Annual Savings Five-Year Savings from (Millions of dollars) Cumulative the 1997 Plan 1998 1999 2000 2001 2002 Total Budget Authority 108 126 101 107 136 578 Outlays 96 113 109 105 118 541
In recent years, the Congress and the Administration have expanded funding for research and development (R&D) on dual-use technologies--those that have both civil and military applications. One program that was financed with part of that increase was the Technology Reinvestment Project. TRP provided support to consortia that developed or disseminated dual-use technologies; it was administered by the Defense Advanced Research Projects Agency (DARPA) in cooperation with the three military departments and five other federal agencies. In most cases, recipients of TRP awards matched their federal support dollar for dollar.
Several other dual-use programs have also received considerable funding increases over the past several years, including R&D in high-performance computing, materials and electronics processing, and electronics modules. Those programs are administered by DARPA, whose technical managers are given considerable independence in selecting technologies and managing projects. Organizations that receive R&D awards from DARPA are not necessarily obligated to share project costs, although some do.
In 1997, the Administration replaced TRP with the Dual-Use Applications Program (DUAP). That initiative was designed to address criticisms of TRP by focusing only on technologies that are potentially useful to the military and by making all of its awards through a competitive selection process--that is, avoiding special earmarks. The Administration has requested $225 million for DUAP in 1998 and would like funding for that program to continue over the next five years. Under the 1997 request, other dual-use programs would have received about $1.1 billion annually.
This option would limit funding for DUAP and other dual-use initiatives to $1.2 billion, an amount that is consistent with appropriation levels from 1992. Compared with the Administration's 1997 request, out-lay savings under this option would be $96 million in 1998 and total $541 million over the next five years.
Advocates of greater funding for dual-use technologies contend that those programs ultimately will help lower the cost of defense equipment. Although military R&D has spawned numerous commercial applications, today some civil products outpace their defense counterparts and are less expensive, particularly those in the field of microelectronics. By incorporating widely available components from the commercial sector, some defense equipment could be made more capable while keeping costs reasonable. Programs such as DARPA's efforts in electronics processing may help to adapt commercial technologies for military use.
Initiatives such as DUAP may also improve the integration of the defense industrial base into civil sectors of the U.S. economy. Historically, military and civil production have been treated as two distinct sectors because of onerous cost-accounting requirements and detailed specifications for military products, among other factors. But as U.S. military spending has declined, integrating those sectors in order to meet future military needs has become more important. Some analysts fear that otherwise, only a few companies would remain in the defense business and retain the capability to produce sophisticated military equipment. That could become a problem if threats to national security emerged that would need advanced technology to counter them. Some advocates also believe that dual-use programs can bolster economic growth in certain industries, especially high-technology ones.
Critics of direct funding for dual-use R&D argue that other policy changes can encourage the integration of civil and military efforts more effectively. Adopting commercial standards in place of military specifications, for example, may allow weapons producers to incorporate civil components on a more widespread basis than, say, a DARPA-sponsored study in which commercial technologies are customized for military use. Dual-use programs that tailor civil technologies to defense specifications can leave too little in common with the commercial marketplace, thereby defeating one of the key purposes of dual-use items: to benefit from economies of scale in production. Ultimately, dual-use programs may not be sufficient to sustain domestic suppliers of high-technology goods for military equipment. And such programs also cannot control whether companies that develop technology with their help share those innovations with foreign firms, even though such sharing may undermine the objectives of the program.
Moreover, these dual-use programs sponsor a
type of R&D for which the grounds for government
funding are less clear. Most economists believe that
federal support for basic research is justified because
the private sector will underinvest in research of that
type. More contentious, however, is the degree to
which the government should support applied R&D,
the type funded by most dual-use programs. As
projects move from underlying scientific knowledge
closer to products and processes, the commercial
benefits of that R&D are likely to become more
apparent. Applied research projects could take
numerous paths, and it is difficult to select a few
projects from among several promising applications
and then evaluate critically the role of federal
support. Some analysts therefore contend that the
private sector--with its vested interests in identifying
commercial potential--is better suited to promote
applied R&D projects. Furthermore, if supported
with federal funds, R&D programs can become
entrenched politically and difficult to discontinue.