The questionnaires were tested on a small trial basis a year ago and revised versions were subsequently shared with all the agencies and laboratories for their suggestions and comments. After further adjustments, we began data collection in November, 1989, by sending the questionnaires to 27 agencies and to 338 of their laboratories.

As of last week, 78 percent of the agencies and 89 percent of the laboratories had returned their questionnaires. We expect to receive the remaining questionnaires within the next several weeks. Although the data base is incomplete at this time, we carried out preliminary analyses which we will share with you today. The results of the analyses are, of course, tentative and a final report, based upon the full data set and a more thorough analysis, will be produced at a later date.

To illustrate the kind of information in our data base, I'll summarize some of the preliminary findings as they pertain to major provisions of the Federal Technology Transfer Act. The numbers I will be giving you are based upon all the laboratory and agency responses that had been included in our data base as of April 25th, and that would be about 58 percent of the sample.

I'll give you the results in two categories, findings about agency and laboratory implementation of the Act and about impact. First, the implementation of the Act.

To check on early implementation steps, we sought information about the communication of policies from the agencies to their laboratories. When laboratories were asked if they had received written guidance, 74 percent responded that they had received final or draft written guidelines from their agencies. However, 26 percent reported that they did not have written guidance from the agencies.

The second point. The original Act, in 1980, mandated that each Federal laboratory shall establish an Office of Research and Technology Applications. When we asked if the office was located within the laboratory, 20 percent answered yes. Seventy percent reported that their office was located at agency headquarters and 9 percent reported it was located at some other location.

Third point. The Act encourages agencies to permit laboratories to enter into cooperative research and development agreements with State and local governments, universities and private industry. When we asked laboratories if they received authority from their agency to approve agreements, however, 61 percent reported that they had not yet received such authority.

Although the Act authorizes agencies to give awards to scientific, engineering and technical personnel for activities leading to the filing of patent applications, more than half the agencies said that they did not make such awards.

And as a final point pertaining to implementation, we can report to you about the Federal Laboratory Consortium for Technology Transfer. The Act encourages Federal agencies and laboratories to participate in and use the services of the consortium that was chartered by the Act.

When we asked laboratories if they had appointed a representative to the consortium, 82 percent reported that they had not. Fur

ther, responses to other questions suggested that the laboratories do not fully utilize the services provided by the consortium.

I'll return to implementation matters at the end of my remarks. Let me now speak to questions about impact of the Act.

Here we have three preliminary findings. First, we found that the laboratories reported no increase in the number of patents issued between 1986 and 1989. Second, we found no significant increase in the granting of licenses between 1986 and 1989. Finally, when the laboratories were asked about their royalty income in 1986 and 1989, they reported about a ten-fold increase in royalties received, from about $176,000 in 1986 to about $1.7 million in 1989. While the first two of these findings indicate no change in the number of patents and the number of licenses, the result in royalty income is a positive sign.

I would like to stress, however, that it's too soon after the 1986 amendments to draw firm conclusions about the impact of the Act. As systems and procedures which support technology transfer are put into place, it will be important to monitor the various indicators of effectiveness. Now that a data bank of comparable information has been established, we have a base line against which to observe future changes if they occur.

I've highlighted some of our findings. Now let's take a step back and see where we are.

We set out to develop and implement a technology transfer reporting system that would provide Congress with sound and comparable data across the Federal agencies and laboratories. We are pleased that we can report success in implementing the data collection system. The cooperation we received, the response rate to our questionnaires and the preliminary data we described, are testimony to the fact that Congress will have a comprehensive data base on Federal technology transfer.

We attribute this result to the cooperation of the agencies and the laboratories and to the serious commitment of the Federal laboratory scientists to technology transfer.

Our initial findings, though preliminary, do, nevertheless, suggest that, overall, agency and laboratory implementation of the amended Act leaves room for improvement. It seems to us that the laboratories need several things. First, more guidance from the agencies regarding implementation of the amended Act; second, direction to establish Offices of Research and Technology Applications at the laboratory level and to negotiate cooperative research and development agreements; and third, encouragement to consider technology transfer activities as a basis for laboratory staff promotions and awards. Our data further suggest that agencies need to encourage greater participation of their laboratories in the Federal Laboratory Consortium.

In summary, our preliminary findings suggest that the implementation of and the responsiveness to the provisions of the Act need improvement.

Mr. Chairman, that concludes my remarks. I would be happy to answer any questions that you or the subcommittee members may have.

[The prepared statement of Mr. Wargo follows:]

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE: I welcome this opportunity to contribute to the Subcommittee's deliberations on using our nation's basic and applied research to improve our competitiveness in world markets. The process by which scientific research and development is transformed into commercially viable products and services has come to be known as "technology transfer." The Congress has long recognized that one way to improve technology transfer is to draw upon the basic scientific research and development strengths of our federally supported

laboratories.

In the following testimony, we present (1) a brief summary of the legislative history of and congressional interest in federal technology transfer, (2) background information on how we developed a reporting system to collect information on federal agency and laboratory implementation of the legislation, (3) examples of the types of analyses that are possible with the data collected using this system, and (4) concluding observations.

LEGISLATION

In 1980, the Congress passed the Stevenson-Wydler Technology Innovation Act (Public Law 96-480) and amended it in 1986 with the Federal Technology Transfer Act (Public Law 99-502). This legislation was passed, in part, to (1) establish a technology transfer mission for federal agencies and their research and

development laboratories, (2) improve the use of federally funded research and technology by, among others, state and local governments, and the private sector, (3) provide federal employee recognition for outstanding contributions to technology transfer, and (4) ensure the full use of the products of the federal investment in research and development. The act also mandated the establishment of offices of research and technology applications (ORTAS) within major federal laboratories and required the setaside for technology transfer of not less than 0.5 percent of each agency's research and development budget.

In addition, the Federal Technology Transfer Act, as implemented by Executive Order 12591, directs department and agency heads to authorize their government-owned, government-operated laboratories to enter into cooperative research and development agreements (CRDAs) with state and local governments, universities, and private companies; award exclusive licenses for patents to cooperators with federal laboratories; grant awards to federal employees significantly contributing to technology transfer; and implement royalty sharing programs. The act also institutionalizes the Federal Laboratory Consortium for Technology Transfer (FLC) and requires agencies to contribute to its funding.

The Congress, in general, and the House Committee on Science, Space, and Technology, in particular, have an understandable interest in determining whether the act as amended is producing the intended results and whether new legislative initiatives are called for to further enhance the technology transfer process. My