[Federal Register Volume 62, Number 180 (Wednesday, September 17, 1997)]
[Proposed Rules]
[Pages 48802-48807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24709]


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DEPARTMENT OF COMMERCE

National Institute of Standards and Technology

15 CFR Part 295

[Docket No. 970822201-7201-01]
RIN 0693-AB44


Advanced Technology Program

AGENCY: National Institute of Standards and Technology, Technology 
Administration, Commerce.

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The National Institute of Standards and Technology requests 
comments on proposed revisions to the regulations which implement the 
Advanced Technology Program (ATP), found at part 295 of title 15 of the 
Code of Federal Regulations. Major changes proposed today include an 
increase in the cost-sharing requirement for large companies applying 
as single proposers in future competitions; modification of the ATP 
evaluation criteria for project selection to place greater emphasis on 
joint ventures and consortia with a broad range of participants; and 
changes in the valuation of transfers between separately-owned joint 
venture members and 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

[[Page 48803]]

transferred from one joint venture member to other separately-owned 
joint venture members. These changes strengthen the fundamental mission 
of the ATP: for Government to work in partnership with industry to 
foster the development and broad dissemination of challenging, high-
risk technologies that offer the potential for significant, broad-based 
economic benefits for the nation.

DATES: Comments on the proposed program must be received no later than 
October 17, 1997.

ADDRESSES: Comments on the proposed program must be submitted in 
writing to: Advanced Technology Program Rule Comments, National 
Institute of Standards and Technology, Room A333, Administration 
Building, Gaithersburg, MD 20899-0001.

FOR FURTHER INFORMATION CONTACT:
To receive additional program information, contact Barbara Lambis at 
(301) 975-4447.

SUPPLEMENTARY INFORMATION: In a statement to Congress in March of 1997, 
Secretary of Commerce William M. Daley announced a Departmental study 
of several issues raised by Members of Congress and others concerning 
the policies and procedures of the ATP. The study was designed to make 
recommendations for possible changes to improve the effectiveness of 
the program. Following issuance of a 30-day notice of opportunity for 
public comment on ways to improve the operation of the ATP, 
recommendations for possible changes were made to improve the 
effectiveness of the program.
    In order to implement the recommendations and the decisions of 
Secretary Daley, the National Institute of Standards and Technology is 
today proposing changes to the operating procedures of the Advanced 
Technology Program found at part 295 of title 15 of the Code of Federal 
Regulations. These changes strengthen the fundamental mission of the 
ATP: For Government to work in partnership with industry to foster the 
development and broad dissemination of challenging, high-risk 
technologies that offer the potential for significant, broad-based 
economic benefits for the nation. Such a unique government-industry 
research partnership fosters the acceleration not only of dramatic 
gains in existing industries, but also acceleration of the development 
of emerging or enabling technologies leading to revolutionary new 
products, industrial processes and services for the world's markets and 
work to spawn industries of the 21st century. Furthermore, the proposed 
changes also ensure that the fundamental strengths of the ATP remain 
unchanged, especially the requirement that the ATP continue to be a 
wholly merit-driven program based on peer review. These changes are 
reflected in proposed amendments to the regulation contained in this 
Notice:
     Proposed revised section 295.32(b) increases the cost-
sharing requirement for large companies applying as single proposers in 
future competitions. ``Large businesses'' as the term is proposed to be 
defined in the revised Sec. 295.2(k), are proposed to cost-share at a 
minimum of 60 percent. This change is proposed to provide an incentive 
for large companies to participate in joint ventures and to guarantee 
that large companies pay a majority of total project costs.
     The term ``large business'' is proposed to be defined as 
including any business, including any parent company and related 
subsidiaries, having revenues in excess of the amount published by ATP 
in the relevant annual notice of availability of funds. In establishing 
this amount, ATP may consider the dollar value of the total revenues of 
the 500th company in Fortune Magazine's Fortune 500 listing. This is a 
response to a perceived need to eliminate the problem of 
unintentionally disadvantaging thousands of medium-sized firms of 
limited resources. The new definition provides for a simple, 
unambiguous and relatively effective measure of size.
     The ATP evaluation criteria for project selection are 
proposed to be modified to: (1) place greater emphasis on joint 
ventures and consortia with a broad range of participants; and (2) 
better define the multi-step selection process based on all of the 
criteria in Sec. 295.6. these proposed changes reaffirm ATP's increased 
emphasis on partnerships as part of the ATP's overall goals. Further, 
these changes will encourage joint ventures and consortia that team 
large companies with smaller companies and other technology resources, 
such as universities and federal laboratories, and will create new 
relationships among small and large companies to develop new 
technologies and bring them to commercialization.
     A new rule is proposed regarding the valuation of 
transfers between separately-owned joint venture members and 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 
other separately-owned joint venture members. This proposal resulted 
from negotiations between the Department of Commerce's Inspector 
General and ATP concerning the valuation of transfers of certain goods 
and services within joint ventures. This proposal appears in Sec. 
295.25.
     Also, a number of administrative and clerical changes are 
proposed to be implemented to Part 295 for consistency and clarity.

Request for Comments

    The National Institute of Standards and Technology requests 
comments on the draft revisions to regulations found at 15 CFR part 
295, implementing the Advanced Technology Program, which are included 
in this notice. Persons interested in commenting on the proposed 
program should submit their comments in writing to the above address. 
All comments received in response to this notice will become part of 
the public record and will be available for inspection and copying in 
the Commerce Department's Central Reference and Records Inspection 
Facility, Herbert Hoover Building, Room 6020, 14th Street between E 
Street and Constitution Avenue NW., Washington, DC 20230.

Additional Information

Executive Order 12866

    This rule has been determined not to be significant under section 
3(f) of Executive Order 12866.

Executive Order 12612

    This rule does not contain policies with Federalism implications 
sufficient to warrant preparation of a Federalism assessment under 
Executive Order 12612.

Regulatory Flexibility Act

    The Assistant General Counsel for Legislation and Regulation of the 
Department of Commerce certified to the Chief Counsel for Advocacy, 
Small Business Administration, that this rule, if promulgated, will not 
have a significant economic effect on a substantial number of small 
entities. (5 U.S.C. 605(b)). This is because there are only a small 
number of awardees and thus only a small number of awards will be given 
to small businesses. Specifically, based on past experience and 
currently foreseen budgets, the ATP would expect to receive only a few 
hundred proposals annually from small businesses, and from these, to 
make under 100 awards. The program is entirely voluntary for the 
participants that seek funding.

[[Page 48804]]

Paperwork Reduction Act

    Notwithstanding any other provisions of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection-of-information, subject to the 
requirements of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) control number.
    This proposed rule contains a collection of information requirement 
subject to the requirements of the Paperwork Reduction Act. The 
collection of information requirement applies to persons seeking 
financial assistance under the Advanced Technology Program as well as 
reporting requirements if financial assistance is granted. The 
collection of information requirement contained in the proposed rule 
has been submitted to the Office of Management and Budget for review 
under section 3507 of the Paperwork Reduction Act. The public reporting 
burden per respondent for the collection of information contained in 
this rule is estimated to range between 20 and 30 hours per submission 
and 3 hours annually for recipients of financial assistance to provide 
monitoring reports. This estimate includes the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    Comments are requested concerning: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of NIST's burden estimate; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology. 
Comments should be addressed to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, Washington, D.C. 
20503 (Attn: Desk Officer for NIST); and to Barbara Lambis, Room A333, 
Administration Building, National Institute of Standards and 
Technology, Gaithersburg, MD 20899.

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.

Executive Order 12372

    Executive Order 12372 ``Intergovernmental Review of Federal 
Programs'' does not apply to this program.

List of Subjects in 15 CFR Part 295

    Inventions and patents, Laboratories, Research, Science and 
Technology, Scientists.

    Dated: September 12, 1997.
Elaine Bunten-Mines,
Director, Program Office.

    For reasons set forth in the preamble, it is proposed that title 
15, part 295 of the Code of Federal Regulations be amended as follows:

PART 295--ADVANCED TECHNOLOGY PROGRAM

    1. The authority citation for part 295 continues to read as 
follows:

    Authority: 15 U.S.C. 278n.

    2. Section 295.1 is revised to read as follows:


Sec. 295.1  Purpose.

    (a) The purpose of the Advanced Technology Program (ATP) is to 
assist United States businesses to carry out research and development 
on high risk, high pay-off, emerging and enabling technologies. These 
technologies are:
    (1) High risk, because the technical challenges make success 
uncertain;
    (2) High pay-off, because when applied, they offer significant 
benefits to the U.S. economy; and
    (3) Emerging and enabling, because they offer wide breadth of 
potential application and form an important technical basis for future 
commercial applications.
    (b) These rules prescribe policies and procedures for the award of 
cooperative agreements under the advanced Technology Program in order 
to ensure the fair treatment of all proposals. While the Advanced 
Technology Program is authorized to enter into grants, cooperative 
agreements, and contracts to carry out its mission, these rules address 
only the award of cooperative agreements. The Program employs 
cooperative agreements rather than grants because such agreements allow 
ATP to exercise appropriate management oversight of projects and also 
to link ATP-funded projects to ongoing R&D at the National Institute of 
Standards and Technology wherever such linkage would increase the 
likelihood of success of the project.
    (c) In carrying out this rule, the Program endeavors to put more 
emphasis on joint ventures and consortia with a broad range of 
participants, including large companies, and less emphasis on support 
of individual large companies.
    3. Section 295.2(c) is revised to read as follows:


Sec. 295.2  Definitions.

* * * * *
    (c) The term ``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 ATP project and associated 
reasonable fringe benefits such as medical insurance. Direct costs 
might also include supplies and materials, special equipment required 
specifically for the ATP project, and travel associated with the ATP 
project. ATP shall determine the allowability of direct costs in 
accordance with applicable Federal cost principles.
* * * * *
    4. Section 295.2 is further amended by removing paragraph (e), 
redesignating paragraphs (f) through (k) as paragraphs (e) through (j), 
removing paragraph (n), redesignating paragraphs (o) through (r) as 
paragraphs (n) through (q), and adding new paragraph (k) to read as 
follows:


Sec. 295.2  Definitions.

* * * * *
    (k) The term ``large business'' for a particular ATP competition 
means any business, including any parent company and related 
subsidiaries, having revenues in excess of the amount published by ATP 
in the relevant annual notice of availability of funds required by 
Sec. 295.7(a). In establishing this amount, ATP may consider the dollar 
value of the total revenues of the 500th company in Fortune Magazine's 
Fortune 500 listing.
* * * * *
    5. The newly designated Sec. 295.2(g) is revised to read as 
follows:


Sec. 295.2  Definitions.

* * * * *
    (g) The term ``indirect costs'' means those costs incurred for 
common or joint

[[Page 48805]]

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. ATP shall determine the allowability of indirect costs in 
accordance with applicable Federal cost principles.
* * * * *
    6. The newly designated Sec. 295.2(h) is revised to read as 
follows:


Sec. 295.2  Definitions.

* * * * *
    (h) The term ``industry-led joint research and development 
venture'' means a joint research and development venture that consists 
of two or more separately-owned, for-profit businesses that perform 
research and development in the project; control the venture's 
membership, research directions, and funding priorities; and share 
total project costs with the Federal government. The venture may 
include additional companies, independent research organizations, 
universities, and/or governmental laboratories (other than NIST) which 
may or may not contribute funds (other than Federal funds) to the 
project and perform research and development. An independent research 
organization may perform administrative tasks on behalf of an industry-
led joint research and development venture, such as handling receipts 
and disbursements of funds and making antitrust filings.
* * * * *
    7. Redesignated Sec. 295.2(j)(1)(vi) is revised to read as follows:


Sec. 295.2  Definitions.

* * * * *
    (j) * * *
    (1) * * *
    (vi) Any combination of the purposes specified in paragraphs 
(j)(1)(i), (ii), (iii), (iv) and (v) of this section, and may include 
the establishment and operation of facilities for the conducting of 
research, the conducting of such venture on a protected and proprietary 
basis, and the prosecuting of applications for patents and the granting 
of licenses for the results of such venture, but does not include any 
activity specified in paragraph (j)(2) of this section.
* * * * *
    8. Section 295.2(l) is revised to read as follows:


Sec. 295.2  Definitions.

* * * * *
    (l) The term ``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 in-kind 
contributions. Cash contributions can be from recipient, state, county, 
city, or other non-Federal sources. In-kind contributions can be made 
by recipients or non-federal third parties (except subcontractors 
working on an ATP project) and include but are not limited to 
equipment, research tools, software, and supplies. Except as specified 
at Sec. 295.25 of this regulation, the value of in-kind contributions 
shall be determined in accordance with OMB Circular A-110, Subpart C, 
Section 23. The value of in-kind contributions will be prorated 
according to the share of total use dedicated to the ATP program. ATP 
restricts the total value of in-kind contributions that can be used to 
satisfy the cost share by requiring that such contributions not exceed 
30 percent of the non-federal share of the total project costs. ATP 
shall determine the allowability of matching share costs in accordance 
with applicable Federal cost principles.
* * * * *
    9. Section 295.3(c) is added as follows:


Sec. 295.3  Eligibility of United States and foreign-owned businesses.

* * * * *
    (c) Companies owned by legal residents (green card holders) may 
apply to the Program, but before an award can be given, the owner(s) 
must either become a citizen or ownership must be transferred to a U.S. 
citizen(s).
    10. Section 295.4 is revised to read as follows:


Sec. 295.4  The selection process.

    (a) The selection process for awards is a multi-step process based 
on the criteria listed in Sec. 295.6. A source evaluation board (SEB) 
is established to ensure that all proposals receive careful 
consideration. In the first step, called ``preliminary screening,'' 
proposals are eliminated that do not meet the requirements of this rule 
or the Program announcement. Typical but not exclusive of the reasons 
for eliminating a proposal at this stage is that the proposal: is 
deemed to have serious deficiencies in either the technical or business 
plan; involves product development rather than high risk R&D; is not 
industry-led; is significantly overpriced or underpriced given the 
scope of the work; does not meet the requirements set out in the notice 
of availability of funds issued pursuant to Sec. 295.7; or, in the case 
of joint ventures, requests more than a minority share of funding. NIST 
will also examine proposals that have been submitted to a previous 
competition to determine whether substantive revisions have been made 
to the earlier proposal, and, if not, may reject the proposal or 
forward it to a later stage in the review process based upon the 
earlier review.
    (b) In the second step, referred to as the ``technical and business 
review,'' proposals are evaluated under the criteria found in 
Sec. 295.6. Proposals judged to have the highest merit based on the 
selection criteria receive further consideration and are referred to as 
``semifinalists.''
    (c) In the third step, referred to as ``selection of finalists,'' 
the Program prepares a final scoring and ranking of semifinalist 
proposals. During this step, the semifinalist proposers may be asked to 
make oral presentations on their proposals at NIST, and in some cases 
site visits may be required. Subject to the provisions of Sec. 295.6, a 
list of ranked finalists is submitted to the Selecting Official.
    (d) In the final step, referred to as ``selection of awardees,'' 
the Selecting Official selects funding recipients from among the 
finalists, based upon;
    (1) The rank order of the proposals on the basis of all selection 
criteria Sec. 295.6;
    (2) Assuring an appropriate distribution of funds among 
technologies and their applications; and
    (3) The availability of funds. The Selecting Official is 
responsible for ensuring that only proposals that meet the Program 
selection criteria receive awards. The Program reserves the right to 
withhold awards in any case where a search of Federal records discloses 
information that raises a reasonable doubt as to the responsibility of 
the proposer. The decision of the Selecting Official is final.
    (e) If a joint venture is ranked as a finalist, but the Program 
determines that the joint venture contains weaknesses in its structure 
or cohesiveness that may substantially lessen the probability of the 
proposed program being completed successfully, the Program may inform 
the proposer of the deficiencies and enter into negotiations with the 
proposer in an effort to remedy the deficiencies. If appropriate, 
funding up to 10 percent of the amount originally requested by the 
proposer may be

[[Page 48806]]

awarded by the Program to the proposer to assist in overcoming the 
organizational deficiencies. If the Program determines within six 
months of this award that the organizational deficiencies have been 
corrected, the Program may award the remaining funds requested by the 
proposer to that proposer.
    (f) NIST reserves the right to negotiate with proposers selected to 
receive awards the cost and scope of the proposed work, e.g., to add or 
delete a task(s) to improve the probability of success or to make the 
proposal more consistent with ATP's mission.
    11. Section 295.6 is revised to read as follows:


Sec. 295.6  Criteria for selection.

    The evaluation criteria to be used in selecting any proposal for 
funding under this Program, and their respective weights, are listed 
below. No proposal will be funded unless the Program determines that it 
has high scientific and technical merit, no matter how meritorious the 
proposal might be with respect to the other selection criteria. 
Similarly, no proposal will be funded that does not require Federal 
support or that is product development rather than high risk R&D.
    (a) Scientific and Technical Merit (30 percent).
    (1) Quality, innovativeness, and cost-effectiveness of the proposed 
technical program, that is, uniqueness with respect to current industry 
practice. Proposers shall compare and contrast their approaches with 
those taken by other domestic and foreign companies working in the same 
field.
    (2) Appropriateness of the technical risk and feasibility of the 
project, that is, is there a sufficient knowledge base to justify the 
level of technical risk involved, and is the risk commensurate with the 
potential payoff. Projects should press the state of the art while 
still having credibility with regard to technical approach.
    (3) Coherency of the technical plan and clarity of vision of the 
technical objectives, and the degree to which the technical plan meets 
the project and, and in the case of focused program competitions, 
program goals.
    (4) Integrated, forward-looking, team approach to the project. This 
factor includes the extent to which the R&D team will take into account 
aspects such as research and raw material suppliers and considerations 
of manufacturability and requirements of customers, regulatory 
concerns, safety issues, and environmental impacts. It also includes 
the extent to which all of the necessary technical disciplines will be 
brought into the R&D and how R&D, manufacturing, and marketing will 
work together in an integrated fashion.
    (5) Potential broad impact on U.S. technology and knowledge base.
    (b) Potential Net Broad-Based Economic Benefits (20 percent). 
Potential to improve U.S. economic growth, taking into account the 
timeliness of the proposal; that is, the potential project results will 
not occur too late or too early to be competitively useful, and the 
degree to which ATP support is essential for the achievement of the 
broad-based benefits from the proposed R&D and appropriateness of 
proposed R&D for ATP support. This criterion takes into consideration 
the likelihood of the results being achieved in the same general time 
frame by the proposer or by other U.S. researchers without ATP support, 
and whether other Federal agencies or other sponsors are already 
funding very similar kinds of work. Projects will not be selected if 
the Program judges that Federal support is not needed. In assessing the 
potential for broad-based economic benefits, emphasis is placed on a 
strong potential for spillover benefits extending well beyond those 
accruing to the awardee(s). Benefits are compared against the costs of 
the proposal to determine cost-effectiveness of the proposal.
    (c) Adequacy of Plans for Eventual Commercialization (20 percent).
    (1) Evidence that if the project if successful, the proposers will 
pursue further development of the technology toward commercial 
application, either through their own organization(s) or through 
others.
    (2) Degree to which proposal identifies potential applications of 
the technology and provides evidence that the proposer has credible 
plans to assure prompt and widespread use of the technology if the R&D 
is successful and to ensure adequate protection of the intellectual 
property by the participant(s) and, as appropriate, by other U.S. 
businesses.
    (d) Level of Commitment and Organizational Structure (20 percent).
    (1) Level of commitment of proposer as demonstrated by contribution 
of personnel, equipment, facilities, and cost-sharing. Extent to which 
the proposer assigns the company's best people to the project. Priority 
given to this work in relation to other company activities.
    (2) For joint ventures, the extent to which the joint venture has 
been structured (vertical integration, horizontal integration, or both) 
so as to include sufficient participants possessing all of the skills 
required to complete successfully the proposed work.
    (3) For joint ventures, the extent to which participation by small 
businesses is encouraged and is a key component of the proposal.
    (4) Appropriateness of subcontractor/supplier/collaborator 
participation and relationships (where applicable). For large company 
single proposers, the extent to which subcontractor teaming 
arrangements are featured and are a key component of the proposal.
    (5) Clarify and appropriateness of management plan. Extent to which 
the proposers have clarified who is responsible for each task, and the 
chain of command. Extent to which those responsible for the work have 
adequate authority and access to higher level management.
    (e) Experience and Qualifications (10 percent).
    (1) Adequacy of proposer's facilities, equipment, and other 
technical, financial, and administrative resources to accomplish the 
proposed program objectives. This factor includes consideration of 
resources possessed by subcontractors to the proposer or other 
collaborators.
    (2) Quality and appropriateness of the technical staff to carry out 
the proposed work program and to identify and overcome barriers to 
meeting project objectives.
    (3) Past performance of the company or joint venture members in 
carrying out similar kinds of efforts successfully, including 
technology application. Consideration of this factor in the case of a 
start-up company or new joint venture, will take into account the past 
performance of the key people in carrying out similar kinds of efforts.
    (f) Each of the subfactors within a selection criterion shall be 
weighted equally.
    (12) Section 295.12 is revised to read as follows:


Sec. 295.12  Special 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 system 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 audit standards to be

[[Page 48807]]

applied to ATP awards are the ``Government Auditing Standards (GAS) 
issued by the Comptroller General of the United States (also known as 
yellow book standards) and the ATP program-specific audit guidelines.
    The ATP program-specific audit guidelines include guidance on the 
number of audits required under an award. In the interest of 
efficiency, the recipients are encouraged to retain their own 
independent CPA firm to perform these audits. The Department of 
Commerce's Office of Inspector General (OIG) reserves the right to 
conduct audits as deemed necessary and appropriate.


Sec. 295.12  [Removed]

    13. Section 295.14 is removed.
    14. Section 295.22 is revised to read as follows:


Sec. 295.22  Limitations on assistance.

    (a) An award will be made under this subpart only if the award will 
facilitate the formation of a joint venture or the initiation of a new 
research and development project by an existing joint venture.
    (b) The total value of any in-kind contributions used to satisfy 
the cost sharing requirement may not exceed 30 percent of the non-
federal share of the total project costs.
    15. Section 295.25 is added as follows:


Sec. 295.25  Special rule for the valuation of transfers between 
separately-owned joint venture members.

    (a) Applicability. 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 other separately-owned 
joint venture members.
    (b) Rule. 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; 
provided, however, that in no event shall the aggregate of these 
allowable costs exceed 30 percent of the non-Federal share of the total 
cost of the joint research and development program.
    (c) Definition. The term ``best customer price'' shall mean 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.
    16. Sections 295.31 and 295.32 are revised to read as follows:


Sec. 295.31  Qualification of proposers.

    Awards under this subpart will be available to all businesses 
subject to the limitations set out in Secs. 295.3 and 295.32.


Sec. 295.32  Limitations on assistance.

    (a) The Program will not directly provide funding under this 
Subpart to any governmental entity, academic institution or independent 
research organization.
    (b) For proposals submitted to ATP after November 1, 1997, awards 
to large businesses made under this Subpart shall not exceed 40 percent 
of the total project costs of those awards in any year of the award.
    (c) Awards under this subpart may not exceed $2,000,000, or be for 
more than three years, unless the Secretary provides a written 
explanation to the authorizing committees of both Houses of Congress 
and then, only after thirty days during which both Houses of Congress 
are in session. No funding for indirect costs, profits, or management 
fees shall be available for awards made under this Subpart.
    (d) The total value of any in-kind contributions used to satisfy a 
cost sharing requirement may not exceed 30 percent of the non-federal 
share of the total project costs.
    17. In addition to the amendments set forth above, in 15 CFR part 
295 remove the word ``applicants'' or ``applicant'' and add in its 
place the word ``proposers'' or ``proposer'' in the following places
    a. Section 295.7(a), (b) and (c);
    b. Section 295.21 section heading;
    c. Subpart C heading; and
    d. Section 295.31 section heading.

[FR Doc. 97-24709 Filed 9-16-97; 8:45 am]
BILLING CODE 3510-13-M