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4

Organization and Management

PATH PROGRAM STRUCTURE

PATH is a government-industry partnership to make housing more affordable through innovation, improved construction productivity, and improved housing performance. Although a number of agencies are involved in the program, HUD and DOE together set the general policy. A PATH Program Office, under the direction of the PATH executive director, is funded by HUD and staffed by employees detailed from several federal agencies and departments. The PATH Program Office facilitates interagency planning and dissemination for housing technology research, serves as the program liaison and major point of contact with industry and the general public, manages and organizes education and information dissemination programs, and coordinates issue-based working groups. HUD is responsible for managing and providing technical direction for PATH contracts, grants, cooperative agreements, and other research activities, in coordination with the PATH Program Office.

In addition to HUD and DOE, the following federal agencies are also involved in PATH: EPA, U.S. Department of Commerce, National Institute of Standards and Technology (NIST), USDA, Forest Products Lab (FPL), U.S. Department of Labor, OSHA, FEMA, NSF, Federal Housing Finance Board, and the U.S. Department of Defense.

The PATH Program Office is responsible for coordinating federal resources for R&D and other program activities. This is accomplished through a federal agency work group. Leadership roles for meeting specific PATH goals are divided as follows:

  • affordability (HUD)

  • energy efficiency for new homes (DOE and EPA)

  • energy efficiency for existing homes (EPA and DOE)

  • environmental impact (EPA, DOE, HUD, NIST, and FPL)

  • durability (HUD, NIST, and FPL)

  • disaster resistance (FEMA)

  • worker safety (OSHA)

  • time to market (PATH)

RELATIONSHIP BETWEEN FEDERAL PARTNERS AND INDUSTRY

The PATH Program is intended to coordinate both federal and private activities. Congress specified in the authorizing legislation that all industry participation was to be coordinated through the NAHBRC. In response to that mandate, an Industry Steering Committee composed of builders and product manufacturers has been established. Staff



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Page 28 4 Organization and Management PATH PROGRAM STRUCTURE PATH is a government-industry partnership to make housing more affordable through innovation, improved construction productivity, and improved housing performance. Although a number of agencies are involved in the program, HUD and DOE together set the general policy. A PATH Program Office, under the direction of the PATH executive director, is funded by HUD and staffed by employees detailed from several federal agencies and departments. The PATH Program Office facilitates interagency planning and dissemination for housing technology research, serves as the program liaison and major point of contact with industry and the general public, manages and organizes education and information dissemination programs, and coordinates issue-based working groups. HUD is responsible for managing and providing technical direction for PATH contracts, grants, cooperative agreements, and other research activities, in coordination with the PATH Program Office. In addition to HUD and DOE, the following federal agencies are also involved in PATH: EPA, U.S. Department of Commerce, National Institute of Standards and Technology (NIST), USDA, Forest Products Lab (FPL), U.S. Department of Labor, OSHA, FEMA, NSF, Federal Housing Finance Board, and the U.S. Department of Defense. The PATH Program Office is responsible for coordinating federal resources for R&D and other program activities. This is accomplished through a federal agency work group. Leadership roles for meeting specific PATH goals are divided as follows: affordability (HUD) energy efficiency for new homes (DOE and EPA) energy efficiency for existing homes (EPA and DOE) environmental impact (EPA, DOE, HUD, NIST, and FPL) durability (HUD, NIST, and FPL) disaster resistance (FEMA) worker safety (OSHA) time to market (PATH) RELATIONSHIP BETWEEN FEDERAL PARTNERS AND INDUSTRY The PATH Program is intended to coordinate both federal and private activities. Congress specified in the authorizing legislation that all industry participation was to be coordinated through the NAHBRC. In response to that mandate, an Industry Steering Committee composed of builders and product manufacturers has been established. Staff

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Page 29 support for this committee is provided by NAHBRC. The role of the steering committee is to identify gaps in advanced housing technology and recommend priorities for industry and government research. In addition to the Industry Steering Committee, six working groups composed of government and private-sector representatives have been created to address specific issues. The goal of the working groups is to coordinate public and private activities and to accelerate the market acceptance and deployment of advanced housing technologies. The discussions of the Technology Working Group are the most advanced. The activities of working groups are described below and will be the focus of future committee assessments: The Technology Working Group is charged with developing a technology research plan and coordinating public and private investments to develop advanced housing technologies that will meet the PATH goals. This group is currently conducting a formal roadmapping 1process to establish research priorities and recommend tactics and timelines for technologies for specific housing components and housing systems, as well as for specific industry segments. The Barriers/Insurance Working Group is charged with addressing regulatory barriers, including issues related to building codes, evaluation systems, product liability, and home owner's property insurance. The Quality Working Group is charged with facilitating quality assurance procedures to reduce code inspections and builder call-backs, and ultimately, to increase durability and affordability. The Labor Working Group is charged with evaluating labor supply, training issues, and worker safety procedures. The Finance Working Group is charged with determining how energy-efficient mortgages could be more widely used and how mortgage limits and insurance rates could be adjusted in recognition of lower operating and maintenance costs and enhanced performance of homes with PATH-evaluated technologies. The Consumer Education Working Group is charged with proposing strategies to encourage rapid market acceptance of new technologies. Consumer education includes teaching home builders and home owners how to identify opportunities for innovation and to demand high-quality housing technologies. Innovative construction technologies are currently brought to market by ongoing programs, such as DOE's Building America and EPA's ENERGY STAR, which emphasize energy conservation and related environmental benefits. New programs 1 Roadmapping is a process of brainstorming to define and organize potential R&D activities to facilitate decisions about resource allocation and achieve other specified ends. Roadmapping is used in many different organizations, industries and technological contexts. The types of technologies included can range from tangible new materials, products and systems to methods of production, software and information technologies. (NAHBRC, 2000)

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Page 30 initiated by PATH are intended to avoid duplications and emphasize coordination and synergies. However, the PATH Program does not address the issue of ownership of patents for advanced technologies. In some cases, PATH might be promoting proprietary products if they support the PATH goals. In contrast, the ENERGY STAR Program provides information on the relative expected costs of operation of particular appliances or homes rather than promoting specific products. The appropriate role of the public sector in promoting new and potentially proprietary technologies should be clearly defined. Historically, public agencies have not been effective in bringing new technologies to market, which is usually best left to private enterprise. The public sector can and does provide a forum for convening stakeholders and facilitating the process. In addition, as barriers to the development and marketing of new technologies are identified, government can work to remove or reduce those barriers (Langlois and Nelson, 1983). PROGRAMMATIC ISSUES Participation by the Codes and Standards Community The PATH Program has assembled a group of interested and committed individuals from a number of federal agencies. An open dialogue and exchanges of information have also been established with the private sector. The building codes and standards community, however, seems to be underrepresented, despite the fact that one of the main barriers to the adoption of new technologies identified by PATH is building codes and standards. The committee believes that the minimal involvement of state and local building officials could jeopardize the success of the program. Leadership The committee is concerned that although the PATH Program brings together a number of ongoing programs in different agencies, it does not provide strong central leadership to focus their activities. A possible reason for this is that DOE's large technology research budget clearly dominates the technology agenda. The PATH budget is $10 million, which is small in comparison to DOE's $266 million budget for energy-related activities and EPA's $15 million budget for its part of ENERGY STAR. This large imbalance between the relatively low level of PATH funding and the much larger program funding for other agency programs could undermine PATH's leadership role. For example, the PATH strategic plan for the next few years emphasizes the role of energy, which, in the committee's opinion, reflects DOE's funding. This will result in less effort being devoted to reducing construction costs and still less to addressing safety issues.

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Page 31 Quantity versus Quality The PATH program plan includes 148 separate line items, which seems out of proportion to the size of the program. Programs related to PATH, but independently funded and managed, are not distinguished from programs directly funded and managed by PATH. Nor does the plan include the relative level of funding or the duration of the project or ongoing program. Nor does the plan include an approach to evaluating projects and programs qualitatively. The only effectiveness measures currently in use are simple quantitative ones (e.g., counting the number of products in the technology inventory or the number of times a web page is accessed). Taking Risk The overall objective is for PATH to change the way Americans think about and build housing, but most of PATH's efforts are focused on incremental changes and applications of existing solutions. The current plan emphasizes encouraging consumers, builders, and regulators to accept new products and technologies to replace existing products and technologies. This approach is not commensurate with the greater goal of finding new and creative solutions to housing problems. The committee suggests that at least a portion of the PATH Program be dedicated to unconventional, high-risk schemes that could potentially revolutionize at least one critical aspect of the housing industry, such as design, construction, materials handling, training, or methods of product evaluation. Overall, the committee believes that PATH has established the organizational and management infrastructure necessary for effective public-private collaboration with the involvement of many federal agencies. The committee recognizes that the relationships between the federal agency partners and the PATH Program are unresolved, but is not yet prepared to recommend a specific structure for resolving them. The committee did conclude, however, that a distinction should be made between PATH-initiated programs and programs controlled by specific agencies. The relationship between PATH and its federal partners will be the focus of future assessments. Although the present infrastructure is by no means perfect, it is critical to maintaining the positive momentum already established. Based on this review of the PATH program organization and management structure, the committee offers the following recommendation. RECOMMENDATION Recommendation 5. PATH should maintain its current management structure but should be careful to maintain PATH's independence from ongoing programs and not become a surrogate for these programs. PATH strategic and management plans should focus on opportunities for synergies and collaboration in ongoing programs and should make a clear distinction between coordination and initiatives that are directly controlled and

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Page 32 funded through PATH. PATH management objectives should measure the value added to ongoing programs by PATH initiatives. REFERENCES Langlois, R.N., and Nelson, R.R. 1983. Industrial innovation policy: lessons from American history, Science. 219(2): 814–818. NAHBRC (National Association of Home Builders Research Center). 2000. PATH Technology Roadmapping, Prepared for the PATH Industry Steering Committee. Upper Marlboro, Md.: National Association of Home Builders Research Center, Inc.