Resource 2. Federal R&D Funding: Quick Agency Profiles

THE FEDERAL FUNDING LANDSCAPE IS COMPLEX AND EVER-CHANGING. HERE, WE DRILL DOWN AND PROVIDE BRIEF, UP-TO-DATE PROFILES ON U.S. AGENCIES THAT AWARD MAJOR R&D GRANTS AND CONTRACTS. THIS PAGE IS NOT A SUBSTITUTE FOR DETAILED AGENCY AND CENTRALIZED WEBSITES, BUT HERE YOU WILL QUICKLY FIND KEY FACTS - BUDGET SIZE, WHERE THE MONEY GOES, TRENDS, AND PRIORITIES. WE DRAW HEAVILY FROM RECENT AAAS SCIENCE AND POLICY ANALYSES FOR THESE PROFILES.

Overview - How much does the federal government spend on R&D and where do the dollars go?
This is a confusing question as there are many categories of research and development and many ways to look at spending. Let’s work through the numbers estimated for 2010(based on the AAAS Report XXXIV – Research and Development FY 2010).

The total US research and development budget for 2010 is estimated at $147.5B, a 0.3% increase from 2009. About $81B is classified as “development”. $59.3B is classified as “research”, including “basic” and “applied” research. The latter “research” amount is what is shown in Figure 1 for the period 1976-2009. (Note that change in the research funding landscape tends to be very incremental from year to year. An exception was the period 1998-2003 when the budget of the NIH doubled). The difference between “research” + “development” and the $147.5B grand total (a few billion) goes toward funding of “R&D facilities” such as the International Space Station (NASA).

2010 comes on the heels of a very unusual year. Passage of the economic stimulus appropriations bill on Feb 17, 2009 resulted in a one-time infusion of $18.4B of additional R&D funds, mainly to NIH, NSF, and DOE.We will not address spillover Recovery Act impacts on the 2010 R&D budget in the discussions below.

All of these numbers can be couched, of course, in terms of the country’s overall budget of $3.6 trillion dollars.

Another way to look at science spending is to lump “research” and “development” together, but segregate defense from non-defense spending. From this perspective, non-defense R&D spending is projected to be about $63B and defense-related spending about $84B. $84B exceeds the DoD’s proposed 2009 budget of $80.0B because defense-related spending is also undertaken by DOE and the Department of Homeland Security.

The main issue for those of you reading this explanation is probably, what are the science (and non-science) budgets available for external investigators and contractors? In other words, most of us know that NSF and NIH give most of their R&D budgets away in the form of competitive awards and contracts, but what about agencies like DOD, NASA, DOE, and USDA?

The answer depends a great deal on the agency – its mission, history, and political health. We attempt to provide more information of this flavor in the quick agency profiles below. AAAS tends to look at things from the investigator vantage point since much of AAAS’ membership depends on grants and contracts for survival, but AAAS is biased towards "research". Certainly in the "development" category, major funding also flows to non-governmental organizations, large and small, to execute projects.

For a more in-depth treatment of the nation's R&D budget outlook for 2010, go to AAAS Report XXXIV – Research and Development FY 2010. (Please note - many of the graphs below are still being updated)

The table below gives a picture of the nation’s spending in science across its largest agencies (from AAAS Report XXXIV). Here are a couple of interesting observations:

  • The total non-defense R&D expenditure budgeted for 2010, $63.5B, is about 1.8% of the nation's total 2010 budget of $3.6B.
  • Reflecting Congress’ (and the American public’s) priority on health care, NIH's 27 institutes receive nearly half of the total non-defense R&D budget.

 federal R&D budget table
Table 1. US R&D budget for FYs 2008-2009-2010 (from AAAS)

trends in federal research by agency
Figure 1

trends in federal research chart
Figure 2

Deciphering the Department of Defense

DOD’s overall budget is nearly $670B or nearly 1/5 of the entire national budget. The DOD’s projected 2010 R&D budget is $80.0B, a decline of about 2.4% from 2009. DOD is easily the largest sponsor of R&D in the federal system.

By far, most of the R&D budget is to support weapons development programs – around $68B. The so-called Science and Technology (S&T) portion of the budget is the difference – around $12.3B (S&T = 6.1+6.2+6.3+medical – see 4th bullet). Generally, Congress has been more supportive of a healthy DOD S&T budget than the Pentagon. There has been discussion of fixing the 6.1 portion of the S&T budget at 3% of DOD’s overall R&D budget, but this target has never yet been reached.

  • DOD’s interest in scientific and engineering disciplines is comprehensive and includes medical research ($536M in 2008).
  • To understand DOD’s spending priorities, one must understand its numerical lingo.DOD S&T encompasses three classes of R&D: 6.1 – Basic Research, 6.2 – Applied Research, and 6.3 -Advanced Technology Development.6.1 and 6.2 are research categories whereas 6.3 embraces development. Other development categories include: 6.4 – Demonstration and Validation, 6.5 – Engineering and Manufacturing Development, 6.6 – RDT&E Management and Support, and 6.7 – Operational System Development. You can access a handy summary table from a RAND report at RAND1194 monograph.
  • Historical defense expenditures in S&T and Development are shown in Figure 1. Defense expenditures by the DOE and DHS are included in this graphic. In Figure 2, you may view how these funds have been partitioned between military branches (i.e. Air Force, Navy, Army) and a few DOD Agencies (Missile Defense and DARPA).
  • The 2010 S&T budget will look like the following: 6.1 @ $1.8B, 6.2 @ $4.2B, and 6.3+medical @ $6.3B. The Pentagon’s request for Medical research funding will continue to fall sharply and even earmarked programs may not survive in 2010 (see Figure 3).
  • DOD’s Defense Agencies budget will drop to $20.8B – a 5.2% reduction. MDA (Missile Defense Agency) would receive $7.1B, DARPA (Defense Advanced Research Projects Agency) $3.3B, CBDP (Chemical and Biological Defense Program) $1.2B, and DTRA (Defense Threat Reduction Agency) $0.51B.
  • Nearly all R&D in categories 6.4 and higher is executed by large private contractors (Lockheed Martin, Boeing, SAIC, etc.). If we exclude development activities, the 6.1+6.2 S&T pot of $6.0B funds a variety of players (Figure 3).Roughly 40% of this work is done by industry, 33% by DOD labs, and 21% by universities.
  • Five states receive about half of DOD’s R&D outflow, chiefly by virtue of being home to large defense contractors (CA, TX, MA, VA, MD). Virginia and Maryland benefit through proximity to the Pentagon and their housing a high density of DOD labs and federally funded R&D centers.


Figure 1

trends in DOD by agency
Figure 2

trends in DOD by agency
Figure 3

 DOD Funding of Research
Figure 4

NIH profile in funding health science R&D

The National Institutes of Health comprise 27 Institutes and Centers. NIH's budget, projected at $31.0B in 2010 (an increase of 1.4%, not including ARRA funds), is spread out accordingly. 97% of the budget is dedicated to R&D and 3% is allocated to overhead costs and research training. Funding by general institute and funding mechanism categories is shown in Figures 1 and 2 below. The NIH is the second-largest supporter of R&D in the federal government (Department of Defense is number one) and the largest federal sponsor of R&D at colleges and universities. NIH received $10.4 billion from the 2009 American Recovery and Reinvestment Act and many of these funds will be spent through FY 2010.

  • The majority of NIH funds are competitively awarded to external investigators through Research Project Grants (RPGs - see figure below). NIH projects about 36,182 RPGs in 2010 worth $15.7B, of which 9,849 would be new. The average RPG award size is about $400K and project duration is 3.7 years (see Figure 3).
  • About 11% of NIH’s budget is awarded through R&D contracts (Figure 2). R&D contract funding grew rapidly between 2001-2004 to fund biodefense research.
  • NIH also operates its own sizeable research laboratories, mostly in Bethesda, MD. Spending on Intramural research may total $3.2 billion in 2010.
  • Per the agency’s Roadmap for Biomedical Research, NIH priorities focus on clinical research, high-risk basic research, new research tools, and multidisciplinary collaborative research. Biodefense R&D (approx $1.7B) and HIV/AIDS research (approx $2.9B) continue to be NIH priorities. The Obama Administration has added cancer (>$6B expected collective expenditure) and autism ($141M) as research priorities.
  • Success rates for new grant applications have fallen to about 20 percent in recent years from a high of 32 percentin FY 2001 (Figure 3). The impact of the frenzied competition over Recovery Act funds in 2009/2010 remains to be seen.
  • NIH expenditure for multidisciplinary centers (now 1,437) continues to increase (about $3.1B/year or 10% of overall budget).
  • Although NIH dominates the Health and Human Services R&D portfolio, other HHS agencies (excluding NIH) will fund a still substantial $751M of R&D in FY 2010.

 NIH budget
Figure 1

NIH budget by funding mechanism
Figure 2

NIH research grants
Figure 3

What is NSF’s role in funding science research?

With a total 2010 budget of $7.0B (8.5% above FY 2009 not including ARRA funds), NSF is the only federal agency with responsibility for all science and engineering disciplines (see Figure 1 below). In broad terms, the (1) physical sciences, (2) environmental sciences, (3) engineering, (4) mathematics/computer sciences, and (5) life sciences receive comparable shares of NSF funding. NSF is second to NIH in support to academic R&D. NSF received $3B as part of the American Recovery and Reinvestment Act that was obligated by September 30, 2010.

  • NSF has no laboratories of its own; 80% of its budget goes to universities and colleges – the highest proportion of any federal agency.90% of NSF funding is awarded via a merit-based award process.
  • NSF estimates that it will provide 12,850 competitive awards and 8,200 research grants in FY 2010. This represents a funding rate of 26% for competitive awards and 22% for research grant proposals.
  • The Major Research Equipment and Facilities Construction (MREFC) program would be funded at $117M, a decrease of $35M; however, MREFC received $400 million in ARRA funding.
  • Due to their high concentration of research universities and government-owned entities such as NCAR, seven states receive over 50% of all NSF grants (CA, NY, MA, CO, IL, VA, PA – see Figure 3). To address the imbalance, NSF created the EPSCoR Program (Experimental Program to Stimulate Competitive Research) to help 25 states become more competitive.
  • 2009-2010 will be good years for NSF, however, it remains to be seen whether the intent of the America Competes Act passed in 2007 to double NSF’s (and DOE’s and NIST’s core research) budget in ten years will come to fruition.

NSF research budget by disciplines
Figure 1

trends in NSF research by discipline
Figure 2

NSF R&D by state
Figure 3

How will NASA execute R&D given its substantial $18.7B budget?

In terms of national impact on research, the National Aeronautics and Space Administration funds about 16 percent of all federal support for engineering research and 7 percent of all federal support for basic and applied research. With a proposed total budget of $18.7B in 2010 (over three times that of NSF), one might expect these proportions to be larger. But the R&D share of the total NASA budget is only about 2/3 of the total budget, and only $4.5B is for NASA’s Science Mission Directorate. Much of NASA’s budget is for large program development (e.g. $3.5B for the Constellation Systems program and $2.3B for the International Space Station).

  • Accordingly, industry executes nearly half of NASA’s R&D (Figure 2). NASA’s own labs (including the contractor-operated JPL) execute another 33% of the NASA R&D portfolio. The amount funneled to universities continues to shrink ($1.3B in 2007), but NASA still ranks fourth behind NIH, NSF, and DOD in sponsorship of academic research.
  • NASA research is focused on engineering (1/3 of total), environmental sciences (1/4 of total), and physical sciences.Favored engineering sub-fields include aero- and astronomical engineering. In environmental sciences, significant funds flow to oceanography and atmospheric and geological sciences. Investment in the physical sciences favors astronomy, chemistry, and physics.
  • The FY 2010 budget reflects the President Obama’s continued support for the U.S. Space Exploration Policy conceived under the Bush Administration that aims to complete assembly of the International Space Station by 2010; retire the Space Shuttle in 2010; return astronauts to the Moon by the end of the next decade; and eventually send human explorers to Mars and beyond.
  • This focus on exploration continues to raise concerns from NASA constituent groups, such as those serving the aeronautics and science mission directorates, that the Moon and Mars initiatives are being planned without significant new funding for NASA.

trends in NASA R&D
Figure 1

NASA funding of R&D
Figure 2

Department of Energy - R&D funding on the rise

DOE is the #1 federal sponsor of the physical sciences, supplying nearly half of all federal supporting this science category. DOE alone funds nearly 2/3 of all federally-supported physics research. DOE R&D also favors computer sciences, mathematics, and engineering research in materials science and nanotechnology. DOE’s R&D budget will climb 5% to $10.7B in 2010 if congressional appropriations are not undercut (overall agency budget is $26.4B). DOE was a prime beneficiary of 2009 ARRA funding ($2.4B - $1.6B of this for R&D) and it continues to benefit by virtue of being one of the three agencies designated by the American Competitiveness Initiative to receive enhanced funding in the physical sciences (along with NSF and NIST).

  • DOE’s budget is divided into three categories: Science (target $4.5B in 2010), Energy ($2.2B), and Defense ($4.0B). (Figure 1)
  • Major Science thrusts in 2010 include Basic Energy Sciences ($1.7B), High Energy Physics ($819M), fusion research ($421M; note: the US commitment to ITER was largely killed in 2008), and Advanced Scientific Computing Research ($409M). (Figure 2)
  • In Energy, key R&D areas include energy efficiency and renewable energy ($950M for fuel cell, biomass, solar, geothermal, water, wind, vehicle/bldg/industrial technologies – priorities of many of these programs have changed), nuclear energy ($562M, down 14%), and fossil fuels ($469M, down 4.5%, but largely compensated for by ARRA funds).
  • Defense R&D spending is mainly in the area of atomic energy defense ($4.0B – weapons stockpile management, navy reactors, environmental consequences, and advanced computer simulation of nuclear explosions)
  • DOE’s dominance in the physical sciences may not be appreciated by all because roughly half of its Science R&D funding goes to operate and construct facilities at federal laboratories that are contractor-operated (e.g. ORNL, BNL, ANL), while the other half supports research, also mostly at DOE laboratories.In 2004, 18% of DOE’s $3.5B Office of Science budget, or $626M, went to universities and colleges.

 trends in DOE R&D
Figure 1

DOE science programs
Figure 2

US Department of Agriculture

With a proposed 2010 R&D budget of $2.24B, the USDA is the 6th largest sponsor of research and development in the federal government. USDA supports over 90% of the total federal outlay for agricultural sciences. Other notable areas of emphasis include environmental biology and economics (latter through the ERS – Economic Research Service).

  • USDA’s three largest service entities are: the Agricultural Research Service (ARS), the Cooperative State Research, Education, and Extension Service (CSREES), and the Forest Service (see Figure 1 for history of funding for these services). By Sep 30, 2010, CSREES will change its name to the National Institute of Food and Agriculture (NIFA).
  • Nearly all R&D conducted by ARS, the Economic Research Service (ERS), and the Forest Service is intramural – that it, it is performed by USDA staff at USDA facilities. This combined expenditure accounts for over 2/3 of the $2.24B R&D budget. Extramural R&D is administered mainly by NIFA through appropriation to land-grant universities ($225M) and the American Food Research Institute (AFRI) - the principal competitive grants program of USDA ($202M) (see Figure 2). A push to move USDA away from so-called “formula funding” and toward more AFRI competitive awards has again been stifled as AFRI funding remains static.
  • USDA is focused on three major initiatives:(1) The Organic Agriculture Research and Extension Initiative ($20M) which has grown from a $3M start in 2008; (2) Biomass Research and Development ($28M) for research to be conducted jointly with DOE to look at feedstocks development, biofuels, and biobased (again rapid growth from a $2M budget in 2008); and (3) the Specialty Crop Research Initiative Program (SCRI) ($50M) to address critical needs of the specialty crop industry through multi-state, multi-institutional, or transdisciplinary projects (the SCRI received $30M in mandatory funding in FY2008; $50M would be made available for the program through FY 2012). 

trends in USDA R&D
Figure 1

USDA funding of R&D
Figure 2

Department of Homeland Security - Big money but growing pains

Formed in response to the terrorist strike in the U.S. in 2001, DHS has become the government’s 7th largest R&D funding agency. The overall budget proposed for DHS in 2010 is a very substantial $55.1B, but only $1.13B is designated for R&D. The $1.13B figure represents a 2.6% increase over FY2009. The components of the $1.0B FY2009 budget can be seen in Figure 1.

  • Like the DOD, DHS funds R&D across a very broad swath of technical disciplines, with particular emphasis on life sciences and engineering to address biological countermeasures. The DHS research budget which excludes development, is proposed to be $0.4B and the split by discipline for research alone is shown in Figure 2.
  • As a relatively new entity, DHS has seen its budget fluctuate due to rapid growth and dissatisfaction on the part of Congress that the agency did not manage this explosive growth well in terms of staffing, spending, and planning. As a result, projected R&D funding levels for 2010 reflect a decline from peak appropriations in 2005-2006 and there is a risk that the agency will suffer further cutbacks (see Figure 3).
  • The Domestic Nuclear Detection Office would receive the largest cut of 2010 DHS R&D funds, $277M, mainly to develop radiological and nuclear countermeasures. This program and emphasis on physical sciences will likely continue to grow at the expense of life sciences and focus on biological countermeasures.
  • The chemical and biological countermeasures portfolio, which remains part of the S&T directorate, would receive $207 million, a 3.2 percent increase from the current year and would remain the second-largest part of the DHS R&D portfolio.
  • Construction of the National Biodefense Analysis and Countermeasures Center (NBACC) was completed in 2009. NBACC is a biodefense complex of DHS, NIH, and DOD facilities at Fort Detrick, MD. DHS’ FY 2010 Laboratory Facilities request of $155M would be used to support operations and management of the facility.
  • In terms of execution (Figure 4), roughly equal thirds of the $1.0B budget will go to industry, intramural programs, and federally-funded R&D Centers (i.e. national labs, especially those connected with DOE). Only a few percent ($33M or 3%) flowed to universities in 2007 and most of this is for 13 Centers of Excellence. The University Programs budget in 2010 is $46M – a decline of $4M from 2009.