[Federal Register Volume 73, Number 123 (Wednesday, June 25, 2008)]
[Rules and Regulations]
[Pages 35913-35920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-14083]


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DEPARTMENT OF COMMERCE

National Institute of Standards and Technology

15 CFR Part 296

[Docket No.: 071106659-8716-02]
RIN 0693-AB59


Technology Innovation Program

AGENCY: National Institute of Standards and Technology, United States 
Department of Commerce.

ACTION: Final rule.

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SUMMARY: The Deputy Director of the National Institute of Standards and 
Technology (NIST), United States Department of Commerce, issues a final 
rule to implement the Technology Innovation Program (TIP). This rule 
prescribes the policies and procedures for the award of financial 
assistance (grants and/or cooperative agreements) under TIP.

DATES: This rule is effective on June 25, 2008.

FOR FURTHER INFORMATION CONTACT: Barbara Lambis, National Institute of 
Standards and Technology, Mail Stop 4700, Gaithersburg, MD 20899-8600, 
telephone number (301) 975-4447, e-mail [email protected].

Background

    The America Creating Opportunities to Meaningfully Promote 
Excellence in Technology, Education, and Science (COMPETES) Act, Public 
Law 110-69, was enacted on August 9, 2007, to invest in innovation 
through research and development and to improve the competitiveness of 
the United States. Section 3012 of the COMPETES Act established TIP for 
the purpose of assisting United States businesses and institutions of 
higher education or other organizations, such as national laboratories 
and nonprofit research institutions, to support, promote, and 
accelerate innovation in the United States through high-risk, high-
reward research in areas of critical national need. High-risk, high-
reward research is research that has the potential for yielding 
transformational results with far-ranging or wide-ranging implications; 
addresses areas of critical national need that support, promote, and 
accelerate innovation in the United States and is within NIST's areas 
of technical competence; and is too novel or spans too diverse a range 
of disciplines to fare well in the traditional peer review process. 
Section 3012(f) of the America COMPETES Act requires the NIST Director 
to promulgate regulations implementing the TIP.
    NIST published a notice of proposed rulemaking with a request for 
public comments in the Federal Register on March 7, 2008 (46 FR 12305) 
to seek public comment on proposed regulations implementing TIP, which 
included policies and procedures for the award of financial assistance 
(grants and/or cooperative agreements) under TIP. The notice 
specifically sought comment on how NIST should determine if 
``reasonable and thorough efforts have been made to secure funding from 
alternative funding sources and no other alternative funding sources 
are reasonably available.'' In addition, the Federal Register notice 
informed the public that NIST was revising the heading of Subchapter K 
of its regulations to accurately reflect the current contents of that 
subchapter.
    The comment period closed on April 21, 2008.
    In response to the comment received regarding the ownership of 
invention rights in the course of a bankruptcy or dissolution, and also 
to correct the following typographical errors and inconsistencies and 
clarify terminology found in the proposed rule, NIST makes the 
following changes from the proposed rule:
    In the Table of Contents, the titles of section 296.11 and the 
title of Subpart C were revised to be consistent with the titles of 
that section and subpart within the body of the rule. The title of 
section 296.20 in both the Table of Contents and the body of the rule 
was changed to be consistent with the capitalization format used in the 
remainder of the rule.
    In paragraphs 296.2(f) and (z), the definitions of critical 
national need and societal challenge, respectively, the word 
``demands'' was changed to ``justifies'' to better characterize the 
government's role in responding to societal challenges.
    In paragraph 296.4(c), the second sentence was corrected to reflect 
the fact that the referenced Procurement Standards are in part 14 of 
subtitle A of title 15.
    Paragraph 296.11(b)(4) was revised to clarify under what situations 
that paragraph applies.
    In section 296.22, the order of the award criteria found in 
paragraphs (d) and (e) was revised to be consistent with the order of 
the evaluation criteria found in section 296.21.
    In paragraph 296.21(b)(1), the first sentence was corrected by 
adding the word ``knowledge'' after ``United States science and 
technology'' to be consistent with newly redesignated paragraph 
296.22(e).

Summary of Public Comments Received by NIST in Response to the May 7, 
2008, Proposed Regulations, and NIST's Response to Those Comments

    NIST received five responses to the request for comments. Two 
responses were from for-profit companies. One response was from a 
United States Senator. One response was from an individual. One 
response was from an industry association. A detailed analysis of the 
comments follows.

General Comments

    Comment: One commenter expressed personal views about NIST.
    Response: This comment is outside the scope of this rulemaking.
    Comment: One commenter stated that they found it difficult to 
understand how NIST staff will identify areas that demand government 
attention. Another commenter highlighted their industry's commitment to 
high-risk, high-reward research, including a few example of their work 
to transform some of the Nation's major societal challenges. The 
commenter further stated that the examples provided amplify that their 
specific industry should be considered as an area of critical national 
need.
    Response: As indicated in the March 7, 2008 Federal Register 
notice, in determining which areas of critical national need will be 
addressed in a competition, TIP may solicit input from within NIST, 
from the TIP Advisory Board, and from the public. TIP may engage 
experts in scientific and technology policy to ensure that the areas of 
critical national need that will be considered are those that entail 
significant societal challenges that are not already being addressed by 
others and could be addressed through high-risk, high-reward research. 
Specific societal challenges within selected areas of critical national 
need will be the focus of TIP funding.
    Comment: One commenter raised a question about a business review 
indicating that the new legislation appears to remove the impetus and 
need to commercialize to capture the economic value potentially 
created.
    Response: The TIP legislation does not include a commercialization

[[Page 35914]]

element; therefore, business review is not required.
    Comment: One commenter stated that a representative of their 
industry should be on the TIP Advisory Board.
    Response: This comment is outside the scope of this rulemaking.
    Comment: One commenter recommended that NIST clarify the ownership 
of invention rights in the course of a bankruptcy or dissolution. 
Specifically, the commenter suggested that in the course of a 
bankruptcy or dissolution of a joint venture, the last participant in a 
joint venture would determine whether to retain ownership or transfer a 
patent for an invention developed with TIP funds. The commenter 
provided an example where a company in bankruptcy could continue to 
exist and run its day-to-day operations and therefore, should be able 
to opt to retain or transfer such a patent for a TIP funded invention.
    Response: The TIP statute requires that intellectual property 
developed by a joint venture from assistance provided by TIP ``shall 
not be transferred or passed, except to a participant in the joint 
venture, until the expiration of the first patent obtained in 
connection with such intellectual property.'' (15 U.S.C. 278n(e)(1)). 
Section 296.11(b)(4) of the TIP rule contemplates the situation where 
all members of a joint venture cease to exist prior to the expiration 
of the first such patent. NIST has revised section 296.11(b)(4) of the 
rule to clarify that whenever the last existing participant in a joint 
venture ceases to exist prior to the expiration of the first patent 
obtained in connection with intellectual property developed by a joint 
venture from assistance under the TIP, title to any such patent must be 
transferred or passed to a United States entity that can commercialize 
the technology in a timely fashion.
    Comment: One commenter recommended that NIST clarify that 
contractors and subcontractors who have contributed to an invention 
should have ownership rights to the invention if contractually agreed 
upon by the participants in the joint venture.
    Response: The TIP statute specifies: ``Title to any intellectual 
property developed by a joint venture from assistance provided under 
this section may vest in any participant in the joint venture, as 
agreed by the members of the joint venture, notwithstanding section 
202(a) and (b) of title 35, United States Code.'' (15 U.S.C. 
278n(e)(1)). This section of the TIP statute clearly means that the 
members of the joint venture must decide and set forth in their joint 
venture agreement how title to all intellectual property that arises 
from the project, including intellectual property developed by the 
members themselves and intellectual property created by contractors, 
will be owned. The decisions of the joint venture will be implemented 
through the contracts.

Comments on the Selection Process

    Comment: Two commenters recommended that the reviewers demonstrate 
proven technical and industry sector expertise in the research proposed 
in order to effectively award scarce funds to appropriate and deserving 
applicants.
    Response: NIST intends to use qualified reviewers with requisite 
in-depth knowledge to evaluate proposals.
    Comment: One commenter recommended that their specific industry be 
represented on the TIP Evaluation Panel and that the Evaluation Panel 
members have in-depth knowledge of their specific private industry 
sector.
    Response: The composition and requisite expertise of the TIP 
Evaluation Panel will depend on the area(s) of critical national need 
selected for each competition. NIST intends to use qualified 
individuals to serve on the Evaluation Panel with requisite in-depth 
knowledge to evaluate proposals.
    Comment: One commenter asked what makes one eligible to participate 
in the Evaluation Panel and what is the overall make-up.
    Response: Since the Evaluation Panel(s) will be providing funding 
recommendations to the Selecting Official, to ensure compliance with 
the Federal Advisory Committee Act (5 U.S.C. App.), all members of the 
Evaluation Panel(s) will be federal employees. The Evaluation Panel may 
request individual technical reviews of proposals. The technical 
reviews will generally be conducted by federal employees. As stated in 
the response to the previous comment, the composition and requisite 
expertise of the TIP Evaluation Panel will depend on the area(s) of 
critical national need selected for each competition. NIST intends to 
use qualified individuals to serve on the Evaluation Panel with 
requisite in-depth knowledge to evaluate proposals. The make-up of the 
Evaluation Panel will be discussed in the notice announcing a 
competition and request for proposals.

Comments on the Evaluation Criteria

    Comment: One commenter questioned, how is a proposing entity to 
provide a 50% matching, when a major premise of the process is that no 
alternative funding is available to support these developments? The 
commenter further stated that while a number of states might respond to 
this by creating specific matching funds for their companies, it could 
create an unnecessary burden on numerous underserved regions and 
benefit those that already have significant technology-based business 
infrastructures.
    Response: The 50% cost sharing requirement is statutorily mandated 
and cannot be changed in the rule.
    Comment: One commenter indicated that meeting ``the second 50% of 
the evaluation criteria relating to demonstrating the potential 
magnitude of transformational results upon the Nation's capabilities in 
an area, the mechanism and timing for the translational effects to be 
useful to the Nation, and demonstrating the capacity and commitment of 
each award participant to enable or advance the transformation seems 
somewhat improbable and potentially impossible.''
    Response: TIP was established to fund research and development 
projects that will address areas of critical national need that demand 
government attention because the magnitude of the problem is large and 
the societal challenges that need to be overcome are not being 
addressed, but could be addressed through high-risk, high-reward 
research. NIST developed the evaluation criteria contained in the rule 
to ensure that projects funded by TIP meet the requirements sets forth 
in the authorizing legislation. The TIP Proposal Preparation Kit will 
provide guidance to potential proposers on how to address the TIP 
evaluation criteria.

Comments on How NIST Should Determine if ``Reasonable and Thorough 
Efforts Have Been Made To Secure Funding From Alternative Funding 
Sources and No Other Alternative Funding Sources Are Reasonably 
Available''

    Comment: One commenter suggested that any criteria set forth 
regarding the demonstration that reasonable and thorough efforts have 
been made to secure external funding ``does not require exchange of 
detailed information that would be deemed to be confidential by the 
alternative funding sources.'' The commenter indicated that in some 
cases, funding sources may deem that even the acknowledgement of 
consideration of funding is confidential and offerors may not be able 
to disclose details about the funding source and would therefore not 
meet award criteria. The commenter requested that the government 
consider the level of information that can be reasonably provided by 
the offeror depending upon the funding source as acceptable.

[[Page 35915]]

    Response: To the extent permitted by law, including the Freedom of 
Information Act (5 U.S.C. 552), NIST will protect confidential/
proprietary information about business operations possessed by any 
organization and provided to NIST. Proposals are likely to be less 
competitive if significant details are omitted due to an organization's 
reluctance to reveal confidential/proprietary information.
    Comment: One commenter suggested that the regulations require 
applicants to provide evidence that their application has been rejected 
by at least two funding sources, including one private source, before 
they can be considered for federal funding, and that the application 
submitted to NIST must be identical to the application rejected twice 
previously. The commenter further suggests that applicants must 
demonstrate that they do not have the necessary financial resources to 
conduct the research themselves.
    Response: Due to the variety of types of organizations that may 
apply to TIP and the various types of funds available to different 
types of organizations and in different sectors, setting a minimum 
number of unsuccessful attempts to obtain funding seems to be 
inappropriate. Rather, NIST will require that each proposer, including 
each member of a joint venture, submit evidence documenting all of 
their unsuccessful attempts to obtain funding for the work described in 
the proposal, including internal funding, funding from external private 
sources, and other funding from government sources (federal, state and 
local). Based on all relevant factors, NIST will determine whether the 
unsuccessful attempts to obtain funding documented in each proposal are 
reasonable and thorough.
    Comment: One commenter recommended that NIST consider an 
applicant's previous efforts to raise funds, such as through public and 
private financing, to demonstrate ``reasonable and thorough'' efforts 
to secure alternative funds and to show that no other alternative 
sources are available. The commenter further recommended that NIST 
should examine the rationale behind a non-lead product failing to 
receive funding, which would allow companies to satisfy the requirement 
that no other alternative sources are reasonably available. The 
commenter provided the example that a company could submit as part of 
their proposal an attestation by the company's board, which would 
usually include key investors. Such attestation would state that the 
funds raised are for the more advanced lead products and that there was 
no alternative in the budget for the proposed project.
    Response: NIST will consider information provided in each proposal 
received to address the award criteria on a case by case basis. It 
would be premature to speculate on what documentation an applicant will 
submit to address the applicant's efforts to secure alternative funding 
and whether such documentation will be acceptable. The example provided 
by the commenter could be considered along with the documentary 
evidence of any efforts to secure alternative funding.

Additional Information

Executive Order 12866

    This rulemaking is a significant regulatory action under sections 
3(f)(3) and 3(f)(4) of Executive Order 12866, as it materially alters 
the budgetary impact of a grant program and raises novel policy issues. 
This rulemaking, however, is not an ``economically significant'' 
regulatory action under section 3(f)(1) of the Executive Order, as it 
does not have an effect on the economy of $100 million or more in any 
one year, and it does not have a material adverse effect on the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities.

Executive Order 13132

    This rule does not contain policies with Federalism implications as 
defined in Executive Order 13132.

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(a)(2), all matters related to agency 
management or personnel or to public property, loans, grants, benefits, 
or contracts are exempt from the rulemaking requirements of 5 U.S.C. 
553, including the 30-day delay in effectiveness. This rule prescribes 
the policies and procedures for the award of financial assistance 
(grants and/or cooperative agreements) under the Technology Innovation 
Program. Because this rule concerns a grant program, this rule is not 
subject to the 30-day delay in effectiveness. Therefore, this final 
rule is made effective immediately upon publication.

Regulatory Flexibility Act

    Because notice and comment are not required under 5 U.S.C. 553, or 
any other law, the analytical requirements of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) are inapplicable. As such, a 
regulatory flexibility analysis is not required, and none has been 
prepared.

Paperwork Reduction Act

    Notwithstanding any other provision of the law, no person is 
required to, nor shall any person be subject to penalty for failure to 
comply with, a collection of information, subject to the requirements 
of the Paperwork Reduction Act, unless that collection of information 
displays a currently valid Office of Management and Budget (OMB) 
Control Number.
    This rule does not contain collection of information requirements 
subject to review and approval by OMB under the Paperwork Reduction Act 
(PRA). The TIP Proposal Preparation Kit, which contains all necessary 
forms and information requirements, was submitted to OMB and approved. 
The OMB Control Number for the information collection requirements is 
0693-0050 and will be published in all Federal Register notices 
soliciting proposals under the Program.

National Environmental Policy Act

    This rule will not significantly affect the quality of the human 
environment. Therefore, an environmental assessment or Environmental 
Impact Statement is not required to be prepared under the National 
Environmental Policy Act of 1969.

List of Subjects in 15 CFR Part 296

    Business and industry; Grant programs--science and technology; 
Inventions and patents; Reporting and recordkeeping requirements; 
Research; Science and technology.

    Dated: June 16, 2008.
James M. Turner,
Deputy Director.

0
For the reasons set forth in the preamble, Title 15 of the Code of 
Federal Regulations is amended as follows:

Subchapter K--NIST Extramural Programs

0
1. The heading of chapter II, subchapter K is revised to read as set 
forth above.
0
2. In 15 CFR chapter II, subchapter K, add a new part 296 as follows:

PART 296--TECHNOLOGY INNOVATION PROGRAM

Subpart A--General
Sec.
296.1 Purpose.
296.2 Definitions.
296.3 Types of assistance available.
296.4 Limitations on assistance.
296.5 Eligibility requirements for companies and joint ventures.
296.6 Valuation of transfers.
296.7 Joint venture registration.
296.8 Joint venture agreement.

[[Page 35916]]

296.9 Activities not permitted for joint ventures.
296.10 Third party in-kind contribution of research services.
296.11 Intellectual property rights and procedures.
296.12 Reporting and auditing requirements.
Subpart B--The Competition Process
296.20 The selection process.
296.21 Evaluation criteria.
296.22 Award criteria.
Subpart C--Dissemination of Program Results
296.30 Monitoring and evaluation.
296.31 Dissemination of results.
296.32 Technical and educational services.
296.33 Annual report.

    Authority: 15 U.S.C. 278n (Pub. L. 110-69 section 3012)

Subpart A--General


Sec.  296.1  Purpose.

    (a) The purpose of the Technology Innovation Program (TIP) is to 
assist United States businesses and institutions of higher education or 
other organizations, such as national laboratories and nonprofit 
research institutes, to support, promote, and accelerate innovation in 
the United States through high-risk, high-reward research in areas of 
critical national need within NIST's areas of technical competence.
    (b) The rules in this part prescribe policies and procedures for 
the award and administration of financial assistance (grants and/or 
cooperative agreements) under the TIP. While the TIP is authorized to 
enter into grants, cooperative agreements, and contracts to carry out 
the TIP mission, the rules in this part address only the award of 
grants and/or cooperative agreements.


Sec.  296.2  Definitions.

    Award means Federal financial assistance made under a grant or 
cooperative agreement.
    Business or company means a for-profit organization, including sole 
proprietors, partnerships, limited liability companies (LLCs), and 
corporations.
    Contract means a procurement contract under an award or subaward, 
and a procurement subcontract under a recipient's or subrecipient's 
contract.
    Contractor means the legal entity to which a contract is made and 
which is accountable to the recipient, subrecipient, or contractor 
making the contract for the use of the funds provided.
    Cooperative agreement refers to a Federal assistance instrument 
used whenever the principal purpose of the relationship between the 
Federal government and the recipient is to transfer something of value, 
such as money, property, or services to the recipient to accomplish a 
public purpose of support or stimulation authorized by Federal statute 
instead of acquiring (by purchase, lease, or barter) property or 
services for the direct benefit or use of the Federal government; and 
substantial involvement is anticipated between the Federal government 
and the recipient during performance of the contemplated activity.
    Critical national need means an area that justifies government 
attention because the magnitude of the problem is large and the 
societal challenges that need to be overcome are not being addressed, 
but could be addressed through high-risk, high-reward research.
    Direct costs means costs that can be identified readily with 
activities carried out in support of a particular final objective. A 
cost may not be allocated to an award as a direct cost if any other 
cost incurred for the same purpose in like circumstances has been 
assigned to an award as an indirect cost. Because of the diverse 
characteristics and accounting practices of different organizations, it 
is not possible to specify the types of costs which may be classified 
as direct costs in all situations. However, typical direct costs could 
include salaries of personnel working on the TIP project, travel, 
equipment, materials and supplies, subcontracts, and other costs not 
categorized in the preceding examples. NIST shall determine the 
allowability of direct costs in accordance with applicable Federal cost 
principles.
    Director means the Director of the National Institute of Standards 
and Technology (NIST).
    Eligible company means a small-sized or medium-sized business or 
company that satisfies the ownership and other requirements stated in 
this part.
    Grant means a Federal assistance instrument used whenever the 
principal purpose of the relationship between the Federal government 
and the recipient is to transfer something of value, such as money, 
property, or services to the recipient to accomplish a public purpose 
of support or stimulation authorized by Federal statute instead of 
acquiring (by purchase, lease, or barter) property or services for the 
direct benefit or use of the Federal government; and no substantial 
involvement is anticipated between the Federal government and the 
recipient during performance of the contemplated activity.
    High-risk, high-reward research means research that:
    (1) Has the potential for yielding transformational results with 
far-ranging or wide-ranging implications;
    (2) Addresses areas of critical national need that support, 
promote, and accelerate innovation in the United States and is within 
NIST's areas of technical competence; and
    (3) Is too novel or spans too diverse a range of disciplines to 
fare well in the traditional peer-review process.
    Indirect costs means those costs incurred for common or joint 
objectives that cannot be readily identified with activities carried 
out in support of a particular final objective. A cost may not be 
allocated to an award as an indirect cost if any other cost incurred 
for the same purpose in like circumstances has been assigned to an 
award as a direct cost. Because of diverse characteristics and 
accounting practices it is not possible to specify the types of costs 
which may be classified as indirect costs in all situations. However, 
typical examples of indirect costs include general administration 
expenses, such as the salaries and expenses of executive officers, 
personnel administration, maintenance, library expenses, and 
accounting. NIST shall determine the allowability of indirect costs in 
accordance with applicable Federal cost principles.
    Institution of higher education means an educational institution in 
any State that--(1) Admits as regular students only persons having a 
certificate of graduation from a school providing secondary education, 
or the recognized equivalent of such a certificate;
    (2) Is legally authorized within such State to provide a program of 
education beyond secondary education;
    (3) Provides an educational program for which the institution 
awards a bachelor's degree or provides not less than a 2-year program 
that is acceptable for full credit toward such a degree;
    (4) Is a public or other nonprofit institution; and
    (5) Is accredited by a nationally recognized accrediting agency or 
association, or if not so accredited, is an institution that has been 
granted preaccreditation status by such an agency or association that 
has been recognized by the Secretary of Education for the granting of 
preaccreditation status, and the Secretary of Education has determined 
that there is satisfactory assurance that the institution will meet the 
accreditation standards of such an agency or association within a 
reasonable time (20 U.S.C. 1001). For the purpose of this paragraph (l) 
only,

[[Page 35917]]

the term State includes, in addition to the several States of the 
United States, the Commonwealth of Puerto Rico, the District of 
Columbia, Guam, American Samoa, the United States Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, and the Freely Associated 
States. The term Freely Associated States means the Republic of the 
Marshall Islands, the Federated States of Micronesia, and the Republic 
of Palau.
    Intellectual property means an invention patentable under title 35, 
United States Code, or any patent on such an invention, or any work for 
which copyright protection is available under title 17, United States 
Code.
    Joint venture means a business arrangement that:
    (1) Includes either:
    (i) At least two separately owned companies that are both 
substantially involved in the project and both of which are 
contributing to the cost-sharing required under the TIP statute, with 
the lead company of the joint venture being an eligible company; or
    (ii) At least one eligible company and one institution of higher 
education or other organization, such as a national laboratory, 
governmental laboratory (not including NIST), or nonprofit research 
institute, that are both substantially involved in the project and both 
of which are contributing to the cost-sharing required under the TIP 
statute, with the lead entity of the joint venture being either the 
eligible company or the institution of higher education; and
    (2) May include additional for-profit companies, institutions of 
higher education, and other organizations, such as national 
laboratories and nonprofit research institutes, that may or may not 
contribute non-Federal funds to the project.
    Large-sized business means any business, including any parent 
company plus related subsidiaries, having annual revenues in excess of 
the amount published by the Program in the relevant Federal Register 
notice of availability of funds in accordance with Sec.  296.20. In 
establishing this amount, the Program may consider the dollar value of 
the total revenues of the 1000th company in Fortune magazine's Fortune 
1000 listing.
    Matching funds or cost sharing means that portion of project costs 
not borne by the Federal government. Sources of revenue to satisfy the 
required cost share include cash and third party in-kind contributions. 
Cash may be contributed by any non-Federal source, including but not 
limited to recipients, state and local governments, companies, and 
nonprofits (except contractors working on a TIP project). Third party 
in-kind contributions include but are not limited to equipment, 
research tools, software, supplies, and/or services. The value of in-
kind contributions shall be determined in accordance with Sec.  14.23 
of this title and will be prorated according to the share of total use 
dedicated to the TIP project. NIST shall determine the allowability of 
matching share costs in accordance with applicable Federal cost 
principles.
    Medium-sized business means any business that does not qualify as a 
small-sized business or a large-sized business under the definitions in 
this section.
    Member means any entity that is identified as a joint venture 
member in the award and is a signatory on the joint venture agreement 
required by Sec.  296.8.
    Nonprofit research institute means a nonprofit research and 
development entity or association organized under the laws of any state 
for the purpose of carrying out research and development.
    Participant means any entity that is identified as a recipient, 
subrecipient, or contractor on an award to a joint venture under the 
Program.
    Person will be deemed to include corporations and associations 
existing under or authorized by the laws of the United States, the laws 
of any of the Territories, the laws of any State, or the laws of any 
foreign country.
    Program or TIP means the Technology Innovation Program.
    Recipient means an organization receiving an award directly from 
NIST under the Program.
    Small-sized business means a business that is independently owned 
and operated, is organized for profit, has fewer than 500 employees, 
and meets the other requirements found in 13 CFR part 121.
    Societal challenge means a problem or issue confronted by society 
that when not addressed could negatively affect the overall function 
and quality of life of the Nation, and as such justifies government 
attention.
    State, except for the limited purpose described in paragraph (l) of 
this section, means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, and any 
territory or possession of the United States, or any agency or 
instrumentality of a State exclusive of local governments. The term 
does not include any public and Indian housing agency under the United 
States Housing Act of 1937.
    Subaward means an award of financial assistance made under an award 
by a recipient to an eligible subrecipient or by a subrecipient to a 
lower tier subrecipient. The term includes financial assistance when 
provided by any legal agreement, even if the legal agreement is called 
a contract, but does not include procurement of goods and services.
    Subrecipient means the legal entity to which a subaward is made and 
which is accountable to the recipient for the use of the funds 
provided.
    Transformational results means potential project outcomes that 
enable disruptive changes over and above current methods and 
strategies. Transformational results have the potential to radically 
improve our understanding of systems and technologies, challenging the 
status quo of research approaches and applications.
    United States owned company means a for-profit organization, 
including sole proprietors, partnerships, limited liability companies 
(LLCs), and corporations, that has a majority ownership by individuals 
who are citizens of the United States.


Sec.  296.3  Types of assistance available.

    Subject to the limitations of this section and Sec.  296.4, 
assistance under this part is available to eligible companies or joint 
ventures that request either of the following:
    (a) Single Company Awards: No award given to a single company shall 
exceed a total of $3,000,000 over a total of 3 years.
    (b) Joint Venture Awards: No award given to a joint venture shall 
exceed a total of $9,000,000 over a total of 5 years.


Sec.  296.4  Limitations on assistance.

    (a) The Federal share of a project funded under the Program shall 
not be more than 50 percent of total project costs.
    (b) Federal funds awarded under this Program may be used only for 
direct costs and not for indirect costs, profits, or management fees.
    (c) No large-sized business may receive funding as a recipient or 
subrecipient of an award under the Program. When procured in accordance 
with procedures established under the Procurement Standards required by 
part 14 of Subtitle A of this title, recipients may procure supplies 
and other expendable property, equipment, real property and other 
services from any party, including large-sized businesses.
    (d) If a project ends before the completion of the period for which 
an award has been made, after all allowable costs have been paid and 
appropriate audits conducted, the unspent balance

[[Page 35918]]

of the Federal funds shall be returned by the recipient to the Program.


Sec.  296.5  Eligibility requirements for companies and joint ventures.

    Companies and joint ventures must be eligible in order to receive 
funding under the Program and must remain eligible throughout the life 
of their awards.
    (a) A company shall be eligible to receive an award from the 
Program only if:
    (1) The company is a small-sized or medium-sized business that is 
incorporated in the United States and does a majority of its business 
in the United States; and
    (2) Either
    (i) The company is a United States owned company; or
    (ii) The company is owned by a parent company incorporated in 
another country and the Program finds that:
    (A) The company's participation in TIP would be in the economic 
interest of the United States, as evidenced by investments in the 
United States in research, development, and manufacturing (including, 
for example, the manufacture of major components or subassemblies in 
the United States); significant contributions to employment in the 
United States; and agreement with respect to any technology arising 
from assistance provided by the Program to promote the manufacture 
within the United States of products resulting from that technology, 
and to procure parts and materials from competitive United States 
suppliers; and
    (B) That the parent company is incorporated in a country which 
affords to United States-owned companies opportunities, comparable to 
those afforded to any other company, to participate in any joint 
venture similar to those authorized to receive funding under the 
Program; affords to United States-owned companies local investment 
opportunities comparable to those afforded to any other company; and 
affords adequate and effective protection for the intellectual property 
rights of United States-owned companies.
    (b) NIST may suspend a company or joint venture from continued 
assistance if it determines that the company, the country of 
incorporation of the company or a parent company, or any member of the 
joint venture has failed to satisfy any of the criteria contained in 
paragraph (a) of this section, and that it is in the national interest 
of the United States to do so.
    (c) Members of joint ventures that are companies must be 
incorporated in the United States and do a majority of their business 
in the United States and must comply with the requirements of paragraph 
(a)(2) of this section. For a joint venture to be eligible for 
assistance, it must be comprised as defined in Sec.  296.2.


Sec.  296.6  Valuation of transfers.

    (a) This section applies to transfers of goods, including computer 
software, and services provided by the transferor related to the 
maintenance of those goods, when those goods or services are 
transferred from one joint venture member to another separately-owned 
joint venture member.
    (b) The greater amount of the actual cost of the transferred goods 
and services as determined in accordance with applicable Federal cost 
principles, or 75 percent of the best customer price of the transferred 
goods and services, shall be deemed to be allowable costs. Best 
customer price means the GSA schedule price, or if such price is 
unavailable, the lowest price at which a sale was made during the last 
twelve months prior to the transfer of the particular good or service.


Sec.  296.7  Joint venture registration.

    Joint ventures selected for assistance under the Program must 
notify the Department of Justice and the Federal Trade Commission under 
section 6 of the National Cooperative Research Act of 1984, as amended 
(15 U.S.C. 4305). No funds will be released prior to receipt by the 
Program of copies of such notification.


Sec.  296.8  Joint venture agreement.

    NIST shall not issue a TIP award to a joint venture and no costs 
shall be incurred under a TIP project by the joint venture members 
until such time as a joint venture agreement has been executed by all 
of the joint venture members and approved by NIST.


Sec.  296.9  Activities not permitted for joint ventures.

    The following activities are not permissible for TIP-funded joint 
ventures:
    (a) Exchanging information among competitors relating to costs, 
sales, profitability, prices, marketing, or distribution of any 
product, process, or service that is not reasonably required to conduct 
the research and development that is the purpose of such venture;
    (b) Entering into any agreement or engaging in any other conduct 
restricting, requiring, or otherwise involving the marketing, 
distribution, or provision by any person who is a party to such joint 
venture of any product, process, or service, other than the 
distribution among the parties to such venture, in accordance with such 
venture, of a product, process, or service produced by such venture, 
the marketing of proprietary information, such as patents and trade 
secrets, developed through such venture, or the licensing, conveying, 
or transferring of intellectual property, such as patents and trade 
secrets, developed through such venture; and
    (c) Entering into any agreement or engaging in any other conduct:
    (1) To restrict or require the sale, licensing, or sharing of 
inventions or developments not developed through such venture; or
    (2) To restrict or require participation by such party in other 
research and development activities, that is not reasonably required to 
prevent misappropriation of proprietary information contributed by any 
person who is a party to such venture or of the results of such 
venture.


Sec.  296.10  Third party in-kind contribution of research services.

    NIST shall not issue a TIP award to a single recipient or joint 
venture whose proposed budget includes the use of third party in-kind 
contribution of research as cost share, and no costs shall be incurred 
under such a TIP project, until such time as an agreement between the 
recipient and the third party contributor of in-kind research has been 
executed by both parties and approved by NIST.


Sec.  296.11  Intellectual property rights and procedures.

    (a) Rights in Data. Except as otherwise specifically provided for 
in an award, authors may copyright any work that is subject to 
copyright and was developed under an award. When claim is made to 
copyright, the applicable copyright notice of 17 U.S.C. 401 or 402 and 
acknowledgment of Federal government sponsorship shall be affixed to 
the work when and if the work is delivered to the Federal government, 
is published, or is deposited for registration as a published work in 
the U.S. Copyright Office. The copyright owner shall grant to the 
Federal government, and others acting on its behalf, a paid up, 
nonexclusive, irrevocable, worldwide license for all such works to 
reproduce, publish, or otherwise use the work for Federal purposes.
    (b) Invention Rights.
    (1) Ownership of inventions developed from assistance provided by 
the Program under Sec.  296.3(a) shall be governed by the requirements 
of chapter 18 of title 35 of the United States Code.
    (2) Ownership of inventions developed from assistance provided by

[[Page 35919]]

the Program under Sec.  296.3(b) may vest in any participant in the 
joint venture, as agreed by the members of the joint venture, 
notwithstanding section 202(a) and (b) of title 35, United States Code. 
Title to any such invention shall not be transferred or passed, except 
to a participant in the joint venture, until the expiration of the 
first patent obtained in connection with such invention. In accordance 
with Sec.  296.8, joint ventures will provide to NIST a copy of their 
written agreement that defines the disposition of ownership rights 
among the participants of the joint venture, including the principles 
governing the disposition of intellectual property developed by 
contractors and subcontractors, as appropriate, and that complies with 
these regulations.
    (3) The United States reserves a nonexclusive, nontransferable, 
irrevocable paid-up license, to practice or have practiced for or on 
behalf of the United States any inventions developed using assistance 
under this section, but shall not in the exercise of such license 
publicly disclose proprietary information related to the license. 
Nothing in this subsection shall be construed to prohibit the licensing 
to any company of intellectual property rights arising from assistance 
provided under this section.
    (4) Should the last existing participant in a joint venture cease 
to exist prior to the expiration of the first patent obtained in 
connection with any invention developed from assistance provided under 
the Program, title to such patent must be transferred or passed to a 
United States entity that can commercialize the technology in a timely 
fashion.
    (c) Patent Procedures. Each award by the Program will include 
provisions assuring the retention of a governmental use license in each 
disclosed invention, and the government's retention of march-in rights. 
In addition, each award by the Program will contain procedures 
regarding reporting of subject inventions by the recipient through the 
Interagency Edison extramural invention reporting system (iEdison), 
including the subject inventions of recipients, including members of 
the joint venture (if applicable), subrecipients, and contractors of 
the recipient or joint venture members.


Sec.  296.12  Reporting and auditing requirements.

    Each award by the Program shall contain procedures regarding 
technical, business, and financial reporting and auditing requirements 
to ensure that awards are being used in accordance with the Program's 
objectives and applicable Federal cost principles. The purpose of the 
technical reporting is to monitor ``best effort'' progress toward 
overall project goals. The purpose of the business reporting is to 
monitor project performance against the Program's mission as required 
by the Government Performance and Results Act (GPRA) mandate for 
program evaluation. The purpose of the financial reporting is to 
monitor the status of project funds. The audit standards to be applied 
to TIP awards are the ``Government Auditing Standards'' (GAS) issued by 
the Comptroller General of the United States and any Program-specific 
audit guidelines or requirements prescribed in the award terms and 
conditions. To implement paragraph (f) of Sec.  14.25 of this title, 
audit standards and award terms may stipulate that ``total Federal and 
non-Federal funds authorized by the Grants Officer'' means the total 
Federal and non-Federal funds authorized by the Grants Officer 
annually.

Subpart B--The Competition Process


Sec.  296.20  The selection process.

    (a) To begin a competition, the Program will solicit proposals 
through an announcement in the Federal Register, which will contain 
information regarding that competition, including the areas of critical 
national need that proposals must address. An Evaluation Panel(s) will 
be established to evaluate proposals and ensure that all proposals 
receive careful consideration.
    (b) (1) A preliminary review will be conducted to determine whether 
the proposal:
    (i) Is in accordance with Sec.  296.3;
    (ii) Complies with either paragraph (a) or paragraph (c) of Sec.  
296.5;
    (iii) Addresses the award criteria of paragraphs (a) through (c) of 
Sec.  296.22;
    (iv) Was submitted to a previous TIP competition and if so, has 
been substantially revised; and
    (v) Is complete.
    (2) Complete proposals that meet the preliminary review 
requirements described in paragraphs (b)(1)(i) through (v) of this 
section will be considered further. Proposals that are incomplete or do 
not meet any one of these preliminary review requirements will normally 
be eliminated.
    (c) The Evaluation Panel(s) will then conduct a multi-disciplinary 
peer review of the remaining proposals based on the evaluation criteria 
listed in Sec.  296.21 and the award criteria listed in Sec.  296.22. 
In some cases NIST may conduct oral reviews and/or site visits. The 
Evaluation Panel(s) will present funding recommendations to the 
Selecting Official in rank order for further consideration. The 
Evaluation Panel(s) will not recommend for further consideration any 
proposal determined not to meet all of the eligibility and award 
requirements of this part and the Federal Register notice announcing 
the availability of funds.
    (d) In making final selections, the Selecting Official will select 
funding recipients based upon the Evaluation Panel's rank order of the 
proposals and the following selection factors: assuring an appropriate 
distribution of funds among technologies and their applications, 
availability of funds, and/or Program priorities. The selection of 
proposals by the Selecting Official is final.
    (e) NIST reserves the right to negotiate the cost and scope of the 
proposed work with the proposers that have been selected to receive 
awards. This may include requesting that the proposer delete from the 
scope of work a particular task that is deemed by NIST to be 
inappropriate for support against the evaluation criteria. NIST also 
reserves the right to reject a proposal where information is uncovered 
that raises a reasonable doubt as to the responsibility of the 
proposer. The final approval of selected proposals and award of 
assistance will be made by the NIST Grants Officer as described in the 
Federal Register notice announcing the competition. The award decision 
of the NIST Grants Officer is final.


Sec.  296.21  Evaluation criteria.

    A proposal must be determined to be competitive against the 
Evaluation Criteria set forth in this section to receive funding under 
the Program. Additionally, no proposal will be funded unless the 
Program determines that it has scientific and technical merit and that 
the proposed research has strong potential for meeting identified areas 
of critical national need.
    (a)(1) The proposer(s) adequately addresses the scientific and 
technical merit and how the research may result in intellectual 
property vesting in a United States entity including evidence that:
    (i) The proposed research is novel;
    (ii) The proposed research is high-risk, high-reward;
    (iii) The proposer(s) demonstrates a high level of relevant 
scientific/technical expertise for key personnel, including contractors 
and/or informal collaborators, and have access to the necessary 
resources, for example research facilities, equipment, materials, and 
data, to conduct the research as proposed;

[[Page 35920]]

    (iv) The research result(s) has the potential to address the 
technical needs associated with a major societal challenge not 
currently being addressed; and
    (v) The proposed research plan is scientifically sound with tasks, 
milestones, timeline, decision points and alternate strategies.
    (2) Total weight of (a)(1)(i) through (v) is 50%.
    (b)(1) The proposer(s) adequately establishes that the proposed 
research has strong potential for advancing the state-of-the-art and 
contributing significantly to the United States science and technology 
knowledge base and to address areas of critical national need through 
transforming the Nation's capacity to deal with a major societal 
challenge(s) that is not currently being addressed, and generate 
substantial benefits to the Nation that extend significantly beyond the 
direct return to the proposer including an explanation in the proposal:
    (i) Of the potential magnitude of transformational results upon the 
Nation's capabilities in an area;
    (ii) Of how and when the ensuing transformational results will be 
useful to the Nation; and
    (iii) Of the capacity and commitment of each award participant to 
enable or advance the transformation to the proposed research results 
(technology).
    (2) Total weight of (b)(1)(i) through (iii) is 50%.


Sec.  296.22  Award criteria.

    NIST must determine that a proposal successfully meets all of the 
Award Criteria set forth in this section for the proposal to receive 
funding under the Program. The Award Criteria are:
    (a) The proposal explains why TIP support is necessary, including 
evidence that the research will not be conducted within a reasonable 
time period in the absence of financial assistance from TIP;
    (b) The proposal demonstrates that reasonable and thorough efforts 
have been made to secure funding from alternative funding sources and 
no other alternative funding sources are reasonably available to 
support the proposal;
    (c) The proposal explains the novelty of the research (technology) 
and demonstrates that other entities have not already developed, 
commercialized, marketed, distributed, or sold similar research results 
(technologies);
    (d) The proposal has scientific and technical merit and may result 
in intellectual property vesting in a United States entity that can 
commercialize the technology in a timely manner;
    (e) The proposal establishes that the research has strong potential 
for advancing the state-of-the-art and contributing significantly to 
the United States science and technology knowledge base; and
    (f) The proposal establishes that the proposed transformational 
research (technology) has strong potential to address areas of critical 
national need through transforming the Nation's capacity to deal with 
major societal challenges that are not currently being addressed, and 
generate substantial benefits to the Nation that extend significantly 
beyond the direct return to the proposer.

Subpart C--Dissemination of Program Results


Sec.  296.30  Monitoring and evaluation.

    The Program will provide monitoring and evaluation of areas of 
critical national need and its investments through periodic analyses. 
It will develop methods and metrics for assessing impact at all stages. 
These analyses will contribute to the establishment and adoption of 
best practices.


Sec.  296.31  Dissemination of results.

    Results stemming from the analyses required by Sec.  296.30 will be 
disseminated in periodic working papers, fact sheets, and meetings, 
which will address the progress that the Program has made from both a 
project and a portfolio perspective. Such disseminated results will 
serve to educate both external constituencies as well as internal 
audiences on research results, best practices, and recommended changes 
to existing operations based on solid analysis.


Sec.  296.32  Technical and educational services.

    (a) Under the Federal Technology Transfer Act of 1986, NIST has the 
authority to enter into cooperative research and development agreements 
with non-Federal parties to provide personnel, services, facilities, 
equipment, or other resources except funds toward the conduct of 
specified research or development efforts which are consistent with the 
missions of the laboratory. In turn, NIST has the authority to accept 
funds, personnel, services, facilities, equipment and other resources 
from the non-Federal party or parties for the joint research effort. 
Cooperative research and development agreements do not include 
procurement contracts or cooperative agreements as those terms are used 
in sections 6303, 6304, and 6305 of title 31, United States Code.
    (b) In no event will NIST enter into a cooperative research and 
development agreement with a recipient of an award under the Program 
which provides for the payment of Program funds from the award 
recipient to NIST.
    (c) From time to time, TIP may conduct public workshops and 
undertake other educational activities to foster the collaboration of 
funding Recipients with other funding resources for purposes of further 
development and diffusion of TIP-related technologies. In no event will 
TIP provide recommendations, endorsements, or approvals of any TIP 
funding Recipients to any outside party.


Sec.  296.33  Annual report.

    The Director shall submit annually to the Committee on Commerce, 
Science, and Transportation of the Senate and the Committee on Science 
and Technology of the House of Representatives a report describing the 
Technology Innovation Program's activities, including a description of 
the metrics upon which award funding decisions were made in the 
previous fiscal year, any proposed changes to those metrics, metrics 
for evaluating the success of ongoing and completed awards, and an 
evaluation of ongoing and completed awards. The first annual report 
shall include best practices for management of programs to stimulate 
high-risk, high-reward research.

 [FR Doc. E8-14083 Filed 6-24-08; 8:45 am]
BILLING CODE 3510-13-P