Energy Research:

Opportunities Exist to Recover Federal Investment in Technology Development Projects

RCED-96-141: Published: Jun 26, 1996. Publicly Released: Jul 11, 1996.


James E. Wells, Jr
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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) cost-sharing arrangements it has with the private sector to fund technology development programs, focusing on the: (1) extent to which DOE requires repayment of its investment in cost-shared technology development; and (2) advantages and disadvantages of repayment.

GAO found that: (1) of the many cost-shared technology development programs DOE participates in, only the Clean Coal Technology Program, Metal Initiative Program, Electric Vehicles Advanced Battery Development Program, and Advanced Light Water Reactor Program require repayment of the federal investment if the technology is ultimately commercialized; (2) repayments are collected through royalties and fees from licensing technologies and revenues from commercial sales; (3) each of the programs except the Metals Initiative Program provide for up to a 20-year repayment period; (4) the Metals Initiative Program provides for up to 150-percent repayment, while the other programs limit repayment to 100 percent; (5) while a repayment policy could recover some or all of the federal government's investment, the additional costs and administrative burdens it imposes could discourage industry from commercializing new technologies; (6) the administrative burdens involved in a repayment policy include negotiating, administering, auditing, and enforcing cost-sharing and repayment agreements; and (7) shifting a greater portion of the burden of cost-sharing from government to industry may be preferable to requiring repayment.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: The Secretary of Energy should develop and implement a departmentwide policy for requiring repayment of the federal investment in successfully commercialized cost-shared technologies. The policy should provide criteria and flexibility for determining which programs and projects are appropriate for repayment.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE originally agreed with this recommendation and considered the merits of implementing a DOE-wide recoupment policy for the repayment of the federal investment in successfully commercialized cost-shared technologies developed under DOE programs. However, at this time, DOE feels that a number of contextual and policy circumstances have changed since the report was issued in 1996. Thus, the department has withdrawn its support. For the record, DOE noted that recoupments, with or without a formal DOE-wide policy, are authorized by Part 35, sec.35.003c of the Federal Acquisition Regulations. DOE is also continuing to explore a number of related R&D policy initiatives associated with technology commercialization.

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