Advanced Technlogist

hile watching the Olympics on television in September, veteran Commerce Department executive Alan P. Balutis felt a surge of pride-but not from watching American athletes bring home the gold. It came during a General Electric commercial highlighting a new, more accurate type of mammography. The reason: Commerce's Advanced Technology Program (ATP), which Balutis heads, played a key role in aiding development of the new technology, which improves early detection of breast cancer. Though 32 million mammograms are performed in this country each year, 15,000 to 45,000 cases of breast cancer go undetected. Digital mammography may help reduce that number. "It was just a nice thing to feel associated with something that . . . could help save lives," Balutis says.

In 21 years at Commerce, Balutis has worked in a variety of positions, including deputy chief information officer. None has been tougher, however, than overseeing ATP, which promotes high-risk technologies through cost-sharing partnerships with industry. ATP funds projects ranging from biomedical engineering and pharmaceutical design to sophisticated electronics, computer software, manufacturing technologies, industrial catalysts and energy generation and storage devices. Since becoming ATP director last April, Balutis has been working to improve management and strengthen morale. Just as importantly, he has been striving to build political support for the program, which in recent years has become a lightning rod for criticism by conservative Republicans in Congress. Critics say the program doles out "corporate welfare" to private companies and involves the government in setting national industrial policy and picking private sector winners and losers.

Budget Cliffhangers

ATP is based at Commerce's sprawling National Institute of Standards and Technology complex in Gaithersburg, Md. The program was launched a decade ago by the Bush administration and grew rapidly under the Clinton administration in the mid-1990s. However, with GOP conservatives controlling key committees in Congress over the last several years, the program has endured what Balutis calls "Perils of Pauline"-repeated appropriation cliffhangers. The picture was the same this year. Funding was eliminated in the House, restored in the Senate and finally approved in a Senate-House conference. ATP wound up with a total fiscal 2001 budget of $190.7 million, down from the previous year's $210.3 million and substantially less than the program's funding peak of $508.7 million in 1995.

Balutis and others say that Republican opposition to the ATP is a vestige of the GOP campaign to abolish programs and agencies, including Com-merce. Looking ahead to next year, with a new President and Congress, Balutis says he'd like to achieve more stable and assured funding. He also hopes his focus on careful, even-handed management will prevent him from becoming a political target.

"I've been a career person working with political people for 15 of the 25 years I've worked in government," Balutis says. "I've worked with both Republicans and Democrats within the executive branch, and I've worked with Republicans and Democrats on the Hill. My job is to manage, guide [and] direct this program as well as I can under the current legislation that authorizes it. So my role is to be a good manager. My role is [also] to be responsive to both legislative and executive policy officials . . . So no, I don't expect that I will be a [political] target. I'm only managing the program as it's structured."

Balutis notes that when he met with then-Secretary of Commerce William M. Daley last spring to discuss the ATP assignment, Daley told him: "I want a manager out there, not a scientist, and I want somebody out there I can trust. I want somebody who will pay attention to financial management, budgeting, those kinds of issues." That's one of the reasons that the job went to Balutis rather than to a physicist or engineer.

After taking over the program, Balutis quickly focused on redirecting funds for projects that were completed early or cancelled. Recapturing these funds has been a problem because ATP's previous managers made a practice of obligating in the first year all of the funds budgeted for multi-year research projects. ATP projects typically run for three to five years. Funds would then need to be "de-obligated" when projects were terminated early because, for example, companies in a joint venture failed to actually come together or technology under development failed or results were achieved earlier than expected. After such early terminations, the program "had all this money . . . that you'd have to go back and try to recapture," Balutis says. "It [was] a rather large amount of money, like $40 million-plus." Balutis resolved the problem and is seeking to strengthen financial management by obligating funds for multi-year projects on a year-by-year basis. "It will never happen again," Balutis says.

Other steps that Balutis has taken include:

• Expanding contacts with the American venture capital community to raise the profile of the ATP and to enlist their help in spotting promising technology projects.
• Developing a closer dialogue with state and local technology offices across the country to help foster regional development activities.
• Substantially simplifying and streamlining the ATP proposal process to make it easier for businesses, particularly small businesses, to apply for the program.
• Moving toward "rolling admission" for projects, so that proposals are reviewed and funded throughout the year.
• Strengthening morale of the 80-member ATP staff. "The people here have been under attack, have been faced with the threat of abolition for several years," Balutis says. "The staff is an excellent staff but they're a little bit reactive, defensive and shell-shocked. I really want to build back the excitement and the energy of the people who work here."

A Commerce Career

Balutis, 54, grew up in Utica, N.Y., went to Syracuse University and did his graduate work at the State University of New York at Albany. He then taught political science at SUNY Buffalo before coming to Washington in 1975 on a fellowship sponsored by the National Association of Schools of Public Affairs and Administration. "I'm one of these people who came down to Washington for what was going to be a one-year fellowship and never went back," he says. Initially he worked in a variety of budget, personnel, policy and management analysis positions at the then-Department of Health, Education and Welfare.

After joining the Commerce Department in 1979, Balutis served as director of systems and special projects (1983-84); management and organization (1984-87); budget planning and organization (1987-94); and budget, management and information (1994-98). From 1998 until earlier this year, he was the department's deputy CIO. His accomplishments in these positions included managing Commerce's $1.1 billion information technology budget; integrating strategic planning, IT planning and secretarial goal-setting into departmental budget form- ulation; creating the first major IT systems oversight board in the government; and serving as staff director for major governmentwide studies for the President's Council on Management Improvement, the Cabinet Council on Management and Administration and the President's Management Council.

Balutis' colleagues describe him as articulate and energetic with a congenial demeanor and a wide-ranging knowledge of how the government works. Michael S. Sade, director of the Office of Acquisition Management at Commerce, worked with Balutis on COMMITS (Commerce Information Technology Solutions), a government-wide contracting vehicle set aside for small business. "One of the key things I've learned from him is that it really does pay off to be disciplined about how you approach these things, particularly in the government. And he was one of the first to teach me that just as it's important to come up with a good idea and try to implement it, it's just as important to have an evaluation program behind that to make sure you're accomplishing your goals."

Robert Welch, a former procurement executive at Commerce and the Treasury Department, says, "in my 32 years of government service, I'd put [Balutis] in the top five public servants I've had the honor to work with, maybe the top three." Welch also worked with Balutis on COMMITS. "We brought our staffs together. It was one of the real 'one plus one equals three' synergistic team behavior solutions." Allan V. Burman, a former Office of Federal Procurement Policy administrator, worked with Balutis in developing the government purchase card program. "I think he's very focused on getting results for the agency, asks good questions, frames issues well. He's just very impressive," says Burman, currently president of the consulting firm Jefferson Solutions and a contributing editor of Government Executive.

Balutis also gets high marks from ATP staff members. "Most people here seem to like his very open management style," says Rosemarie Hunziker, a program manager. "He's very accessible, but he also doesn't want to listen to long diatribes. If you have something to say, you better know what it is you're going to say and be straight to the point with him, because he doesn't have any time for just chit-chatting." Robert T. Sienkiewicz, a special assistant to the director, says, "He's a really good role model for what a government executive should be. He treats all of his staff like professionals. He is very respectful of our privacy. He's just really good to work with, a no-nonsense type of person."

Uncertainty and Instability

Balutis draws on every ounce of his executive skills in managing the ATP, which has been controversial ever since its creation in 1988. ATP was born amid serious concerns about the global competitiveness of American industry, particularly in the face of Japan's challenge in automobiles, electronics and other technology-intensive products.

Sen. Ernest F. Hollings, D-S.C., then-chairman of the Senate Commerce Committee, championed the effort to create the ATP. "Hollings' personal support was critical," says Christopher T. Hill, vice provost for research at George Mason University in Fairfax, Va., and an expert on ATP. The senator remains a strong advocate of the program. In a statement appended to a Senate Commerce Committee legislative report issued in August, Hollings argued that the program is "an important investment in American economic competitiveness. It supports American industry's own efforts to develop new cutting-edge, next-generation technologies-technologies that will create the new industries and jobs of the 21st century." Now that the U.S. economy is strong and American industry is much more globally competitive than in the late 1980s, the motivation that spurred the formation of ATP has diminished, Hill argues. "[ATP has] had its political challenges, it's had its management and administrative challenges," he says. "[Now], paradoxically, the program is challenged by the fact that the economy is so strong."

The situation has been compounded by conservative Republicans' political arguments against ATP. "At a time when the Congress is committed to funding true priorities in areas such as defense, education and basic science, the administration is continuing to fund wasteful corporate welfare projects," said Rep. John R. Kasich, R-Ohio, chairman of the House Budget Committee, in a press release last April. "The government should not be in the business of picking corporate winners and losers," he added. ATP continues to draw support, however, from congressional Democrats and more moderate Republicans, including Rep. Sherwood L. Boehlert, R-N.Y., second-ranking GOP member on the House Science Committee. "I support the program as a way of providing valuable assistance to American industry at relatively modest cost," Boehlert says. He has confidence in ATP's leadership and believes the program has been largely successful in insulating project funding from political pressures.

A study panel of the National Research Council, an operating arm of the National Academy of Sciences, is conducting a detailed assessment of ATP. Charles W. Wessner, program director for the council's Board on Science, Technology and Economic Policy, says the panel plans to complete the assessment early in the next administration. "I would not say that ATP is broken, but I've worked in government too long to think that things can't be done better," he says. "And our task will be trying to figure out what can usefully be improved in ATP and make recommendations to its management, while obviously keeping the core things that are working well." Wessner says that the program could benefit from more funding stability. "This ritual-of the House zeroing it out and the Senate providing money and then it's resolved at the last minute in conference really doesn't encourage vice presidents for research and development in major corporations to commit time and allocate funds for a partnership in something that they're not sure is going to continue," says Wessner. "That uncertainty and instability would be a problem for any program, but particularly for a program that relies on private-sector partners."

Wessner says ATP critics who object to government involvement in industrial policy haven't done their homework very well. "The U.S. has a longer history than most people realize of active government-industry partnerships and active government intervention in helping to create the conditions of economic growth," Wessner says. As early as the 1790s, government procurement contracts with Eli Whitney were instrumental in creating the American firearms and machine tool industries. In the 1840s, Congress provided funds to Samuel Morse to help develop the telegraph. The Navy took an equity position in RCA during the 1920s because the then-Secretary of the Navy was convinced that the United States should have an independent radio capability and not rely on the British. Government involvement with the private sector accelerated during and after World War II. "When you look at how much the federal government has contributed to the [recent] biotechnology revolution, I personally take umbrage when they say we never pick winners or losers," Wessner says.

Overall, he says, "the Advanced Technology Program seems to be a low-cost, effective means of disseminating technology of significant value through the economy faster than it might otherwise go and a way of capitalizing on R&D. There is corporate welfare in Washington, there's an awful lot of corporate welfare, [but] this isn't it."

Wessner praises Balutis for bringing dynamism, rigor and a "fresh look" to the Advanced Technology Program. Close examination of the ATP and other government technology programs yields an important lesson, he says. "Management matters. You can have a well-designed program, but if you don't have effective management, you can end up wasting significant taxpayer resources. There's a tendency to think that there's some rule you can apply that will solve all the problems. That's simplistic. What you need are good managers and good managers who are held accountable."