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In August 2007, Congress authorized the establishment of the Advanced Research Projects
Agency - Energy (ARPA-E) within the Department of Energy (DOE) as part of the America
COMPETES Act (P.L. 110-69). Modeled on the Defense Advanced Research Projects Agency
(DARPA), ARPA-E would support transformational energy technology research projects with the
goal of enhancing the nation’s economic and energy security.
Proponents of ARPA-E contend that additional energy research and development (R&D) would
help respond to the nation’s need for clean, affordable, and reliable energy. Opponents question
whether ARPA-E is necessary to develop new technologies, when existing energy technologies
are not fully utilized due to insufficient policies to encourage their implementation. ARPA-E
proponents counter that that ARPA-E is needed to catalyze the energy marketplace by
accelerating research, and doubt that existing DOE structure and personnel can achieve ARPA-E’s
goals, requiring instead ARPA-E’s innovative R&D management design. Opponents of ARPA-E
question whether the DARPA model is appropriate for the energy sector, and express concern that
funding ARPA-E might redirect funds away from current DOE research activities, particularly
those funded by the DOE Office of Science.
Congress authorized $300 million for ARPA-E in FY2008 and “such sums as are necessary” for
FY2009 and FY2010. Congress subsequently appropriated no funds for FY2008. The Bush
Administration requested no funds for ARPA-E in FY2009, and took no actions to begin its
operations. In the American Recovery and Reinvestment Act (ARRA; P.L. 111-5), Congress
provided ARPA-E initial funding of $400 million which supplemented FY2009 funds of $15
million (P.L. 111-8). As a result, ARPA-E’s received its initial funding of $415 million in
FY2009. The ARRA funds are available for obligation until September 30, 2010.
Now that ARPA-E has received its initial funding, concerned members of Congress might wish to
oversee its implementation to ensure that it achieves its goals. Several management design
elements to monitor include the timely appointment of a director for ARPA-E, recruitment of
highly qualified technical Program Managers familiar with the DARPA process, maintenance of
autonomy from DOE’s current activities, and sufficient funding and organizational flexibility.
One concern is that the minimum number of scientific, engineering, and professional personnel
required by the America COMPETES Act, 70, may be too high, at least in the initial stages, given
ARPA-E’s budget of $415 million.
On April 27, 2009, the Obama Administration announced the “launch” of ARPA-E and its initial
solicitation for concept papers due June 2009. DOE expects to award $150 million of its $415
million FY2009 budget in response to this solicitation. No information was provided regarding
ARPA-E’s organization or staffing, or the amount of its $415 million FY2009 budget that will be
used to fund those activities.
A policy issue for many congressional policymakers is the degree to which FY2009 funding,
which includes both regular and supplemental appropriations, will influence FY2010
appropriations. This issue is heightened for ARPA-E, whose funding in the supplemental, $400
million, is greater than the $15 million in the regular FY2009 appropriation. The President’s
budget request expected in May 2009 may help clarify the Obama Administration’s plans
regarding the future of ARPA-E in FY2010.
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Overview of ARPA-E Design.......................................................................................................... 1
Management.............................................................................................................................. 2
Authorization of Funding.......................................................................................................... 3
Outcome Evaluation.................................................................................................................. 3
Legislative Origins and Policy Debates Prior to ARPA-E Authorization........................................ 4
Legislative Origins in the 109th and 110th Congress.................................................................. 4
Policy Debates........................................................................................................................... 5
Is ARPA-E Needed?............................................................................................................ 6
How Much Funding Should ARPA-E Receive? How Might ARPA-E Receive
Funding? .......................................................................................................................... 7
Will ARPA-E Work? ........................................................................................................... 9
Funding............................................................................................................................................ 9
Establishment of ARPA-E ............................................................................................................... 9
What Will Be ARPA-E’s Relationship with Other DOE R&D Organizations and
DARPA?............................................................................................................................... 10
Other DOE R&D Organizations ....................................................................................... 10
Defense Advanced Research Projects Agency (DARPA) ..................................................11
What Lessons Might be Learned from the Establishment of Other DARPA-based
Organizations? ..................................................................................................................... 15
Homeland Security Advanced Research Project Agency (HSARPA)............................... 15
Intelligence Advanced Research Projects Activity (IARPA) ............................................ 17
What Research Might ARPA-E Support? ............................................................................... 18
Secretary of Energy Steven Chu ....................................................................................... 19
DOE Basic Energy Sciences Advisory Committee Report............................................... 20
How Might ARPA-E Obtain Guidance on Customer Needs? ................................................. 23
What Might Be the Next Steps in Establishing ARPA-E?............................................................. 25
Obama Administration Actions ..................................................................................................... 26
President Obama ..................................................................................................................... 27
Funding Opportunity Announcement...................................................................................... 28
Next Steps ............................................................................................................................... 29
Activities in the 111th Congress ..................................................................................................... 29
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Figure 1. Selected Department of Energy Research and Development Organizations ................. 12
Figure 2. DARPA Role in Science and Technology ...................................................................... 13
Figure 3. Making Fuels From Sunlight ......................................................................................... 21
Figure 4. Generating Electricity Without Carbon Dioxide Emissions .......................................... 22
Figure 5. Revolutionizing Energy Efficiency and Use.................................................................. 23
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Author Contact Information .......................................................................................................... 30
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n August 2007, Congress authorized the establishment of the Advanced Research Projects
Agency - Energy (ARPA-E) to support transformational energy technology research projects
I with the goal of enhancing the nation’s economic and energy security.1 Modeled on the
Defense Advanced Research Projects Agency (DARPA) in the Department of Defense (DOD),
ARPA-E would be a new organization within the Department of Energy (DOE) (see Box 1
below).
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As outlined in the America COMPETES Act (P.L. 110-69, §5012), the goal of ARPA-E is to
enhance the economic and energy security of the United States through the development of
technologies that reduce energy imports, reduce energy-related greenhouse gas emissions, and
improve energy efficiency in all economic sectors. In addition, ARPA-E would aim to ensure that
the United States is a technical leader in developing and deploying advanced energy technologies.
According to the act, ARPA-E would achieve this goal by identifying and promoting
revolutionary advances in fundamental sciences and translating scientific discoveries and cutting-
edge inventions into technological innovations. ARPA-E would focus its efforts on accelerating
transformational technological advances in areas that industry, by itself, is not likely to undertake
due to technical and financial uncertainty. As stated in §5012, the agency’s programs would
accelerate novel early-stage energy research with possible technology applications; the
development of techniques, processes, and technologies and related testing and evaluation;
research and development (R&D) of manufacturing processes for novel energy technologies; and
coordination with nongovernmental entities to demonstrate technologies and research
applications to facilitate technology transfer.
To achieve these goals, ARPA-E would make awards to academic institutions, companies,
research foundations, and trade and industry research collaborations. In addition, awards may be
made to consortia of these organizations, and these consortia could include federally funded
research and development centers (FFRDCs). According to the act, the criteria for selecting
projects would include novelty, scientific and technical merit, the demonstrated capability of the
applicant to successfully carry out the proposed project, future commercial applications of the
project, and the feasibility of partnering with one or more commercial entities, as well as
additional criteria established by the director of ARPA-E.
1 America COMPETES Act (P.L. 110-69), §5012. For more information, see CRS Report RL34328, America
COMPETES Act: Programs, Funding, and Selected Issues and CRS Report RL34396, The America COMPETES Act
and the FY2009 Budget, both by Deborah D. Stine.
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Box 1. ARPA-E Management Design Keys
How does ARPA-E differ from the typical business-as-usual federal R&D management model? In congressional
testimony, Steven Chu, now the Secretary of Energy, and other members of the committee that wrote the National
Academies report, Rising Above the Gathering Storm, which proposed ARPA-E, recommended ARPA-E have four
objectives that would distinguish it from current DOE activities:
1. Bring a freshness, excitement, and sense of mission to energy research that will attract many of our best and
brightest minds—those of experienced scientists and engineers, and, especially, those of students and young
researchers, including those in the entrepreneurial world.
2. Focus on creative, out-of-the-box, potentially transformational research that industry cannot or will not
support.
3. Utilize an ARPA-like organization that is flat, nimble, and sparse, yet capable of setting goals and making
decisions that will allow it to sustain for long periods of time those projects whose promise is real, and to phase
out programs that do not prove to be productive or as promising as anticipated.
4. Create a new tool to bridge the troubling gaps between basic energy research, development, and industrial
innovation. It can serve as a model for how to improve science and technology transfer in other areas that are
essential to our future prosperity.
Source: Testimony of Dr. Charles M. Vest, in U.S. Congress, Senate Committee on Energy and Natural Resources, Protecting
America’s Competitive Edge—Energy, hearings, 109th Congress, 2nd sess., February 14, 2006, S.Hrg. 109-358 (Washington: GPO, 2006),
available at http://energy.senate.gov/public/index.cfm?FuseAction=Hearings.Testimony&Hearing_ID=1526&
Witness_ID=4320. Testimony of Dr. Steven Chu, in U.S. Congress, House Committee on Science, Should Congress Establish “ARPA-
E”, The Advanced Research Projects Agency - Energy?, hearings, 109th Congress, 2nd sess., March 9, 2006, H.Hrg. 109-39 (Washington:
GPO, 2006).
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The management of ARPA-E, as described in the act, is modeled on that of DARPA (see Box 2
below). DARPA has a well-known history of catalyzing innovative technologies, such as Saturn
rocket engines used for moon flights, pilotless Predator planes used in Iraq and Afghanistan,
computer-aided design, global positioning satellites, computer mouse, and Internet. DARPA seeks
to sponsor revolutionary, high-payoff research that “bridges the gap between fundamental
discoveries and their military use.”2 According to a former director, “DARPA will take a chance
on an idea with no data. We’ll put up the money to go get the data and see if the idea holds. That
is the highest-risk type of research you can have.”3
The act states that ARPA-E would be managed by a presidentially appointed director, who would
report to the Secretary of Energy. The director would approve all new programs, develop funding
criteria, establish technical milestones to assess program success, and terminate programs not
achieving their goals. The director would have the authority to appoint not less than 70, and no
more than 120, scientific, engineering, and professional personnel without regard to civil service
laws and to determine their compensation. The director would be responsible for ensuring that
ARPA-E activities are coordinated with, and do not duplicate, DOE and other federal programs
and laboratory activities; the Program Managers would establish R&D goals and select projects
based on merit.
2 Testimony of Dr. Anthony Tether, Director, Defense Advanced Research Projects Agency, in U.S. Congress, House
Committee on Science, The Future of Computer Science Research in the United States, hearing, 109th Cong., 1st sess.,
May 12, 2005, H.Hrg. 109-14 (Washington, DC: GPO, 2005) at http://science.house.gov/commdocs/hearings/full05/
may12/tether.pdf.
3 Anthony Tether as quoted in Stephen Barr, “The Idea Factory That Spawned the Internet Turns 50,” Washington Post,
April 7, 2008.
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Both the director and the Program Managers would be permitted to seek advice on the overall
direction of ARPA-E and specific program tasks from a new ARPA-E advisory committee or
existing DOE federal advisory committees. Additional sources of advice provided for in the act
include the President’s Council of Advisors on Science and Technology (PCAST), professional
organizations, and disciplinary societies.4
Box 2. DARPA Management Design Keys
How does DARPA differ from the typical business-as-usual federal R&D management model? According to DARPA, it
has maintained the following management principles over its 50-year history:
Management: DARPA is a small, flexible, and flat organization with substantial autonomy and freedom from
bureaucratic impediments. At DARPA, there is a complete acceptance of failure if the payoff of success was high
enough. Management does focus on good stewardship of its taxpayer funds, but imposes little else in terms of rules.
Management views their job as enabling DARPA’s Program Managers.
Staff: Program managers are selected to be technically outstanding and entrepreneurial. The best DARPA Program
Managers have always been freewheeling zealots in pursuit of their goals. The technical staff is drawn from world-class
scientists and engineers with representation from industry, universities, government laboratories and Federally
Funded Research and Development Centers. Technical staff are assigned for 3-5 years and rotated to assure fresh
thinking and perspectives. Necessary supporting personnel (technical, contracting, administrative) are “hired” on a
temporary basis to provide complete flexibility to get into and out of an area without the problems of sustaining the
staff.
Projects: DARPA’s activities are project-based. All efforts are typically 3-5 years long with strong focus on end-goals.
Major technological challenges may be addressed over much longer times, but only as a series of focused steps. The
end of each project is the end. It may be that another project is started in the same technical area, perhaps with the
same Program Manager and, to the outside world, this may be seen as a simple extension. For DARPA, though, it is a
conscious weighing of the current opportunity and a completely fresh decision. The fact of prior investment is
irrelevant.
Source: DARPA, “DARPA Over the Years,” webpage at http://www.darpa.mil/body/overtheyears.html.
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The act authorizes an Energy Transformation Acceleration Fund in the Department of the
Treasury, with $300 million of funding authorized for FY2008 and “such sums as are necessary”
for FY2009 and FY2010. ARPA-E’s budget request and appropriations are to be separate and
distinct from the rest of DOE’s budget.
No more than 50% of ARPA-E funding may be used for coordination with nongovernmental
entities for technology demonstration and research applications to facilitate technology transfer.
At least 2.5% must be used for technology transfer and outreach activities. No funds may be used
for construction of new buildings or facilities until August 2012.
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After ARPA-E has operated for four years, the National Academy of Sciences (NAS) is to
evaluate how well ARPA-E is achieving its goals and mission. The ARPA-E director would
submit an annual report, describing projects supported in the previous year, as part of the annual
budget request to Congress. The director would also submit strategic vision roadmaps to
4 For a description of these organizations, see CRS Report RL34454, Science and Technology Policymaking: A Primer,
by Deborah D. Stine.
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Congress no later than October 1, 2008,5 and October 1, 2011. The roadmaps are to describe the
strategic vision ARPA-E would use to determine its future technology investments for the
subsequent three fiscal years.
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The DARPA model has frequently been proposed as a structure for improving the management of
federal R&D. For example, an “advanced civilian technology agency” was proposed in the 100th
and 101st Congresses.6 In 1992, an NAS report recommended that the government consider a
civilian technology corporation or a civilian technology agency in limited areas including energy
research.7 In 1993, the Progressive Policy Institute made a similar proposal.8 In 1992, presidential
candidate Bill Clinton and Senator Al Gore proposed the creation of a civilian advanced research
agency to support research on renewable technologies and renewable fuels.9
From 1977-2000, DOE had an Advanced Energy Projects (AEP) division to “explore the
feasibility of novel, energy-related concepts that evolve from advances in basic research,” and
“high-risk, exploratory concepts which do not readily fit into an existing DOE program area but
which could lead to applications that span scientific or technical disciplines.”10 In 1995, DOE
placed AEP’s activities were under a new Computational and Technology Research program. This
reorganization was formally stated in DOE’s 1997 budget request. Funding for the program was
reduced in FY1998 and FY1999, and the AEP program was terminated in FY2000.11
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Against this historical backdrop, in October 2005, a committee of the NAS recommended the
establishment of ARPA-E in its report Rising Above the Gathering Storm.12 In November 2005,
during the 109th Congress, House Minority Leader Pelosi released an innovation agenda that
5 No report was made in October 1, 2008. President Bush did not nominate an individual as ARPA-E director, and no
actions were taken by the Bush Administration to establish ARPA-E.
6 Proposals during the 101st Congress, 2nd session, included S. 1978, H.R. 3833, H.R. 4715, and S. 2765. These are
discussed in U.S. Congress, Office of Technology Assessment, Making Things Better: Competing in Manufacturing,
OTA-ITE-443 (Washington, DC: GPO), February 1990.
7 National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, The Government Role
in Civilian Technology: Building a New Alliance (Washington, DC: National Academy Press, 1992).
8 Will Marshall and Martin Schram, Mandate for Change (New York: Berkeley Books, 1993).
9 Bill Clinton and Al Gore, Putting People First: How We Can All Change America (New York: Random House,
1992).
10 Department of Energy, “Advanced Energy Projects: FY 1995 Research Summaries,” DOE/ER-0660T, September
1995 at http://www.sc.doe.gov/bes/archives/summaries/Advanced_Energy_Projects_Summary_Book_FY1995.pdf.
Sarah Adee, “Power Up,” IEEE Spectrum, September 2007 at http://spectrum.ieee.org/sep07/5484.
11 A history of this organization is at http://www.sc.doe.gov/bes/BES_history.html.
12 The National Academies, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter
Economic Future (Washington, DC: National Academy Press, 2007), p. 154. This report was initially released in pre-
publication form in October 2005.
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proposed to create a new DARPA-like initiative within DOE.13 In 2007, this same concept was
part of an updated “Innovation Agenda” proposed by then Speaker of the House Pelosi at the
beginning of the 110th Congress.14
Although some analysts questioned whether ARPA-E was the best policy option to respond to the
nation’s energy challenges,15 the proposal recommended in the NAS report became the basis for
congressional hearings and debates in the 109th and 110th Congresses and eventually served as the
outline for ARPA-E as authorized in the America COMPETES Act.
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In the 109th Congress, the Senate Committee on Energy and Natural Resources and the House
Committee on Science held hearings on ARPA-E.16 Chairman of the House Committee on
Science Boehlert stated that he was an “open-minded skeptic” regarding ARPA-E, and pointed
out that the recommendation for its establishment was based on four assumptions that he
considered questionable:
• The problem with the energy market is that the supply of new technologies is
insufficient;
• The supply of new technologies is constrained because of a lack of fundamental
research;
• A sensible way to promote more fundamental research is to apply the DARPA
model to a civilian energy sector; and
• Implementing the DARPA model is the best way to improve energy research,
given tight federal budgets.17
In the 110th Congress, Chairman of the House Committee on Science and Technology Gordon
held a similar hearing. In his opening statement, Chairman Gordon stated that, among several
policy goals and objectives, DARPA has succeeded largely because it continued to foster a culture
of innovation. The key for ARPA-E success, he said, is that it be a similarly nimble organization
with minimal administrative layers and the ability to quickly start and stop research programs.
According to the chair, “Investment in ARPA-E must be seen as the first step in boosting energy
13 U.S. Congress, Office of Congresswoman Nancy Pelosi, “Pelosi: Unveils Innovation Agenda, Part of Vision for a
Stronger America,” press release, November 15, 2005, at http://www.house.gov/pelosi/press/releases/Nov05/
innovation.html.
14 U.S. Congress, Speaker Nancy Pelosi, The Innovation Agenda: 110th Congress at http://www.speaker.gov/issues?id=
0016, April 27, 2007.
15 See for example, David Goldston, “Misspent Energy,” Nature, 447:130, May 10, 2007 at http://www.nature.com/
nature/journal/v447/n7141/pdf/447130a.pdf.
16 U.S. Congress, Senate Committee on Energy and Natural Resources, “PACE Energy Act,” hearing, 109th Cong., 2nd
session, February 15, 2006 (Washington, DC: GPO, 2006) at http://www.gpoaccess.gov/chearings/index.html; U.S.
Congress, House Committee on Science, “Should Congress Establish ‘ARPA-E,’ The Advanced Research Projects
Agency - Energy?,” hearing, 109th Congress, 2nd session, March 9, 2006 (Washington: GPO, 2006) at
http://www.gpoaccess.gov/chearings/index.html.
17 U.S. Congress, House Committee on Science, “Should Congress Establish ‘ARPA-E,’ The Advanced Research
Projects Agency - Energy?,” hearings, 109th Congress, 2nd session, March 9, 2006 (Washington, DC: GPO, 2006) at
http://www.gpoaccess.gov/chearings/index.html.
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research and development to a level that addresses the scale of our challenge, and the true cost of
doing transformational research.”18
The following sections discuss several key questions debated during the House Science and
Technology and Senate Committee on Energy and Natural Resources hearings held regarding
ARPA-E in the 109th and 110th Congress.19 This analysis incorporates issues discussed in hearing
charters, Members’ statements and questions, and the statements and responses of those providing
expert testimony.
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Is ARPA-E needed when the federal government and industry already invest a great deal in
energy R&D? Similarly, is a DARPA model the best research and development policy option for
the energy marketplace? A related question is whether In-Q-Tel,20 the Central Intelligence Agency
(CIA) venture capital firm that provides funding to identify, develop, and deliver technologies of
interest to the intelligence community, is a better model for the energy marketplace than DARPA.
(See Box 3 below.)
Proponents state that ARPA-E will address organizational problems21 at DOE by being small and
flexible, unlike existing DOE organizations, which they believe are risk-averse and do not
sufficiently interact with each other to reach the nation’s energy goals. In addition, proponents
argue that ARPA-E should focus on breakthrough research, using emerging basic research in
areas such as nanotechnology to develop totally new technologies, as opposed to existing
programs that have already identified paths forward and tend to focus on incremental advances.
Further, unlike current programs, ARPA-E is designed to bridge the gap between basic research
and industrial development—not to get products to the marketplace, but to transform the
marketplace by accelerating research.
In response to the claim that ARPA-E will be more flexible and less risk-adverse, critics point out
that the new organization will still be within DOE, so there is no guarantee that DOE
management will let it take more risks than existing programs. While proponents contend that
ARPA-E would bridge the gap between basic research and industrial development and that
18 U.S. Congress, House Committee on Science and Technology Committee, “Establishing the Advanced Research
Projects Agency-Energy (ARPA-E),” hearing, 110th Cong., 1st session, April 26, 2007, at http://www.gpoaccess.gov/
chearings/index.html.
19 U.S. Congress, Senate Committee on Energy and Natural Resources, “PACE Energy Act,” hearing, 109th Cong., 2nd
session, February 15, 2006 (Washington, DC: GPO, 2006) at http://www.gpoaccess.gov/chearings/index.html; U.S.
Congress, House Committee on Science, “Should Congress Establish ‘ARPA-E,’ The Advanced Research Projects
Agency - Energy?,” hearings, 109th Congress, 2nd session, March 9, 2006 (Washington: GPO, 2006) at
http://www.gpoaccess.gov/chearings/index.html; U.S. Congress, House Committee on Science and Technology
Committee, “Establishing the Advanced Research Projects Agency-Energy (ARPA-E),” hearing, 110th Cong., 1st
session, April 26, 2007 (Washington, DC: GPO, 2007) at http://www.gpoaccess.gov/chearings/index.html.
20 For more information on In-Q-Tel, see http://www.inqtel.org/.
21 For example, a recent Brookings Institution study states that the magnitude of federal research efforts is inadequate
and that “The character and format of federal energy efforts is also holding back innovation and rapid deployment of
clean energy technology. In this connection, today’s federal energy research program lacks the mission, capacity, and
organizational structure to equip the nation to meet the full run of its challenges.” James Duderstadt, Gary Was, Robert
McGrath, Mark Muro, Michael Corradini, Linda Katehi, Rick Shangraw, and Andrea Sarzynski, Energy Discovery-
Innovation Institutes: A Step Toward America’s Energy Sustainability, Brookings Institution, February 2009 at
http://www.brookings.edu/reports/2009/0209_energy_innovation_muro.aspx.
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existing applied programs tend to focus on incremental advances, some critics argue that
reforming DOE’s existing programs would be better than creating a new organization.
Advocates for ARPA-E indicated that candidate energy technologies are not yet at a stage where
venture capital investment, such as occurs with In-Q-Tel, would provide the best return. At some
point, however, ARPA-E research may lead to technologies appropriate for venture capital
investment. At that stage, it might be appropriate to incorporate a venture capital component into
ARPA-E’s design. Just as DARPA has evolved over 50 years, ARPA-E may need to evolve as
well, some witnesses said.
Box 3. In-Q-Tel Management Design Keys
In 2001, a panel of the Business Executives for National Security (BENS) conducted an analysis of the In-Q-Tel model.
It found that In-Q-Tel has the following characteristics that differentiate it from the typical business-as-usual federal
R&D model. In-Q-Tel
• Can make equity investments;
• Has fewer bureaucratic constraints;
• Is not required to comply with the Federal Acquisition Regulations (FAR) requirements;
• Can obligate funds in multi-year increments, i.e., “no year” money;
• Is not restricted by civil service personnel policies;
• Engages only in unclassified projects;
• Has the cachet of being associated with the CIA; and
• Has a flexible deal structure modeled after commercial contractual/investment vehicles.
The BENS panel also described the differences between the In-Q-Tel model and a private venture capital firm. In-Q-
Tel, BENS states, is better described as a “technology accelerator” than a venture capital firm, as In-Q-Tel
• Places its value proposition on obtaining IT [information technology] solutions, not foremost on return on
equity or asset;
• Deals always result in a product or service (e.g. feasibility assessment, test product or prototype);
• Investments are more likely to provide value to the portfolio companies beyond cash: Investment is “smart
money” in its portfolio companies; that is, In-Q-Tel provides portfolio companies with intellectual capital,
technology-related experience and the Agency as a potential test-bed; and
• Due diligence process is more strict: In-depth investigation into the company’s structure and financial status
as well as the ability of the proposed technology to meet the Agency problem domain is completely
evaluated before forming a contract.
The BENS panel found that “In-Q-Tel’s potential advantage to the CIA outweighs the risk. In-Q-Tel should continue
as the CIA’s entrepreneurial and innovative venture facilitating the delivery of new technology to the CIA.”
Source: Business Executives for National Security, Accelerating the Acquisition and Implementation of New Technologies for Intelligence:
The Report of the Independent Panel on the Central Intelligence Agency In-Q-Tel Venture, June 2001 at http://www.bens.org/
mis_support/nqtel-panel-rpt.pdf.
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The America COMPETES Act authorized $300 million for FY2008, and “such sums as
necessary” for FY2009 and FY2010. The NAS report proposed that funding for ARPA-E start at
$300 million the first year and increase gradually over five or six years to $1 billion per year. At
that point, the program’s effectiveness would be evaluated and appropriate actions taken,
according to the report.
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One issue discussed in hearings was whether the level of authorized funding for ARPA-E is
sufficient to support the research necessary for ARPA-E to reach its goals. Some noted with
concern that the proposed $300 million in FY2008 was less than 0.02% of the transportation and
energy industries’ annual revenues, a level they believed was insufficient relative to the potential
return. Some suggested that if it is to be successful, ARPA-E needs to be funded at a level
comparable to DARPA—about $3 billion per year.22
Some of those testifying did not believe ARPA-E should be funded due to budget constraints.
ARPA-E, they argued, would be funded by shifting resources from DOE’s Office of Science.
Increasing funding for the DOE Office of Science is also a goal of the America COMPETES Act.
Some hearing witnesses expressed concern that dilution of DOE Office of Science resources
might influence DOE’s acceptance of ARPA-E, and hinder its success. Supporters of ARPA-E
agreed that funding for the DOE Office of Science is the highest priority and testified that funding
for ARPA-E should not be redirected from that office.
Some witnesses expressed concerns that a risk-tolerant agency like ARPA-E could not survive if
it was subject to the annual appropriations cycle, political and financial pressures, and resource
fluctuations that might stifle innovation. To overcome this potential challenge, some
policymakers and experts have proposed funding ARPA-E outside of the regular appropriations
process. This might include, for example, providing an advance appropriation supporting ARPA-
E for several years, rather than the usual one-year appropriation. Another option is to identify a
dedicated revenue source for ARPA-E. Some of the funding sources that have been proposed are
• oil industry tax and other incentives;23
• gasoline tax;24
• oil company profit tax;25
• federal oil and gas royalties;26
• climate change cap-and-trade program;27 and
22 DARPA’s FY2008 budget is $3.0 billion. Its FY2009 request is $3.3 billion. For more information, see
http://www.darpa.mil/body/budg.html.
23 House Committee on Science and Technology, “Chairman Gordon Presses Establishment of ARPA-E as a Key to
Clean Energy Independence,” press release, May 9, 2008, at http://science.house.gov/press/PRArticle.aspx?NewsID=
2189. As stated in the press release, “Four times in this Congress, the House has voted to repeal between $13 billion
and $18 billion in tax and other incentives for the oil industry,” Chairman Gordon said. “I don’t disagree that we need
incentives to move toward energy independence. But I don’t believe the Federal government should be subsidizing an
industry that is already seeing the highest profits on record. With oil at $125 a barrel and oil company profits at $123
billion last year alone, I think this $18 billion would be much better used to invest in the very goals and technologies
that we are talking about today – ARPA-E, renewable energy, energy efficiency, and clean coal.”
24 For more information on the federal excise tax on gasoline, see CRS Report RL30304, The Federal Excise Tax on
Gasoline and the Highway Trust Fund: A Short History, by Pamela J. Jackson.
25 For more information on use of oil company profits, see CRS Report RL34044, The Use of Profit by the
Five Major Oil Companies, by Robert Pirog.
26 Testimony of Melanie Kenderdine, Vice President, Gas Technology Institute in U.S. Congress, House Committee on
Science, “Should Congress Establish ARPA-E, The Advanced Research Projects Agency - Energy?,” hearings, 109th
Congress, 2nd session, March 9, 2006, H.Hrg. 109-39 (Washington: GPO, 2006) at http://science.house.gov/commdocs/
hearings/full06/March%209/Kenderdine.pdf. For an example of oil and gas royalties, see CRS Report RS22567,
Royalty Relief for U.S. Deepwater Oil and Gas Leases, by Marc Humphries.
27 Testimony of Melanie Kenderdine, Vice President, Gas Technology Institute in U.S. Congress, House Committee on
(continued...)
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• Strategic Petroleum Reserve funds.28
An analogous situation might be research supported through the Ultra-Deepwater and
Unconventional Natural Gas and Other Petroleum Resources Program,29 authorized by the
Energy Policy Act of 2005 (P.L. 109-58), which receives funding of $50 million per year derived
from royalties, rents, and bonuses from federal onshore and offshore oil and gas leases.30 Based
on past experience, however, all of these proposals would face challenges in Congress.
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Some critics believe that what is preventing the United States from reaching its energy goals is
not federal funding for innovative, high-risk research, but rather a lack of private-sector
investment in basic research, failure to effectively transfer new energy technologies to the
marketplace, or some combination of these. They point out the lack of a captive customer as a
challenge to ARPA-E’s ability to be successful: energy has a broad and diverse public and private
market, while DARPA has DOD as its single primary customer, guaranteeing a solid base of
demand. ARPA-E proponents indicated that ARPA-E is needed for “translational research.” This
type of research identifies the most pressing market needs, selects and funds the most promising
scientific approaches to enable breakthrough products, and brings the best candidates of those
products to the brink of production.
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Congress authorized $300 million for ARPA-E in FY2008 and “such sums as are necessary” for
FY2009 and FY2010. Congress subsequently appropriated no funds for FY2008. The Bush
Administration requested no funds for ARPA-E in FY2009, and took no actions to begin its
operations. In the American Recovery and Reinvestment Act (ARRA; P.L. 111-5), Congress
provided ARPA-E funding of $400 million which supplemented FY2009 funds of $15 million
(P.L. 111-8). As a result, ARPA-E’s received its initial funding of $415 million in FY2009. The
ARRA funds are available for obligation until September 30, 2010.
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Now that ARPA-E has received its initial funding, interested member of Congress may decide to
oversee its implementation to ensure that it achieves its goals. This section discusses ARPA-E’s
(...continued)
Science, “Should Congress Establish ARPA-E, The Advanced Research Projects Agency - Energy?,” hearings, 109th
Congress, 2nd session, March 9, 2006, H.Hrg. 109-39 (Washington: GPO, 2006) at http://science.house.gov/commdocs/
hearings/full06/March%209/Kenderdine.pdf. For more information on cap-and-trade programs, see CRS Report
RL33846, Greenhouse Gas Reduction: Cap-and-Trade Bills in the 110th Congress, by Larry Parker, Brent D.
Yacobucci, and Jonathan L. Ramseur.
28 For more information on the strategic petroleum reserve, see CRS Report RL33341, The Strategic Petroleum
Reserve: History, Perspectives, and Issues, by Robert Bamberger.
29 For more information, see http://www.fossil.energy.gov/programs/oilgas/ultra_and_unconventional/index.html.
30 For more information, see CRS Report RL33493, Outer Continental Shelf: Debate Over Oil and Gas Leasing and
Revenue Sharing, by Marc Humphries.
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potential relationship with other DOE R&D organizations and DARPA, lessons that might be
learned from the establishment of two other organizations based on DARPA, the research ARPA-
E might support, and possible mechanisms for ARPA-E to obtain guidance on customer needs.
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The America COMPETES Act mandates that ARPA-E be managed by a presidentially appointed
director, confirmed by the Senate, who would report to the Secretary of Energy, presumably to
facilitate the independence of ARPA-E within DOE. The act also states that no other programs
within DOE will report to the ARPA-E director. As a result, the head of ARPA-E could not also be
head of another organization such as the Office of Science or one of the energy technology
offices, which focus on specific topics such as energy efficiency and renewable energy, fossil
energy, nuclear energy, and electricity delivery and energy reliability. In addition, one key
consideration that the ARPA-E director may face is to identify projects that complement those of
the Office of Science and the energy technology offices.
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The Department of Energy may need to distinguish how ARPA-E’s role differs from that of
existing DOE R&D activities, including the Office of Science and the energy technology offices
(see Figure 1). For example, DOE’s Office of Science has now funded 46 new Energy Frontier
Research Centers (EFRCs).31 According to a recent Administration announcement,
The Department of Energy will also be supporting 46 Energy Frontier Research Centers with
a total planned commitment of $777 million. These centers will enlist the talents and skills of
the very best American scientists and engineers to address current fundamental scientific
roadblocks to clean energy and energy security. Roughly one-third of the centers will be
supported by Recovery Act funding.
These centers, involving almost 1,800 researchers and students from universities, national
labs, companies, and non-profits from 36 states and the District of Columbia, will address
the full range of energy research challenges in renewable and carbon-neutral energy, energy
efficiency, energy storage, and cross-cutting science. Each center will receive $2-$5 million
per year for an initial period of five years.
EFRC researchers will be able to take advantage of new capabilities in nanotechnology, light
sources that are a million times brighter than the sun, supercomputers, and other advanced
instrumentation, much of it developed with support from the Department of Energy’s Office
of Science.32
In addition, the America COMPETES Act authorizes the establishment of Discovery Science and
Engineering Innovation Institutes, multidisciplinary research institutes located at DOE national
laboratories that would apply fundamental science and engineering discoveries to technological
innovations. No funding, however, has been provided for these institutes.
31 For more information, see http://www.er.doe.gov/bes/EFRC.html.
32 White House, “Fact Sheet: A Historic Commitment To Research And Education,” April 27, 2009 at
http://www.whitehouse.gov/the_press_office/Fact-Sheet-A-Historic-Commitment-To-Research-And-Education/.
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One option to quickly begin ARPA-E’s operations may be to take advantage of DARPA’s
Program Managers and energy portfolio. As illustrated in Figure 2, DARPA faces challenges that
will be similar to those of ARPA-E in terms of focusing on mid-term programs, based on time of
acquisition, relative to other DOD activities that focus on near and far-term programs. One
analyst testified that the following are key elements in DARPA’s succeeding in its unique role as
an instigator of radical innovation:
• Create surprise; don’t just seek to avoid it: DARPA mission is to investigate new
emerging technological capabilities that have prospects to create disruptive capabilities.
It is differentiated from other R&D organizations by a charter that explicitly emphasizes
‘‘high-risk, high payoff’’ research.
• Build communities of ‘‘change-state advocates’’: DARPA Program Managers may
often themselves foster a specific concepts or technological approach that they seek to
explore and develop. But they almost never are the main, let alone sole, investigator of
the notion. Rather it is DARPA’s motif to instigate cooperation among a group of
forward-looking researchers and operational experts. In this sense, DARPA’s success
depends on it being a leader and catalyst in developing this community of interest.
• Define challenges, develop solution concepts, and demonstrate them: One aspect of
DARPA’s success has been efforts to define strategic challenges in detail. Since its
inaugural Presidential Issues, DARPA has been problem focused, seeking breakthrough
change-state approaches to overcome daunting issues.33
33 Testimony of Richard Van Atta, Research Staff Member, Science & Technology Policy Institute, Institute for
Defense Analyses in U.S. Congress, House Committee on Science and Technology, “Establishing the Advanced
Research Projects Agency – Energy (ARPA-E) – HR 364,” hearing, 110th Congress, 1st sess., April 26, 2007, H.Hrg.
110-22 at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_house_hearings&docid=f:34719.wais.pdf.
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Figure 1. Selected Department of Energy Research and Development Organizations
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Figure 2. DARPA Role in Science and Technology
Source: Dr. Anthony J. Tether, DARPA Director, Defense Advanced Research Projects Agency, “PACOM S&T
Conference: Defense Advanced Research Projects Agency PACOM S&T Conference,” powerpoint presentation,
2008 at http://www.dtic.mil/ndia/2008POST/Wed1/Tether/tether.pdf.
Besides the management lessons that might be learned from DARPA’s history of interacting with
other DOD organizations to ensure programs are complementary, employing Program Managers,
and its way of doing business (see Box 4 below), one policy option might be for ARPA-E to use
some of DARPA’s existing Program Managers focused on energy issues, or alternatively Program
Managers who are ending their rotation at DARPA. This would provide ARPA-E with a
workforce already trained in how to work as a Program Manager in the DARPA model. In
addition, ARPA-E might either subsume DARPA’s existing energy projects, or alternatively solicit
the researchers its supports for ideas appropriate for ARPA-E.
DARPA includes energy programs within its portfolio. For example, in its 2007 strategic plan,
DARPA identifies the following energy projects:
• Mobile Integrated Sustainable Energy Recovery (MISER) program: to develop
technologies that can use military waste to run military generators;
• Very High Efficiency Solar Cell program: to develop photovoltaic devices with
efficiencies exceeding 50 percent; and the
• BioFuels program: to develop an affordable surrogate for military jet fuel (JP-8)
derived from oil-rich crops produced by either agriculture or aquaculture
including, but not limited to, plants, algae, fungi, and bacteria.34
34 DARPA, Strategic Plan 2007 at http://www.darpa.mil/Docs/DARPA2007StrategicPlanfinalMarch14.pdf. A new
strategic plan will be made available when the detailed FY2010 budget is released.
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Box 4. Doing Business with DARPA Brochure
DARPA’s mission is to maintain the technological superiority of the U.S. military and prevent technological surprise
from harming our national security by sponsoring revolutionary, high-payoff research that bridges the gap between
fundamental discoveries and their military use. To achieve these goals, DARPA focuses on the following when crafting
business agreements:
• Developing of innovative business relationships and practices
• Matching military requirements with technological opportunities
• Protecting information and ideas
• Creating agreements for investments in high-risk projects involving revolutionary technologies and
systems
• Promoting innovation by creating flexible strategy agreements
Getting Your Ideas Considered by a DARPA Program Manager
Don’t constrain your great ideas by how you think DARPA may react. Even though DARPA may not appear active in a
particular area doesn’t mean the Agency won’t be interested in a great technological idea in a new arena. In fact, your
idea could lead to new areas of research. The key to working with DARPA is through a Program Manager. To maintain
an entrepreneurial atmosphere and the flow of new ideas, DARPA hires Program Managers for 2 to 6 years; the best
way to foster innovations is to bring in new people with fresh outlooks. DARPA Program Managers:
• Provide feedback regarding whether an idea is suited to DARPA.
• Help shape ideas to synchronize with an ongoing or new DARPA program.
• In some cases, a Program Manager may substantially alter what he or she plans to do based on a new
idea.
A big part of a Program Manager’s job is to find great ideas upon which to build new programs. Information exchanges
with DARPA Program Managers are the foundation for “Doing Business with DARPA.” When considering an idea,
DARPA Program Managers will ask:
• What are you trying to do?
• How is this done now? What are the limitations?
• How will this approach remove those limitations and improve performance? By how much?
• If an idea is successful, what difference will it make?
DARPA Program Managers often fund studies (“seedlings”) as initial research to determine if a more formal program is
appropriate.
DARPA Methods of Soliciting Business: DARPA uses requests for proposals (RFPs) and broad agency
announcements (BAAs) to solicit business. Because DARPA understands that creating proposals involves a great deal
of time and effort, many DARPA solicitations encourage the submission of a white paper or abstract to determine
whether an idea is likely to be selected. It is the Program Manager’s job to develop projects, so be sure to
demonstrate how your idea will fit as part of a larger project.
Requests for Proposal (RFPs): An RFP provides a specific statement of work, contract deliverables, and
evaluation criteria for Government selection. An RFP serves as the basis for award selection.
Broad Agency Announcements (BAAs): A BAA is a competitive solicitation procedure used to obtain
proposals for basic and applied research and that part of development not related to the development of a
specific system or hardware procurement. The type of research solicited under a BAA attempts to increase
knowledge in science and/or to advance the state of the art compared to practical application of knowledge.
Evaluation and Award: BAA proposals are evaluated on technical merit and are not compared to other
proposals. The basis for the selection of proposals is the technical importance with respect to Agency programs
and funding availability. Cost realism and reasonableness is also considered, to the appropriate extent.
Source: Excerpts from DARPA, “Doing Business with DARPA,” at http://www.darpa.mil/DoingBusiness.pdf.
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One key difference between DARPA and ARPA-E as outlined in the America COMPETES Act
may be the number of Program Managers relative to its overall budget. While DARPA’s budget is
$3 billion in FY2009 with approximately 100 Program Managers,35 ARPA-E’s budget is $400
million with the America COMPETES Act stating ARPA-E must have minimum of 70 scientific,
engineering, and professional personnel. It is not yet known how many of the 70 will be Program
Managers; however, the disparity of funding may mean that each Program Manager will have less
funding to facilitate their ideas. This may make it challenging for ARPA-E to recruit high quality
Program Managers and for those managers to be successful.
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As discussed earlier, the general concept for management of ARPA-E is based on that of DARPA
(see Box 2 above). Since 2002, two federal organizations have been established based on the
DARPA model: the Homeland Security Advanced Research Project Agency (HSARPA) and the
Intelligence Advanced Research Projects Activity (IARPA).
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The Homeland Security Act of 2002 (P.L. 107-296) authorized establishment of HSARPA with an
authorization of $500 million for FY2003 and such sums as may be necessary thereafter. 36
According to the act, the HSARPA Director was to administer an Acceleration Fund for Research
and Development of Homeland Security Technologies
to award competitive, merit-reviewed grants, cooperative agreements or contracts to public
or private entities, including businesses, federally funded research and development centers,
and universities. The Director shall administer the Fund to
(A) support basic and applied homeland security research to promote revolutionary changes
in technologies that would promote homeland security;
(B) advance the development, testing and evaluation, and deployment of critical homeland
security technologies; and
(C) accelerate the prototyping and deployment of technologies that would address homeland
security vulnerabilities.
Some experts believe that although Congress provided HSARPA with a strong and flexible
authorization closely modeled on DARPA’s strengths, it has not been adequately utilized or
implemented, emphasizing the need for congressional oversight of ARPA-E as it begins
operations.37 Among the concerns are a minimal budget, lack of an initial director for
35 This estimate is based on a statement in the following article, Peter Lee and Randy H. Katz, ReEnvisioning DARPA,
December 12, 2008 at http://www.cra.org/ccc/docs/init/Re-Envisioning_DARPA.pdf, and a review of DARPA’s staff
list at http://www.darpa.mil/Docs/staff-directory.pdf.
36 For more information on HSARPA, see CRS Report RL34356, The DHS Directorate of Science and Technology:
Key Issues for Congress, by Dana A. Shea and Daniel Morgan.
37 Testimony of William B. Bonvillian, , in U.S. Congress, House Committee on Science and Technology,
“Establishing the Advanced Research Projects Agency – Energy (ARPA-E) – HR 364,” hearing, 110th Congress, 1st
(continued...)
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approximately one year providing insufficient leadership for start-up in a competitive
environment despite the presence of a talented staff, and lack of autonomy and flexibility in
making award decisions.38
Given the proximity of its name to DARPA, and the statement in the act that HSARPA was “to
promote revolutionary changes in technologies,” most in the science and technology community
believed that HSARPA would be based on the DAPRA model and would focus on innovative
research.39 According to its first director, however, comparisons of HSARPA to DARPA were
inappropriate as only about 10 percent of HSARPA’s work was comparable to that of DARPA.40
By this statement, Dr. Bolka might have been implying that 10% of HSARPA’s R&D was focused
on transformative R&D, while 90% was focused on incremental R&D.41
This focus changed as HSARPA evolved. Beginning in 2006, DHS Under Secretary for Science
and Technology Cohen redirected the work of HSARPA as part of a general reorganization of
DHS’ R&D activities. As a result, HSARPA began to focus its efforts on high risk and high
reward transformative R&D research activities more similar to that of DARPA . HSARPA R&D
focuses on two programs: Homeland Innovative Prototypical Solutions (HIPS), to demonstrate
prototypes of high-payoff technologies in two to five years with moderate to high risk; and High
Impact Technology Solutions (HITS), to conduct high-risk basic research that provides proofs of
concept for potential breakthroughs.42
HSARPA is located within the Office of Innovation, whose overall budget was $33 million in
FY2008. HSARPA’s budget, therefore, is smaller than DARPA’s ($2,959 million in FY2008).43 In
addition, HSARPA does not have a dedicated funding stream, which may influence its ability to
be autonomous of its parent agency – a key aspect, some experts believe, of DARPA’s success.
According to one expert, the failure to implement HSARPA as authorized illustrates several
points for the implementation of ARPA-E that Congress should monitor:
(...continued)
sess., April 26, 2007, H.Hrg. 110-22 at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=
110_house_hearings&docid=f:34719.wais.pdf.
38 Ibid.
39 American Association for the Advancement of Science, Congress Finalizes Creation of Department of Homeland
Security, Authorizes New S&T Infrastructure, November 22, 2002 at http://www.aaas.org/spp/rd/dhs1122.pdf.
40 David Bolka, HSARPA Director, as quoted in William New, “Homeland Security research agency has lofty vision,”
Government Executive, January 6, 2004 at http://www.govexec.com/story_page.cfm?articleid=27368&ref=rellink.
41 According to the National Science Board (NSB), “Transformative research is defined as research driven by ideas that
have the potential to radically change our understanding of an important existing scientific or engineering concept or
leading to the creation of a new paradigm or field of science or engineering. Such research is also characterized by its
challenge to current understanding or its pathway to new frontiers.” This is less common than incremental research. As
stated by the NSB, “The vast majority of scientific understanding advances incrementally, with new projects building
upon the results of previous studies or testing long-standing hypotheses and theories. This progress is evolutionary—it
extends or shifts prevailing paradigms over time. The vast majority of research conducted in scientific laboratories
around the world fuels this form of innovative scientific progress.” For more information, see National Science Board,
Enhancing Support of Transformative Research at the National Science Foundation, May 2007 at http://www.nsf.gov/
pubs/2007/nsb0732/nsb0732.pdf.
42 CRS Report RL34356, The DHS Directorate of Science and Technology: Key Issues for Congress, by Dana A. Shea
and Daniel Morgan.
43 For information on DARPA’s budget, see http://www.darpa.mil/Docs/DARPAPB09February2008.pdf.
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• The innovation culture critical to success cannot be created by legislation alone unless
the implementing agency shows real leadership, supports the new R&D mission, and is
determined to use flexible statutory authorities to create a strong entity.
• An ARPA-E needs its own budget and the ability to control it, rather than taking its
funding from other competitor agencies that will dispute the diversion
• An ARPA-E needs technical talent of great skill with leaders who also have experience
at the helm of government R&D entities, and so can work with other agency
bureaucracies
• An ARPA-E needs a clear mission—breakthrough technology or incremental
technology (HSARPA tried both); mixing the two risks having the former become the
billpayer for the latter.44
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The Director of National Intelligence (DNI) established IARPA in 2007. It effectively began
operation in February 2008 when its first director, Lisa Porter, began to manage the organization.
IARPA is considered one of the DNI’s mission support activities. According to IARPA, it does
not have an operational mission by design, but rather “its focus is on capabilities that its user
community might want in the future, not on the requirements they have today.”45 By user
community, IARPA is referring to the Intelligence Community (IC), 16 federal organizations
whose focus is national intelligence. 46
The initial stages of IARPA might be a useful model to examine as ARPA-E begins its operations.
Dr. Porter used the following management design elements in developing the IARPA
organization:
• High-risk, high pay-off research with a clearly defined and measureable 3-5 year
end-goal, rather than focusing on “quick wins” or “low hanging fruit”;
• Autonomy from the IC’s current activities, in order to challenge the status quo,
but also complementary to existing IC activities rather than duplicating them;
• Best and brightest technical Program Managers, to identify the best ideas and the
best performers to investigate those ideas, and who constantly rotate to continue
to bring fresh ideas;
• Sufficient funding, so program mangers can invest in their ideas to see if they are
successful, to incorporate possible failures, and to attract the best Program
Managers;
• Flexibility, rather than specifying a particular organizational design;
• Full and open competition, including peer or independent review, to select the
best projects;
44 William B. Bonvillian, “Will the search for new energy technologies require a new R&D mission agency? – The
ARPA-E debate,” bridges, July 2007 at http://www.ostina.org/content/view/2297/.
45 IARPA, “Organization,” webpage at http://www.iarpa.gov/organization.html.
46 For more information, see http://www.intelligence.gov/1-members.shtml.
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• Customer involvement, so that the outcomes from IARPA’s projects have a
transition strategy to an end user; and
• Acceptance of low success rates, as long as the results are fully documented and
the failure was not caused by lack of technical and programmatic integrity.47
IARPA uses the “Heilmeier Questions,” developed by a former DARPA director to determine
whether or not a good idea becomes an IARPA program:
1. What are you trying to do?
2. How does this get done at present? Who does it? What are the limitations of the present
approaches? Are you aware of the state-of-the-art and have you thoroughly thought through
all the options?
3. What is new about your approach? Why do you think you can be successful at this time?
Given that you've provided clear answers to 1 and 2, have you created a compelling option?
What does first-order analysis of your approach reveal?
4. If you succeed, what difference will it make? Why should we care?
5. How long will it take? How much will it cost? What are your mid-term and final exams?
What is your program plan? How will you measure progress? What are your
milestones/metrics? What is your transition strategy?48
IARPA has three strategic thrusts: Smart Collection, to dramatically improve the value of
collected data; Incisive Analysis, to maximize insight from the information the IC collects in a
timely fashion; and Safe and Secure Operations, to counter new capabilities of U.S. adversaries
that could threaten the ability of the United States to operate effectively in a networked world.
IARPA’s budget is classified.
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According to the America COMPETES Act, ARPA-E has the general goal
(A) to enhance the economic and energy security of the United States through the
development of energy technologies that result in
(i) reductions of imports of energy from foreign sources;
(ii) reductions of energy-related emissions, including greenhouse gases; and
(iii) improvement in the energy efficiency of all economic sectors; and
(B) to ensure that the United States maintains a technological lead in developing and
deploying advanced energy technologies.
47 Personal Communication with Lisa Porter, Director, IARPA, January 23, 2009. Sally Adde, “Q&A With: IARPA
Director Lisa Porter,” IEEE Spectrum, May 2008 at http://www.spectrum.ieee.org/may08/6208. Yudhijit Bhattacharjee,
“A New Spy Agency Asks Academics for Help in Meeting Its Mission,” Science, January 9, 2009.
48 IARPA, “It All Starts with the Heilmeier Questions,” webpage, at http://www.iarpa.gov/join3.html.
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ARPA-E is to achieve these goals through energy technology projects by—
(A) identifying and promoting revolutionary advances in fundamental sciences;
(B) translating scientific discoveries and cutting-edge inventions into technological
innovations; and
(C) accelerating transformational technological advances in areas that industry by itself is not
likely to undertake because of technical and financial uncertainty.
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In 2006, during congressional testimony provided to the House Committee on Science prior to
becoming Secretary of Energy in the Obama Administration, Dr. Steven Chu suggested the
following as research that ARPA-E might fund:
1. The development of a new class of solar cells.
Photovoltaic solar cells using semiconductor technology can be very efficient at converting
sunlight into electrical energy, but the fabrication cost remains too high. Organic and
polymer solar cells can be made at low cost, but the efficiencies are low and existing
materials degrade in sunlight. One promising avenue towards inexpensive, efficient and long
lasting solar cells is to create novel materials based on multiple elements that can be
manufactured with thin-film technologies. Another approach is to create nano-particle
devices (distributed junction solar cells) that use different nanostructures for the conversion
of sunlight into charge carriers and for the collection of those charges onto electrodes.
2. Biomass substitutes for oil.
The ethanol for transportation is currently produced from sugar cane, corn or other plants.
However, the most cost effective bio-fuels will come from the conversion of cellulose into
chemical fuel. When the fuel is burned, CO2 is released into the atmosphere, but the overall
cycle can, in principle, be carbon neutral. The creation of crops raised for energy will also
take full advantage of our great agricultural capacity.
ARPA-E can fund the creation of new plants to be grown for energy by incorporating a
number of genes introduced into plants. Recently, a team of scientists at Lawrence Berkeley
National laboratory inserted many genes into bacteria to produce an extremely effective anti-
malarial drug. The Gates Foundation has given this team a $42 M [million] grant to
commercialize the technology so that the drug can be made available to the developing
world. Similar technology can be used to make plants self-fertilizing, drought and pest
resistant. Note that about 25% of the energy input in growing corn comes from fertilizer,
which is made from ammonia derived from natural gas.
Research on more efficient conversion of cellulose into liquid fuel would also yield great
dividends. Current methods use the high temperature/high acid processes that are very
energy intensive. The breakdown of cellulose into ethanol is also accomplished with bacteria
or fungi, but this process can be made much more efficient if the micro-organisms are
modified with these methods.49
49 Testimony of Dr. Steven Chu, in U.S. Congress, House Committee on Science, Should Congress Establish “ARPA-
E”, The Advanced Research Projects Agency - Energy?, hearings, 109th Congress, 2nd sess., March 9, 2006, H.Hrg.
(continued...)
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Since becoming Secretary of Energy, Secretary Chu reportedly contends that “solving the world’s
energy and environment problems would require Nobel-level breakthroughs in three areas:
electric batteries, solar power and the development of new crops that can be turned into fuel.”50
Further, that a “‘revolution’ in science and technology would be required if the world is to reduce
its dependence on fossil fuels and curb the emissions of carbon dioxide and other heat-trapping
gases linked to global warming.”51 Additionally Secretary Chu reportedly believes that solar
technology “will have to get five times better than it is today, and scientists will need to find new
types of plants that require little energy to grow and that can be converted to clean and cheap
alternatives to fossil fuels,” and that alternatives must be found to burn coal cleanly as other
countries are unlikely to discontinue its use.52
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In December 2008, a DOE Basic Energy Sciences Advisory Committee (BESAC) subcommittee
released a report entitled New Science for a Secure and Sustainable Energy Future, based on
reports from a series of workshop and a panel on Grand Challenges report held over several
years.53 The report identified “three strategic goals for which transformational scientific
breakthroughs are urgently needed.” 54 These goals include: making fuels from sunlight (see
Figure 3); generating electricity without carbon dioxide emissions (see Figure 4); and
revolutionizing energy efficiency and use (see Figure 5).55 The figures referenced provide an
illustration of possible breakthrough research needs for each as identified by the BESAC
subcommittee.
(...continued)
109-39 (Washington: GPO, 2006).
50 John M. Broder and Matthew L. Wald, “Big Science Role Is Seen in Global Warming Cure,” New York Times,
February 12, 2009 at http://www.nytimes.com/2009/02/12/us/politics/12chu.html?_r=1.
51 Ibid.
52 Ibid.
53 For more information on these activities and to obtain copies of the reports from the workshop and panels, see
http://www.sc.doe.gov/BES/reports/list.html.
54 Department of Energy, Basic Energy Sciences Advisory Committee, Subcommittee on Facing Our Energy
Challenges in a New Era of Science, New Science for a Secure and Sustainable Energy Future: A Report from the
Basic Energy Sciences Advisory Committee, December 2008 at http://www.sc.doe.gov/BES/reports/files/
NSSSEF_rpt.pdf.
55 Ibid.
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Figure 3. Making Fuels From Sunlight
Illustration of Breakthrough Research Needs
Source: Department of Energy, Basic Energy Sciences Advisory Committee, Subcommittee on Facing Our
Energy Challenges in a New Era of Science, New Science for a Secure and Sustainable Energy Future: A Report from
the Basic Energy Sciences Advisory Committee, December 2008 at http://www.sc.doe.gov/BES/reports/files/
NSSSEF_rpt.pdf.
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Figure 4. Generating Electricity Without Carbon Dioxide Emissions
Illustration of Possible Breakthrough Research Needs
Source: Department of Energy, Basic Energy Sciences Advisory Committee, Subcommittee on Facing Our
Energy Challenges in a New Era of Science, New Science for a Secure and Sustainable Energy Future: A Report from
the Basic Energy Sciences Advisory Committee, December 2008 at http://www.sc.doe.gov/BES/reports/files/
NSSSEF_rpt.pdf.
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Figure 5. Revolutionizing Energy Efficiency and Use
Illustration of Possible Breakthrough Research Needs
Source: Department of Energy, Basic Energy Sciences Advisory Committee, Subcommittee on Facing Our
Energy Challenges in a New Era of Science, New Science for a Secure and Sustainable Energy Future: A Report from
the Basic Energy Sciences Advisory Committee, December 2008 at http://www.sc.doe.gov/BES/reports/files/
NSSSEF_rpt.pdf.
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Although there may be interim steps along the way, some experts believe that the end goal for
ARPA-E research is a “proof of concept,” that is, “evidence (usually deriving from an experiment
or pilot project) demonstrating that a design concept, business idea, etc., is feasible.”56 Although
smaller in scale than ARPA-E, university proof of concept centers, whose goal is to accelerate the
commercialization of university innovations without being part of the commercialization effort,
56 Oxford English Dictionary at http://dictionary.oed.com/.
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might provide a useful example for ARPA-E as to how to incorporate the views of customers into
the research process.
A study by the Kauffman Foundation examined two proof of concept centers they deemed
successful: the Massachusetts Institute of Technology (MIT) Deshpande Center for Technological
Innovation and the University of California, San Diego (USCD) von Liebig Center.57 MIT’s
Deshpande Center investment of $9.0 million since 2002 has resulted in 1 licensing agreement,
18 startup companies, $140 million in outside financing, and over 200 jobs.58 UCSD’s von Liebig
Center project investment of $3.8 million since 2001 has resulted in 22 license agreements and 16
start-up companies, which have attracted more than $78 million in subsequent capital from the
private sector and created over 130 new jobs.59
At MIT, business community volunteers called “Catalysts” provide guidance to researchers. The
Catalyst volunteers are individuals with experience relevant to innovation, technology
commercialization, and entrepreneurship, but do not represent any company interests. The
approximately 50 Catalysts are chosen based on their “experience in commercializing early stage
technologies and/or mentoring researchers and entrepreneurs, and industry expertise; willingness
to proactively provide assistance to MIT research teams; willingness to abide by the time
commitment, confidentiality, and conflict of interest guidelines; and commitment to the interests
of MIT researchers and the Deshpande Center.”60 Catalysts are also members, along with MIT
staff, of a multidisciplinary committee that evaluates all applications for research funds. Once
selected by the committee, a Catalyst works with researchers to submit a full proposal.61
At UCSD’s von Liebig Center, two kinds of mentors provide guidance to researchers: Technology
and Business Advisors, and Champion Entrepreneurs. The approximately six Technology and
Business Advisors are seasoned entrepreneurs, paid discounted wages by UCSD, to help project
teams develop and implement commercialization strategies. Champion Entrepreneurs are venture
capitalists, experienced entrepreneurs, and angel investors who lead projects through the
commercialization pipeline and help start a company around it.62 Advisors at UCSD are assigned
to faculty after they submit a Statement of Intent to help them prepare a proposal and presentation
to a review panel that consists of both technical and business experts. Projects are selected based
on the technology’s novelty and need, the potential market size, the market definition, the
57 Christine Gulbranson and David Audretsch, Proof of Concept Centers: Accelerating the Commercialization of
University Innovation, Ewing Marion Kauffman Foundation, January 2008 at http://sites.kauffman.org/pdf/
POC_Centers_01242008.pdf.
58 MIT Deshpande Center for Technological Innovation, “About the Center,” webpage at http://web.mit.edu/
deshpandecenter/about.html.
59 UCSD von Liebig Center, “Mission,” webpage at http://www.vonliebig.ucsd.edu/about/mission.shtml.
60 MIT Deshpande Center for Technological Innovation, “Catalyst Program,” webpage at http://web.mit.edu/
deshpandecenter/catalyst.html. Christine Gulbranson and David Audretsch, Proof of Concept Centers: Accelerating the
Commercialization of University Innovation, Ewing Marion Kauffman Foundation, January 2008 at
http://sites.kauffman.org/pdf/POC_Centers_01242008.pdf.
61 Christine Gulbranson and David Audretsch, Proof of Concept Centers: Accelerating the Commercialization of
University Innovation, Ewing Marion Kauffman Foundation, January 2008 at http://sites.kauffman.org/pdf/
POC_Centers_01242008.pdf.
62 UCSD von Liebig Center, “Mentor a Project Team,” webpage at http://www.vonliebig.ucsd.edu/giving/
mentor.shtml.
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technology’s maturity, the utility of the grant, the intellectual property position, and the principal
investigator’s credibility.63
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The following are the likely events needed to take place, not necessarily in this order, to establish
ARPA-E and begin its operation based on the steps taken by IARPA when it began operation.
Concerned members of Congress may be involved in oversight of these activities to ensure that
ARPA-E meets the goals outlined in the America COMPETES Act.
• Nomination of ARPA-E Director by President Obama.
• Conduct Senate hearing and vote on confirmation of ARPA-E Director.
• Identify location for ARPA-E operations, perhaps temporary until permanent
space is determined.
• Employ senior administrative staff.
• Develop plan for ARPA-E operations including organization design, R&D
initiatives, and related program offices.
• Recruit Program Managers suited to managing the program offices.
• Post pre-solicitation announcement for each program (e.g., IARPA is seeking
ideas for innovative research and technology demonstrations for Biometrics
Exploitation Science and Technology (BEST) to significantly advance the state
of the science and enable revolutionary advances in algorithms, devices, and/or
systems for non-contact biometrics).
• Host proposer’s day for each program to familiarize participants with ARPA-E
and its interest in a given program; promote an understanding of the broad area
announcement (BAA) proposal submission requirements and process; and foster
discussion of synergistic capabilities among potential program participants
• Send out BAAs soliciting proposals for each program office (e.g., IARPA, in
partnership with the U.S. Army Research Office (ARO), solicits proposals to:
develop fundamental understanding into defects in superconducting qubits;
develop means to characterize defects; develop advanced materials, constructions
and fabrication methods to eliminate these defects; and subsequently demonstrate
substantially extended coherence times in superconducting qubits fabricated from
the foregoing developments).
• Review proposals and make awards.
As stated by one expert, “Standing up new energy technologies is a major and complex challenge,
perhaps the most difficult technology stand-up challenge we have faced. Ever.”64 If so, Congress
63 Christine Gulbranson and David Audretsch, Proof of Concept Centers: Accelerating the Commercialization of
University Innovation, Ewing Marion Kauffman Foundation, January 2008 at http://sites.kauffman.org/pdf/
POC_Centers_01242008.pdf.
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might wish to ensure the implementation of ARPA-E meets the goals and principles provided in
the America COMPETES Act.
Several management design elements to monitor include the timely appointment of a director for
ARPA-E, recruitment of highly qualified technical Program Managers familiar with the DARPA
process, maintenance of autonomy from DOE’s current activities, and sufficient funding and
organizational flexibility. In terms of the research funded, key aspects to monitor are the focus on
high-risk, high-payoff, possibly transformational research that has clearly defined and measurable
3-5 year end-goals rather than incremental research or that focused on “quick wins;” full and
open competition, so that the best projects are selected; and perhaps most challenging of all,
customer involvement so that the outcomes from ARPA-E’s projects have a transition strategy to
an end user.
Reportedly, DOE officials say there is no timeline for organizing ARPA-E, but that DOE staff are
developing the details of its operation.65 Further, Secretary of Energy Secretary Steven Chu has
reportedly emphasized the importance of moving quickly to disseminate R&D funds provided by
the American Recovery and Reinvestment Act, while ensuring that funds are used wisely.66
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In March 2009, while responding to questions following congressional testimony, Secretary of
Energy Steven Chu indicated that DOE staff had told him that it would take a year to establish
ARPA-E. Although he was attempting to advance that timeline, he was unsure when it would be
established.67 Since that testimony, President Obama discussed ARPA-E in a speech, and the
Obama Administration has released a funding opportunity announcement soliciting concept
papers. The Administration has not announced ARPA-E’s director or organization. More details
may be forthcoming when the Administration submits its FY2010 budget request to Congress.
These activities are discussed below.
(...continued)
64 Testimony of William B. Bonvillian, , in U.S. Congress, House Committee on Science and Technology,
“Establishing the Advanced Research Projects Agency – Energy (ARPA-E) – HR 364,” hearing, 110th Congress, 1st
sess., April 26, 2007, H.Hrg. 110-22 at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=
110_house_hearings&docid=f:34719.wais.pdf.
65 George Leopold, “Stimulus: Energy Department scrambles to build new R&D agency,” EE Times, February 23,
2009, at http://www.eetimes.com/showArticle.jhtml?articleID=214502434.
66 Ibid.
67 Congressional Quarterly Congressional Transcripts, “House Committee on Science And Technology Holds a
Hearing On New Directions For Energy Research And Development At Energy Department,” March 17, 2009. In
response to a question from the Chair, House Committee on Science and Technology, Secretary of Energy Steven Chu
stated the following: “So I met with those—a team of people that were trying to see what the structure should be like. I
think it’s very consistent with this committee’s views. I did ask specifically how long it would take. I didn't like the
answer. The answer was, quite frankly the first pass answer was one year, and so I instruct them go back and I want to
see exactly the timeline of why it would take so long. There might be regulations, things like that, and I have not gotten
back the answer to that. So I hope it would take much shorter than one year.”
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On April 27, 2009, President Obama in remarks at the National Academy of Sciences stated the
following:
And today, I'm also announcing that for the first time, we are funding an initiative—
recommended by this organization—called the Advanced Research Projects Agency for
Energy, or ARPA-E.
This is based, not surprisingly, on DARPA, the Defense Advanced Research Projects
Agency, which was created during the Eisenhower administration in response to Sputnik. It
has been charged throughout its history with conducting high-risk, high-reward research.
And the precursor to the Internet, known as ARPANET, stealth technology, the Global
Positioning System all owe a debt to the work of DARPA.
So ARPA-E seeks to do the same kind of high-risk, high-reward research. My administration
will pursue, as well, comprehensive legislation to place a market-based cap on carbon
emissions. We will make renewable energy the profitable kind of energy. We will put in
place the resources so that scientists can focus on this critical area. And I am confident that
we will find a wellspring of creativity just waiting to be tapped by researchers in this room
and entrepreneurs across our country. We can solve this problem.68
In a fact sheet that provided additional details regarding the speech, the Obama Administration
stated the following:
SPARKING THE CLEAN ENERGY REVOLUTION
• As part of his plan to build a clean energy economy that will reduce our dependence on
foreign oil and cut carbon pollution, the President will announce the launch of the $400
million Advanced Research Projects Agency-Energy (ARPA-E). In addition, the
Department of Energy will announce grants to establish 46 Energy Frontier Research
Centers.
• ARPA-E is a new Department of Energy organization modeled after the Defense
Advanced Research Projects Agency, the defense agency that gave us the Internet,
stealth aircraft, and many other technological breakthroughs. The recommendation to
create ARPA-E came from a report of the National Academy of Sciences entitled Rising
Above The Gathering Storm, and funding for ARPA-E was included in the Recovery
Act.
• ARPA-E will award grants to recipients that enhance the economic and energy security
of the United States through the development of breakthrough energy technologies;
reduce the need for consumption of foreign oil; reduce energy-related emissions,
including greenhouse gases; improve the energy efficiency of all economic sectors; and
ensure that the United States maintains a technological lead in developing and deploying
advanced energy technologies.
68 White House, “Remarks by the President at The National Academy Of Sciences Annual Meeting,” speech, April 27,
2009, at http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-at-the-National-Academy-of-
Sciences-Annual-Meeting/.
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• ARPA-E will issue an initial solicitation that will focus on applicants with a well-
formed R&D plan for a transformational concept or new technology that can make a
significant contribution towards attainment of the President’s Energy Plan. Under this
announcement, ARPA-E will fund energy technology projects that (1) translate
scientific discoveries and cutting-edge inventions into technological innovations and (2)
accelerate transformational technological advances in areas that industry is not likely to
undertake independently because of high technical or financial risk.69
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Later that day, the DOE released a Funding Opportunity Announcement (FOA) with ARPA-E’s
first solicitation.70 The solicitation states the following:
This is the first solicitation for the Advanced Research Projects Agency – Energy (ARPA-E).
ARPA-E is a new organization within the Department of Energy (DOE), created specifically
to foster research and development (R&D) of transformational energy-related technologies.
Transformational technologies are by definition technologies that disrupt the status quo.
They are not merely better than current technologies, they are significantly better. Often, a
technology is considered transformational when it so outperforms current approaches that it
causes an industry to shift its technology base to the new technology. The Nation needs
transformational energy-related technologies to overcome the threats posed by climate
change and energy security, arising from its reliance on traditional uses of fossil fuels and the
dominant use of oil in transportation.
ARPA-E will fund scientists and technologists to take an immature technology that promises
to make a large impact on the ARPA-E Mission Areas (see Section I.B) and develop it
beyond the “valley of death” that prevents many transformational new technologies from
becoming a market reality. The “valley of death” generally occurs in two phases. The first
phase occurs at the point of determining whether a laboratory stage technology can ever
become a real-world technology or it has some inherent unsuitability for real-world
applications. Once it has been determined through R&D that the apparent barriers can be
overcome and how they may be overcome, then additional investment from many other
sources causes a new field of technology options to open up. The second phase of the “valley
of death” occurs at the point of developing the immature transformational technology to the
point where key risks have been lowered enough that industry can invest in the final stages
of development and incorporate the technology into products.
Success for ARPA-E as an organization will be gauged by (a) whether its portfolio of
investments includes the most promising transformational energy technology options and (b)
the agency’s ability to form and manage R&D efforts to mature these technologies rapidly.
In the end, the nation will judge ARPA-E on whether these technologies come to market and
are being used widely enough that they make a significant difference to reductions in
domestic oil use and energy-related emissions of greenhouse gases.71
69 White House, “Fact Sheet: A Historic Commitment To Research And Education,” April 27, 2009, at
http://www.whitehouse.gov/the_press_office/Fact-Sheet-A-Historic-Commitment-To-Research-And-Education/.
70 This solicitation is available at http://www.energy.gov/media/ARPA-E_FOA.pdf.
71 Department of Energy, “Advanced Research Projects Agency – Energy (ARPA-E): Funding Opportunity Number:
DE-FOA-0000065,” CFDA Number: 81.135, April 27, 2009, at http://www.energy.gov/media/ARPA-E_FOA.pdf.
Submissions may be made through the grants.gov website at http://www.grants.gov/search/search.do?mode=VIEW&
flag2006=false&oppId=47045.
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Proposers will initially submit a concept paper by June 2, 2009. ARPA-E will inform applicants
by July 13, 2009, if they should submit a full application. The FOA indicates that ARPA-E
anticipated most awards will be for projects in the $2 million-$5 million range, though some may
be as low as $500,000 and as high as $20 million. In addition, ARPA-E anticipates making
multiple awards, and awarding agreements totaling up to $150 million. The period of
performance for awards is expected to be no more than 24 months, with a 36-month maximum. A
minimum of 90% of work, as defined by total project costs, must be performed in the United
States.
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No information is provided in the FOA regarding ARPA-E’s organization or staffing, or the
amount of its $415 million FY2009 budget for those activities. Given DOE expects to award $150
million in response to this first solicitation, $265 million remains of this budget for ARPA-E
administration and possible future awards. More details may be forthcoming when the Obama
Administration submits its FY2010 budget request to Congress, expected in May 2009.
A policy issue for many congressional policymakers is the degree to which FY2009 funding,
which includes both regular and supplemental appropriations, will influence FY2010
appropriations. This issue is heightened for ARPA-E, whose funding in the supplemental, $400
million, is greater than the $15 million in the regular FY2009 appropriation. The President’s
budget request may help clarify the Obama Administration’s plans regarding the future of ARPA-
E in FY2010.
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In the American Recovery and Reinvestment Act (ARRA; P.L. 111-5), the 111th Congress
provided ARPA-E initial funding of $400 million, which supplemented FY2009 funds of $15
million (P.L. 111-8). As a result, ARPA-E’s received its initial funding of $415 million in
FY2009.
A draft Senate Committee on Energy and Natural Resources bill entitled Energy Innovation and
Workforce Development would amend the America COMPETES Act to give contracting
authority to ARPA-E separate from the Department,72 make technical corrections to reporting
requirements, and authorize ARPA-E through 2020.73
72 For more information, see CRS Report RL34760, Other Transaction (OT) Authority, by L. Elaine Halchin.
73 For more information, see http://energy.senate.gov/public/index.cfm?FuseAction=IssueItems.Detail&IssueItem_ID=
cd38563f-445e-4c75-9a70-94324136c99b&Month=3&Year=2009.
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Deborah D. Stine
Specialist in Science and Technology Policy
dstine@crs.loc.gov, 7-8431
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