology; and the heads of the National Economic Council, National Security Council, Domestic Policy Council, and OMB. NSTC would be charged with ensuring that the President's science and technology goals are implemented effectively, as well as with performing the functions currently assigned to FCCSET, the National Space Council, and the National Critical Materials Council. NSTC would coordinate science and technology policies for all federal agencies. The group would be chaired by the President or Vice President.

--NSTC must have the authority to initiate Presidential Review Directives and Presidential Decision Directives in order to ensure that policy decisions are implemented and to compel participation by all agencies.

--The current FCCSET committee structure would be streamlined. All current FCCSET standing committees and subcommittees would be dissolved or rechartered to meet current needs. NSTC would establish technical working groups as needed. The working groups would provide technical information in support of NSTC goals and would develop detailed implementation plans including milestones and measures of progress toward stated goals. Working groups would be composed of senior technical staff from participating agencies and would exist only as long as NSTC needed their assistance.

--Advisory groups representing the private sector would be established to provide information for NSTC deliberations on policy and priorities. In addition, working groups would communicate with appropriate private sector organizations or small technical advisory groups composed of private sector representatives in order to receive input from stakeholders. These advisors would ensure that the government used the most current and relevant information in developing its plans.

--The NSTC should make recommendations regarding research and development budgets to OMB.

--Whenever possible, exchange of information should occur electronically in order to minimize the number of meetings and the exchange of paper. Initially, all members of the S&T Deputies Group should be connected to Internet, a widely available worldwide computer network, or any other network that will allow electronic communication among group members.

2. The proposed policy council should be created immediately by presidential directive.

Consistent with the goal of coordinating all scientific R&D in one organization, formal action should be taken to deal with related groups that are no longer needed. Legislation is needed to reassign the functions of the National Space Council, the National Critical Materials Council, and the three FCCSET standing committees established by legislation.

IMPLICATIONS
The proposed NSTC does not create an additional federal organization but, rather, it streamlines the existing structure by combining three councils into one and by giving the new council the authority needed to function effectively.

The primary benefit of the proposed council is to focus scarce resources on national priorities which have been agreed upon in open discussion among agencies involved in science and technology. Agencies are likely to receive benefits from expanded cooperation but would relinquish some independence as a result of the council's expanded authority. Applying formal evaluation criteria to the collaborative efforts is likely to improve the endproducts and benefit all participants.

The streamlined organization provides an opportunity to apply information technology to coordination, planning, and review functions. The council can, from the start, use current information technology to reduce meetings, reports, and paper exchange. Over time, it can expedite development of standard terminology and formats for shared databases pertaining to federal R&D activities.

FISCAL IMPACT
Because this proposal makes use of existing agency and OSTP personnel, there would be no estimable fiscal impact. It has the potential to use federal R&D funds more efficiently by focusing agencies' efforts on welldefined goals.

A less complex operating structure should reduce operating costs slightly. For example, assuming that each of the 76 meetings cited earlier takes three hours, including travel and preparation time, and that each one involves 15 people, six months of FCCSET meetings consume 3,420 hours of agency personnel time. Some of these hours spent in meetings would become available for other activities in support of interagency science and technology efforts.


ENDNOTES
  1. National Science Board, Commission on the Future of the National Science Foundation, A Foundation for the 21st Century: A Progressive Framework for the National Science Foundation (Washington, D.C., November 20, 1992), p. 4.
  2. Carnegie Commission on Science, Technology, and Government, Enabling the Future: Linking Science and Technology to Societal Goals (New York, September 1992), p. 16.
  3. U.S. Congress, House, A Bill to Establish a Department of Science, Space, Energy, and Technology, 103rd Cong., 1st sess., 1993, H. R. 1300.
  4. U.S. General Accounting Office, High Performance Computing: Advanced Research Projects: Agency Should Do More to Foster Program Goals (Washington, D.C.: U.S. General Accounting Office, May 1993).
  5. Federal Coordinating Council for Science Engineering and Technology, Policies and Procedures Manual (Washington, D.C.: Office of Science and Technology Policy, October 30, 1992), pp. 11-13.

NSF02:

Use the Federal Demonstration Project to Increase Research Productivity

BACKGROUND
In the mid-1980s, the nine campuses of the Florida State University System and the University of Miami joined with five federal agencies (National Science Foundation, Department of Energy, National Institutes of Health, U.S. Department of Agriculture, and the Office of Naval Research) to experiment with reducing administrative overhead on research grants. They wanted to simplify administrative procedures without compromising financial accountability so that Principal Investigators (PIs) would have more time for research activities. The Florida demonstration was so successful that in 1988, it was broadened to 50 universities and 10 federal agencies as the Federal Demonstration Project (FDP). The participating universities were selected through a competitive process managed by the National Academy of Sciences.

FDP was developed cooperatively by federal agencies and researchers. Interested agencies and universities have joined together to find ways to make grant award and administration work better. FDP has no formal status and no operating budget. FDP is organized into a Committee of the Whole which meets once a year to exchange information and set the future agenda, and a steering committee that meets four times a year to provide coordination. A federal Interagency Assessment Committee (IAC) created by the Office of Management and Budget (OMB) oversees the project. The GovernmentUniversity -Industry Research Roundtable of the National Academies of Science and Engineering and Institute of Medicine serves as a neutral convener for discussion of issues relating to FDP.[Endnote 1] FDP demonstrations, designed by several task groups, include formal evaluation which allows OMB to determine the value of recommended changes. FDP is planning a one-day meeting in the fall of 1993 to identify critical issues of research administration to be addressed in the next several years.

Four demonstrations were included in the Florida phase, the first of which gave institutions the authority to manage project budgets without getting prior approval for moving funds between budget line items. The second demonstration allowed grantees to incur costs at their own risk up to 90 days before formal issuance of the grant without prior approval. A third allowed no-cost extensions of up to 12 months, and the fourth and final demonstration allowed grantees to carry forward unobligated grant funds to the next funding period.

On the basis of the experience in Florida, OMB authorized all federal agencies, on an optional basis, to use the streamlined procedures. The impact of the four experimental procedures also was formally evaluated in 28 universities in addition to those in Florida.[Endnote 2 ]Responses from 2,501 PIs indicated that the streamlined procedures saved an average of 52days per year. That represented 38.5 person-years of effort for the 2,501 investigators.[Endnote 3] Eighty nine percent of that time was reinvested in scholarly activity and 73 percent in research. The study's authors assert that if these findings were extrapolated to all federally funded PIs, reinvestment in research, as a result of using the simplified procedures, would increase substantially.

The next demonstration evaluated the effectiveness of equipment screening regulations. OMB Circular No. A-110 (Responsibilities for Disclosure with Respect to the Budget) requires procurement procedures "to assure the avoidance of purchasing unnecessary or duplicative items.''[Endnote 4 ]Subsequent A-110 audits prescribed a two-level screening process based on cost of equipment as well as a requirement for centralized inventories and proof of screening.

The FDP studied the value of the formal equipment screening process for meeting the objective stated in A-110.[Endnote 5] In a one-year period, the 31 participating institutions performed over 4,900 separate screenings involving almost $83 million worth of equipment. Two screenings resulted in matches, avoiding the purchase of $18,881 worth of equipment. The study concluded that the cost of the time spent by PIs and administrators (estimated at $195,413) was more than 10 times the savings accrued as a result of equipment screening.

That estimate did not include the cost of developing and maintaining the screening systems. The study also found that PIs, independent of screening requirements, used university systems and informal networking to find opportunities to share equipment when it benefited their research and that such inquiries were made before a procurement request was ever submitted for screening.

The Commonwealth of Virginia performed a study of administrative decentralization in higher education.[Endnote 6] The purpose of the study was to identify administrative functions that could be delegated to the universities. Universities that met standards for financial management and management efficiency were relieved from following selected procedures. Given a positive incentive, all universities in the state improved their financial management, and all but one qualified. An additional, unexpected success was the qualification of the two major teaching hospitals. In response to the incentives, they brought very complex financial systems into compliance with the standards.

FDP has been able to recommend regulatory changes that simplify administration of research grants and allow university researchers to spend more of their time on productive research. Although OMB has modified Circular A-21 (Cost Principles for Educational Institutions) and is in the process of modifying A-110 as a result of the initial demonstrations, there is no set place in the federal government to receive FDP recommendations. This process of developing procedures that simplify research administration without reducing accountability should be continued.

ACTION
The Federal Demonstration Project, in cooperation with OMB, should define a systematic means to select participants and to introduce those procedures that are shown to be effective into federal regulations.

A formal certification process for including organizations in FDP should be established. Certification criteria should be based on official audits of university financial statements, and on internal controls based on audits conducted in accordance with OMB Circular A-133 (Audits of Institutions of Higher Learning and Other Nonprofit Institutions) and cognizant audit agencies as necessary. The focus should be on operating procedures that prevent misuse of funds. Those universities whose procedures provide a reasonable assurance of accountability and control of financial expenditures for federal activities would be allowed to participate. Periodic recertification should be required, and the process of applying for certification should be formalized and perpetuated in OMB Circular A-110.

The IAC should define the certification criteria to be included in OMB Circular A-110. Examples of standards are: (1) an unqualified audit opinion from the designated auditor; and (2) no significant audit deficiencies, including compliance findings, to the university as a whole and relative to federally assisted activities.

The current structure of FDP should be used to approve and evaluate demonstrations and to present results to OMB. A central point within OMB should be designated to receive suggestions.

FDP should be used as a model for testing new procedures. FDP is currently serving as an effective interagency reinvention lab for administration of research grants. It is a model for an approach that could be used for testing and evaluating other changes to federal procedures. Interested parties organize to suggest changes and to implement them on a limited basis so that risk can be controlled and results studied. The new procedures would be subjected to a formal evaluation and implemented more widely only if they prove beneficial.

IMPLICATIONS
FDP provides a model for simplifying administrative research grant procedures without eliminating accountability. Because administrative costs are reduced, more federal grant money can be spent on research. The certification process will help assure qualified participants, and IAC will provide the necessary oversight.

FISCAL IMPACT
Using streamlined procedures allows the federal government to fund research instead of paperwork with its grant money. Implementation of the procedures in the four initial demonstrations has been estimated to add 158 years of research activity per year at no cost.[Endnote 7]


ENDNOTES
  1. Research Roundtable, What is the Federal Demonstration Project? (Washington, D.C., August 1991).
  2. Productivity/Assessment Task Group of the Federal Demonstration Project (PATG), The Impact of the Use of Expanded Authorities with in the Federal Demonstration Project (February 1991).
  3. Ibid., p. 3.
  4. U.S. Office of Management and Budget, Circular No. A-110 Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations (Washington, D.C., 1976) attachment O, paragraph 3.c.
  5. Federal Demonstration Project, Report of Task Group Five on Equipment Screening Study (Washington, D.C., December 1991).
  6. Finley, Donald J., Administrative Decentralization in Higher Education (Richmond, Virginia, May 1988).
  7. Productivity/Assessment Task Group, p. 3.

NSF03:

Continue Automation of NSF Research Support Functions

BACKGROUND
In the last several years, the National Science Foundation (NSF) has reengineered many of its business practices in order to handle an increase in workload without a concurrent increase in staff. Five years ago, NSF's interactions with the research community were paper-intensive. NSF would mail thousands of copies of program announcements to researchers throughout the country. Research institutions would respond with 10 to 15 copies of over 30,000 proposals that averaged over 50 pages. Appropriate peer reviewers were selected by NSF scientific staff, and 8 to 12 copies of a proposal would be sent to them. The peer reviewers would mail back their written review of the proposal. Copies of the reviews of proposals would be made for panel reviewers. After a funding decision was made, an award letter would be sent to the research institution and to the principal investigator. In short, NSF was beginning to drown in its paper processes.

The agency committed itself to implementing new technological strategies to attack the paperwork problem and reduce workload burdens for NSF staff and the research community. NSF initiated a research program to address the technological and behavioral issues involved in the design and implementation of a totally electronic proposal, review, and award process. In 1987, this program, Experimental Research in Electronic Submission (EXPRES), began as a cooperative agreement with university and industry partners to explore the research issues involved in implementing a full-scale interoperable system. The goal was to build on the diversity of technology in the university environment rather than to mandate limited standards for interacting with NSF.

EXPRES researchers discovered that major breakthroughs in technology were necessary before the basic concepts of EXPRES could be achieved. In 1987, the technology was not advanced enough to meet the objectives of the research program. Additionally, the university information technology infrastructure was uneven; quality varied significantly even on the same campus. The EXPRES program, however, did validate the NSF goals of electronic document exchange. Although full-scale implementation of NSF's concept was not possible, NSF committed to the pursuit of achievable components of the overall program. The following examples illustrate some of the progress the Foundation has made in these areas:

AUTOMATION OF EXTERNAL INFORMATION DISSEMINATION. Several years ago, NSF implemented the Scientific and Technical Information System (STIS) to provide information about NSF and its research programs to its customers.[Endnote 1] This system, which is accessible in a variety of ways, including Internet access and dial-in access, has grown over the years. Today, there are over 2,000 requests for information each day from across the United States. People in over 60 countries have obtained information from the STIS system. The system now provides immediate access to all NSF program announcements, NSF guidelines for the submission of proposals, information about the research being performed by NSF grantees, personnel vacancy announcements, and numerous informational publications.

STANDARDIZATION OF PROPOSAL PACKAGE. In coordination with other research agencies, NSF has identified data elements commonly required by each agency and has developed proposal submission standards in a package that may be used by all research institutions to submit proposals.[Endnote 2] This package is available electronically and is intended to facilitate electronic submission of proposals.[Endnote 3]

ELECTRONIC RECEIPT OF PROPOSAL REVIEWS. After careful consideration and coordination with the research community, NSF allows reviewers to send their reviews to NSF by electronic mail. Several technical and legal issues needed to be addressed and resolved, such as the question of electronic signatures. With the cooperation of the research community, many proposal reviews are now received electronically.

ELECTRONIC TRANSMISSION AND RECEIPT OF FINANCIAL INFORMATION. Beginning in 1992, NSF implemented a program to electronically mail Federal Cash Transaction Reports to many of the major research institutions receiving NSF funding. This process greatly facilitates the institution's ability to account for expenditures made under NSF grants and expedites posting to the NSF financial accounting system.

SIGNIFICANT REDUCTION OF INTERNAL PAPER PROCESSES. While the agency still receives much of its external correspondence by paper, it has sharply reduced the majority of paper-intensive processes that existed five years ago. This was accomplished with state-of-the-art information systems to support mission requirements, the use of bulletin boards and electronic mail to support internal communications requirements, and the modification of proposal processing to make it suitable for automation.

A sign of the success of these initiatives is the increased efficiency in the work processes of the agency. In the last 10 years, the number of proposals received by the agency has more than doubled and its budget has nearly tripled. While this represents a significant increase in workload and accountability, the staffing at NSF has remained virtually constant. The reengineering of business practices using information systems is credited with NSF's ability to do more with less.

NSF continues to reengineer. However, its primary "production'' process, the programmatic reviews of unsolicited proposals, is still too paper-intensive and inflexible. Pilot studies are needed to test advanced information technology and new processes for exchanging information among proposers, reviewers, NSF staff, and the systems which support their work. For full value, a major study of system reengineering to explore ways to tie together processes, program design, proposal acquisition and review, selection decisionmaking, and award administration will be required. If the workload continues to increase at the current rate, increasing efficiency through automation will be the only way to handle it.

ACTIONS

  1. NSF should continue its efforts to implement advanced information technology in the proposal submission, review, award, and information dissemination process.

NSF should continue, as it has done with STIS, to make use of commonly available low-cost technologies. Advances in commercial word processing, forms applications, and mail-enabled applications will provide many of the tools needed for researchers to prepare and submit grant applications electronically and for NSF to distribute them for review and comment. Public domain search-and-retrieval software, like that used in STIS, is continuing to improve and to be adopted by university researchers. NSF already has responsibility for much of the work in development of the high-speed network that will be needed. Because of its responsibility in the area of computer science, NSF will continue to stay abreast of industry advances in encryption, network security, and digital signature standards. These are necessary for widespread acceptance of electronic grant processing. Researchers must be assured that the technology will protect their proposals against unauthorized access and electronic theft, and universities must be confident that proposals cannot be submitted without proper authorization by designated officials. Demonstrations and pilot projects will be necessary to evaluate the cost-effectiveness of new systems prior to implementation.

2. A formal means for NSF to share developments with other research agencies should be defined.

NSF's achievements in automation should be shared more widely with other agencies. Because of its expertise and experience, in consultation with the Office of Science and Technology Policy, NSF should be designated as the lead agency for automation of grants processing. NSF should use interagency coordinating groups such as the Working Group on Government Information Technology Services proposed in the NPR accompanying report on information technology to interact and form alliances with agencies who have similar needs. In addition, it should use the informal contacts forged over the years on other cooperative efforts to identify agencies that could both contribute and benefit from participation in collaborative efforts.

Through the lead agency mechanism, NSF could be identified as a test site for projects that will demonstrate the efficiencies realized through fullscale use of information technology in grant-making agencies. These pilot projects could focus on all aspects of the process from proposal receipt, review, and award to financial management and dissemination of research results.

3. NSF should be able to compete for funds to accelerate automation of grants processing.

The NPR accompanying report on information technology has proposed that a governmentwide "venture capital'' fund be available to federal agencies for innovative research and that agencies be allowed to keep some of the funds saved as a result of reengineering their business processes. If these suggestions are enacted, NSF should seek such "venture capital'' to accelerate its efforts. NSF should also explore the possibility of entering into interagency agreements with other agencies that might benefit from its work. Cost of development could be shared and more funding would be available to NSF for its development efforts.

IMPLICATIONS
Considerable savings in materials, mailing, and storage can be realized by moving to paperless grant processing and information dissemination. However, the government cannot set up a system that would have the effect of excluding potential users. NSF must provide for those universities that do not have the latest technology available. They must also be sensitive to the various groups within the university community who participate in grant preparation. Whereas scientific researchers may have the necessary hardware and software, the administrative side of the university, which must approve budgets and prepare the institutional sections of the proposal, may not.

NSF must balance the need to serve all parties with the need to take advantage of the best technology. With rapidly changing technology, using the least common denominator means building in obsolescence. NSF's approach in STIS was to provide several alternative methods. Like STIS, other new systems must attempt to achieve the advantages of the most advanced approach while making allowance for those who cannot afford to acquire them.

The concern for security cannot be ignored. Stories of computer fraud and break-ins are becoming routine. Advances in data encryption and network security will alleviate some concern. Widespread acceptance of electronic processing may not occur until security improvements are available.

Universities may have to change their internal processing so that the electronic grant proposals can flow through their offices and be properly signed and approved before submission. The need for change within the university may be the most difficult barrier to automating grant processing.

Whereas there are economies for the government in developing a single method for processing all grant proposals and for the university in processing all grants the same way, not all agencies may be satisfied with a generic grant proposal kit. Several research offices joined with NSF in developing their current kit, but at least one preferred to develop a kit to meet its own requirements.

FISCAL IMPACT
While cost savings are difficult to quantify, savings in postage for the STIS system cited above amount to as much as $1 million per year in addition to the cost of preparing thousands of mailings.

After full implementation, the electronic receipt and review of proposals could result in savings of $1 million or more annually in postage alone. Currently, approximately $1.2 million is spent to mail 10 copies of the 30,000 proposals that are sent out to reviewers. Productivity gains could result in even larger savings. For full implementation, a multiyear investment to purchase equipment, revise procedures, and retrain employees will be required. Therefore, anticipated savings cannot be estimated until pilot projects have been completed. Savings may also accrue to the universities which collectively spend a minimum of $1.2 million to mail proposals to NSF.

Economies in grant processing, combined with the introduction of information technologies in the process for dissemination and use of research results, would yield substantial benefit to the government and the research community. If proposal volumes increase over the next decade as they have in the past, only intensive use of information technology will permit NSF and other agencies to maintain control over rapidly expanding program administrative costs.


ENDNOTES
  1. National Science Foundation, STIS User's Guide, NSF 91-19 (rev.), version 2.1 (Washington, D.C., September 1992).
  2. National Science Foundation, Grants for Research and Education in Science and Engineering: A Proposal Guide and Forms Kit, Draft (June 5, 1993), Appendix H.
  3. National Science Foundation,The NSF Electronic Proposal Submission Project, Draft (May 5, 1993).

AGENCY REIVENTION ACTIVITIES

Getting Started and Motivating Participation

The National Science Foundation (NSF) is a small, sharply focused agency with intense interaction with the public it serves, the research and education community, and the general public. It has direct communication with the academic community through temporary visiting staff, external advisory committees, and peer reviews. In addition, NSF has a history of partnership with industry and is at the core of federal enterprises of computing and networking research and applications programs. Thus, NSF proposed to serve as a model reinvention agency and as a reinvention lab.

Reinvention Lab

In response to the Vice President's invitation to collaborate on reinventing government, six employees have been designated to lead the reinvention effort within NSF. This group coordinated the development of the issues for submission to the National Performance Review team and recommended using NSF as a reinvention lab. Doing this will enable the agency to accelerate its present innovation activities in a staged fashion within and across organizational units. This strategy already has yielded:

--widespread adoption of electronic interaction in and outside of the agency,

--an advanced computer-based information infrastructure, and

--worldwide network communications accessible on every desk.

Looking Ahead

NSF seeks to employ its resources to sharply expand its emerging innovations:

--electronic commerce, such as proposal submission and review, financial transactions, and networked information services;

--flexible workplace (remote computer-based office operations and essential programs across NSF and other agencies);

--electronic meetings such as teleconferences; and

--showplace laboratories (joint labs and metacenters).


SUMMARY OF FISCAL IMPACT
      Change in Budget Authority by Fiscal Year
               (Dollars in Millions)

Recommendation
(1994/1995/1996/1997/1998/1999/Total Change in FTEs)

NSF01: Strengthen Coordination of Science Policy (N/A 1994 through 1999)

NSF02: Use the Federal Demonstration Project to Increase Research Productivityn
(N/A 1994 through 1999)

NSF03: Continue Automation of NSF Research Support Functions*
(N/A 1994 through 1999)

Total NSF/OSTP
(N/A 1994 through 1999)

N/A = Not Applicable (recommendation improves efficiency or redirects resources but does not directly reduce budget authority).

           Change in Outlays by Fiscal Year
                (Dollars in Millions)

Recommendation
(1994/1995/1996/1997/1998/1999/Total Changein FTEs

NSF01: Strengthen Coordination of Science Policy (N/A 1994 through 1999)

NSF02: Use the Federal Demonstration Project to Increase Research Productivityn
(N/A 1994 through 1999)

NSF03: Continue Automation of NSF Research Support Functions*
(N/A 1994 through 1999)

Total NSF/OSTP
(N/A 1994 through 1999)

*This measure is expected to increase the efficiency of NSF operations, although specific savings cannot be estimated until pilot projects have been completed.

N/A = Not Applicable (recommendation improves efficiency or redirects resources but does not directly reduce outlays).


APPENDIX

Accompanying Reports of the National Performance Review

Governmental Systems...........................Abbr.

Changing Internal Culture

 Creating Quality Leadership and Management.....QUAL
 Streamlining Management Control................SMC
 Transforming Organizational Structures.........ORG
 Improving Customer Service.....................ICS

Reinventing Processes and Systems

 Mission-Driven, Results-Oriented Budgeting.....BGT
 Improving Financial Management.................FM
 Reinventing Human Resource Management..........HRM
 Reinventing Federal Procurement................PROC
 Reinventing Support Services...................SUP
 Reengineering Through Information Technology...IT
 Rethinking Program Design......................DES

Restructuring the Federal Role

Strengthening the Partnership in

 Intergovernmental Service Delivery.............FSL
 Reinventing Environmental Management...........ENV
 Improving Regulatory Systems...................REG
 Agency for International Development...........AID
 Department of Agriculture......................USDA
 Department of Commerce.........................DOC
 Department of Defense..........................DOD
 Department of Education........................ED
 Department of Energy...........................DOE
 Environmental Protection Agency................EPA
 Executive Office of the President..............EOP
 Federal Emergency Management Agency............FEMA
 General Services Administration................GSA
 Department of Health and Human Services........HHS
 Department of Housing and Urban Development....HUD
 Intelligence Community.........................INTEL
 Department of the Interior.....................DOI
 Department of Justice..........................DOJ
 Department of Labor............................DOL

National Aeronautics and Space Administration..NASA National Science Foundation/Office of Science

 and Technology Policy..........................NSF
 Office of Personnel Management.................OPM
 Small Business Administration..................SBA
 Department of State/ U.S. Information Agency...DOS
 Department of Transportation...................DOT
 Department of the Treasury/ Resolution Trust 
 Corporation....................................TRE
 Department of Veterans Affairs.................DVA