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Review of the 21st Century Truck Partnership 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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Review of the 21st 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 research and development (R&D) investments specifically in high-risk areas or activities with uncertain or long-term outcomes that are of national interest but would most likely not be pursued by industry alone. Program activities include research, development, testing, technology validation, technology transfer, and education. These activities are aimed at developing technologies that could achieve significant improvements in vehicle fuel consumption and displacement of oil by other fuels that ultimately can be produced domestically in a clean and cost-competitive manner. In DOE vehicle research, which specifically addresses the national issue of energy security and the increasing pressures of rising global consumption of oil, the FCVT Program has involved the affected industries in planning the research agenda and identifying technical goals that, if met, will provide the basis for commercialization decisions. The government’s approach is intended to allow industry-wide collaboration in precompetitive research, which is then followed by competition in the marketplace. The Partnership provides a forum for technical information exchange among the industry and government partners involved in heavy-duty transportation. At present, coordination of initiatives takes place as part of this information exchange. 21CTP holds regular meetings and conference calls to exchange information and hold productive discussions on technical topics. Specific areas in which the government partners have already coordinated initiatives include diesel fuel sulfur standard development (with coordination between DOE and EPA on appropriate sulfur levels for low-sulfur diesel), idle reduction activities (cooperation between EPA/DOT and their focus on deployment and DOE with
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Review of the 21st Century Truck Partnership 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 collaborative 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), discussion 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 Meeting, SAE Commercial Vehicle Congress, and so forth) and any Partnership participation plans, discussion of other Partnership activities (such as face-to-face meetings, special 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 meetings typically last no more than two hours, with time reserved for industry partners to speak among themselves, for government personnel to speak among themselves, and for industry and government to speak together. Face-to-face meetings are typically more focused on a specific topic or topics of interest to the group, rather than on general Partnership business. For example, the Partnership has conducted a meeting at DOT to discuss truck-related activities, a meeting at DOD, several meetings at various DOE national laboratories to tour their facilities and bring lab capabilities to the attention of the government and industry participants, and a meeting of the full Partnership with an industrial partner with international ties to discuss Partnership structure and activities with their overseas representatives. The agenda for these meetings focused on the topic or topics of interest, but a certain period of time was reserved for general Partnership business. These meetings typically last not more than one day, and are held chiefly at the convenience of the individual partners. The Executive Committee is made up of three industry members, one from each of three industrial sectors: truck original equipment manufacturers (OEMs), engine manufacturers, and hybrid/system component manufacturers. It is thus a subset of the industrial membership of the 21CTP, that is, a subset of the fifteen participating companies. The Executive Committee is charged with organizing the business of the industrial partners in a manner consistent with the wishes of their constituencies. It is representative of a consensus of FIGURE 2-3 Government agency relationships. SOURCE: Responses to committee queries on 21CTP, Management and Process Issues, transmitted via e-mail by Ken Howden, March 27, 2007, p. 1. the full membership. It is responsible for meeting once per month to discuss partnership business, and it can represent the industrial sectors in discussions with government agencies or other external parties. The Executive Committee structure has proven to be a convenient way for issues to be brought to the partnership through the Executive Committee that can then take these issues off-line for consensus-building discussions within their sectors, so that final consensus on an issue can be reached more quickly, with less time spent in full Partnership discussions.1 Although the above discussion indicates a considerable amount of interaction among the government and industrial participants, no evidence was ever presented to the committee that these interactions included a rigorous go/no go process for evaluating individual projects. This may have been difficult to accomplish because, as described below, there was no central funding source for the 21CTP, and each of the government agencies involved runs its own programs. As confirmed by representatives of DOE and other agencies, there is no single source of funds for the 21CTP, as perhaps intended by its creators. Instead, each of the four agencies has its own stream of funds, deriving from congressional appropriations. DOE, DOT, DOD, and EPA budget and optimize funding based upon their own priorities. In 1 Ken Howden, DOE, FCVT, “Partnership History, Vision, Mission, and Organization,” Presentation to the committee. Washington, D.C., February 8, 2007, Slide 3.
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Review of the 21st Century Truck Partnership addition, they must maintain funding to companies with multi-year cooperative agreements.2 (This does not allow for good project management or prioritization from a 21CTP programmatic perspective.) The 21CTP is operated as a virtual network of agencies and government labs. Agency personnel meet frequently and industry partners meet periodically for limited sharing and communication. This has been the extent of the coordination. Both government agencies and industry partners believe that improvements in program management are possible and necessary. For example, the management process seemed more effective when a full-time person from industry was assigned as an Executive Director to coordinate the cross-agency efforts. In summary, the 21CTP’s effectiveness could be improved by: Adhering to the agreed-upon program budget spanning the agencies; Providing a full-time executive director to provide project management and set unified priorities; Setting realistic programmatic goals and objectives with stretch targets; and Empowering the 21CTP Executive Committee with authority to act collaboratively across agencies on program decisions and implementation, using a rigorous go/no go process. PRIORITIZATION OF PROJECTS The organizational structure of the 21CTP program precludes any systematic prioritization of research projects for the total program. Each of the four agencies included in 21CTP—DOE, DOT, DOD, and EPA—has separate budgets and priorities. The industrial partners also have their own needs, priorities, and resources. As a consequence, the program-wide prioritization that does occur is the result of a complex interaction (summarized in Figures 2-1 through 2-3) among government agencies, the industrial partners, the national laboratories, and the Congress and the Office of Management and Budget (OMB). 21CTP’s primary function is to promote and facilitate interaction among the participants to enhance the sharing of information, discussion of common problems and the elimination of duplication. A roadmap has been developed (DOE, 2006) that clearly states the goals of the program, with a listing of the many barriers to the accomplishment of the goals. However, there is little information in the roadmap document from modeling, expert opinion, or basic scientific analysis that would guide researchers to the most promising areas for research or to those with the greatest payback. The program would benefit greatly by an analysis similar to the one done for light vehicles by the National Research Council (NRC) in 2002.3 In this analysis, estimates of the potential for fuel economy improvements and the associated costs were made for approximately twenty technologies and the results summarized in a single table. This approach highlighted the areas where substantial energy savings could be made, and at what cost, while facilitating a quick and easy comparison of the various candidate technologies. For example, engine cylinder deactivation was projected to improve fuel efficiency by 3 to 6 percent at a retail cost increase between $100 and $230 per vehicle, while a continuously variable transmission was projected to improve fuel efficiency by 4 to 8 percent at a retail cost of $150 to $325 per vehicle. Heavy vehicles would likely have a different cost-benefit structure, but such an analysis would provide a basis for setting research priorities. It is difficult to assess the industrial partners’ views on the establishment of research priorities. Generally, industry representatives gave 21CTP credit for help in meeting 2007 emissions standards, development of the light-duty diesel engine, and developing clean combustion technology. Some felt DOE’s role was to develop high risk, high-payback technologies, but others complained that DOE did not do enough to help commercialize new technology. Some of the companies have successfully lobbied to obtain congressional earmarks to support their programs, bypassing peer review and program prioritization procedures. While many, if not 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 research within the DOE portion of the program is influenced by many factors. Under the Government Performance Results Act of 1993 (GPRA), the agency uses objective processes in strategic planning (and must estimate quantitatively the potential of its proposed research to help reach program goals). The Program Assessment Rating Tool (PART), overseen by the OMB, is a diagnostic tool for assessing the performance of federal programs and to drive improvements in program performance by making agencies accountable for improvement plans, for each of their programs. 21CTP uses the model VISON to forecast the effect of a successful research program on energy use, the model GREET (Greenhouse Gas, Regulated Emissions, and Transportation) on environmental impacts and PSAT (Powertrain Systems Analysis Toolkit) for vehicle simulation. In addition, DOE conducts project-level reviews and uses outside technical experts to review their research portfolio. However, each Administration has its priorities and special projects, and it expects the agencies to be responsive. In addition, congressional earmarks in effect establish priorities. As a consequence the research undertaken by DOE is influenced by many factors: scientific opportunity, engineering 2 Personal communication to the committee from Ken Howden, 21st Century Truck Partnership, April 18, 2007. 3 DOE responses to committee queries on 21CTP Management and Process Issues, transmitted via e-mail by Ken Howden, March 27, 2007.
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Review of the 21st Century Truck Partnership needs, national priorities, congressional mandates, industry requests. In summary, the primary role of 21CTP is to facilitate communication among the many partners to avoid duplication of effort, to communicate technical achievements, and to provide financial support to assist in moving new technology through development to commercialization. PERFORMANCE OF THE PARTNERSHIP WITH INDUSTRY The 21CTP was organized to reduce fuel consumption and emissions while improving the safety of heavy vehicles. To fully assess the performance of the industry partnership, the committee collected information using a questionnaire sent to the fifteen industrial partners and held discussions with a selected few. A questionnaire was distributed seeking their input on: Overall program management and organization The process for setting milestones, research directions, and making Go/No Go decisions Collaborative activities within the DOE, other government agencies, the private sector, universities, and others Other topics deemed important to the success of the partnership Two approaches were used by the committee. One-hour conference calls were held with each of the three company representatives serving on the 21CTP Executive Committee. Written questionnaire requests were provided to the other twelve companies. Five responded. The same set of questions was used in both instances. This resulted in a total response of eight from the original fifteen companies. The set of nine questions was as follows: Has your organization’s involvement with the 21CTP provided sufficient progress to consider commercialization of the technology on which you were involved? If yes, explain how the 21CTP helped. If no, explain what is preventing commercialization in terms of technology development, economics, market, etc. Was there sufficient “sharing” of technology among the industrial partners and the government agencies? If not, why not? Would your organization like to continue in the 21CTP? If yes, why? If no, why not? Based on your organization’s experience with the 21CTP would you recommend for or against its participation in a similar future government technology partnership? If for, why? If against, why? Was there sufficient cooperation and coordination among the government agencies involved with your project? Please explain. Was sufficient attention given to technological “show stoppers” in terms of technical support and funding? Please explain. Regarding development of hybrid systems for trucks, does your organization believe that the specialized duty cycles for trucks and their limited production volumes are impediments regarding their commercialization? Please provide support for your answer. If you consider them impediments, can you provide input on how they can be overcome? If you had the latitude to double the current program budget, where would you invest the additional funds? Given your assessment of the program, do you support its continuance? If not, why? In general, industry responded to these questions to indicate its appreciation and encouragement of the 21CTP. Its funding allowed progress to be made in solving technological issues and in moving advanced systems closer to commercialization. For example, meeting the 2007 heavy-duty emissions standards without loss in fuel economy was possible with DOE support. However, significant frustration was voiced relative to the funding variance which was experienced from year to year. As evidenced in Table 1-6, funding for the heavy-duty vehicle programs has declined steadily in the past few years, while light-duty vehicle technology has held its own. Industry viewed this as placing undue pressure on the programs resulting in the reduction of program budget or elimination of some programs (NRC, 2002; Bezdek and Wendling, 2005).4 Although there was some sharing across agencies, the promise of interagency partnership has not been borne out. When asked to provide cross-agency budgets for programs relevant to the 21CTP, only some of the agencies were willing and able to do so. Industry partners felt that their continuance in the 21CTP was contingent on there being adequate funding, the agencies cooperating among themselves on technological issues and budgets, simpler contracting procedures, and a strong leader to represent the industrial partners. The consensus opinion was that the program made the most progress when a full-time leader was in place to handle cross-agency issues and interactions. The 21CTP has become a communications channel for agency members. But, it is less relevant to industry or to senior policy makers in government. The sources of funding are not apparent to industry. In the process of moving a new concept from research idea to commercial product, DOE research organizations use the general process shown in Figure 2-4. The “Basic Research” 4 DOE, FCVT, response to committee queries, delivered via e-mail by Ken Howden, March 27, 2007.
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Review of the 21st Century Truck Partnership FIGURE 2-4 DOE project management and innovation process. SOURCE: DOE, 2006. steps are clearly dominated by DOE laboratories and “Commercial Research and Design” by industry. Research results and budget proposals are thoroughly reviewed. Those not approved or having marginal benefit go into the “Valley of Death” where they remain until there is a change in circumstances. The industry assessment is that more funding should be directed toward “Cooperatively-Funded Activities.” This would focus more resources on the eventual commercialization of technologies, which was the goal of the program. The technical showstoppers would get sufficient funding to address and commercialize them. In general, industry responses were favorable toward the 21CTP and would support its continuation if improved funding, discipline, coordination, and cooperation are provided. Finding 2-1. The 21CTP is operated as a virtual network of agencies and government laboratories, with an unwieldy structure and budgetary process. Agency personnel meet frequently and industry partners meet periodically for limited sharing and communication. This has been the extent of the coordination. Both government agencies and industry partners, per their remarks to the committee, have found the arrangement less than effective. The program was most productive when a full-time person from industry was assigned to coordinate the cross-agency efforts. Oversight of the 21CTP is provided through an Executive Committee with representation from DOE, DOT, EPA, DOD, and the industry partners. Although that committee lacks authority to make cross-agency decisions and implement firm actions, it has been most effective when chaired by a full-time executive. This seemed to be an effective measure to ensure cooperation among agencies and address program challenges. Recommendation 2-1. A full-time, technically capable leader with consensus-building skills should be appointed to coordinate the 21CTP program among industry partners and government agencies. This person could chair the Executive Committee and would be authorized to make recommendations to the committee on behalf of the entire program on stopping or redirecting existing research, on setting research priorities, and on future funding levels. Finding 2-2. As confirmed in meetings with the DOE and other agencies, there is no single source of funds for the 21CTP, as perhaps intended by its creators. Instead, each of the four agencies has its own stream of funds. DOE, DOT, DOD, and EPA budget and optimize funding based on their own priorities. In addition, they maintain funding to companies with multiyear cooperative agreements. Thus, managing the 21CTP program and projects across multiple agencies has been challenging, and there have been difficulties in setting program priorities, especially in aligning budgets to programmatic requirements. A result has been difficulty in balancing between near- and long-term projects and setting appropriate metrics and measures. In addition, variation in funding levels from year to year has diminished the impact of project achievements and results and reduced the probability of success and commercialization. The result of this complexity and lack of transparency is that some federal funds were spent by industry partners and by other federal agencies in ways that cannot be accounted for in the funding structure by fiscal year. Recommendation 2-2. A portfolio management process that sets priorities and aligns budgets among the agencies and industrial partners is recommended. A proposed table of project priorities (Figure 2-5) would provide an objective way of ranking research and development projects according to their expected outcomes. This could evolve into a budgeting process that ensures support for programs of merit beyond a single year. Precompetitive, collaborative technol-
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Review of the 21st Century Truck Partnership 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. ogy and concept development could receive proper focus for successful programs. REFERENCES Bezdek, Roger, and Robert Wendling. 2005. Fuel efficiency and the economy. American Scientist, Vol. 93, No. 2, p. 135. DOE (U.S. Department of Energy). 2006. 21st Century Truck Partnership Roadmap and Technical White Papers. Document No. 21CTP-003. Washington, D.C. December. NRC (National Research Council). 2002. Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards, Table 3-3, Fuel Consumption Technology Matrix, p. 44. Washington, D.C.: National Academy Press.