Financial Assistance for Research and Development, U.S.-Israeli Science and Technology Program

DEPARTMENT OF COMMERCE

Technology Administration

[Docket No. 950313072-5072-01]

RIN No.: 0693-AB37

Financial Assistance for Research and Development, U.S.-Israeli

Science and Technology Program

agency: Tecnology Administration, Commerce.

action: Notice.

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summary: The Under Secretary for Technology of the United States

Department of Commerce invites proposals for financial assistance under

the U.S.-Israeli Science and Technology Program (the ``Program''). The

Program will assist U.S.-based industrial firms that have entered into

U.S.-Israeli joint ventures (partnerships of United States and Israeli

companies) to carry our research and development on long-term, medium-

to high-risk technologies. This Program is separate from the existing

Bi-national Industrial R&D Foundation (BIRD), which continues to offer

support for commercial joint ventures. Inquiries about BIRD assistance

should be addressed directly to the BIRD Foundation, Tel Aviv, Israel.

Such projects should focus on research, development and

commercialization of technologies that are not appropriately funded by

other U.S. or Israeli government-funded research and development

efforts. This assistance will take place through the use of cooperative

agreements with U.S.-based industrial firms pursuant to this Notice.

Funding will be made directly to the U.S. firms that are partners

in the U.S.-Israeli joint ventures. Funding from the U.S. Department of

commerce for the Program is limited to the U.S. partner(s) to a U.S.-

Israeli joint venture, with funding for the Israeli partner(s) to be

provided by the Israeli Government. On December 21, 1994, the

Technology Administration published a notice in the Federal Register to

announce this Program (FR 65756), including the availability of funds

for a first round of awards. Funding recipients for this first round

were announced on February 6, 1995, referenced in more detail below.

dates: Applications must be received on or before Close of Business May

19, 1995. It is expected that the review and selection process will

take approximately thirty (30) days.

addresses: Applications must be submitted to: U.S.-Israel Science and

Technology Commission, Room 7068, U.S. Department of Commerce,

Washington, DC 20230.

for further information contact: Lee Bailey, Executive Director, U.S./

Israel Science and Technology Commission, telephone number (202) 482-

6351.

supplementary information: In March, 1993, President Clinton and

Israeli Prime Minister Yitzhak Rabin announced their intention to

create the U.S.-Israeli Science and Technology Commission (the

``Commission'') to promote U.S.-Israeli cooperative science and

technology activities that could benefit the two nations' civilian high

technology commercial sectors, and create jobs and economic growth. The

Commission was established by an agreement of January 18, 1994 between

the U.S. and Israeli governments, and plans to implement certain of its

objectives through a U.S. non-profit corporation (hereinafter

``USNPC'').

The Commerce Department expects that the USNPC itself will award

future financial assistance agreements under the Program, and may also

be in a position to award the agreements contemplated by this notice.

Should this occur, applicants that have submitted proposals that remain

under review will be asked to transfer their proposals to the USNPC,

and will receive further information about the requirements that apply

to the USNPC's financial assistance agreements. Applicants should take

note that the USNPC's requirements will differ in certain respects from

those announced in this notice, including modification with respect to

accounting, reporting, and intellectual property requirements, and the

adoption of award recovery policies that would apply in cases where the

USNPC-sponsored projects result in commercially successful products.

Applicants that enter into agreements with the Commerce Department may

also be asked to consent to the Department assigning their agreements

to the USNPC at a later point, and to negotiate any modifications to

the agreement that may be necessary to satisfy the USNPC's financial

assistance requirements. For additional information, applicants may

contact the Information Contact Person listed above. Funding is

intended for projects (1) That will have significant economic benefits

for both the United States and Israel and (2) that in general are in

the areas of the environment, energy, health, biotechnology,

information processing/telecommunications or agriculture, or in the

commercialization of defense technologies.

This program announcement has been determined to be not significant

for purposes of Executive Order 12866.

Authority

The Under Secretary for Technology, pursuant to the authority

delegated to her by section 3706 of Title 15 of the U.S. Code, as well

as sections 2.02 and 4.03(d) of Department Organization Order 10-17,

dated July 14, 1992, is implementing this activity.

Program Description

The Program will assist eligible U.S.-based industrial firms that

have entered into U.S.-Israeli joint ventures (partnerships of United

States-based and Israeli-based companies) to carry out research and

development of long-term, medium- to high-risk technologies that offer

significant economic benefits, that are focused on commercialization

and that are not appropriately funded by other U.S. and Israeli

government-funded research and development efforts. This assistance

will take place through the use of cooperative agreements. U.S.

Commerce Department assistance is offered to promote the economy of the

U.S. via the creation of new technologies and the commercialization of

new and existing technologies.

Funding Availability

The implementation and conduct of this Program is contingent upon

the availability of all funding anticipated for its operation. The

Commerce Department reserves the right to discontinue this Program in

the event all funding is not made available or is otherwise not

secured. It is anticipated that funds will be available subject to

reprogramming notifications to Congress.

The U.S. Government and the Government of Israel are each making

available up to $5 million in the current fiscal year for this Program

for qualified projects. The governments of both nations intend to fund

this Program at [[Page 16455]] the same level during 1996 and 1997. Two

awards and one feasibility study totalling $5,721,000, to be paid over

four fiscal years, were announced on February 6, 1995. Within the

limits of available funding, there is no predetermined minimum or

maximum award. The funds may be spent toward research and development

activities consistent with the goals set forth in this Notice.

Matching Funding Requirements--Federal financial assistance must be

accompanied by at least an equal matching investment by the U.S.-based

firm(s) party to each U.S.-Israeli joint venture. In the event there

are multiple U.S.-based firms in a given U.S.-Israeli venture, the

aggregate investment of the U.S. partners must at least equally match

the Federal investment in that project.

Eligibility Requirements

The Program will accept proposals only from U.S.-Israeli joint

ventures led by one U.S.-based industrial partner and one Israeli-based

industrial partner. In general, awards will not be made to a joint

venture composed of affiliated U.S.- and Israeli-based partners.

Concerns are considered to be affiliates of each other when either

directly or indirectly (a) one concern controls or has the power to

control the other, or (b) a third party or parties controls or has the

power to control both, or (c) an identity of interest between or among

parties exists such that affiliation may be found.

Federal financial assistance will be given only to U.S.-based

industrial partner or to a consortia led by U.S.-based industrial

partners. A U.S.-based industrial partner, or a consortia led by U.S.-

based industrial partners, shall be eligible to receive assistance

under this Program only if the U.S.-based industrial partner, or each

member of the consortia, is incorporated in the United States and has

its principal place of business in the United States.

Project Eligibility

Proposed projects must meet the following criteria:

Must be in one of the following areas: The environment,

energy, health, biotechnology, information processing/

telecommunications, the commercialization of defense technologies, or

agriculture. Further, the project must be for research and development

activities in long term, medium- to high risk technologies, and which

show a plan to commercialization within 48 months.

Must include technical innovation, significant commercial

potential, and economic benefit to both countries.

Award Period

The duration of Federal financial assistance to a U.S.-based

industrial firm will not exceed four years.

Indirect Costs

Indirect costs will not be funded under this Program.

Application Forms and Kit

Applicants must submit one (1) signed original plus two copies of

each application. Standard Forms 424 and 424A, Application for Federal

Assistance (which have been approved under the Paperwork Reduction Act

by OMB Control No. 0348-0043 and 0348-0044, respectively) shall be used

in applying for financial assistance, plus such additional information

as is needed to permit the evaluation of the applications on the

criteria set forth below. Forms are available by request from the

Information Contact Person listed above. The additional information

shall include a business plan containing the following:

Executive summary (maximum 3 pages);

Description of the project and technology involved (See

Evaluation Criteria No. 1);

Commercialization objectives including economic benefits

to U.S. & Israel and other regions (See Evaluation Criteria No. 2);

Commercialization plan including project objectives target

markets and strategy, technology transfer and intellectual property

requirements and additional capital requirements (See Evaluation

Criteria No. 3)

Description of proposed project participant qualifications

and time schedule (See Evaluation Criteria No. 4);

Project management, organizational structure, equipment,

facilities and support (See Evaluation Criteria No. 5); and,

Proposed budget.

Proposals shall not exceed 40 pages (50 pages for joint proposals)

exclusive of the Standard Forms. Proposals must be on 8\1/2\ by 11''

paper (copies double sided) no fold out inserts and no smaller than 12

point type. Additional information beyond the page limit will not be

considered. In addition, each proposer is asked to submit a brief one

paragraph project summary containing non-proprietary information which

may be utilized by the Commission without regard to the Confidentiality

Provisions applicable to this notice.

Evaluation Criteria--Factors within each criteria (labelled i, ii,

iii, etc.) will be weighed equally. No project will be funded in the

absence of a finding of technical and commercial merit by the

reviewers. The evaluation criteria to be used in selecting any proposal

for funding under this program, and their respective weights, are:

(1) Scientific and Technical Merit of the Proposal (30 percent).

(i) Quality and innovativeness of the proposed technical program

(i.e. uniqueness with respect to current industry practice).

(ii) Technical feasibility of the project (i.e., are the technical

objectives realistic?).

(iii) Coherency of technical plan and clarity of vision of

technical objectives.

(iv) Breadth of impact of accomplishment of technical objectives.

(2) Commercial Benefits of the Proposal (20 percent).

(i) Commercial potential of the technology in the proposed venture.

(ii) Potential to improve U.S. and Israeli economic growth and the

productivity of a broad spectrum of industrial sectors or businesses

within an economically important single sector.

(iii) Timeliness of proposal (i.e. the project results will not

occur too late to be competitively useful in the marketplace).

(3) Commercialization Plans for the Project (20 percent).

(i) Evidence that the participants will pursue commercial

application of the technology including production and distribution

plans.

(ii) Project plan adequately addresses technology transfer and

ownership requirements to assure prompt and widespread use and

protection of results by participants and, as appropriate, others;

(4) Qualifications of the Proposing Organization(s) (15 percent).

(i) Quality and appropriateness of proposer's commercial and

managerial staffing, facilities, equipment, and other resources to

accomplish the proposed program objectives.

(ii) Quality and appropriateness of the technical staff to carry

out the proposed work program and to identify and overcome technical

barriers to meeting project objectives.

(iii) For proposals involving laboratory prototype development,

evidence of availability of adequate design and manufacturing tools

appropriate to the prototype.

(5) Proposer's Level of Commitment and Organizational Structure (15

percent).

(i) Appropriateness of the structure of the proposed organization

in terms of composition of participants (i.e. vertical and/or

horizontal integration) and existing relationships among the

parties. [[Page 16456]]

(ii) Level of commitment of proposers as demonstrated by

contribution of personnel, equipment, facilities, and matching funds.

(iii) Appropriate participation by U.S. small businesses.

(iv) Evidence of a strong commitment by applicants to complete and,

if appropriate, provide support for continuation of the program beyond

the period of funding.

Selection Procedures

The selection process for awards is a multi-step process based on

the criteria listed above.

In the first step, called the ``preliminary screening,''

representatives from both governments will review the applications and

will eliminate those that do not meet the threshold Eligibility

Requirements listed above. Further disqualifications will be made if

the application is deemed to have serious deficiencies in the technical

and/or business plan, if the application does not fall within the

overall scope of the Program, or if the application is more

appropriately funded by other U.S. or Israeli government-funded

research and development efforts.

In the second step, referred to as the ``technical and

business review,'' applications are evaluated under the preceding

Evaluation Criteria. Applications are rated as ``not recommended'' or

``recommended.'' Applications must have high scientific and technical

merit to be recommended. Only those applications rated as

``recommended'' are considered further. Such applications are referred

to as ``semifinalists.'' If a majority of either country's

representatives rate an application as ``not recommended,'' that

application will be disqualified.

In the third step, referred to as ``selection of

finalists,'' representatives from both governments (``the Joint

Panel'') will prepare a final scoring and ranking of recommended

semifinalist applications, based upon evaluative criteria. A list of

ranked finalists is then submitted to each respective nation's

Selection Official.

In the final step, referred to as the ``selection of

awardees,'' the Selection Officials select funding recipients from

among the finalists, based upon the rank order of the applications on

the basis of all Evaluation Criteria (see above), assuring appropriate

distribution of funds among technologies, activities and recipients,

the availability of funds, and upon a determination as to the

responsibility of the applicant. The decision of the Selection

Officials is final. Applicants not chosen will be notified.

In the event that a U.S.-Israeli joint venture is ranked

as a finalist, but is determined to contain weaknesses in its structure

or cohesiveness that may substantially lessen the likelihood of the

proposed project's success, the applicant may be informed of the

deficiencies and negotiations may be entered into with the applicant in

an effort to remedy the deficiencies. If appropriate, funding up to 10%

of the amount originally requested by the applicant, but no more than

$100,000, may be awarded by the Program to the applicant to conduct a

feasibility study. If the Program determines within six months that the

organizational deficiencies have been corrected, the Program may award

over the life of the project the remaining funds requested by that

applicant to that applicant.

The Program reserves the right to negotiate with

applicants selected to receive awards over the cost and scope of the

proposed project, e.g., to add or delete a task in order to improve the

probability of success.

Funding Logistics

Funding will be made directly to the U.S.-based firm(s) that is/are

party to the U.S.-Israeli joint venture.

Rights to Inventions

The provisions of the Bayh-Dole Act (35 U.S.C. 201, et seq.,

concerning patent rights in inventions made with Federal assistance)

and the Government Patent Policy set forth in President Reagan's

memorandum to the heads of Executive Departments and Agencies, dated

February 18, 1983, shall apply to all Federally-funded research and

development activities performed under this Program.

Other Requirements

(1) Federal Policies and Procedures--Recipients and subrecipients

are subject to all Federal laws and Federal and Department of Commerce

policies, regulations, and procedures applicable to Federal financial

assistance awards.

(2) Past Performance--Unsatisfactory performance under prior

Federal awards may result in an application not being considered for

funding.

(3) Preaward Activities--If applicants incur any costs prior to an

award being made they do so solely at their own risk of not being

reimbursed by the U.S. Government. Notwithstanding any verbal or

written assurance that may have been received, there is no obligation

on the part of the Department of Commerce to cover preaward costs.

(4) No Obligation for Future Funding--If an application is selected

for funding under the Program, there is no obligation to provide any

additional future funding in connection with that award. Renewal of an

award to increase funding or extend the period of performance is at the

total discretion of the awarding entities. An annual review of each

award will be conducted to determine the worthiness of continued or

additional future funding.

(5) Delinquent Federal Debts--No award of Federal funds shall be

made to an applicant who has an outstanding delinquent Federal debt

until either:

i. The delinquent account is paid in full,

ii. A negotiated repayment schedule is established and at least one

payment is received, or

iii. Other arrangements satisfactory to the Department of Commerce

are made.

(6) Name Check Review. All applicants are subject to a name check

review process. Name checks are intended to reveal if any key

individuals associated with the applicant have been convicted of or are

presently facing criminal charges such as fraud, theft, perjury, or

other matters which significantly reflect on the applicant's management

honesty or financial integrity.

(7) Primary Applicant Certifications. All primary applicants must

submit a completed Form CD-511, ``Certifications Regarding Debarment,

Suspension and Other Responsibility Matters; Drug-Free Workplace

Requirements and Lobbying,'' and the following explanations are hereby

provided:

i. Nonprocurement Debarment and Suspension. Prospective

participants (as defined at 15 CFR part 26, section 105) are subject to

15 CFR part 26 ``Nonprocurement Debarment and Suspension'' and the

related section of the certification form prescribed above applies;

ii. Drug-Free Workplace. Funding recipients (as defined at 15 CFR

part 26, section 605) are subject to 15 CFR part 26, subpart F,

``Governmentwide Requirements for Drug-Free Workplace (Grants)'' and

the related section of the certification form prescribed above applies;

iii. Anti-Lobbying. Persons (as defined at 15 CFR part 28, Section

105) are subject to the lobbying provisions of 31 U.S.C. 1352,

``Limitation on use of appropriated funds to influence certain Federal

contracting and financial transactions,'' and the lobbying section of

the certification form prescribed above applies to applications/bids

for grants, cooperative agreements, and [[Page 16457]] contracts for

more than $100,000, and loans and loan guarantees for more than

$150,000, or the single family maximum mortgage limit for affected

programs, whichever is greater; and

iv. Anti-Lobbying Disclosures. Any applicant or component entity

thereof that has paid or will pay for lobbying using any funds must

submit an SF-LLL, ``Disclosure of Lobbying Activities,'' as required

under 15 CFR part 28, appendix B.

(8) Lower Tier Certifications. Recipients shall require applicants/

bidders for subgrants, contracts, subcontracts, or other lower tier

covered transactions at any tier under the award to submit, if

applicable, a completed Form CD-512, ``Certifications Regarding

Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier

Covered Transactions and Lobbying'' and disclosure form, SF-LLL,

``Disclosure of Lobbying Activities.'' Form CD-512 is intended for the

use of recipients and should not be transmitted to the Department of

Commerce. SF-LLL submitted by any tier recipient or subrecipient should

be submitted to the Department of Commerce in accordance with the

instructions contained in the award document.

(9) False Statements. A false statement on an application is

grounds for denial or termination of funds and grounds for possible

punishment by a fine or imprisonment as provided in 18 U.S.C. 1001.

(10) Intergovernmental Review--Applications under this program are

not subject to Executive Order 12372, ``Intergovernmental Review of

Federal Programs.''

(11) Purchase of American-Made Equipment and Products--Applicants

are hereby notified that they will be encouraged, to the greatest

extent practicable, to purchase American-made equipment and products

with funding provided under this Program in accordance with

Congressional intent as set forth in the resolution contained in Public

Law 103-317, sections 607(a)-(b).

Dated: March 27, 1995.

Mary Lowe Good,

Under Secretary of Commerce for Technology, Department of Commerce.

[FR Doc. 95-7800 Filed 3-29-95; 8:45 am]

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