2
Management Strategy and Priority Setting

INTRODUCTION

The official technology goals of the 21st Century Truck Partnership (21CTP), set out in the official Roadmap and Technical White Papers document (DOE, 2006, pp. 1, 54), cover Engines, Heavy-Duty Hybrids, Parasitic Losses, Engine Idle Reduction, and Safety.

As part of its review, the committee received presentations by participating agencies (DOE, DOT, DOD, and EPA) and industrial partners. These presentations raised concerns about the program’s overall effectiveness, funding variations, priority setting, partnership performance, etc. The committee decided to further explore these management and process issues. Information requests were submitted to the partnership participants. In addition, a detailed questionnaire was prepared, and private interviews were conducted to develop a better understanding of three areas:

  • 21CTP Program Management

  • Prioritization of Projects

  • Performance of Industry Partnership

In this chapter the committee reviews each of these areas and reports its findings and recommendations.

PROGRAM MANAGEMENT

Overall management for the Partnership currently rests with the FreedomCAR and Vehicle Technologies (FCVT) Program of DOE, in the Office of Energy Efficiency and Renewable Energy. DOE personnel organize meetings and conference calls, maintain the information flow infrastructure (Web sites, e-mail lists, etc.), and lead the discussions for and preparation of the updated 21CTP Roadmap and White Papers, laying out Partnership goals (DOE, 2006). Management for individual projects under the 21CTP umbrella rests with the individual federal agencies that have funded the work. These agencies are intended to communicate among one another through the 21CTP information sharing infrastructure to coordinate efforts and ensure that valuable research results are communicated and that overlap of activities is reduced.

Figure 2-1 illustrates the interrelation among the key parties in setting research programs. Government agencies request funding from Congress through the administration, and work with the industrial partners and research organizations (including universities and federal laboratories) to establish research programs that meet national priorities and the interests of industry partners. However, final funding levels are determined by congressional appropriations.

In the case of the DOE, technology programs are developed to meet a cascading series of goals that begin at the President’s National Energy Plan and culminate (at the program level) with specific technology goals. Figure 2-2 illustrates that pattern schematically.

FIGURE 2-1 Interrelationships among 21CTP participants. SOURCE: DOE, FCVT, Responses to Committee Queries on 21CTP, Management and Process Issues, transmitted via e-mail by Ken Howden, March 27, 2007, p. 2.



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2 management strategy and Priority setting iNTrodUcTioN among one another through the 21CTP information sharing infrastructure to coordinate efforts and ensure that valuable The official technology goals of the 21st Century Truck research results are communicated and that overlap of activi- Partnership (21CTP), set out in the official Roadmap and ties is reduced. Technical White Papers document (DOE, 2006, pp. 1, 54), Figure 2-1 illustrates the interrelation among the key cover Engines, Heavy-Duty Hybrids, Parasitic Losses, parties in setting research programs. Government agencies Engine Idle Reduction, and Safety. request funding from Congress through the administration, As part of its review, the committee received presenta- and work with the industrial partners and research organi- tions by participating agencies (DOE, DOT, DOD, and EPA) zations (including universities and federal laboratories) to and industrial partners. These presentations raised concerns establish research programs that meet national priorities and about the program’s overall effectiveness, funding variations, the interests of industry partners. However, final funding priority setting, partnership performance, etc. The committee levels are determined by congressional appropriations. decided to further explore these management and process In the case of the DOE, technology programs are devel- issues. Information requests were submitted to the partner- oped to meet a cascading series of goals that begin at the ship participants. In addition, a detailed questionnaire was President’s National Energy Plan and culminate (at the prepared, and private interviews were conducted to develop program level) with specific technology goals. Figure 2-2 a better understanding of three areas: illustrates that pattern schematically. • 21CTP Program Management • Prioritization of Projects • Performance of Industry Partnership In this chapter the committee reviews each of these areas and reports its findings and recommendations. ProGram maNaGemeNT Overall management for the Partnership currently rests with the FreedomCAR and Vehicle Technologies (FCVT) Program of DOE, in the Office of Energy Efficiency and Renewable Energy. DOE personnel organize meetings and conference calls, maintain the information flow infrastruc- ture (Web sites, e-mail lists, etc.), and lead the discussions for and preparation of the updated 21CTP Roadmap and White Papers, laying out Partnership goals (DOE, 2006). Manage- FIGURE 2-1 Interrelationships among 21CTP participants. ment for individual projects under the 21CTP umbrella SOURCE: DOE, FCVT, Responses to Committee Queries on Fig 2-1, bitmapped 21CTP, Management and Process Issues, transmitted via e-mail by rests with the individual federal agencies that have funded Ken Howden, March 27, 2007, p. 2. the work. These agencies are intended to communicate 

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0 REVIEW OF THE ST CENTURY TRUCK PARTNERSHIP FIGURE 2-2 DOE goal-setting process. SOURCE: DOE, FCVT, Responses to Committee Queries on 21CTP, Management and Process Issues, transmitted via e-mail by Ken Howden, March 27, 2007, p. 2. DOE focuses its technology research2-2, bitmapped--typewill provide the possible-- Fig and development changes not basis for commercialization decisions. The (R&D) investments specifically in high-risk areas or activi- or government’s approach is intended to allow industry-wide can’t be easily altered improved ties with uncertain or long-term outcomes that are of national slide has text that can be edited? research, which is then collaboration in precompetitive perhaps the original interest but would most likely not be pursued by industry followed by competition in the marketplace. alone. Program activities include research, development, The Partnership provides a forum for technical informa- testing, technology validation, technology transfer, and tion exchange among the industry and government partners education. These activities are aimed at developing technolo- involved in heavy-duty transportation. At present, coordi- gies that could achieve significant improvements in vehicle nation of initiatives takes place as part of this information fuel consumption and displacement of oil by other fuels exchange. 21CTP holds regular meetings and conference that ultimately can be produced domestically in a clean and calls to exchange information and hold productive discus- cost-competitive manner. sions on technical topics. Specific areas in which the govern- In DOE vehicle research, which specifically addresses ment partners have already coordinated initiatives include the national issue of energy security and the increasing diesel fuel sulfur standard development (with coordination pressures of rising global consumption of oil, the FCVT between DOE and EPA on appropriate sulfur levels for low- Program has involved the affected industries in planning the sulfur diesel), idle reduction activities (cooperation between research agenda and identifying technical goals that, if met, EPA/DOT and their focus on deployment and DOE with

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 MANAGEMENT STUdY ANd PRIORITY SETTING a focus on technology R&D), truck aggressivity (with the National Transportation Safety Board (NTSB) using 21CTP as a forum for approaching all key government and industry participants involved with the issue), and hybrid powertrains (with DOE and EPA pursuing different technologies for hybridization, e.g., hydraulic hybrids at EPA and electric hybrids at DOE). Figure 2-3 illustrates the general collab- orative structure of the four government agencies and some areas of interest among them. The Partnership meets by conference call twice each month, and meets face-to-face about eight times per year. Agendas for the conference call typically include discussion of open funding opportunities (to bring these to the attention of members who may wish to apply), discussion of budget activities in the federal sector (where appropriate), discus- sion of technical accomplishments or plans for individual areas of interest to the heavy-trucking industry, discussion of news articles of interest to the industry, discussion of industry/government events (i.e., Society of Automotive Engineers International [SAE] Government Industry Meet- ing, SAE Commercial Vehicle Congress, and so forth) and FIGURE 2-3 Government agency relationships. SOURCE: Responses to committee queries on 21CTP, Management any Partnership participation plans, discussion of other and Process Issues, transmittedbitmapped by Ken Howden, Fig 2-3, via e-mail Partnership activities (such as face-to-face meetings, special March 27, 2007, p. 1. visits to laboratories or other facilities, and reviews such as the National Academies/National Research Council review), and planning and participation in Diesel Engine-Efficiency and Emissions Research (DEER) conferences. These meet- ings typically last no more than two hours, with time reserved the full membership. It is responsible for meeting once per for industry partners to speak among themselves, for govern- month to discuss partnership business, and it can represent ment personnel to speak among themselves, and for industry the industrial sectors in discussions with government agen- and government to speak together. cies or other external parties. The Executive Committee Face-to-face meetings are typically more focused on a structure has proven to be a convenient way for issues to be specific topic or topics of interest to the group, rather than on brought to the partnership through the Executive Committee general Partnership business. For example, the Partnership that can then take these issues off-line for consensus-building has conducted a meeting at DOT to discuss truck-related discussions within their sectors, so that final consensus on activities, a meeting at DOD, several meetings at various an issue can be reached more quickly, with less time spent in full Partnership discussions.1 DOE national laboratories to tour their facilities and bring lab capabilities to the attention of the government and Although the above discussion indicates a considerable industry participants, and a meeting of the full Partnership amount of interaction among the government and industrial with an industrial partner with international ties to discuss participants, no evidence was ever presented to the committee Partnership structure and activities with their overseas that these interactions included a rigorous go/no go process representatives. The agenda for these meetings focused on for evaluating individual projects. This may have been dif- the topic or topics of interest, but a certain period of time was ficult to accomplish because, as described below, there was reserved for general Partnership business. These meetings no central funding source for the 21CTP, and each of the typically last not more than one day, and are held chiefly at government agencies involved runs its own programs. the convenience of the individual partners. As confirmed by representatives of DOE and other agen- The Executive Committee is made up of three industry cies, there is no single source of funds for the 21CTP, as members, one from each of three industrial sectors: truck perhaps intended by its creators. Instead, each of the four original equipment manufacturers (OEMs), engine manu- agencies has its own stream of funds, deriving from congres- facturers, and hybrid/system component manufacturers. It is sional appropriations. DOE, DOT, DOD, and EPA budget thus a subset of the industrial membership of the 21CTP, that and optimize funding based upon their own priorities. In is, a subset of the fifteen participating companies. The Execu- tive Committee is charged with organizing the business of 1Ken Howden, DOE, FCVT, “Partnership History, Vision, Mission, and the industrial partners in a manner consistent with the wishes Organization,” Presentation to the committee. Washington, D.C., February of their constituencies. It is representative of a consensus of 8, 2007, Slide 3.

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 REVIEW OF THE ST CENTURY TRUCK PARTNERSHIP addition, they must maintain funding to companies with light vehicles by the National Research Council (NRC) in multi-year cooperative agreements.2 (This does not allow 2002.3 In this analysis, estimates of the potential for fuel for good project management or prioritization from a 21CTP economy improvements and the associated costs were made programmatic perspective.) for approximately twenty technologies and the results sum- The 21CTP is operated as a virtual network of agencies marized in a single table. This approach highlighted the areas and government labs. Agency personnel meet frequently and where substantial energy savings could be made, and at what industry partners meet periodically for limited sharing and cost, while facilitating a quick and easy comparison of the communication. This has been the extent of the coordination. various candidate technologies. For example, engine cylinder Both government agencies and industry partners believe that deactivation was projected to improve fuel efficiency by 3 to improvements in program management are possible and 6 percent at a retail cost increase between $100 and $230 per necessary. For example, the management process seemed vehicle, while a continuously variable transmission was pro- more effective when a full-time person from industry was jected to improve fuel efficiency by 4 to 8 percent at a retail assigned as an Executive Director to coordinate the cross- cost of $150 to $325 per vehicle. Heavy vehicles would likely agency efforts. have a different cost-benefit structure, but such an analysis In summary, the 21CTP’s effectiveness could be improved would provide a basis for setting research priorities. by: It is difficult to assess the industrial partners’ views on the establishment of research priorities. Generally, industry • Adhering to the agreed-upon program budget spanning representatives gave 21CTP credit for help in meeting 2007 the agencies; emissions standards, development of the light-duty diesel • Providing a full-time executive director to provide engine, and developing clean combustion technology. Some project management and set unified priorities; felt DOE’s role was to develop high risk, high-payback • Setting realistic programmatic goals and objectives technologies, but others complained that DOE did not do with stretch targets; and enough to help commercialize new technology. Some of the • Empowering the 21CTP Executive Committee with companies have successfully lobbied to obtain congressional authority to act collaboratively across agencies on pro- earmarks to support their programs, bypassing peer review gram decisions and implementation, using a rigorous and program prioritization procedures. While many, if not go/no go process. all, of the industrial partners appreciated the cost sharing by the government, they expressed displeasure with the time and money it took to win and negotiate the contracts. PrioriTizaTioN oF ProJecTs Prioritization of research within the DOE portion of the The organizational structure of the 21CTP program program is influenced by many factors. Under the Govern- precludes any systematic prioritization of research projects ment Performance Results Act of 1993 (GPRA), the agency for the total program. Each of the four agencies included in uses objective processes in strategic planning (and must 21CTP—DOE, DOT, DOD, and EPA—has separate bud- estimate quantitatively the potential of its proposed research gets and priorities. The industrial partners also have their to help reach program goals). The Program Assessment own needs, priorities, and resources. As a consequence, the Rating Tool (PART), overseen by the OMB, is a diagnostic program-wide prioritization that does occur is the result of tool for assessing the performance of federal programs and a complex interaction (summarized in Figures 2-1 through to drive improvements in program performance by making 2-3) among government agencies, the industrial partners, agencies accountable for improvement plans, for each of the national laboratories, and the Congress and the Office of their programs. Management and Budget (OMB). 21CTP’s primary function 21CTP uses the model VISON to forecast the effect of is to promote and facilitate interaction among the participants a successful research program on energy use, the model to enhance the sharing of information, discussion of common GREET (Greenhouse Gas, Regulated Emissions, and Trans- problems and the elimination of duplication. portation) on environmental impacts and PSAT (Powertrain A roadmap has been developed (DOE, 2006) that clearly Systems Analysis Toolkit) for vehicle simulation. In addi- states the goals of the program, with a listing of the many tion, DOE conducts project-level reviews and uses outside barriers to the accomplishment of the goals. However, there technical experts to review their research portfolio. However, is little information in the roadmap document from model- each Administration has its priorities and special projects, ing, expert opinion, or basic scientific analysis that would and it expects the agencies to be responsive. In addition, guide researchers to the most promising areas for research congressional earmarks in effect establish priorities. As or to those with the greatest payback. The program would a consequence the research undertaken by DOE is influ- benefit greatly by an analysis similar to the one done for enced by many factors: scientific opportunity, engineering 2Personal 3DOE communication to the committee from Ken Howden, 21st responses to committee queries on 21CTP Management and Century Truck Partnership, April 18, 2007. Process Issues, transmitted via e-mail by Ken Howden, March 27, 2007.

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 MANAGEMENT STUdY ANd PRIORITY SETTING needs, national priorities, congressional mandates, industry 5. Was there sufficient cooperation and coordination requests. among the government agencies involved with your In summary, the primary role of 21CTP is to facilitate project? Please explain. communication among the many partners to avoid duplica- 6. Was sufficient attention given to technological “show tion of effort, to communicate technical achievements, and to stoppers” in terms of technical support and funding? provide financial support to assist in moving new technology Please explain. through development to commercialization. 7. Regarding development of hybrid systems for trucks, does your organization believe that the specialized duty cycles for trucks and their limited production PerFormaNce oF The ParTNershiP volumes are impediments regarding their commercial- WiTh iNdUsTrY ization? Please provide support for your answer. If you The 21CTP was organized to reduce fuel consumption consider them impediments, can you provide input on and emissions while improving the safety of heavy vehicles. how they can be overcome? To fully assess the performance of the industry partnership, 8. If you had the latitude to double the current program the committee collected information using a questionnaire budget, where would you invest the additional funds? sent to the fifteen industrial partners and held discussions 9. Given your assessment of the program, do you support with a selected few. A questionnaire was distributed seeking its continuance? If not, why? their input on: In general, industry responded to these questions to • Overall program management and organization indicate its appreciation and encouragement of the 21CTP. • The process for setting milestones, research directions, Its funding allowed progress to be made in solving techno- and making Go/No Go decisions logical issues and in moving advanced systems closer to • Collaborative activities within the DOE, other govern- commercialization. For example, meeting the 2007 heavy- ment agencies, the private sector, universities, and duty emissions standards without loss in fuel economy was others possible with DOE support. • Other topics deemed important to the success of the However, significant frustration was voiced relative to partnership the funding variance which was experienced from year to year. As evidenced in Table 1-6, funding for the heavy-duty Two approaches were used by the committee. vehicle programs has declined steadily in the past few years, while light-duty vehicle technology has held its own. Industry • One-hour conference calls were held with each of the viewed this as placing undue pressure on the programs result- three company representatives serving on the 21CTP ing in the reduction of program budget or elimination of some programs (NRC, 2002; Bezdek and Wendling, 2005).4 Executive Committee. • Written questionnaire requests were provided to the Although there was some sharing across agencies, the other twelve companies. Five responded. promise of interagency partnership has not been borne out. When asked to provide cross-agency budgets for programs The same set of questions was used in both instances. This relevant to the 21CTP, only some of the agencies were will- resulted in a total response of eight from the original fifteen ing and able to do so. Industry partners felt that their continu- companies. The set of nine questions was as follows: ance in the 21CTP was contingent on there being adequate funding, the agencies cooperating among themselves on 1. Has your organization’s involvement with the 21CTP technological issues and budgets, simpler contracting proce- provided sufficient progress to consider commercial- dures, and a strong leader to represent the industrial partners. ization of the technology on which you were involved? The consensus opinion was that the program made the most If yes, explain how the 21CTP helped. If no, explain progress when a full-time leader was in place to handle cross- what is preventing commercialization in terms of tech- agency issues and interactions. nology development, economics, market, etc. The 21CTP has become a communications channel for 2. Was there sufficient “sharing” of technology among agency members. But, it is less relevant to industry or to the industrial partners and the government agencies? senior policy makers in government. The sources of funding If not, why not? are not apparent to industry. 3. Would your organization like to continue in the In the process of moving a new concept from research idea 21CTP? If yes, why? If no, why not? to commercial product, DOE research organizations use the 4. Based on your organization’s experience with the general process shown in Figure 2-4. The “Basic Research” 21CTP would you recommend for or against its par- ticipation in a similar future government technology 4DOE, FCVT, response to committee queries, delivered via e-mail by partnership? If for, why? If against, why? Ken Howden, March 27, 2007.

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 REVIEW OF THE ST CENTURY TRUCK PARTNERSHIP FIGURE 2-4 DOE project management and innovation process. SOURCE: DOE, 2006. Fig 2-4, bitmapped steps are clearly dominated by DOE laboratories and “Com- coordinate the 21CTP program among industry partners and mercial Research and Design” by industry. Research results government agencies. This person could chair the Executive and budget proposals are thoroughly reviewed. Those not Committee and would be authorized to make recommenda- approved or having marginal benefit go into the “Valley tions to the committee on behalf of the entire program on of Death” where they remain until there is a change in stopping or redirecting existing research, on setting research circumstances. priorities, and on future funding levels. The industry assessment is that more funding should be Finding 2-2. As confirmed in meetings with the DOE and directed toward “Cooperatively-Funded Activities.” This would focus more resources on the eventual commercializa- other agencies, there is no single source of funds for the tion of technologies, which was the goal of the program. 21CTP, as perhaps intended by its creators. Instead, each of The technical showstoppers would get sufficient funding the four agencies has its own stream of funds. DOE, DOT, to address and commercialize them. In general, industry DOD, and EPA budget and optimize funding based on their responses were favorable toward the 21CTP and would own priorities. In addition, they maintain funding to compa- support its continuation if improved funding, discipline, nies with multiyear cooperative agreements. Thus, managing coordination, and cooperation are provided. the 21CTP program and projects across multiple agencies has been challenging, and there have been difficulties in Finding 2-1. The 21CTP is operated as a virtual network setting program priorities, especially in aligning budgets to of agencies and government laboratories, with an unwieldy programmatic requirements. A result has been difficulty in structure and budgetary process. Agency personnel meet balancing between near- and long-term projects and setting frequently and industry partners meet periodically for lim- appropriate metrics and measures. In addition, variation in ited sharing and communication. This has been the extent funding levels from year to year has diminished the impact of the coordination. Both government agencies and industry of project achievements and results and reduced the prob- partners, per their remarks to the committee, have found the ability of success and commercialization. The result of this arrangement less than effective. The program was most pro- complexity and lack of transparency is that some federal ductive when a full-time person from industry was assigned funds were spent by industry partners and by other federal to coordinate the cross-agency efforts. Oversight of the agencies in ways that cannot be accounted for in the funding 21CTP is provided through an Executive Committee with structure by fiscal year. representation from DOE, DOT, EPA, DOD, and the industry Recommendation 2-2. A portfolio management process partners. Although that committee lacks authority to make cross-agency decisions and implement firm actions, it has that sets priorities and aligns budgets among the agencies been most effective when chaired by a full-time executive. and industrial partners is recommended. A proposed table This seemed to be an effective measure to ensure cooperation of project priorities (Figure 2-5) would provide an objective among agencies and address program challenges. way of ranking research and development projects accord- ing to their expected outcomes. This could evolve into a Recommendation 2-1. A full-time, technically capable budgeting process that ensures support for programs of merit leader with consensus-building skills should be appointed to beyond a single year. Precompetitive, collaborative technol-

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 MANAGEMENT STUdY ANd PRIORITY SETTING Total If Goal Is Reached: Project Estimated Funding Estimated Start FY 2007 Projected Estimated Cost Project Over Life Likelihood Likelihood of Priority Goals and Funding Fuel of of Meeting Name of Implementation End (US$) Savings Implementation Goal Project (high, medium, Dates (gal/yr) (per vehicle) (US$) or low) 1 2 3 4 5 6 Etc. FIGURE 2-5 Proposed table of project priorities. Each agency involved with the 21st Century Truck Partnership would identify each project considered part of the 21CTP, rank it by priority, and provide the information requested. Fig 2-5 ogy and concept development could receive proper focus for DOE (U.S. Department of Energy). 2006. 21st Century Truck Partnership Roadmap and Technical White Papers. Document No. 21CTP-003. successful programs. Washington, D.C. December. NRC (National Research Council). 2002. Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards, Table 3-3, Fuel reFereNces Consumption Technology Matrix, p. 44. Washington, D.C.: National Bezdek, Roger, and Robert Wendling. 2005. Fuel efficiency and the Academy Press. economy. American Scientist, Vol. 93, No. 2, p. 135.