LegiStorm

Summary:

Prize competitions are a tool for incentivizing the achievement of scientific and technological innovation by offering monetary and non-monetary benefits (e.g., recognition) to competition Marcy E. Gallo participants. Prize competitions have a long history of use in both the public and private sectors, Analyst in Science and but have gained popularity in recent years. Experts view federal prize competitions as an Technology Policy alternative policy instrument for spurring innovation, not a substitute for more traditional mgallo@crs.loc.gov methods of federal support for research and innovation such as competitive research grants and procurement contracts. For a copy of the full report, please call 7-5700 or visit The use of prize competitions by the federal government has increased significantly since the www.crs.gov. passage of the America COMPETES Reauthorization Act of 2010 (P.L. 111-358). P.L. 111-358 encouraged the use of prize competitions by providing the head of any federal agency with the authority to carry out prize competitions that have the potential to stimulate innovation and advance the agency’s mission. Congress has also provided various federal agencies, including the Department of Defense, the National Aeronautics and Space Administration, the Department of Energy, the National Science Foundation, and the Department of Health and Human Services, with additional authority to conduct prize competitions. The United States General Services Administration estimates that since 2010 federal agencies have conducted more than 840 prize competitions and offered more than $280 million in prize money. While the total amount of prize money offered by federal prize competitions conducted under P.L. 111-358 has increased over time— from $247,000 in FY2011 to over $30 million in FY2016—the median amount of prize money offered per prize has remained relatively steady—$34,500 in FY2011 compared to $41,590 in FY2016. According to the Office of Management and Budget and the Office of Science and Technology Policy, prize competitions benefit the federal government by allowing federal agencies to: (1) pay only for success; (2) establish ambitious goals and shift technological and other risks to prize participants; (3) increase the number and diversity of individuals, organizations, and teams tackling a problem, including those who have not previously received federal funding; (4) increase cost effectiveness, stimulate private sector investment, and maximize the return on taxpayer dollars; and (5) motivate and inspire the public to tackle scientific, technical, and societal problems. Despite an increase in the use of federal prize competitions, there is limited information on their effectiveness and impact in spurring innovation and providing other potential benefits to the federal government. Members of Congress may wish to examine the ability of prize competitions to spur innovation in comparison to more traditional policy tools (e.g., grants and contracts); the cost effectiveness of prize competitions; the metrics federal agencies are using to evaluate the success of federal prize competitions; and the capability of federal agencies to appropriately design and administer prize competitions.