[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
A REVIEW OF THE
ADVANCED RESEARCH PROJECTS
AGENCY--ENERGY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON INVESTIGATIONS AND
OVERSIGHT
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
TUESDAY, JANUARY 24, 2012
__________
Serial No. 112-57
__________
Printed for the use of the Committee on Science, Space, and Technology
Available via the World Wide Web: http://science.house.gov
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. RALPH M. HALL, Texas, Chair
F. JAMES SENSENBRENNER, JR., EDDIE BERNICE JOHNSON, Texas
Wisconsin JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas LYNN C. WOOLSEY, California
DANA ROHRABACHER, California ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland BRAD MILLER, North Carolina
FRANK D. LUCAS, Oklahoma DANIEL LIPINSKI, Illinois
JUDY BIGGERT, Illinois GABRIELLE GIFFORDS, Arizona
W. TODD AKIN, Missouri DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas MARCIA L. FUDGE, Ohio
MICHAEL T. McCAUL, Texas BEN R. LUJAN, New Mexicoo
PAUL C. BROUN, Georgia PAUL D. TONKO, New York
SANDY ADAMS, Florida JERRY McNERNEY, California
BENJAMIN QUAYLE, Arizona JOHN P. SARBANES, Maryland
CHARLES J. ``CHUCK'' FLEISCHMANN, TERRI A. SEWELL, Alabama
Tennessee FREDERICA S. WILSON, Florida
E. SCOTT RIGELL, Virginia HANSEN CLARKE, Michigan
STEVEN M. PALAZZO, Mississippi VACANCY
MO BROOKS, Alabama
ANDY HARRIS, Maryland
RANDY HULTGREN, Illinois
CHIP CRAVAACK, Minnesota
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
------
Subcommittee on Investigations and Oversight
HON. PAUL C. BROUN, Georgia, Chair
F. JAMES SENSENBRENNER, JR., DONNA F. EDWARDS, Maryland
Wisconsin ZOE LOFGREN, California
SANDY ADAMS, Florida BRAD MILLER, North Carolina
RANDY HULTGREN, Illinois JERRY McNERNEY, California
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
RALPH M. HALL, Texas EDDIE BERNICE JOHNSON, Texas
C O N T E N T S
Wednesday, April 13, 2011
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Paul C. Broun, Chairman, Subcommittee
on Investigations and Oversight, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 12
Written Statement............................................ 15
Statement by Representative Paul D. Tonko, Ranking Minority
Member, Subcommittee on Investigations and Oversight, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 17
Written Statement............................................ 19
Witnesses:
Dr. Arun Majumdar, Director, Advanced Research Projects Agency--
Energy, U.S. Department of Energy
Oral Statement............................................... 21
Written Statement............................................ 24
Hon. Gregory Friedman, Inspector General, U.S. Department of
Energy
Oral Statement............................................... 29
Written Statement............................................ 31
Frank Rusco, Director, Energy and Science Issues, U.S. Government
Accountability Office
Oral Statement............................................... 37
Written Statement............................................ 39
Discussion 49
Appendix: Answers to Post-Hearing Questions
Dr. Arun Majumdar, Director, Advanced Research Projects Agency--
Energy, U.S. Department of Energy;............................. 70
Hon. Gregory Friedman, Inspector General, U.S. Department of
Energy......................................................... 83
Appendix 2: Additional Material for the Record
Majority Staff Report as Submitted by Chairman Paul C. Broun..... 86
Minority Staff Report as Submitted by Ranking Member Paul Tonko.. 98
Polar-Orbiting Environmental Satellites: Report from GAO, June
2012........................................................... 159
A REVIEW OF THE ADVANCED RESEARCH PROJECTS AGENCY--ENERGY
----------
TUESDAY, JANUARY 24, 2012
House of Representatives,
Subcommittee on Investigations and Oversight,
Committee on Science, Space, and Technology,
Washington, DC.
The Subcommittee met, pursuant to call, at 2:04 p.m., in
Room 2318 of the Rayburn House Office Building, Hon. Paul Broun
[Chairman of the Subcommittee] presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Broun. The Subcommittee on Investigations &
Oversight will come to order. I will try not to break this desk
like my predecessor Chairman did.
Good afternoon, everyone, to today's hearing titled, ``A
Review of the Advanced Research Projects Agency--Energy,''
ARPA-E. You will find in front of you packets containing our
witness panel's written testimony, biographies and their truth
in testimony disclosures. I want to welcome everyone here, and
I particularly want to welcome our witnesses here today.
Now I will recognize myself for five minutes for an opening
statement.
The Advanced Research Projects Agency--Energy, or ARPA-E,
was created in 2007 by the America COMPETES Act but not funded
until 2009 with the passage of the American Recovery and
Reinvestment Act. ARPA-E was directed to foster high-risk,
high-reward energy technologies too risky for the private
investment. In general, the statute calls for these
technologies to be focused on reducing energy imports and
emissions while improving energy efficiency.
The Agency is directed to accomplish these goals by doing
the following: identifying and promoting revolutionary advances
in fundamental sciences; secondly, translating scientific
discoveries and cutting edge inventions into technological
innovations; and thirdly, accelerating transformational
advances in areas that industry by itself is not likely to
undertake because of the technical and financial uncertainty.
These principles and goals are generally well-supported on
both sides of the aisle here in Congress, and for good reason.
If the Federal Government is going to fund energy research, it
should not duplicate or crowd out private-sector investment. It
should focus on revolutionary breakthroughs that will transform
our energy infrastructure.
Despite this support, this Committee did raise a number of
concerns when ARPA-E was proposed. Specifically, the Committee
was concerned with how the creation of a new agency would
affect the world-class research supported by DOE's Office of
Science. Historically, DOE's Office of Science has been the
home of basic energy research, and their efforts have focused
on high-risk, high-reward basic research for decades. The
Committee was concerned that ARPA-E would compete with the
Office of Science for scarce resources, thereby undermining
basic research.
Similarly, the Committee was also concerned that ARPA-E
could unnecessarily duplicate DOE's significant related work in
other programs and areas scattered throughout the department.
Finally, the Committee was concerned ARPA-E would focus on
late-stage technology development and commercialization efforts
that are better left for the private sector to undertake,
thereby accepting both the risk and the potentially great
reward. Such interventions could eventually crowd out private
investment and get the government into the business of picking
winners and losers among competing companies and technologies
rather than letting the marketplace make these decisions.
Today's hearing allows the Committee to evaluate whether
those concerns have been addressed. With respect to the impact
ARPA-E is having on the Office of Science, we saw a 53 percent
increase in ARPA-E's budget in the 2012 fiscal year, while the
Office of Science received only a 0.6 percent increase. In the
prior fiscal year, ARPA-E's budget increased by 260 percent,
while the Office of Science budget decreased six percent.
Apparently our concern was well-founded.
We also have some initial data regarding duplication with
private- and public-sector funding, and based on work
undertaken by GAO and Committee staff, the record appears
mixed. Of the 44 small- and medium-sized companies that
received an ARPA-E award, GAO found that 18 had previously
received private-sector investment for a similar technology.
Committee staff were able to identify five additional companies
that received private sector funding prior to their ARPA-E
award.
Similarly, a review of GAO work papers and publicly
available information indicates numerous instances of overlap
and duplication between ARPA-E and both public- and private-
sector funding. For example, GAO found that 12 of the 18
companies it identified as having received private sector-
funding prior to their ARPA-E award planned to use ARPA-E
funding to either advance or accelerate prior funded work. One
eventual ARPA-E awardee stated in its application that their
``original projections planned on prototype demonstration and
subsequent first-market adopter sales in late 2012 or early
2013. The ARPA-E award coupled with another $1 million in
venture financing as part of our cost share allows us to
accelerate our development schedule to 2011 instead.'' Just
brought it a year or possibly two sooner.
These and numerous other examples that are detailed in a
majority staff report that I have attached to my opening
statement raise a fundamental question regarding the role and
future of ARPA-E. Should it direct taxpayer money to simply
speed up or accelerate companies and what they are already
doing, or should it fund research in truly high-risk white
spaces, so-called white spaces, that no one else is willing to
undertake? I hope today's hearing provides an opportunity to
identify common ground on this question.
Another thing that taxpayer money should not be used for is
meetings with bankers to raise capital and a fee to appear on a
local television shows. The DOE IG noted in its report that
these two tasks were cited as an allowable cost by ARPA-E under
its Technology Transfer and Outreach policy. ARPA-E originally
argued that such spending should be allowed despite the DOE
IG's concerns, Just yesterday, however, ARPA-E provided an
updated technology transfer policy that is now silent on the
appropriateness of this type of spending. Personally, I think
it is inappropriate. The Subcommittee is reviewing this policy,
and I look forward to getting clarification from ARPA-E on this
question. These concerns are not meant to imply that all of the
work being conducted by ARPA-E is duplicative or unworthy of
federal funding. Many of the projects it supports are clearly
in line with its statutory direction, and if taxpayers are
going to be involved in funding energy technologies at all, it
should be in a manner similar to ARPA-E's focus on high-risk,
high-reward research that is not being pursued by the private
sector.
Despite ARPA-E's stated commitment to ``carefully structure
its projects to avoid any overlap with public and private
sources of funding,'' we have seen numerous instances that
deviate from that pledge. Going forward, we will continue to
monitor whether the agency is actually following the statutory
direction and look forward to ARPA-E's cooperation.
[The prepared statement of Mr. Broun follows:]
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Chairman Broun. Now I recognize the Ranking Member from New
York, my good friend, Mr. Tonko, for five minutes or whatever
time beyond that that he needs. Mr. Tonko.
Mr. Tonko. Thank you, Mr. Chairman. Thank you for holding
this hearing today, and thank you to our witnesses for
participating.
The Advanced Research Projects Agency--Energy, or ARPA-E,
was designed to be nimble, creative and aggressive in funding
promising ideas that could transform the way we obtain and use
energy. Nothing in the law said that ARPA-E could only fund
companies that did not have private-sector funding or that it
could not fund companies that had funding from other agencies.
Our expectation was that ARPA-E could apply the successful
DARPA model to the energy sector and enable promising ideas to
move expediently toward proof of concept or demonstration.
ARPA-E was to take on a scope of work that the private
sector could not take on by itself and to accelerate the
timeline of innovation in a way other agencies or venture
capital could not do alone. Nothing in the GAO report that
tackled this question suggests ARPA-E is doing anything but
what the Congress and the president envisioned when ARPA-E was
established in 2007. Time to market with an invention matters.
Everyone knows who Alexander Graham Bell was and that he was
awarded the first patent for a telephone. Very few people know
who Elijah Gray was. He was second to file at the Patent Office
for a very similar device. ARPA-E is supposed to make sure that
the Alexander Graham Bells in our new and more competitive
globalized world are American inventors and American companies.
The response to this new organization has been enormous.
DOE has received over 4,000 concept papers in the three years
of its existence. Companies and academic institutions that I
interact with are very excited about this new model for funding
our energy research. ARPA-E is funding innovative companies in
my district, like SuperPower in partnership with the University
of Houston and others to research materials and
superconductivity applications with the potential to provide
essential improvements in our energy infrastructure.
Given the importance of energy to every sector of our
economy and our comeback and to all of our citizens, I believe
we not only can afford this program, we cannot afford to lose
it.
Other national governments are investing, investing in the
energy technologies of the future, clean energy technologies,
especially renewable energy technologies. The Chinese
government invested $34.6 billion in clean energy in 2009 while
our United States Government invested $18.6, or rather, the
United States invested $18.6 billion. Perhaps others are
willing to accept second place in the race to develop new
energy technologies. I simply am not.
Finally, Mr. Chair, I have to comment on the Staff Report
that the majority will enter into the record today. You and
Chairman Hall have a well-documented opposition to ARPA-E. You
asked GAO to examine how ARPA-E might be skirting the law
requiring that DOE ensure they are not duplicating funding of
the private sector. We will hear from the GAO about their
findings today, but their bottom line was that DOE has been
working to ensure that they fund projects on a scale and time
line that the private sector alone would not fund.
Mr. Chair, it appears that when GAO's report did not give
the majority the findings you had hoped for, the majority staff
wrote the report it wished to receive. The majority staff went
through GAO's work papers and cherry-picked some examples to
portray the law as something that it is not. These are
hallmarks of a partisan hit piece, not a thoughtful, thorough
report. Just as one example, the staff report points to several
examples of companies that received private-sector funding or
funding from other federal programs. However, the report does
not validate whether the funding is duplicative with ARPA-E
funding or not. The report settles for assertion and hand
waving where only facts should matter. I will not oppose a
motion to put the majority's report into the record, despite my
misgivings about the process so long as it is understood that
members on this side may decide to insert into the record our
own evaluation of that work product and this program. I am
pleased to note that we will receive testimony on two reports
today, one from GAO, and one from the DOE Inspector General. I
am going to put far more faith in their work products and
findings, which are largely positive and productive than the
partisan claims of the majority's report.
I thank the witnesses for appearing before us this
afternoon, and I do look forward to your testimony. Thank you.
I yield back.
[The prepared statement of Mr. Tonko follows:]
[GRAPHIC] [TIFF OMITTED] T2379.012
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Chairman Broun. Thank you, Mr. Tonko. I want to read into
the record the following. Review of GAO's work papers was
necessary to provide context and quantification to key findings
and best inform the Committee's oversight work going forward.
ARPA-E is a fledgling agency that is still adjusting as it
grows, and it just received a 50 percent budget increase over
the prior year.
I think the minority will agree with me, it is important
that we identify and correct potential problems now while the
agency is still getting its feet under it.
To this end, the more extensive review adds great value to
the community's efforts to be good stewards of the taxpayers'
dollars.
I appreciate your opening statement. If there are Members
who wish to submit additional opening statements, your
statements will be added to the record at this point. I ask
unanimous consent that Mr. Bartlett and Mr. Rohrabacher be able
to participate. Hearing no objections, so ordered.
[The information may be found in Appendix 2.]
Chairman Broun. At this time, I would like to introduce our
panel of witnesses. Doctor--help me.
Mr. Majumdar. Majumdar.
Chairman Broun. Majumdar. Close. I am trying, sir. I
apologize. My family can't spell, can't pronounce, I am not
sure which, with my spelling, B-r-o-u-n. But anyway, Dr.
Majumdar is Director of Advanced Research Projects Agency--
Energy for the U.S. Department of Energy. The Honorable Gregory
Friedman, Inspector General of the U.S. Department of Energy,
and Mr. Frank Rusco, the Director of the Energy and Science
team at the U.S. Government Accountability Office.
As our witnesses should know, spoken testimony is limited
to five minutes each. I am not going to be real hard on that,
as I mentioned to you all before, if you need a few extra
moments, I will give you a little leeway. But if you could keep
it to five minutes if possible, but I don't want to short-
change you, either.
After those five minutes, of course, the Members of the
Committee will have five minutes each to ask questions. Your
written testimony will be included in the record of the
hearing.
It is the practice of the Subcommittee on Investigations
and Oversight to receive testimony under oath. Do any of you
have objections to taking an oath? Let the record reflect that
all witnesses were willing to take an oath by shaking their
heads side to side in a negative manner.
If all of you would please stand and raise your right hand.
Do you solemnly swear or affirm to tell the whole truth and
nothing but the truth, so help you God? Let the record reflect
that all witnesses participating have taken the oath and said,
``I do.''
Now, I recognize our first witness, Dr. Majumdar.
STATEMENT OF DR. ARUN MAJUMDAR, DIRECTOR,
ADVANCED RESEARCH PROJECTS AGENCY--ENERGY,
U.S. DEPARTMENT OF ENERGY
Dr. Majumdar. Mr. Chairman, Ranking Member Tonko, Chairman
Hall and the esteemed Members of this Subcommittee, I want to
thank you for inviting me to testify on behalf of the Advanced
Research Projects Agency for Energy, or ARPA-E, about recent
R&D activities, a recent report by the U.S. Government
Accountability Office, GAO, and a report released in August
2011 by the U.S. Department of Energy's Office of Inspector
General, IG.
I am here to report to you on ARPA-E's activities and
challenges. ARPA-E, which this Committee was integral in
creating, is modeled after DARPA, which helped catalyze
innovations such as the Internet, GPS, stealth technology, and
many others. These innovations not only strengthened our
national security but also economic prosperity by creating
entirely new industries. ARPA-E's goal is to catalyze similar
quantum leaps in energy technologies, ones that are too risky
for the private sector, and those that have the potential to
create entirely new industries.
Today, we import roughly 50 percent of the oil we use from
other nations, many who don't share our values, and we pay
approximately $1 billion a day. This is a national security
problem as well as an economic prosperity one. If we keep
importing oil and pay like business as usual, we will put our
children's and grandchildren's future at risk. A secure future
is like a stool with three legs--national security, economic
security, and environmental security--and at the foundation of
all three securities are innovations in energy technologies.
ARPA-E funds high-risk research projects focused on early-
stage breakthrough energy technologies by a competitive
process. Some examples, batteries that will make electric cars
have a longer range and be cheaper than gasoline-based cars so
that they can be sold without subsidies; entirely new ways of
making biofuels using microbes that do not use sunlight but
rather use electricity from nuclear, wind and other sources.
With durations of two to three years, these inherently
high-risk projects have the potential to be transformative and
create a large economic growth 15 to 20 years from now. ARPA-E
does not fund incremental improvements in existing technology
but rather funds research that could create new technologies
that do not exist today. But if it did, it would make today's
technologies obsolete.
As you may know, ARPA-E issued its fourth round of Funding
Opportunity Announcements on April 20, 2011, and subsequently
announced 60 cutting-edge research projects aimed at
dramatically improving how the U.S. produces and uses energy.
With over $150 million from our fiscal year 2011 budget, the
new ARPA-E projects focus on research for innovative energy
technologies, while increasing U.S. competitiveness in rare
earth alternatives and breakthroughs in biofuels, thermal
storage, grid controls, and power electronics. These projects
are located across 25 states, with 50 percent of the projects
led by universities, 23 percent by small businesses, 12 percent
by large businesses, and 13 percent by national labs, and two
percent by non-profits.
We are currently looking at new technologies and
innovations in various areas. For example, we are holding a
technical workshop in the area of natural gas and its
undeveloped, innovative and potentially transformational uses
in the transportation sector. We are also gearing up for our
third annual ARPA-E Energy Innovation Summit on February 27th
to 29th, which will feature many of the country's energy
thought leaders such as Bill Gates, Fred Smith, Lee Scott,
Ursula Burns and Susan Hockfield. I invite you to join us at
the summit and witness for yourself our Nation's energy
innovation ecosystem.
To be globally competitive, speed is of the essence. ARPA-E
has developed a streamlined process so it can execute with a
fierce sense of urgency and unprecedented speed and efficiency.
Being vigilant stewards of taxpayer dollars is a critical
component of ARPA-E's DNA. All projects will be selected purely
based on merit, based on a panel of experts. Once selected,
ARPA-E Program Directors are personally invested in every
project they manage to help them overcome technical barriers.
But if a technology does not work and a project cannot reach
its go/no-go milestones, ARPA-E discontinues the projects
before the end of the day rather than waste taxpayer dollars.
I would like to express my thanks to the DOE Inspector
General and the GAO for their total reviews and final
recommendation, all of which have been accepted and implemented
by ARPA-E. ARPA-E is committed to continuously improving its
operations so as to better fulfill its statutory mission of
enhancing our Nation's economic and energy security and
maintaining the U.S.'s technological lead in the development
and deployment of advanced energy technologies.
I would also like to thank the IG and the GAO for
safeguarding the sensitive proprietary information of ARPA-E
applicants and awardees. Maintaining the confidentiality of
this information was promised in the competitive selection
process. It is critical to attracting the best ideas and talent
in future funding competitions and maintains the
competitiveness of a performance in domestic and foreign
markets.
Thank you again for your time, and I look forward to
answering your questions.
[Statement of Dr. Majumdar follows:]
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Chairman Broun. Thank you, Doctor. Our next witness is Mr.
Friedman. Mr. Friedman, you are recognized for five minutes.
STATEMENT OF HON. GREGORY FRIEDMAN,
INSPECTOR GENERAL, U.S. DEPARTMENT OF ENERGY
Mr. Friedman. Thank you, Mr. Chairman. Mr. Chairman and
Members of the Subcommittee, I appreciate the opportunity to
testify at your request on the work of the Office of Inspector
General concerning the Department of Energy's Advanced Research
Projects Agency, commonly referred to as ARPA-E. Specifically,
as requested by the Subcommittee, my testimony today will focus
on our August 2011 audit report.
ARPA-E, as has been noted previously, was created to
enhance domestic economic and energy security by funding high-
risk, high-payoff energy technology research and development.
As of January 17, 2012, according to department data, it had
approved 153 projects valued at about $448 million. Of this
amount, approximately $220 million has been expended.
The purpose of our audit was to evaluate ARPA-E's program
implementation and its stewardship of taxpayer-provided
resources. Our review revealed that ARPA-E generally had
effective systems in place to make research awards and to
deploy Recovery Act resources. Of particular note, we found
that ARPA-E, despite being a relatively new program, had
developed and implemented research proposal selection criteria
designed to make certain that awards were consistent with its
mission objectives.
We did, however, identify several opportunities to enhance
safeguards over program execution activities and funding. At
the time of our review, ARPA-E had not fully implemented
policies and procedures to ensure that first, technology
transfer and outreach activity expenditure goals were met and
that such costs were effectively tracked and verified; second,
that awardee activities were effectively monitored and that
recipient requests for reimbursement were properly reviewed;
and finally, ARPA-E had not established formal procedures for
determining whether to continue or terminate projects that were
not meeting program objectives.
Based on the interim results of our audit, ARPA-E surveyed
award recipients about their technology transfer and outreach
activities and expenditures. Recipients reported that they have
spent an estimated $15.3 million on such activities which
allowed program officials to conclude that ARPA-E had exceeded
the 2.5 percent spending requirement established in law.
To address this matter on an ongoing basis, ARPA-E
established a requirement that recipient expenditures reflect
at least the minimum required amount and that such expenditures
be tracked and reported.
We also identified potentially unallowable costs that had
been incurred by a small business recipient. At this small
business, which was awarded approximately $5.8 million in ARPA-
E funding, $1.2 million of which had been incurred at the time
of our audit, we identified almost $40,000 in questionable
direct costs. Responding to our finding, the responsible
contracting officer, as had been mentioned earlier, concluded
that virtually all of the direct costs were allowable because,
in his judgment, they fell under the broad category of
technology transfer activities.
Further, this same recipient did not have support for its
indirect cost rate. As such, we questioned the total indirect
costs of $239,000 claimed by the recipient as of June 30, 2010.
In response to our finding, program officials requested a
review of the recipient's indirect cost rate.
APRA-E's response to our report was favorable. ARPA-E took
specific steps to address several of the issues we raised
during the course of the audit. For example, policies governing
monitoring and oversight, invoice review, and those related to
terminating non-performing awards had been finalized. Further,
ARPA-E officials told us that it had taken action to better
define allowable technology transfer costs, and it implemented
a process to measure progress in meeting spending goals in this
area.
We will continue to monitor ARPA-E's activities as part of
our normal risk assessment process. I would like to point out
that the Office of Inspector General recently issued a Lessons
Learned Report based on our body of work covering the
department's efforts under the Recovery Act, a major source of
ARPA-E support. Our report, based on over 70 audits and
inspections, along with a number of investigations, identifies
several best practices, which if fully implemented, in our
judgment, should help ARPA-E and the Department enhance overall
program execution.
Mr. Chairman, this concludes my statement. I would be
pleased to answer any questions that you or the Members of the
Subcommittee may have.
[Statement of Mr. Friedman follows:]
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Chairman Broun. Thank you, Mr. Friedman. I next recognize
our next witness, Mr. Rusco. You are recognized for five
minutes, sir.
STATEMENT OF MR. FRANK RUSCO, DIRECTOR,
ENERGY AND SCIENCE ISSUES,
U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Rusco. Thank you. Mr. Chairman, Ranking Member Tonko
and Members of the Subcommittee. I am happy to speak today
about GAO's work on ARPA-E. At the request of this Committee,
GAO undertook an evaluation of ARPA-E to examine, one, the
Agency's use of criteria and other considerations for making
awards, including applicants' identification of past private-
sector funding; two, the extent to which ARPA-E projects could
have been funded by the private sector; and three, the extent
to which ARPA-E coordinates with other DOE offices to avoid
duplication of efforts. At this hearing, the resulting GAO
report is being released, and I will speak briefly about our
key findings. In reviewing applications and selecting awardees,
ARPA-E uses four key criteria. These include an assessment of
the potential impact of the proposed technology; the project's
overall scientific merit; the applicant's qualifications,
experience and capabilities; and the quality of the applicant's
management plan.
In addition, ARPA-E program directors take other things
into consideration, including the transformative nature of
projects and the likelihood that the project could be funded by
the private sector.
ARPA-E program directors also assist successful applicants
in shaping projects and management plans to focus on
transformational energy technologies and to increase the
chances of success. With regard to the extent to which ARPA-E
type projects could have been funded privately, it is
impossible to know with certainty whether or not any individual
project could be solely funded by private sources. However,
based upon a wide range of evidence, we concluded that it is
unlikely that most ARPA-E projects could have been solely
financed by the private sector.
We did find that 18 of 121, or 15 percent of applicants
given awards in ARPA-E's first three rounds of funding, had
previously received some venture capital funding. It is
important to note that some of the applicants also would have
had other forms of funding that were not visible to us in the
course of our audit. So any successful company engaged in this
will have some source of private funding likely or other
university funding. But we found 18 that had venture capital
funding, and that was available for us to review.
Of these projects funded by ARPA-E that had received
previous venture capital funding, the projects differed from
what had been previously funded by the venture capital. In most
cases, the differences were technological. Either the ARPA-E
projects were fundamentally different than projects that had
received prior funding or were related but more challenging or
transformational in nature. And for five of the projects, they
were quite similar to what had been previously funded, but the
ARPA-E funding allowed them to speed up their research
significantly over what was possible with private funding
alone.
Our overall conclusion was based on the result of
interviews with ARPA-E program directors, six venture
capitalists and ARPA-E applicants and awardees including the 18
that had previously received private funding. All of these
sources provided evidence consistent with the conclusion that
the specific projects funded by ARPA-E would not have been
funded solely by the private sector.
Finally, we found that ARPA-E program directors and other
staff take steps to coordinate with other DOE program offices
before making funding announcements to try to identify funding
gaps. ARPA-E program directors also use officials from other
DOE offices and from the Department of Defense to assist in
reviewing ARPA-E applications. These efforts to communicate
with and coordinate with other members of federal research and
development programs may reduce the potential for overlap in
funding.
While we found it unlikely that most ARPA-E projects could
have been solely funded by the private sector, we also found
that ARPA-E could improve its approach to collecting and
evaluating information about applicants' past private funding.
Specifically, while ARPA-E directors were generally aware of
prior funding and applicants were required to provide such
information, we found that most applicants did not initially
adequately identify prior funding or explain why their projects
could not be solely funded by the private sector. As a result,
in order for program directors to evaluate private-sector
funding, the directors had to ask for supplemental information
from those applicants.
To improve the efficiency of the application review process
and the quality of information about private funding, we
recommended that ARPA-E provide guidance to applicants,
including a sample response. We also recommended that ARPA-E
require applicants that had previously received private-sector
funding to provide letters from investors or other
documentation with their applications that explained why
investors are not willing to fund applicants' projects.
Finally, we recommended that ARPA-E use venture capital
funding databases to help identify applicants that had received
private-sector funding and to verify information provided by
applicants. ARPA-E concurred with our findings and
recommendations.
Thank you. This concludes my prepared statement. I will be
happy to answer any questions you may have.
[The prepared statement of Mr. Rusco follows:]
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Chairman Broun. Thank you, Mr. Rusco, and I want to thank
the whole panel for your all's testimony.
Reminding Members that the Committee rules limit Member
questioning to five minutes per round of questions, the Chair
at this point will open the round of questions. The Chair
recognizes himself for five minutes of questions.
Dr. Majumdar, I want to see if you can help us by
clarifying for the Subcommittee what appears to be a point of
confusion regarding ARPA-E's philosophy with respect to
industry awardees. You have emphasized many times that ARPA-E
limits its support to how risk technology, so-called white
spaces, that are not being supported by industry or elsewhere
in the government. GAO found that this was true with respect to
most awards, most as they described it. However, GAO's review
as well as other public information indicates many instances
where ARPA-E's philosophy appears to instead support
acceleration of activities already being undertaken by the
private sector.
Let me give you two quick examples. One venture capital-
backed company, Phononic, testified before this Committee that
it was using ARPA-E funds to accelerate what it was already
doing. The Phononic CEO stated that his company's ``original
projections planned on prototype demonstration and subsequent
first market adoptive sales in late 2012 or early 2014, the
ARPA-E award coupled with another $1 million in venture
financing as part of our cost share allows us to accelerate our
development schedule to 2011 instead.'' GAO paperwork states
that another company ``said that once the technical development
of its first traunch of private financing were met, the second
traunch was automatically funded and would have occurred
irregardless of whether the company received ARPA-E funding or
not.''
Those don't sound like high-risk projects in which the
private sector is unwilling to invest. Please help reconcile
award examples like this with ARPA-E's stated philosophy to
limit funding to technology areas too risky for private
investment.
Dr. Majumdar. Congressman, thank you for your question. Let
me just explain the philosophy of what do I mean by ARPA-E
funds projects that are too risky for the private sector. And I
have stated this before in many of my hearings, that ARPA-E
will fund ideas that have never been funded before by the
private sector, not to say that if there are companies that
have been funding by the Venture Capital industry or by other
private sector, that we will not fund. They may have funded for
low-risk ideas for things that will generate revenue in three
or four years, which is what the GAO report----
Chairman Broun. Let me interrupt you just for the sake of
time. I have about two minutes left.
GAO has this example where they said all they did is
accelerate their funding. Now, that is one example, granted.
But it is one example that is out there. And they said that
ARPA-E funding just accelerated the production of work that
they would have done anyway. Is this an anomaly or is this
something that is ongoing or is this something that is
pervasive within ARPA-E or what?
Dr. Majumdar. We have never funded any idea that had been
funded by the private sector. Since you raised the issue of,
you know, specifically of Phononic Devices, that happens to be
my area of research myself. So I can get into gory details on
that. But essentially, they are trying to come up with a
material which conducts electricity very well but blocks heat.
Now, as you know, you take material like copper, it will
conduct electricity and heat, and if you take a material like
in a diamond, it won't conduct electricity, but will conduct
heat. To find a material which conducts electricity but blocks
heat is a non-trivial problem, and there is--you know, they
are, in a sense, trying to get into a scientific breakthrough
that they will translate into a device. But if they could do
that, here is--let me just give you a number.
Chairman Broun. Again, I have 1/4 of a minute, 3/4 of a
minute left. I misspoke. That was not GAO. That was the
company's CEO that made those statements, and he said the
Charles grant just accelerated what they were going to do
anyway with private funding all from private sourcing, not
something new, something that would be just that they were
going to do anyway. You all's grant just helped them to do it
in 2011 instead of 2012 or 2013 as they stated.
The point is, and my time has run out, and I will just let
this go and you and I can talk later, ARPA-E is supposed to
fund projects that the private sector will not and cannot fund.
This CEO said that all you did was just accelerate their
development, and I think we need to be very cognizant that
taxpayer dollars are very scarce. We are in a financial crisis
as a Nation, and we need to make sure that projects that are
funded through ARPA-E will not get private funding, cannot get
private funding because they are too risky. That is one of the
charges of ARPA-E. So we will talk about that later. My time is
up. Now I yield to Mr. Tonko for five minutes.
Mr. Tonko. Mr. Rusco, you are releasing your report today?
Mr. Rusco. Yes, that is correct.
Mr. Tonko. And a report that you spent perhaps the better
part of a year in developing. And that I believe was done at
the request of Chairman Hall and Chairman Broun?
Mr. Rusco. Yes.
Mr. Tonko. Can you briefly describe the review steps at GAO
for the report to be developed, the interviews, the documents
that you collect, and can you do that within the frame of a
minute, please?
Mr. Rusco. Yes. Just briefly, to look at the private-sector
funding, we looked at a venture capital funding database to try
to identify prior capital that had gone to the companies that
had the ARPA-E projects. And then we followed up with both the
program directors and with the companies that had gotten the
funding to try to determine what the nature of the funding was
and how it differed from the projects. And then we also talked
to venture capitalists, some of whom were the funders of the
ARPA-E projects we looked at.
Mr. Tonko. Well, thank you. And curiously, the staff to the
majority did their own report, largely based on your working
papers. When did they see your working papers?
Mr. Rusco. We have had a long back-and-forth with our
client's staff throughout this, and I think it has been
productive. At the very beginning of the job, they gave us
information they would be working on. And then at the end of
the report when we released the report to them but it had not
been publically issued, then as per our protocols, they were
able to come over and look at our work----
Mr. Tonko. At what point?
Mr. Rusco. That took place last week.
Mr. Tonko. So last week? So they took about a week to
develop their own report? That staff product reaches radically
different conclusions, does it not, from those in your report?
Mr. Rusco. I think that the facts in the Committee report
are in our work papers, the ones that----
Mr. Tonko. Right, but the conclusions----
Mr. Rusco. And I haven't had a chance to look at it very
carefully so I can't really speak too much to it. But I think
that the difference is that our conclusion is based on a body
of evidence that goes beyond those work papers and that----
Mr. Tonko. But are the conclusions----
Mr. Rusco [continuing]. May be why we interpret things
differently.
Mr. Tonko. Would you analyze or characterize those
conclusions as being drastically, radically different than
yours?
Mr. Rusco. I wouldn't characterize it as radically
different. I think it is a matter of degree. It is sort of like
what should the program be doing? We certainly found cases
where----
Mr. Tonko. Well, does it live within, is it a conclusion
that they live within the context of the statute? Are we
misinterpreting statute here to draw a conclusion?
Mr. Rusco. Well, certainly we would have reported on that
had we found that. That was not one of our objectives to
interpret the statute, but we always have our general counsel
working on reports. We did not find anything that to us looked
like the agency was in violation of statute or we would have
reported that.
Mr. Tonko. Okay. And did the Republican staff ask you to
check on their facts and conclusions?
Mr. Rusco. Yes.
Mr. Tonko. And when did that come about?
Mr. Rusco. They sent us a memo on Thursday, last week, and
we looked through the facts through our work papers and
commented on those.
Mr. Tonko. Well, the report, using your work papers again,
finds cases where they allege or imply that a company was
getting funding for work from the private sector, even as they
took ARPA-E money. They point to ample cases from your work
papers to suggest that ARPA-E is simply duplicating work
already funded or soon to be funded by private capital or other
agencies. I assume you know what is in your work papers. Did
you find the kind of overlapping funding in duplication?
Mr. Rusco. I think our interpretation is different. We did
find cases in which companies had received prior private
funding, but the projects differed to a large extent or a
significant extent from what was funded in the past, and in
several instances, five instances, we found that the company
said that the ARPA-E funding had enabled them to significantly
speed up their research and it was a----
Mr. Tonko. So as we heard already from Dr. Majumdar, there
are cases of innovation, of technology transfer and of
expediting, moving along, developing the market, transforming
the market. So these 18 cases were getting funded for something
other than previously being funded?
Mr. Rusco. Most of them were technologically distinct from
what had been previously funded.
Mr. Tonko. Okay. Thank you very much.
Chairman Broun. Thank you, Mr. Tonko. I want to ask you to
put your hatchet down because the report was actually meant to
supplement and not to refute the working papers, and in fact,
staff have done some extra research on top of that and found
other instances where--we just call into question--we just want
the same thing that the minority staff and minority members
want, this ARPA-E to be successful and utilize taxpayers'
dollars in the proper way.
Mr. Tonko. Well, Mr. Chair, if you will----
Chairman Broun. Certainly.
Mr. Tonko. I think the statute is quite clear about
transformational and about speeding up, expediting a process
that can transform the market. And I think that it is very
clear, the spirit and the letter of the law is very clear that
this is to move along in a way that--time is innovation here.
Time will determine who comes to the market first. If you can
transform the market, I am assuming that is what we all wanted
ARPA-E to do, and the statute is very clear. And to
misrepresent it or misinterpret it, is just not helping, I
think, the effort.
Chairman Broun. Mr. Tonko, there has never been an
allegation that there has been a statutory breach.
Now I recognize the Full Committee Chair, Mr. Hall, for
five minutes.
Chairman Hall. Thank you, Mr. Chairman. I have a feeling
that maybe ARPA-E is saying that they couldn't spend the money
wisely because they had to spend it so quickly. I am not sure I
am on solid ground there, but during debate on the America
COMPETES Act which created ARPA-E, a lot of us were very
concerned that the new agency might ultimately reshuffle the
budget prioritization for existing DOE offices and de-emphasize
the basic science research conducted within the Office of
Science.
So given the current budget constraints, where does ARPA-E
fit into DOE's priority list? Whoever wants to answer that
could.
Dr. Majumdar. I will be happy to answer, as Secretary Chu
has said many times in the past that ARPA-E is one of his top
priorities. In terms of DOE priorities, Secretary Chu has said
ARPA-E is one of his top priorities.
Chairman Hall. Which offices will be reduced funding to
provide additional ARPA-E funds if they are special and they
set them up on such a high plane?
Dr. Majumdar. Well, I think that, you know--frankly, the
budget is decided by Congress. And so----
Chairman Hall. Well, that doesn't help us a hell of a lot.
Go ahead.
Dr. Majumdar. So I mean, it is really the budget that is
decided by Congress that we execute on. And so with regards to
where the funds go, I think Congress will decide, and we will
just execute according to the law.
Chairman Hall. Well, EPA seems to have a way around what
Congress says to do. That is not the subject here, though.
Mr. Friedman, the IG report states that in response to the
questionable spending by ARPA-E recipients that you identified,
an ARPA-E official said that the agency, and I am quoting here,
``focused its attention on meeting the Recovery Act requirement
of expeditiously awarding funds to projects by September 30,
2010, and as a consequence didn't have sufficient time and
resources to devote to establishing its operational controls in
the area of policies and procedures.'' That is the reason I
said initially that basically ARPA-E is saying that they
couldn't spend the money wisely because they had to spend it so
quickly. Is that a fair statement?
Mr. Friedman. Well, Mr. Hall, I think you are going beyond
where I would go. What we clearly have said in the report and
what we found was that there were certain mid-point and end-
point policies and procedures that had not been formalized.
Some of them were in draft, some of them were not. And we were
told by people in the program office that their priority going
in that because of the rush, because of the pressure they faced
with some of the front-end decisions as to how to selection
criteria and the rest, so that they were putting the other
policies and procedures--sort of they were the second priority.
Chairman Hall. Well, the lack of institutional financial
controls seems to indicate the potential that misuse of funds
could be much more widespread than that identified in the three
awards that the IG reviewed. Do you agree to that?
Mr. Friedman. Well, not to be too clever, Mr. Hall, I don't
know what I don't know. We felt that the three that we selected
gave us a fair representation. We looked at the control
structure fairly thoroughly. Is it possible in the 100-plus
awards that were made that we didn't look at there were
problems? Absolutely.
Chairman Hall. Well, I guess it is not too much to ask, if
your office will review this spending in more detail as part of
your ongoing stimulus oversight. And if we have some questions
later to follow up on this, that we are going to ask the
Chairman to ask you to answer them within a reasonable amount
of time.
Mr. Friedman. I will do my best.
Chairman Hall. I have some other questions I would like to
ask about, Solyndra and many others. But I may get back to
that. I may try to handle that by direct letter where you will
have plenty of time to sit down and give us your answer to that
or that you don't have an answer to it.
I thank you, and I yield back my time.
Chairman Broun. Thank you, Mr. Chairman. And I now
recognize Mr. Miller for five minutes.
Mr. Miller. Thank you, Mr. Chairman. In the four years that
I chaired this Subcommittee, in addition to knocking a hole in
the Chairman's podium with the gavel, we also did look at the
performance of a lot of agencies within this Committee's
jurisdiction. And in a perfect world, agency leadership, the
Inspector General would have welcomed the work of the GAO. It
was an important oversight tool for Congress. The IG statute
contemplates that. It intends for it to be a management tool
for the executive branch as well as an oversight tool for
Congress. And GAO and the IGs can make constructive criticism,
can actually be helpful in their suggestions.
But it was rarely seen as that by the executives, by the
top leadership of the agencies. They always saw it as
unwelcomed criticism, not as helpful criticism. And frequently
any cooperation was very grudging at best.
Mr. Friedman, Mr. Rusco, what cooperation was there from
ARPA-E in your work? Were they cooperative or did they hinder
in any way your work?
Mr. Friedman. Mr. Miller, was that directed to me?
Mr. Miller. To both of you, yes.
Mr. Friedman. I must say that in his testimony, when Dr.
Majumdar, praised the work of the IG and GAO, I got very
nervous. But having said that, we had a very good relationship.
It was a productive relationship. As we point out in our
report, management took responsive action during the course of
our audit when we brought issues to their attention. So I would
say it was a productive relationship.
Mr. Rusco. I would echo that.
Mr. Miller. Same thing. And in looking at your report, the
reports never come back and say they are doing everything
perfectly. There are always suggestions for how things might be
done differently. But my sense from your report, Mr. Friedman
and Mr. Rusco, is that you regard--well, how did you regard
ARPA-E's management overall? I know the GAO has kind of a watch
list of the most troubled agencies. ARPA-E is not on that. How
do you regard the management of ARPA-E overall, having spent
some time looking at the program?
Mr. Friedman. Well, we would point out some shortcomings,
and obviously ARPA-E has come back and told us they have made a
lot of changes, improvements, corrections, instituted policies
that we found lacking at the time. We have not confirmed what
they have said. But fundamentally, as I said, Mr. Miller, the
relationship was good, and I think it was a productive
situation. I must say that I think so far we view it as a
fairly positive situation in the Department of Energy family.
Mr. Rusco. The ARPA-E management has been very responsive
to our requests for information. They have also been very
responsive to our findings and recommendations. But again, we
always evaluate what has happened after the passage of time. So
I am hoping they will follow up on these.
Mr. Miller. Okay. Mr. Majumdar, sorry. Dr. Majumdar, there
has been some criticism on this Committee on ARPA-E as crowding
out research that the private sector would have done otherwise.
But leaders in industry seem to disagree with that, including
Bill Gates of Microsoft, Jeff Immelt of GE, Norm Augustine who
was the former head, the former CEO of Lockheed-Martin and of
course the chair of the Augustine Commission that issued the
Rise Above the Gathering Storm report on competitiveness. And
they concluded that ARPA-E was in fact funding high-tech, high-
risk, long-term investments in clean energy. That would not
have happened otherwise. And this is a quote from a letter they
wrote. ``By nearly all accounts it appears that ARPA-E is being
managed as a highly efficient, risk-taking, results-oriented
organization.''
Dr. Majumdar, could you compare for us ARPA-E to other
government programs that are considering energy issues, and
what value does ARPA-E bring to our commitment to invest in
clean energy innovation research?
Dr. Majumdar. Well, thank you, Mr. Congressman. I think if
you go to the Gathering Storm report that Dr. Augustine and his
committee wrote, they felt there was a gap in our energy
landscape in the R&D, in the research section of the landscape,
where we were doing basic science where, you know, looking for
how energy interactions matter, the origins of
superconductivity and basically scientific discoveries.
And then we were doing quite applied work, and there was a
gap out there of translating basic science understanding into
something useful that did not exist before and that was--and
they created or they proposed that an agency like ARPA-E be
created so that to translate the science into technologies that
did not exist before, the first prototype of something that did
not exist before, and thereby provide U.S. technological lead
and economic and national security, which is what you have
enacted under the law, and we are following exactly what was
proposed in the law including the accelerating of
transformation technology which is in the law. That is exactly
what we are doing.
Chairman Broun. The gentleman's time is expired. I now
recognize Mr. Bartlett for five minutes.
Mr. Bartlett. Thank you, sir, but is there still a
Subcommittee Member that hasn't had a chance, time, on the
Democrats' side?
Chairman Broun. Mr. McNerney.
Mr. Bartlett. I would yield to him. I should come at the
end of all your----
Chairman Broun. Okay. Mr. McNerney, I apologize.
Mr. McNerney. Well, Mr. McNerney thanks the esteemed Member
for his time.
I have in front of me what I believe are the Republican
objections to the ARPA-E program, first of all, that it funds
projects that receive private funding; secondly that it picks
winners and losers; and third, that it crowds out private
investment. So the first objection, that it funds projects that
receive private funding, I think has already been discredited.
But just to drive the point home a little bit, I am going to
read a section of the statute that I believe is a fitting
section and that is Section C.2.2.C, ``Accelerating
transformational technological advances in areas that industry
by itself is not likely to undertake because of technical and
financial uncertainty.'' So that, in my mind, doesn't say that
private funding is to be excluded from ARPA, and I think that
drives that point home.
The objection that ARPA-E crowds out private investment I
think was dealt with pretty effectively by my colleague. And
the third objection is it picks winners and losers. So Dr.
Majumdar, I would like you to address that.
Dr. Majumdar. Well, thank you, Congressman, for the
question. Here is what we do in ARPA-E. The process involves
identifying a white space as was mentioned before. Let me give
you an example. We are looking for those batteries for electric
vehicles that will make the electric cars have a longer range
and be cheaper than gasoline cars so that these electric
vehicles, so these plug-in hybrid electric vehicles will be
cheaper so that you can sell without subsidies. Now, that
battery does not exist anywhere in the world, and today's
lithium ion battery is not going satisfy that metric. So we
said we will go to that white space where no one exists and no
one in the world has this battery, and if we develop that
battery, the U.S. will get the technological lead then. And
that battery has to be double the energy density of today's
lithium ion battery and 1/3 the cost.
And so that was a technology agnostic metric that if anyone
could meet. And what that created is really the competition. We
are not picking winners. We are creating the competition
between 15 different types of approaches that we have funded in
that portfolio. They are all competing to get to that metric
because if they do, and some of them might, we will have the
technological lead. And if you manufacture those batteries in
the United States, we will have really the economic growth as
well. And that is what we are trying to do.
Mr. McNerney. So that is typical of a portfolio is that you
fund different organizations to come up with technologies
competing with each other and then let the winner decide by the
technology?
Dr. Majumdar. We create the competition. We don't pick
winners.
Mr. McNerney. Okay. Just to answer what the Chairman of the
Full Committee asked, is there any connection whatsoever
between ARPA-E and Solyndra?
Dr. Majumdar. Absolutely not.
Mr. McNerney. Can you confirm that, Mr. Friedman?
Mr. Friedman. Well, I have no indication there is any
connection whatsoever. There may be something that I am not
aware of. But let me address the Solyndra matter now if I can.
As has been publically stated both by the Department of Justice
and by my office, there is a criminal investigation ongoing
with regard to Solyndra. So it is impossible for me to answer.
It could possibly disrupt an ongoing investigation. I know that
would not be in the interest of anybody, and therefore, I
really can't talk beyond that.
Mr. McNerney. Thank you. Mr. Friedman, also, I would like
to ask you what are the similarities and difference between
ARPA-E and another program called the SBIR program? Are they
both trying to accomplish the same thing? What is the
difference in philosophy? Is that something you could answer?
Mr. Friedman. You know, I really couldn't give you the best
answer. Certainly we have done work in the SBIR program, a fair
amount of work. We have done work now in ARPA-E. The Department
of Energy is a $13 billion a year science department on many
different levels using many different programs. So you know, I
can't define specifically the differences between them right
here and now.
Mr. McNerney. Dr. Majumdar, do you have any idea what the
differences are between the two programs?
Dr. Majumdar. Well, I can give you a long answer but I have
only 22 seconds. I was, at one point, a former recipient of an
SBIR grant for a small company that started in the Bay Area,
and basically, lots of differences. SBIR do not have active
program management. We hire some of the smartest people in the
technical community to come to ARPA-E and actively manage and
help make the decision if something is not working to terminate
it to not waste taxpayer dollars.
That does not happen in SBIR. In SBIR, there is Phase One,
and there is a gap of six months before you get to Phase Two.
In the start-up company there is no cash flow. It will go out
of business. And so that doesn't happen in ARPA-E. There are
go/no-go milestones, annual milestones, and quarterly reports
that people have to submit.
So there are many, many differences. I could go on and on,
but I will just limit my answer to that.
Chairman Broun. The gentleman's time has expired. Sorry. I
would like to add, back to--part of the statute it says areas
that industry by itself is not likely to undertake. So you
can't overlook the not, either, Mr. McNerney and Mr. Tonko, and
that is the whole thing. We are not here to be a hatchet job on
ARPA-E or anybody else.
Mr. McNerney. Mr. Chairman, it is not likely to undertake
by itself.
Chairman Broun. It says is not likely to undertake, period.
It doesn't say by itself.
I now recognize Mr. Bartlett for five minutes.
Mr. Bartlett. Thank you very much. I believe the--I am told
the staff has loaded a couple of slides for me that will I hope
kind of put--okay. There they are. We can see them now--kind of
put the need for ARPA-E in context.
[Slide]
Mr. Bartlett. The upper figure here is from '08 from the
International Energy Association which is a creature of OECD. I
think you would see it on the side screen so you don't have to
turn around. And what they are showing there is oil from our
wells that we are now pumping. The dark blue at the bottom, you
see that we have now reached a peak there.
By the way, we were told that that was going to happen 56
years ago by M. King Hubbard, and 32 years ago in 1980, looking
back at 1970 when he predicted the U.S. would peak, we knew
with absolute certainty that he was right about the U.S., and
therefore he would probably be right about the world.
I want to note a couple things in that slide. Note that the
total liquid fuels is about 84 million barrels a day for five
years now. Note that they projected by 2030 that the world
would be producing 106 barrels of oil per day. Now, just two
years later in the slide at the bottom, reality is setting in.
They go up to 35 now, not to just 30. And note there the
precipitous decline in production in the wells from which we
are now pumping oil. And the two curves on top, by the way, are
the same thing. They are different colors, and they are flipped
around. One is natural gas liquids, and the other is
unconventional oil. They are the same things. They are just one
on top of the other in different colors.
The dark red wedge on top, which is enhanced oil recovery,
in the lower slide is incorporated where it should be in the
oil we are now pumping because that just squeezes a little more
out with live steam or CO2 or something like that
down there.
Notice the two huge wedges that they put in there to keep
the world from having a reduced production of liquid fuels.
They put huge wedges in there of oil that they hope will be
produced from fields that we have found, but too tough to
develop, like under 7,000 feet of water and 30,000 feet of rock
in the Gulf of Mexico.
And then there is a pretty big wedge there that is of
fields yet to be discovered. Now, I will tell you with some
confidence, that those two wedges will not occur to that
degree. They did not occur in our country. We are the most
creative, innovative society in the world. We drill more oil
wells than all the rest of the world put together. And today we
produce half the oil that we did in 1970. Now, if you think
that the world is more creative and innovative than the United
States, then maybe you think those two wedges are going to
happen. They are not going to happen. Your government paid for
four studies that said that we were going to be here, two of
them issued in '05, two of them issued in '07. Your government
didn't like what those studies said, so they just ignored them.
The first was the big Hirsch report. In '05, the second was the
Corps of Engineers, in '07 two reports. The Government
Accountability Office, sir, your office did a report, and the
National Petroleum Council. All four reports said essentially
the same thing, the peaking of oil is either present or
imminent with potentially devastating consequences. The world
has never faced a problem like this to quote the Hirsch report,
the SAIC report. And the social and economic consequences will
be unprecedented is what they said.
You know, the tragedy is that ARPA-E was not here 20 years
ago because that is when we needed it. It is now too late
because I think that there essentially no chance that the world
is going to avoid some enormous geopolitical consequences as a
result of the peaking of oil. It is not that we are running out
of oil. Don't let anybody tell you that. We are not running out
of oil. There is a lot of oil left out there. Half of all the
oil that we will ever pump, probably more than half that we
will ever pump, is still left out there. What we have run out
of is our ability to produce the oil as fast as we would like
to use it.
The next slide shows that.
[Slide].
Mr. Bartlett. There is the next slide. A bit of wishful
thinking in this. The bar at the left shows increased
production. There is not going to be any increased production.
This is wishful thinking. But the bar on the right is not
wishful thinking. That is going to be demand. Demand is going
up. It is kind of the perfect storm, Mr. Chairman. At just the
time we are trying to come out of a recession and just the time
that they are developing oil with China and India leading, that
is when oil is $100 a barrel, that is just the time that we
need more oil and it is not going to be there.
So there is a dire need for ARPA-E. If you could use more
money, sir, I would gladly vote to provide it for you. You
know, I tell audiences that the innocence and ignorance on
matters of energy in the general population is astounding, and
we have truly a representative government. Thank you.
Chairman Broun. I assume you yield back?
Mr. Bartlett. Mr. Rohrabacher.
Chairman Broun. Mr. Rohrabacher, you are recognized for
five minutes.
Mr. Rohrabacher. Thank you very much, Mr. Chairman, and I
am not as pessimistic as my colleague, but I am certainly in
agreement with him that we need----
Dr. Bartlett. It is realistic, sir.
Mr. Rohrabacher [continuing]. And that we--realistic. Or
maybe I am too optimistic, let us put it that way. But I do
believe that no matter how you come down on it, we need to be
focusing on developing energy resources and using our brains
and our creativity in finding new ways of creating energy,
rather than just more traditional ways. And that is what ARPA-E
is supposed to be about.
Let me ask about--you know, people mention Solyndra, and
everybody, you know, sort of is shaking around and trying to
duck. But let me just ask--and again, I am sorry. I always
mispronounce your name as well.
Dr. Majumdar. Maybe because it has fallen down.
Mr. Rohrabacher. Okay, Majumdar. Has the White House,
anyone in the White House, ever contacted you regarding a grant
that someone had applied for an ARPA-E grant?
Dr. Majumdar. No, never.
Mr. Rohrabacher. This White House has never contacted you
for any of these awards that you are giving? So you don't have
any pressure from them at all?
Dr. Majumdar. No.
Mr. Rohrabacher. Okay. That is good to hear. Obviously--
well, I can't say obviously was the case with Solyndra. We will
find out. There is a case, for example, where Beacon Power
received a $2.8 grant from you, and they also received a $24
million grant from the Office of Electricity from DOE and a $43
million loan guarantee from the DOE, all within a seven-month
period. Now, how is it that your organization that is supposed
to be aimed at helping people who can't get funding is now
helping an organization duplicating the support from two
different other entities or two other approaches they are doing
for money? How is that?
Dr. Majumdar. Sure. I will be happy to clarify that,
Congressman. What they did in the ARPA-E project is they went
through a competitive process. They actually went through that
process and won this grant, which is not a loan, it is a grant,
and this is on energy storage as opposed to power storage. So
the one that they got from the Office of Electricity is for
power storage which is for frequency regulation. It is short-
time power storage with fly wheels.
Mr. Rohrabacher. Now, I know----
Dr. Majumdar. Our program was designed to look for storing
gigawatts of power for an hour. When a wind gust comes in from
the west or from anywhere else, you got to store about a
gigawatt of electricity for an hour. That is energy. That is
not power. And ARPA-E's program was designed to look at the
energy storage which is quite different from the power storage.
And I can go into----
Mr. Rohrabacher. I will have to admit to you that not being
an expert when a Ph.D. tells me that there is a difference
between energy and power, and those of us who are less
educated----
Dr. Majumdar. Let me explain.
Mr. Rohrabacher. It seems rather similar to be--no, it is
government money. And by the way, this company happened to go
bankrupt after receiving this $70 million of money from the
Government.
Dr. Majumdar. The difference between power and energy is
like if you have a car, the power comes from your engine, and
the energy storage comes from your gas tank, the size of a gas
tank. They are different, and so that is what--so what we were
funding them for is the energy storage part.
Mr. Rohrabacher. Well, there are a couple other in this GAO
report. There are several other companies that have suggested
their names were redacted. But it does look like--it says,
``Potentially duplicative funding for essentially the same
work. Are these--maybe I should ask our GAO guy. Are we talking
about here--and here is another one--name redacted, submitted
similar grant proposals to ARPA-E and other agencies, and both
proposals were successfully awarded.
Are these just because they are similar, people don't know
the difference between energy and power or what have we got
here?
Mr. Rusco. I am sorry. I am not sure exactly what you are
referring to. Is that in the committee report or is that in
our----
Mr. Rohrabacher. This is from a GAO work paper notes that
one company named redacted. And here is a quote, ``Submitted
similar grant proposals to ARPA-E and other agencies, and both
proposals were successfully awarded.'' And so you found them to
be apparently similar grant proposals.
And then another company by your report, name redacted,
explicitly stated that its application, that the proposal was
``potentially duplicative funding for essentially the same work
statement.'' Do you know--I can't tell you the company because
you eliminated the name there. Oh, excuse me. We redacted the
name. I thought this was coming from----
Voice. It is a summary of their work.
Mr. Rohrabacher. It is a summary of their work, but I have
been recommended -- I guess or recommended when they gave me
this paper not to read the names of the companies. Perhaps we
should let them know what the name of the company is.
Chairman Broun. The gentleman's time is expired. If one of
you want to make a quick answer, I will be glad to accept that
or you can present the question, if that is all right with you,
Mr. Rohrabacher. If you have a quick answer, please say it.
Mr. Rusco. Maybe the best way to proceed would be for us to
talk to your staff about those things off line since some of
the information in our--much of the information in our work
papers is business sensitive.
Mr. Rohrabacher. Well, there are two companies then that
you did name and were eliminated from my copy here but----
Chairman Broun. The gentleman's time is expired.
Mr. Rohrabacher. Sorry about that. We are going to go to a
second round of questions. The minority has acquiesced to my
suggestions that we go to three minutes per member, and I ask
unanimous consent that that be approved, so ordered.
The Chair will recognize himself for three minutes. The IG
report notes that in February of 2011, ARPA-E updated its
technology transfer and outreach policy that included guidance
to awareness on appropriate tech transfer expenditures. But
this policy ``allows recipients to incur costs that are
typically unallowable under the FAR.'' That is Federal
Acquisition Regulations.
At 3:00 p.m. yesterday, ARPA-E provided an updated TTO
policy to the Committee. There were several notable differences
between the February 2011 policy and the one provided
yesterday. Dr. Majumdar, I would like to ask you a few
questions about these differences, please, sir. The formal
policy explicitly says that the expenditures on the following
activities are acceptable uses of awardees' funds: number one,
meetings with investors to raise capital; number two, business
plan, development and market research; three, expenditures
relating to seeking additional funding from the private sector
and government agencies; four, marketing and other expenditures
relating to promoting an ARPA-E funded technology; and five,
commercialization expenditures. The new policy we just received
lists examples of both appropriate and inappropriate spending
but is silent on all of these activities.
So I would like to ask you to clarify, does ARPA-E allow
awardees to spend taxpayer funding on each of these items?
Dr. Majumdar. Well, Congressman, just to give you some
general terms, we have basically created this policy in
consultation with the Federal Acquisition Regulation. Our
contracting officer has decided, has determined, that these are
allowable costs under the FAR rules, and if there is something
that is unallowable and if the IG--we worked with the IG in the
past, some things are unallowable, we go and recover the cost.
And so we work together to do that.
And so we are basically following the regulations, Federal
Acquisition Regulation, with our contracting office making the
determination.
Chairman Broun. Sir Inspector General, would you agree with
that?
Mr. Friedman. Well, I have not seen the new policy
formulation that you apparently received. We haven't had a
chance to study it, so I really wouldn't be in a position, Mr.
Chairman, to comment on the new policy.
What we found--I should point out that when it comes to
cost-incurred audits that we do, we develop questionable costs
and make recommendations to the contracting officer. The
ultimate decision is that of the contracting officer. We
provide advisory reports which we have done, and the
contracting officer ultimately decides. That doesn't mean we
agree with the contracting officer in every instance, but I
would have to see the new policy in this regard.
Chairman Broun. Very good. My time is just about expired. I
will yield it back and yield to Mr. Tonko for three minutes.
Mr. Tonko. Thank you, Mr. Chair. To me, you know, listening
to the testimony here today, I come to the conclusion that the
IG and the GAO, the two places we turn to for honest
evaluations of how programs are doing, both came back from the
reviews of ARPA-E with largely positive reports. They have
recommended modifications. It seems as though they have been
complied with by ARPA-E folks. It would seem to me that simple
fairness would dictate that the Committee acknowledge and
congratulate Dr. Majumdar on his accomplishments. I am
disappointed that partisanship has sunk to the level where we
cannot even come together for such a simple thing as
acknowledging when we find a program that seems to be on the
right track, encouraging jobs and allowing acceleration and
transformation to take hold. I look at the guidelines within
the statute which indicates accelerating transformational
technological advances in areas that industry by itself is not
likely to undertake.
So with that, Dr. Majumdar, I would ask with small
companies and start-ups often looking for any support they can
get to carry forth with their ideas, I know they look to
venture capital and other agencies anywhere they can. How does
ARPA-E differ in what it does as compared to other agencies or
the private capital market?
Dr. Majumdar. Well, as I explained in the past, what we are
looking for are white spaces, and let me just describe what
that white space is because it has been referred to several
places, are those areas where (a), within, first of all within
the Department of Energy, no one else is funding. Secondly, are
areas where there are potential for transformative solutions
that meet the ARPA-E goals as written in the statute, the U.S.
technological lead, reducing our imports, et cetera. Where
there is an opportunity for science, new scientific discoveries
can be translated into quantum leaps in technologies that will
provide the U.S. with a technological lead and potential
technological growth down the line. That is the area. And to
identify that, we recruit some of the best people from the
technical community to bring them in and then work with the
technical community and within the DOE and other federal
agencies, including the Department of Defense, to identify
those white spaces. And that is how we create these areas, and
the battery one that I gave earlier was an example of that. I
gave the example of creating oil based on microbes that have
never been used to make oil before. And these live on
electrodes, and they grab electricity and make oil which has
never been done ever by anyone in the world before. And that is
a completely new pathway of creating oil. And if in the future
it becomes successful and scales down in cost and volume, it
will create the foundation of an entirely new industry that
does not even exist today. That is the kind of research that we
are funding right now.
Mr. Tonko. That might be something that the country needs
right now. We need that reinforcement if we are going to
compete effectively in an innovation economy race around the
world. Thank you.
Chairman Broun. Mr. Tonko, I agree with you. In fact, in my
opening statement I congratulated or said that ARPA-E is
supporting a lot of projects that are clearly aligned. This is
a Committee of Investigation and Oversight. We are not trying
to beat up on them. We just have a responsibility to our
constituents and taxpayers in this country to make sure that we
continue with this very much-needed research. In fact, Dr.
Majumdar and I had some private discussions about some of the
things they are doing, and I am very excited about some of the
projects that he has undertaken.
I now recognize Mr. Hall for three minutes.
Chairman Hall. Mr. Chairman, I maybe made a few people
nervous when I mentioned Solyndra. I didn't really mean any
harm to anybody. I just know that it is a good example that we
can learn from, and we are going to follow up. And I think it
is reason for the nervous situation.
In the wake of Solyndra, I would hope DOE is taking great
care to insure such influential political actors are not
receiving favored treatment from the Administration, but it is
very difficult to follow the money in some of these cases and
not be concerned. Dr. Majumdar, wouldn't one of the best ways
to avoid such potential cronyism and favored treatment be to
avoid funding companies with such extensive private-sector
backing in the first place?
Dr. Majumdar. Well, Chairman Hall, I can only speak for
ARPA-E, and I think I would say that everything that we do in
ARPA-E is based purely on merit. It is based on external panel
reviews that we have, of two stages of reviews, and as I said,
it is purely based on merit and that is how every single
project has been decided and executed on.
Chairman Hall. Well, let me ask you this. How often were
officials from the White House were in touch with you? They
weren't in touch with you or your team or people under you
regarding specific ARPA-E awards. Would you answer that for me?
Dr. Majumdar. They have never been in touch with me in
terms of actual ARPA-E awards before the selection.
Chairman Hall. You have said that before. Anyone with your
team under you?
Dr. Majumdar. No one has been in touch--no one from the
White House has been touch with anyone in ARPA-E with regards
to selection.
Chairman Hall. Okay. Did anyone connected to the White
House or entities concerned with the presidential elections
contact you or your staff regarding any ARPA-E applicants prior
to the award to them?
Dr. Majumdar. No.
Chairman Hall. All right. I thank you.
Chairman Broun. Thank you, Mr. Chairman. Now I recognize
Mr. Miller for three minutes.
Mr. Miller. Thank you, Mr. Chairman. There have been a lot
of questions about some research getting funding from more than
one source within the Federal Government. It is almost an
implication that that research is getting more than is needed
and they are pocketing the rest, like Mel Brooks' movie, ``The
Producers.'' My impression is that all that money is actually
being spent on the research in those cases, but how do you
account for some research getting funding from more than one
source and what steps are you taking to make sure there is not,
in fact, duplicative funding of the same kind of research by
different parts of the Federal Government?
Dr. Majumdar. Well, Mr. Congressman, let me just give you
my own background. I have been a scientist and an engineer for
the last 22 years in the research community. I have received
funding from many of the federal agencies out here. In fact, my
group was, I would say, fairly successful where I had funding
from the NIH, funding from NSF, from the Office of Naval
Research, et cetera. So my group had funding from multiple
sources. But we had to make clear, absolutely crystal clear,
that they were for different projects. And so that is exactly
what we are following right now, that if ARPA-E is providing
funding for anything and if that particular group has received
funding from somewhere else, our job is to make sure that the
ARPA-E funding is distinct and it is unique for that particular
project only. And that is what we have followed, and you know,
the records would show that.
Mr. Miller. Do you have any procedures to make sure that
there is not overlapping funding for the same kind of research,
that it is in fact distinct funding?
Dr. Majumdar. Yes, we do, and I think I would like to
acknowledge the help of the IG in helping us with that. I am
sorry, the GAO in helping us with that and the IG. And they
have made recommendations in making sure that we follow some of
the procedures. And those have now been enacted and there are
policies in ARPA-E to make sure that we do this in the right
way, and we appreciate the help that we have received from
them.
Mr. Miller. Either of you in the little time I have left
have any comment on this? You don't have to have a comment on
this, you just can have a comment on this.
Mr. Friedman. Well, Mr. Miller, the uneasiness that--
Chairman Hall appears to be bipartisan. We are working on
several cases that involve precisely the subjects that you are
talking about, but they are at a very early stage, and it would
be inappropriate for me to discuss them.
Mr. Miller. But not involving ARPA-E?
Mr. Friedman. In one or more cases, ARPA-E's funds are
involved, but it does not reflect negatively upon the
management of ARPA-E or the Department of Energy.
Mr. Miller. Okay.
Mr. Friedman. In other words, people in the science
community are not immune from seeking funding from multiple
organizations for essentially the same work. That happens,
research misconduct cases that we do work, we do have in our
inventory.
Mr. Miller. Okay. My time has expired.
Chairman Broun. Thank you, Mr. Miller. Dr. Bartlett, we
enjoyed your five-minute sermon. I recognize you for another
three-minute sermon if you have it geared----
Mr. Bartlett. Okay. Thank you very much.
Chairman Broun [continuing]. Up or questions, sir.
Mr. Bartlett. I would just like to note that in a former
life, I worked for the IBM Corporation, Federal Systems
Division, and at one time I was performing 14 different grants
and contracts. So one entity can solicit money from a number of
different sources because there are different projects that you
work on.
I would like to ask the members of the family if they know
that there is a better prognosticator of energy futures than
the IEA? Are you sufficiently familiar with the International
Energy Association?
Dr. Majumdar. Yes, sir.
Mr. Bartlett. Do you know if there is a better energy
prognosticator in the world than this group?
Dr. Majumdar. I think they are considered one of the top,
you know, agencies to look at energy futures, et cetera.
Dr. Bartlett. Of the slides that I showed were called the
World Energy Outlook. The first one was in '08 where they
thought that by 2030 we would be producing 106 million barrels
of oil a day. Just two years later, just last year in 2010,
they now believe that by 2035, five years late, we would be
producing only 96 million barrels of oil a day. And if you look
at the crude oil projections, even with those two huge wedges
which I do not think have a prayer of being realized, they are
flat. The only increase in growth that they have is from
natural gas liquids, and those won't be in your gas tank
probably because they are propane and butane and things like
that, and then unconventional oil that is growing. That is like
the tar sands of Alberta, Canada, and we will get a bit more
from that.
We really need to--energy is somewhat fungible but not
totally. The energy future for electricity is very good. I
don't have any problem with their energy future there, more
nuclear and wind and solar and microhydro and true geothermal,
tapping into the molten core of the earth, we can get about all
the electricity that we need.
Our real crisis for the future is going to be liquid fuels,
and there is--every 12 days we use a billion barrels of oil.
That is about sixth-grade arithmetic. That is not tough, is it?
84 million barrels a day, 12 days, that is about a billion,
right? So you see a new find of 10 billion barrels and that is
a huge discovery of oil. That will last 120 days. Big deal. We
face a huge challenge here, and you know, I am exhilarated by
challenges, and this is a huge challenge. It is going to call
the best from us to meet this challenge. It is not trivial. And
why do you think your government ignored four different studies
that essentially the same thing, four organizations I
mentioned? They didn't want to hear it so they didn't pay any
attention to it. You know, it is sad. Thank you, Mr. Chairman.
Chairman Broun. The Chairman's time has expired. You don't
have anybody on your side. Mr. Rohrabacher, you are recognized
for three minutes.
Mr. Rohrabacher. Thank you very much. Just to go back to
the line of questioning they had before, especially about
Beacon Power, which, as I mentioned at the end of the last
time, it went bankrupt after receiving these $70 million from
three different sources, from ARPA-E as well as from the DOE.
Our records seem to show that all of this was done to develop a
flywheel energy storage technology. Again, I am not educated
enough to know the difference between the terms that we were
talking about, energy and power, but doesn't the fact that it
was all going for flywheel technology seem to indicate that
there was duplication? And by the way, just so my colleagues on
the other side of the aisle, when we say we are against
duplication, it doesn't mean that we are suggesting that
someone has pocketed the money. That is absurd. We are
suggesting that maybe the money could have been used better
somewhere else that wasn't duplicating the money being spent on
the research. But you may answer the question.
Dr. Majumdar. Congressman, I am also very concerned--that I
share a concern about duplication as well, which is why we
coordinate very, very closely with the rest of the DOE and
other federal agencies and also look at where the private
sector is funding. In this particular case, they went through a
competition, they won the award competitively. Right now they
are meeting the go/no go milestones that we have put together.
They are also meeting----
Mr. Rohrabacher. They are now meeting it?
Dr. Majumdar. Yeah, and they are also meeting the
obligations of the cost share.
Mr. Rohrabacher. But even after they filed for bankruptcy
they are meeting these things?
Dr. Majumdar. Well, it is going through some restructuring,
and we are in consultation with the Department of Justice, you
know, when we work with them.
Mr. Rohrabacher. And what factor, how does that play into
if someone is asked for a grant, do you check to see if they
are not going to go bankrupt before you provide the grant?
Dr. Majumdar. Well, at that time, you know, when we
actually gave the grant, we did check at that time. At that
time they had not filed for bankruptcy, and you know, then they
subsequently did because----
Mr. Rohrabacher. Well, wouldn't the money be coming back?
If a company gets money from ARPA-E and then goes bankrupt, do
we get any of the money back as part of the settlement for a
company that is going out of business?
Dr. Majumdar. Well, they have not been liquidated, they are
being restructured right now.
Mr. Rohrabacher. Okay.
Dr. Majumdar. So it is not that they are completely gone.
They have been restructured, and that is part of the Department
of Justice thing. We are not involved in that except to the
point that we consult with them in making sure that we are not
violating any laws.
Mr. Rohrabacher. Okay.
Dr. Majumdar. But at the same time, they are meeting the
milestones and their cost-share obligations.
Mr. Rohrabacher. Okay. Well, let me just note for the
record that we do have two companies that we do have their
names here, but we didn't want to put them forth in this
hearing for fear of saying something bad about the company. But
we do have two names that were included in the GAO report that
said there was duplication. It appeared to be duplication, and
if we could get the answer back in writing of why that was not
duplicative and the GAO report was inaccurate.
Chairman Broun. The gentleman's time is expired. I remind
Members that we can all submit questions in writing, and I
appreciate the witnesses to answer in a timely manner. I think
you have two weeks to do so, and we appreciate it. We are going
to----
Mr. Rohrabacher. Mr. Chairman.
Chairman Broun. Mr. Rohrabacher.
Mr. Rohrabacher. Whereas our friends on the other side of
the aisle have suggested that we have not congratulated them
for the good things that they have done, could I please note
for the record that because we ask questions like this does not
mean that we do not deeply appreciate the job that you are
doing and that of course all of you have done for your country
and for the benefit of all of mankind, and so we congratulate
you for that, and thank you, and please don't think the tone
that we have here does not mean that we don't appreciate the
good things.
Dr. Majumdar. Thank you very much to all of you.
Chairman Broun. I want to associate myself with those
remarks, and I am sure all our Democrat friends would also
associate. I hope that you all will associate yourself with
those remarks.
I thank you all for your valuable testimony and Members for
your questions. The Members of the Subcommittee may have
additional questions as I have already mentioned, and we do ask
you to respond to those in writing. The record will remain open
for two weeks for additional comments from Members. The
witnesses are excused, and the hearing is now adjourned.
[Whereupon, at 3:40 p.m., the Subcommittee was adjourned.]
Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
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Appendix 2
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Additional Material for the Record
Majority Staff Report as Submitted by Chairman Paul C. Broun
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Minority Staff Report as Submitted by Ranking Member Paul Tonko
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Polar-Orbiting Environmental Satellites: Report from GAO, June 2012