EXECUTIVE SUMMARY
Sixteen agencies comprising the Federal Construction Council (FCC) asked the Building Research Board (BRB) to advise them on factors to be considered in making decisions about the use of new building technology. Some agency officials actively seek to foster development and adoption of new building technology to meet their own needs or to enhance the productivity of U.S. industry. Others suggest that the inherent risks of new technology require that responsible managers be more conservative in the application of new technology in government facilities.
With an aggregate annual construction budget of some $15 billion, should not U.S. government agencies act as a significant market force for beneficial change? On the other hand, as stewards of public assets, can government officials responsible for facilities planning, construction, and management accept the inevitable risks of innovation?
The issues raised by these questions have broad implications. Building-related industries account for a major fraction of the U.S. economy, and their products have pervasive influence on individuals and business. Many observers have expressed concern in recent years that the rate of innovation in these industries has lagged behind other U.S. industries and the building-related industries in other countries. The BRB Committee on New Technology and Innovation in Building, appointed to respond to the FCC request, found itself involved in a more basic discussion of whether there is an appropriate role for the government in fostering the development of new building technology. That is the subject of this report.
The U.S. building-related industries (i.e., design services, construction, building materials and products manufacture, and facilities operations and maintenance) are highly fragmented. There are many distinct segments within these industries, and in many segments there are many small firms with limited geographic scopes of operations. Government agencies' policies on matters of new technology are similarly fragmented. This feature has decisive influence on technological innovation in the building-related industries.
Much of the concern for innovation in these industries has focused on process-related innovation in design and construction. An emphasis on individual construction projects as the basis for analysis has supported increasingly misleading views of the rate of innovation and of the way much new technology is introduced in the industries. Building products and materials manufacturers are an important and neglected source of new technology, a source that is often ignored by studies of innovation in the building-related industries.
Even so, the rates of development of new technology and innovation in the building-related industries have been, for at least the past two decades, lower—and the role of government has been less positive—than they could be, relative to both the industry's potential capabilities and the nation's welfare. There are three primary reasons why the federal government, and government at other levels as well, should play a greater role in fostering new building technology:
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to achieve better cost (initially and over the course of a building's lifecycle), quality, and performance in government facilities;
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to enhance the quality of life in the United States generally (and worldwide), through encouraging better cost—initial or lifecycle—quality, and performance in private sector building; and
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to enhance U.S. industrial competitiveness in international markets.
Government agencies generally encourage new technology through direct purchase for mission-oriented applications or through promulgation of policies aimed at broader social goals (e.g., environmental protection). Both roles are appropriate and necessary but have had only limited impact with respect to building technology. In contrast to many other countries, there is no U.S. government agency with explicit responsibility for representing or encouraging enhancement of the nation's construction industry as a whole. Programs and policies are needed to overcome the industries' and government's fragmentation. Such programs as the percentage-of-construction-cost set-aside for art and the Strategic Highway Research Program are models that have demonstrated success in dealing in the short term with a fragmented environment while building in the long term a coalition of interest.
The committee considered the range of strategic roles that government might play in fostering new building technology, and characterized that range in terms of three broad options representing generally increasing levels of proactive government involvement in the U.S. building-related industries' innovation processes:
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Business as usual—a continuation of relatively conservative current policies and support for new technology—is the baseline against which any recommendations for change must be compared. Actual funding levels may decrease as federal agency construction budgets shift away from military construction toward civilian facilities, and may decline in absolute terms for at least the next decade. State and local governments could, in aggregate, experience substantial growth in construction for the renewal of physical infrastructure, the renovation and expansion of educational facilities, and the accommodation of increased work loads associated with programs formerly under federal administration. Agency research and development activities would be expected to continue at least at current funding levels.
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Active mission-oriented technology pursuit would involve definite action to encourage development of new building technology that can be applied in agencies' own facilities projects. General policies such as required ''new technology set-asides'' in procurement to fund testing and demonstration, required annual progress reports by each agency to the Office of Science and Technology Policy, or the establishment of presidential awards for new building technology demonstrations could motivate each individual agency's efforts. These efforts might include establishing a centralized "building innovation office" or an interagency coordinating body, or contracting with one of the national laboratories for assistance in identifying promising projects and technologies. A new organization would have certain advantages, but existing agency research and development programs and centers can be expanded and used effectively to identify needs, mobilize the search for solutions, and aid the transfer of emerging technology into practice.
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Increased federal research, development, and demonstration support would be targeted to benefit state and local governments and the private sector, as well as federal agencies themselves. The National Science Foundation, the Advanced Technology Program of the National Institute of Standards and Technology, and the Strategic Highway Research Program, all congressionally funded, and the U.S. Army's CPAR1 program are potential models for how this support might be provided. Tax disincentives that discourage investment could be reduced and actions taken to limit liability
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exposure and awards, limit the diversity and restriction of building regulations, and generally reduce regulatory and administrative impediments to the application and commercialization of new technology, consistent with the protection of life safety, health, and environmental integrity.
The committee evaluated alternative strategies in terms of their potential consequence for cost and performance of government facilities, U.S. quality of life overall, and U.S. international competitiveness. The committee concluded that the federal government's position as a major provider and user of facilities effectively imposes on individual agencies a responsibility to pursue innovation and foster new technology. A government-wide "business as usual" strategy is therefore not appropriate. Because agencies differ in their missions, resources, and needs, no one strategy is appropriate throughout government. Rather, strategy for fostering new building technology should be tailored to each agency, generally incorporating elements at several levels of proactive involvement: (1) federal agencies' encouraging applications of new technology for their own projects, (2) multiagency activities to enhance the pursuit and effective transfer of new technology to the U.S. private sector, and (3) generally increased support for targeted efforts to develop new technologies in specific areas, perhaps through existing and new university-and industry-based "centers of excellence." All agencies with interest in facilities and their construction would have some part to play in implementing this composite strategy.
An institutional mechanism to focus attention on technology in the building-related industries is needed. There is no single agency or program in the federal government with comprehensive responsibility for dealing with issues of construction and facilities. At the same time, many agencies that build facilities can benefit directly from innovation in these facilities. These agencies have separate missions, operate independently, and are in some senses competitive in their traditions and administrative procedures. For these reasons, the committee concluded that the institutional focus needed is outside any single construction agency's existing facility program. Responsibility and resources for coordinating government building-related innovation strategy, for taking positive leadership in implementing this strategy, for fostering action by construction agencies, and for evaluating progress, should be assigned to the agency or office in which this focus is established.
Existing agencies might assume these functions (e.g., within the Department of Commerce or Department of Housing and Urban Development), but there are models for creating new organizations (e.g., the Council on Environmental Quality). In either case, a broad scope for this organization would include support of technology development and demonstrations in government facilities, funded by a percentage set-aside or "tax" on all agencies' construction
appropriations. Agencies would then compete for support of their specific projects. Such a commission or other focus should be established with a limited life, perhaps five years, but might be renewed if progress is demonstrated clearly. The evaluation and information dissemination functions, however, should continue.
Mission-oriented agencies responsible for design and procurement of facilities should adopt measures to encourage designers and constructors to propose and perfect cost-effective new technologies, such as
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using new technology as a selection factor, by giving particular credit in design and construction procurement to offerers who propose to apply potentially cost-effective new technology that has been developed at least to the stage of prototype application;
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using performance specifications in construction procurements to permit offerers to propose new technologies that may not meet more traditional (i.e., prescriptive) standard specifications; and
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using such procurement mechanisms as design-build or build-operate-transfer to promote increased integration in the delivery process, both to permit innovators to apply new technology at any stage of the facility life cycle and to assist the innovator to recapture benefits of innovation.
Budgets must be made available to pay for added costs of planning and design analyses that may be required and for evaluation of completed installations. Responsible officials must have adequate time to oversee projects on which new technology is being applied and to assess and document results. In addition, senior agency and congressional officials must accept that some new technologies may not perform as expected. Systems are needed to provide careful review and to offer insurance and indemnification for both providers and users of new technology. More importantly, support must be reliably sustained long enough to permit investments in research, development, and technology transfer to yield results.
To enhance technology transfer, agencies should reward efforts to innovate, by establishing programs to promote projects showcasing new technology or design competitions based on applications of new technology. Award programs (similar perhaps to the Presidential Design Awards or the Malcolm Baldridge National Quality Award) for building innovation would highlight the contribution of these efforts to agency effectiveness. Further, industry should be intimately involved in the direction of government spending to encourage high-priority research and development activities.
Although major growth in the estimated $200 million to $230 million spent annually, for federally supported building research, development, and demonstration is unlikely in today's fiscal climate, the scale of the market suggests that
relatively modest increases of 10 to 15 percent could produce significant results, particularly if the spending is matched by private sector contributions and concentrated in a relatively few institutions. The building-related industries should petition Congress to establish a program of integrated research, development, and incubation of new building technology, to support establishment or continuation of several "building technology centers of excellence."
Changing international relationships may reduce the scale of military expenditures, making resources available, in the United States and elsewhere, to seek improvements in our quality of life. New technologies are emerging that offer greater opportunities for enhanced service, greater efficiencies, and protection of natural environmental resources. The growth of global markets can enhance productivity and the dissemination of building technology improvements. However, over the shorter term, the risks and inevitable discomforts of change must be managed rather than permitted to block progress. The U.S. building-related industries are being called on to evolve under conditions of uncertainty. Government agencies, as both users of the industries' products and instruments of national policy, have an important role to play in fostering new technology and the innovation on which the future of these industries depend.
