CENTERS FOR ADVANCED TECHNOLOGY (CAT) PROGRAM

GUIDELINES FOR PREPARING

THE 1997-98 INVESTMENT REQUEST

June 20, 1997
TABLE OF CONTENTS

THE 1997-98 INVESTMENT REQUEST	3
Foundation Outcome	3
	I.	Center-wide Targets	4
	II.	Customers	4
	III.	Worksheets to Develop Center-wide Targets	5
			Worksheet to Develop Center-Wide Targets	7
	IV.	Customer Milestones and Center Steps	8
	V.	Economic Impact Opportunity / Project Abstracts	10
	VI.	University Support	10
	VII.	Action on Recommendations	10
	VIII.	Budget	10
			Changes in Budget Forms	10
			Matching Funds	11
			Budget 1 Instructions	11
			Budget 2 Instructions	12
			Budget 1 Form	13
			Budget 2 Form	14
	IX.	Attachments	15
			Key Outreach Documents	15
			Staff	15
			Organization	15
			Advisory Boards	15
			Federal Funds	15
APPENDIX A :  CAT PROGRAM REQUIREMENTS	16
CAT Program Outcomes and Center Targets	16
Use of CAT Program Funds	17
Matching Funds	18
Documentation of Matching Funds	21
Intellectual Property	22
Conflicts of Interest	23

APPENDIX B:   OUTCOME FUNDING CONCEPTS	24
APPENDIX C:  PROPRIETARY INFORMATION	26

THE 1997-98 INVESTMENT REQUEST

The 1997-98 Investment Request should look distinctly different from previous requests.  In keeping with the Outcome Funding approach, we are more interested in projected economic impact than projected research topics.  The Investment Request should build directly on the target-setting document that your CAT submitted this past February.  It should be both a refinement and an enhancement of your earlier submission.  Be sure to incorporate any feedback you receive from the Foundation concerning this previous document.  If you have questions at any time as you work on the Investment Request, call us before you proceed further rather than waste time and energy.  Five (5) copies of your CAT=s Investment Request are due at the Science and Technology Foundation office no later than July 31, 1997.  This will be in lieu of the fourth quarter progress report normally due on that date.

In the interest of streamlining this document, we have placed much of the descriptive information about the CAT Program in appendices.   You should read the appendices, as they contain important guidance and explain the rules that will govern the management and administration of the CAT Program.   Appendix A describes CAT Program Requirements, including matching fund requirements.  Appendix B outlines key Outcome Funding terms and concepts. 

Remember that the Freedom of Information Law applies to your Investment Request.  You cannot claim that the entire Investment Request is confidential.  However, specific information having proprietary value can be protected from public disclosure.  Please see Appendix C: AProprietary Information@ for details on how to properly identify and protect confidential information in your submission. 

Foundation Outcome—A competitive and expanding technology-based industrial sector as evidenced by employment growth and increased profitability in New York companies, which, in turn, provide a return on investment via tax revenues that exceed the cost of the State’s investment.

The above statement describes what the Foundation seeks to achieve by investing in the CAT Program.  Basically, we are investing in positive economic impact in New York State that can be measured in jobs and/or dollars.  Furthermore, the Foundation seeks the highest possible return in economic impact for New York companies.  A minimum for investment consideration is $10 in economic impact for every $1 invested in a specific CAT over the life of that CAT.  

The geographic location of a customer=s office or corporate headquarters is less important than where the economic impact will occur.  If the economic impact of a project will not be felt in New York State, then we cannot include those gains as part of your results because they do not contribute to a return on our investment.  This Investment Request focuses specifically on the economic impact that will be generated from your CAT’s work during the 12 months of the 1997-98 CAT contract.

The following sections must appear in your Investment Request: 

I.	Center-wide Targets
II.	 	Customers
III.	 	Worksheets to Develop Center-wide Targets
IV.	 	Customer Milestones and Center Steps
V.	 	Economic Impact Opportunity/Project Abstracts
VI.	 	University Support
VII.	 	Action on Recommendations
VIII.	 	Budget
IX.	 	Attachments

I.	Center-wide Targets

In essence, the Center-wide targets tell us, the investor, what we are buying.  They tell us what the payoff from our investment will be if your CAT is successful.  The targets also tell us what you as a CAT are committed to achieving.  You will use the resources and capabilities under your direct control, as well as those you can leverage and influence, to meet the targets you set.

For each of your customer groups (see Section II, Customers, below), provide totals for your CAT=s projected economic impact in New York for 1997-98, 1998-99, and 1999-2000.  Quantify these targets in terms of job impact (measured in real jobs) and non-job impact (measured in dollars).

In each customer group, break down the totals into the following two categories:  
•	New impact on current and past customers due to previous work; 
•	Impact on current and new customers due to current work.
The first category indicates new impacts that will accrue from past CAT work, where the CAT is no longer actively involved.  The second category indicates future economic impacts from work that the CAT is currently engaged in or will begin during the 1997-98 contract term.

Do not double-count impact in totals, and do not convert jobs-to-dollars nor dollars-to-jobs.  Try to be as accurate as possible in your projections.  Do not simply add up all the possible economic impact that would occur if every project goes exactly as planned.  Consider risk and probability of success when projecting total impact.  Only include numbers for projects where economic impact will occur inside New York State.

II.	Customers 

A CAT has many constituencies, including faculty members, students, university administrators, and companies.  For the purpose of this Investment Request, the customers we, the investor, are interested in are the companies which will grow and thrive in New York as a result of their collaborations with your CAT.  Generally, they are companies that are either currently in New York State or will be in the near future.  As an investor, we need to know that a CAT has a customer base of New York companies and entrepreneurs that can contribute significantly to economic growth in the State.  In addition, we need to know that the CAT understands the needs of its customers and has a clear vision of how the CAT can provide tangible value which can translate into increased growth and profitability for those customers.  Most CATs have more than one type of customer.  The different attributes of the various customer types may cause you to deal with them in different ways, or to use different “business models” to create economic value.

Please identify, describe and define the characteristics of each type of customer (customer group) that you plan to work with over the next year.  Highlight the critical characteristics which distinguish Agood@ customers (i.e., those which are most likely to achieve significant economic impact as a result of collaborating with the CAT).  These descriptions should be quite specific rather than overly general.  For each customer group, state your goal for recruiting new customers during the next year and identify the top prospects you are pursuing.  In the next section you will be listing the current CAT customers that fit into each type or customer group.

III.	Worksheets to Develop Center-wide Targets 

The Worksheets and the subsequent sections of the Investment Request provide information which will help us to assess the likelihood that the targets will actually be reached.  This important information adds credibility to your center-wide targets and helps us understand how your CAT intends to achieve the targeted levels of economic impact.  At the end of the year, we will be looking at your CAT=s actual total economic impact rather than hold you to achieving specific targets with specific customers due to specific projects.  Once again, only include opportunities where economic impact will occur in New York State.  

In the discussion that follows, we introduce the phrase “economic impact opportunity,” which is used almost interchangeably with “project.”   We use “economic impact opportunity” (EIO) to emphasize the desired end point, and we apply it to those instances in which you are working with a specific customer or customers towards a tangible economic impact target.  “Project” is used in a generic sense and to refer to those activities which contribute to the CAT’s effectiveness but are not yet directly tied to a specific target with a specific company. 

Using the format shown on page 7, prepare worksheets for each of your customer groups.  Each row of the chart is for a specific economic impact opportunity (EIO) with a specific customer.  The same customer may appear in several rows if your CAT is pursuing several different opportunities with that customer.  For each customer group, after listing the opportunities involving current customers, also include an aggregate target for unknown-as-yet, new customers.

Column 1:	EIO’s Budget Item Number:  Fill this in only for those projects that have already been assigned an identifying number by your CAT.  Typically, a number is assigned once an agreement is in place between the customer and the CAT and/or a specific project account has been established.  These numbers should match those used later on the Budget forms and should be used consistently in all future reports.

Column 2:	Customer Name & Location of Economic Impact:  Indicate location(s) within New York State where economic impact will be realized.  

Column 3:	Previous, Current, or Future Work:  Indicate the timing of the work with the CAT which is leading to projected economic impact.  Choose one of the following for each EIO:
	1. “Previous” for completed projects that continue to produce economic impact.
	2. “Current” for interactions that have begun but are yet to completed.
	3. “Future” for programs which have not begun as yet.

Column 4:	Economic Impact Opportunity (EIO):  Give a descriptive title of the opportunity/project.

Column 5:	CAT Contribution:  Identify the CAT product/service/deliverable which will contribute to the projected economic impact (e.g., license for new technology, linkage to new customer, improved understanding of manufacturing process variables, research collaboration, employee training, etc.)

Columns 6,8,10:	Job Impact:  For each of the specified years, indicate the magnitude and nature of projected job impacts in New York (e.g., 4 new jobs created to develop new product, 2 jobs saved due to updated product offering, 10 jobs retained in NY as a result of productivity improvements, 3 new jobs in CAT spin-off company).  Give actual job numbers.  Do not convert into a revenue figure.  Indicate continuing job impacts (e.g. jobs previously created due to CAT work and still continuing in existence in the specified year) separately from new job impacts.

Columns 7,9,11:	Non-Job Impact:  For each of the specified years, indicate the magnitude and nature of non-job impacts in New York (e.g., $200,000 cost savings due to reducing cycle time; $100,000 new revenues from sales of new product; $750,000 SBIR funds for collaborative development of new product).  NOTE: To avoid inadvertent double counting of results, do not convert job figures into revenue figures.  

New York State Science and Technology Foundation Centers for Advanced Technology (CAT) Program	
                                                                     Customer Group Worksheet to Develop Center-Wide Targets	
	
               Customer Group :  ____________________________                                      Center Name:  ______________________________	
	Customer	Previous			Economic Impact Targets						
Budget	 Name & Location	Current or	Economic Impact	CAT	1997-98		1998-99		1999-2000		
Item No.	of Economic Impact	Future Work	Opportunity (EIO)	Contribution	Jobs	Non-job $$	Jobs	Non-job $$	Jobs	Non-job $$	

											

											

IV.	Customer Milestones and Center Steps

Customer Milestones provide the CAT with a framework to effectively manage opportunities toward achievement of economic impact.  Customer milestones are especially important in light of the long-term nature of many of the opportunities in which CATs are involved.  Without milestones to track progress towards impact on customers, the Foundation has no assurances that our investment in your CAT is likely to reap the desired economic results.  

In our Outcome Funding framework, milestones are progressive changes, decisions, or actions in the companies who are your customers; they are not activities of the CAT.  Milestones are meaningful, critical advancements that tell you that it is increasingly likely that the targeted economic impact for the customer will be realized.  You might think of milestones as sequential Amake or break@ points in an interaction with a customer.  If a customer milestone is not reached as planned, that is a flag for the CAT to evaluate and adjust its strategy with that customer.  For example, if the company does not develop an internal champion for the CAT’s technology or other service, experience has shown us that a project is unlikely to result in economic impact.  Failure to meet a milestone is an alert that the projected economic impact may not occur, and therefore the CAT will not meet its target, unless some positive action is taken to help get the effort back on track.

Center Steps are the activities CATs undertake to ensure achievement of the customer milestones. The Center steps may begin well before a project is proposed to a customer and they end only when full economic impact is achieved.  Center steps are actions the CAT takes to build a relationship with a customer, deliver tangible value to that customer, and facilitate economic impact in New York State through that customer.

Often, both Center activities and customer activities will be required to meet a milestone, but neither the CAT’s nor the customer’s activity is itself a critical milestone.  For example, let’s say that one of the Center steps is to develop three alternative approaches to addressing a problem, which would be followed by evaluation of the alternatives by the customer.  While the act of carrying out the evaluation is necessary, the more critical and meaningful milestone is that, based on the evaluation, the customer judges that at least one of the options meets certain defined technical specifications and cost constraints, and therefore decides that it is worthwhile to proceed further.

For most of the CATs, milestone articulation has been the weakest area of submissions to date. One way to get a handle on milestones is to consider their opposites – “deal breakers.”  If you think about the experience of your CAT’s interactions with companies and identify the various reasons why opportunities were not realized (particularly when the technical work proceeded well), you have probably identified some crucial requirements that are the stuff of customer milestones.

As part of your Investment Request, submit the following:
Deal Breakers:  Based on your CAT’s experience to date, list the top 5 or 6 “Deal Breakers” with companies.  In other words, what are key conditions or situations which greatly reduced or completely prevented the achievement of projected economic impact in past interactions with customers? 
Customer Milestones and Center Steps:  From each of your customer groups, choose 2 specific economic impact opportunities in which you are currently actively engaged with a customer and in which the economic impact is projected to be achieved in 2 to 3 years.  Do not select an example in which the impact will be occurring within the next 12 months.  Try to choose 2 very different examples within each customer group.  For each case, provide the following information:

•	Milestones:  On the left-hand side of the page, list the key milestones that span the life of the opportunity you are pursuing, all the way to achieving the projected economic impact. Articulate the milestones in a meaningful way that indicates why they are critical to achieving the target.  Be sure to address all relevant deal breakers.  Include those milestones that have already been achieved as well as those that are on the horizon. We expect that milestones which have been achieved and which are near to being achieved can be stated in more specific terms, while those which are farther off will be identified in more generic terms.  For each milestone, give an approximate date (e.g., quarter and year) when you project the milestone is to be achieved.

•	CAT Steps:  On the right-hand side of the page, next to the respective milestones, list the key actions the CAT will be taking in order to move the program ahead and meet the milestone.  Be as specific as you can be.  Once again, we expect that it will be easier to describe with specificity those actions which have already been taken, and those that are imminent.  A very critical time for many opportunities is the gap between the times when research/design results are delivered and when economic impact is realized.  How will you monitor to keep the customer on track?  What resources will you access for companies to help them with non-technical issues?

We realize that each opportunity involves a dynamic interplay of forces internal and external to the CAT and the company.  We do not consider the customer milestones or the center steps to be cast in stone.  But they should represent your best assessment at this time.  We expect that significant effort will go into identifying meaningful customer milestones and center steps and that they will be living documents by which your CAT manages opportunities.

While we are asking for milestones on only a sample of opportunities for this Investment Request, we expect that milestones will be set for all active Economic Impact Opportunities in which your CAT is engaged.  This will be audited during the contract year.

V.	Economic Impact Opportunity/Project Abstracts

For each Economic Impact Opportunity and each project which is listed in either the Worksheets to Develop Center-wide Targets (Section III, above) or the Budget (Section VIII, below), provide a 1-paragraph abstract.  The abstract should focus specifically on what the CAT is doing and should identify the key individuals responsible for the work.  For projects that are not linked with a specific company target, include a sentence explaining how the project will contribute to the effectiveness of the CAT.  If there is an assigned project number, please include it and make sure it matches those listed on the target worksheet and in the Budget.  Also make sure that project titles are consistent across worksheets, abstracts, and Budget.

VI.	University Support

Please write a brief narrative answering the following questions:  What resources will the University contribute to the CAT in the next year in order to provide a supportive "home" for the CAT?  Who is the primary "champion" outside the CAT who ensures that the University is providing the necessary support for the CAT?  Have there been any changes in the University culture, organization, or management that could either help or hinder the CAT?  What will the CAT do to exploit or work around these changes, as the case may be?  What can the Foundation do to help?

VII.	Action on Recommendations

The report from the 1996-97 annual evaluation of the CAT ("Report of the CAT Program Steering Committee," May 13, 1997) has already been sent to you under separate cover.

Describe the specific new actions being taken to address each recommendation.

VIII.	Budget

The purpose of your Investment Request is to convince the Foundation that your CAT is an outstanding investment opportunity because it will lead to strong and verifiable economic growth (measured in jobs and dollars) in New York State in the near and the long term.  Everything in your CAT Budget submission should relate to achieving this desired outcome.

Begin your Budget submission by describing the CAT’s strategy for using Foundation funds.  How do you decide to allocate them?  How do you leverage them?  How do they contribute to your CAT’s ability to achieve the Foundation’s desired outcome?

Changes in Budget Forms.  You will note that we have reduced the six budget forms from last year down to only two.  The BUDGET-1 form asks you to break down the budget by economic impact opportunity/project and source of funds.  It is a streamlined version of Budget-1 from last year, but without the project-level detail on expense categories (personnel, equipment, materials, travel, etc.).  The BUDGET-2 form asks for an aggregate distribution of funds by source and by major expense category.  This second form is very similar to the information that has typically been required on interim financial reports, but it is formatted differently in order to accommodate a little more information. 

Matching Funds.  We are not asking you to submit matching fund documentation with the Investment Request.  Instead, the documentation will be submitted to the Foundation at the end of the year.  For a detailed discussion of the matching fund distribution requirement and documentation requirements, see Appendix A.   In brief:

•	CATEGORY A is cash from New York for-profit companies to support research and development in the CAT.

•	CATEGORY B consists of two other types of support from New York for-profit companies:

-	Fees or other cash support paid to the university for CAT education or training programs;

-	Documented in-kind contributions in support of CAT programs; examples include the depreciated value of equipment donated to the CAT and used in CAT programs, or salary paid to full-time regular company employees who are in residence at the CAT working on CAT projects.

C	CATEGORY C is cash from non-New York for-profit companies to support research and development in the CAT.

•	CATEGORY D consists of two other types of support from non-New York for-profit companies:

-	Fees or other cash support paid to the university for CAT education or training programs;

-	Documented in-kind contributions in support of CAT programs.

Note that internal university funds remain not eligible as matching funds and are not to be reported on the Budget forms.  If you can quantify the amount of university support provided to the CAT, include that in Section VI, University Support, above.

BUDGET-1 Instructions—Budget Summary for 1997-98 Contract by Project and Revenue Source

BUDGET-1 constitutes an overview of the CAT's entire program, encompassing all CAT opportunities/projects/activities, whether funded solely by the Foundation, solely by matching funds, or jointly by more than one source.  It should provide the relevant budget information for each opportunity/project described in the narrative of the Investment Request.  Your CAT’s entire budget should appear on this form.  As with the rest of this advisory, please contact the Foundation with any questions as they arise.

List each economic impact opportunity and project on BUDGET-1.  List the economic impact opportunities (EIOs), in which you are working with specific companies, first.  Organize the EIOs under sub-headings by customer group.  Next, list the projects which are not linked with specific company targets.  Organize these projects under the following sub-headings: Administration, Research & Development, Outreach, Education & Training, and Facilities.

Budget Item Number:  A unique number must identify each economic impact opportunity/ project on this form.   This number should match the number listed on the Worksheets to Develop Center-Wide Targets.  There should be only one number for each item, even if the institution may internally use multiple numbers.  The same one number should be reported, where requested, on all forms, for the entire duration of the project.

Customer Name:  The name of the company with which the CAT is collaborating.

Economic Impact Opportunity/ Project:  Give a descriptive title of the opportunity/project.  Be consistent across the target worksheets, the abstracts, and this Budget form.

Category and Status of Sources of Funds:  For each EIO/project, fill in the relevant columns regarding funding sources.  Break down matching funds in each Category into “committed” (i.e., there is an agreement in place between the funding source and the CAT) and “anticipated” funds.

BUDGET-2 Instructions—Budget Summary for 1997-98 Contract by Revenue Source and Expense Category

BUDGET-2 asks for information that is very similar to what you have been submitting in interim financial reports.  Whereas in BUDGET-1 the budget is broken down by opportunity/project and source, BUDGET-2 shows the budget broken down by expense category and source.  Please break down and label all items that appear under “Other”.

Samples of both budget forms follow.
											BUDGET-1	
													
 New York State Science and Technology Foundation Centers for Advanced Technology (CAT) Program													
BUDGET SUMMARY FOR 1997-98 CONTRACT BY PROJECT AND REVENUE SOURCE													
													
Institution:  ____________________________                     Center Name:  ______________________________													
													
Organize Economic Impact Opportunities under subheadings by customer group.  Organize other projects under subheadings by Administration, Research and Development, Outreach, Education & Training, and Facilities													
													
Budget			Committed	Anticipated	Committed	Anticipated	Committed	Anticipated	Committed	Anticipated	$$ 		
Item	Customer	Economic Impact	Category	Category	Category	Category	Category	Category	Category	Category	from	Total	
No.	 Name	Opportunity/Project	A ($$)	A ($$)	B ($$)	B ($$)	C ($$)	C ($$)	D ($$)	D ($$)	NYSSTF	$$	

													

													

													

													

													

													

													

													

													
													
		TOTAL = 											

							BUDGET - 2	
 New York State Science and Technology Foundation 	
Centers for Advanced Technology (CAT) Program								
								
BUDGET SUMMARY FOR 1997-98 CONTRACT BY REVENUE SOURCE AND EXPENSE CATEGORY								
								
	Institution: ____________________			Center Name:________________________				
								
	Expense Category	Category A
($$)	Category B
($$)	Category C
($$)	Category D
($$)	NYSSTF
($$)	Total
($$)	
								
Personnel								
	Salaries							
	Fringe							
	Indirect (</= 15% Sal+Fringe)							
								
Other than Personnel								
	Equipment							
	Materials & Supplies							
	Travel							
	Tuition							
	Subcontracts							
								
Other (specify)								

								

								

								
	Total = 							

IX.	Attachments

Append to your Investment Request the following items:

•	Key Outreach DocumentsKey Outreach Documents.  Provide copies of materials and documents used to communicate about the CAT and CAT opportunities to your various constituencies (e.g., customers, members, industry, faculty, students, university administration, etc.).  Include brochures, calls for proposals, criteria for selecting opportunities, notices to faculty, etc.

•	StaffStaff.  Provide a list of staff and faculty involved in the CAT.  For staff, give name, title, and level of effort devoted to the CAT.  For faculty, give name, department, rank (Prof., Assoc. Prof., Asst. Prof., Research Prof., etc.) and whether tenured or not.

•	OrganizationOrganization.  If there have been any organizational changes in the past year, provide relevant organization charts showing the relationships within the CAT, between the CAT and the university, and with other institutions outside the university.

•	Advisory BoardsAdvisory Boards.  Provide a list of advisory boards, their function and composition (names, titles, and affiliations of all members).

•	Federal FundsFederal Funds.  Provide a brief overview of federal funds supporting CAT-related projects.  A list showing source, project title, faculty member(s), and approximate level of funding in 1997-98 will suffice. 

•	
APPENDIX A :  CAT PROGRAM REQUIREMENTS

Foundation Outcome—A competitive and expanding technology-based industrial sector as evidenced by employment growth and increased profitability in New York companies, which, in turn, provide a return on investment via tax revenues that exceed the cost of the State’s investment.

The above statement describes what the Foundation seeks to achieve by investing in the CAT Program.  Basically, we are investing in positive economic impact in New York State that can be measured in jobs and/or dollars.  Furthermore, the Foundation seeks the highest possible return in economic impact for New York companies.  A minimum for investment consideration is $10 in economic impact for every $1 invested in a specific CAT over the life of that CAT.  

Achievement of verifiable economic impacts (measured in jobs and dollars) in New York State is the primary determinant of continued Foundation investment in a CAT.

CAT Program Outcomes and Center Targets

To be successful, the CAT Program in the long term must produce outcomes which contribute to the retention and creation of jobs, increased productivity, and increased profitability in New York technology-based companies.  These outcomes are the cumulative effects of changes made in New York companies as a result of their relationships with the CATs.

Individual CATs must establish and meet specific, quantifiable performance targets, which are likely to lead to the desired CAT Program outcomes.  The performance targets are changes in the companies as a result of their collaboration with the CAT.  Activities completed by the CAT are not acceptable performance targets.  A performance target is an end point in which there are tangible and verifiable benefits to New York companies as a result of CAT activity.  Some areas in which CATs would establish performance targets include, for example:

C	companies' introduction of new product or process technology on the market, leading to increased employment, sales, and profits;

C	companies' introduction of product or process improvements, leading to increased sales and profits;

C	establishment of new companies, creating new jobs;

C	improvement of company employee skills, leading to increased productivity;

C	expansion of business opportunities for companies, leading to new markets, increased sales and profits.

Because the performance targets are end points, they typically span several years.  Therefore, centers must also establish and meet meaningful milestones which will indicate whether or not the center is "on track" to achieve the longer-term targets.  When milestones are not met, the center is thereby cued to make the necessary changes in order to get back on track.

Performance targets establish a "selective pressure" in the decision-making process of a CAT, guiding allocation of resources to those efforts which are most likely to contribute to the accomplishment of the center targets.  In this context, ambitious, high-risk targets, with commensurate high potential payoffs, are encouraged; however, CATs must also identify critical milestones to track incremental progress and guide management decisions about continued investment.

Center directors are expected to manage the CAT's program dynamically; to review the progress of all center projects and activities against performance milestones and targets on a continuing basis, re-orienting, dropping, and adding projects and activities as needed to meet performance milestones and targets.

Use of CAT Program Funds

The Foundation looks to the Director of the CAT to be responsible for all Foundation fund expenditures and expects that documents releasing Foundation funds for use in the CAT program will bear his or her signature.  The Director is responsible for determining the allowability of costs before submitting claims for reimbursement from the Foundation and for maintaining such documentation with other CAT program records.  This responsibility extends to subcontracts as well. 

CAT Program funds can only be used to support activities that contribute to the achievement of economic impact in New York State in the near and long term.  CAT Program funds cannot be used to support basic research.

The following guidelines should be adhered to:

•	CAT Program funds may be used for purchase of equipment and fixtures, employment of faculty and staff, support of graduate students, and other purposes explicitly approved by the Foundation.  

•	CAT Program funds cannot be used for construction, nor for rental of space; the host institution is expected to provide space and facilities for the CAT.  

•	Indirect costs are limited to 15% of direct personnel costs (salaries plus fringe benefits).  This indirect cost limit also applies to matching funds.

•	Travel Funds.  The allocation of Foundation funds for travel shall be a specific responsibility of the Director.  All travel must contribute to meeting CAT targets or milestones.  For example, it is not appropriate to use Foundation funds to support faculty and students attending traditional scientific conferences for their own scholarly, professional activity.  While this type of travel is a necessary part of professional activity, other sources should be used to support it.  Foundation funds may be used to support only that travel which advances the center's purpose to contribute to a positive impact on the New York State economy.

Matching Funds

The CAT Program is dependent on leverage to achieve economic impact.  The Foundation investment alone will not be sufficient to accomplish all the goals of the CAT Program.  The requirement for matching funds is one of the defining elements of the CAT Program.  It has two purposes:  it expands the capacity of the CAT, and it serves as an indicator of industrial relevance. The willingness of a company to use its own funds to support Center work is a critical milestone in a Center’s interaction with a company.  It signifies the company’s commitment to the goals of a project and its expectations of a future benefit in return for its support.

The statute authorizing the CAT Program establishes the minimum matching fund requirement.  In the year of its designation and the following five years, a CAT must match all Foundation dollars on a 1 to 1 basis.  In the sixth through tenth years following the year of designation, Foundation funds up to $750,000 must be matched on a 1 to 1 basis; but additional Foundation dollars must be matched at progressively higher ratios:  sixth year 1.2 to 1; seventh year 1.4 to 1; eighth year 1.6 to 1; ninth year 1.8 to 1; and tenth year 2 to 1.  

Existing CATs that have won redesignation must continue to meet the tenth year level of matching funds.  At this level, in order to qualify for $1 million in Foundation funds, for example, a CAT would need a minimum of $1.25 million in matching funds that meet the distribution requirements.  Generally, a successful CAT meets this minimum requirement and also has additional external financial support that further leverages the Foundation funding.

All of the matching funds must be from for-profit companies that have a collaborative relationship with the CAT.  In rare cases, there may be specific exceptions.  If funding from a not-for-profit source is clearly and directly providing tangible value to a New York for-profit company working with the CAT, the Foundation may allow it as match.  Such cases will be considered on an individual basis.

Matching funds must be strategic to the CAT and contribute to meeting the center's performance targets in support of New York State industry.  Only external funds from for-profit corporations that are used for purposes that contribute to achievement of the center’s targets and milestones will be accepted as matching funds for the CAT.

Matching funds must represent tangible assets to the university, which are either monies, or which have verifiable monetary value, and which can be used by the CAT in support of achieving its performance targets and milestones.  The funds must flow directly through the university's accounts and must be auditable to the claimed source.

The Foundation monitors anticipated matching fund expenditures in the Investment Request and actual matching fund expenditures at the close of the annual contract.  The Investment Request must demonstrate the strong likelihood that sufficient matching funds will be available to conduct the CAT’s program.  At the close of the annual contract, before the final Foundation payment is made, the actual level of eligible matching fund expenditures will be evaluated and this will affect the amount of Foundation funding.

Distribution Requirement

The Foundation has established a matching fund distribution requirement in order to provide a stronger incentive for the CAT to orient its work towards the needs of New York industry, the intended beneficiary of the CAT Program.

For the purposes of the CAT Program, a company providing matching funds is considered a  “New York company” if it is a private for-profit enterprise and:

1.	its worldwide corporate headquarters is in New York State; or 

2.	the business unit with which the CAT is collaborating has a fixed place of business in New York housing (a) business unit headquarters, research, development, or manufacturing facilities and (b) regular full-time employees.

A sales presence or New York mailing address is not sufficient to qualify as a “New York company,” nor is the conduct of clinical trials or field studies in New York in the absence of the above requirements.  Situations that do not conform to this operational definition will be considered on an individual basis.

There are four general categories of eligible matching fund sources, two relating to New York for-profit companies and two relating to non-New York for-profit companies:

C	Category A is cash from New York for-profit companies to support research and development in the CAT.

C	Category B consists of two other types of support from New York for-profit companies:

-	Fees or other cash support paid to the university for CAT education or training programs;

-	Documented in-kind contributions in support of CAT programs; examples include the depreciated value of equipment donated to the CAT and used in CAT programs, or salary paid to full-time regular company employees who are in residence at the CAT working on CAT projects.

C	Category C is cash from non-New York for-profit companies to support research and development in the CAT.

C	Category D consists of two other types of support from non-New York for-profit companies:

-	Fees or other cash support paid to the university for CAT education or training programs;

-	Documented in-kind contributions in support of CAT programs.

At least 75% of the required minimum level of matching funds must be from New York for-profit companies (Categories A and B).  At least two-thirds of the New York company match (50% of the total matching funds) must be from Category A.  No more than one-third of the New York company match may be from Category B.

No more than 25% of the required minimum level of matching funds may be from non-New York for-profit companies (Categories C and D).  Cash for research and development (Category C) is the preferred form of support from non-New York for-profit companies, but up to half of non-New York corporate support may be from Category D.

The distribution requirement described above applies only to the minimum required match (e.g., for $1 million in Foundation funds: $1 million is the minimum required match in the case of young CATs, ramping up to $1.25 million for CATs older than 10 years).  There is no ceiling on the amount of matching funds that can be acquired in any category.  In fact, most successful CATs exceed the minimum.

Small New York Companies

In order to encourage CATs to work with small New York companies and to recognize the significant value of even small contributions from these companies, the Foundation will add weight to the matching fund value of contributions from small New York for-profit companies.  

For every one dollar of eligible matching funds from a small New York company that is in Category A (cash for research and development), the CAT will be credited for two dollars in Category A.  For every two dollars of eligible matching funds from a small New York company that is in Category B (cash for education and training; in-kind), one dollar of additional credit in Category A will be given.

In addition to meeting the other requirements for a "New York company," to qualify as a small New York company, the CAT must submit a letter from an officer of the corporation, dated within the relevant contract term, certifying:

(1)	That the firm's principal place of business is in New York; and

(2)	That the firm has 250 employees or less, including subsidiaries and/or affiliated corporations.

All other requirements for documentation of matching funds must also be satisfied.

Documentation of Matching Funds

CATs must supply to the Foundation documentation of matching funds in the following instances:  all New York industry sources; all in-kind match from any source; and all "small New York company" certifications.  This documentation should be submitted as part of the Final Financial Report.  Documentation of other matching funds must be available for audit but does not need to be submitted to the Foundation.

Adequate documentation would be:  

(1)	A copy of the signed agreement between the university and the company.  The name, title, and telephone number of a contact person at the company should be provided.

(2)	In the absence of a signed agreement, a letter from the company, in which the company states the amount, duration, and intended use of the funds, and any conditions on the commitment.

If the required documentation is not provided by the time of filing the Final Financial Report, claimed matching funds will not be accepted.  This could result in a reduced payment of Foundation funds.

In-Kind Contributions

Documentation for in-kind contributions must include:

(1)	A description of the contribution which clearly explains how the claimed contribution is a usable resource for the CAT, which enables the CAT to do something it could not otherwise do.

(2)	Documentation from the contributor which evidences an explicit commitment and endorsement in support of the CAT and its programs.

(3)	An independent assessment, in writing, of the claimed monetary value of the contribution.

The most common types of in-kind contributions are equipment donations and company personnel in residence at the CAT.  Specific requirements for these in-kind contributions are as follows.

(1)	Equipment - The depreciated value of capital equipment donated by industry sources for use in the CAT may qualify as in-kind matching funds.  Documentation for equipment donations must include the university's new capital asset number(s), the industry source's old capital asset number(s) for the equipment being donated, and a letter from the donor certifying the depreciated value. Equipment donations may only be claimed in the year in which the equipment is actually received by the university; they cannot be carried over to subsequent years.  So called "deep discounts" on equipment do not qualify as matching funds.

(2)	Personnel - Salaries (but not overhead) paid by for-profit companies to full-time regular company employees who are resident at the university working on CAT projects, may be considered as eligible matching funds.  This does not encompass time spent by company employees working at the company site, nor does it encompass informal arrangements or casual visits to the university.  In order to be considered eligible, documentation of the nature of the arrangement from both the employer and the university must be provided to the Foundation.  In addition, the CAT Director must explain how the efforts of the employees are directly related to the stated goals of the CAT.

Small New York Companies

To qualify as a small New York company, the CAT must submit a letter from an officer of the corporation, dated within the relevant contract term, certifying:

(1)	That the firm's principal place of business is in New York; and

(2)	That the firm has 250 employees or less, including subsidiaries and/or affiliated corporations.

All other requirements for documentation of matching funds must also be satisfied.

Intellectual Property

University decisions about the disposition of intellectual property created with Foundation funding shall, to the maximum extent possible, promote the exploitation of such intellectual property in ways that will contribute to the growth and profitability of New York companies.  Furthermore, it is the Foundation’s intent to promote reinvestment in the CAT when the fruits of its efforts result in a financial return to the university or to any subcontractor who receives Foundation funds under the CAT’s program.  Therefore, the university is expected to develop and implement an acceptable distribution policy whereby the CAT receives a reasonable share of any royalty or other income which is received by the university or any subcontractor as a result of the sale, licensing, or other use of intellectual property supported by Foundation funds.

Conflicts of Interest

The diversity of priorities and interests represented by the many individuals, organizations, and companies involved in a CAT creates the potential for conflicts of interest.  The Foundation recognizes that such conflicts cannot be completely eliminated without defeating the purpose for which the Foundation's investment in the CAT is made.  However, perceived and real conflicts can be minimized and must be managed effectively in order to maximize the positive results from university-industry collaboration.  Therefore, the university is expected to develop and implement an acceptable conflict of interest policy which protects the interests of faculty, students, staff and companies involved with the CAT. 

APPENDIX B:  OUTCOME FUNDING CONCEPTS

This document outlines the outcome funding concepts that are being introduced into the University-Industry Programs.  Words in boldface are terms that have significant, specific meanings in the outcome funding context.

1.  Investor Perspective

Investment Premise:  State funding is not a grant or entitlement.  It is an investment, and the expected return is in the form of economic growth in New York companies.
 
Overall University-Industry Program Outcome:  Industry-university collaboration measurably contributes to a competitive and expanding technology-based industrial sector as evidenced by employment growth and increased profitability in New York companies.  This increased business activity provides a positive return to New York State via tax revenues that exceed the cost of the State’s investment.

Overall Program Target:  For each $1 invested in the University-Industry Programs, New York companies working with the programs realize at least $10 of new Arevenue-equivalents,@ reflected in job growth, increased sales, decreased costs, new capital acquired, etc.  Implication:  Programs and projects that can provide returns substantially greater than 10:1 should be considered for increased investment.  Those that consistently yield much lower returns should be considered for decreased investment or divestiture.

2.  Implementor Perspective

Customers:  New York companies whose growth and/or profitability can be improved through collaboration and partnership with the implementing organization.

Performance Targets:
•	Relate to overall desired outcome, i.e., employment growth and increased profitability in NY companies
•	Quantifiable
•	Verifiable
•	Represent impact (change) in NY companies.  For example:
•	new start-up companies
•	attraction of out-of-state companies to NY
•	new products and lines of business
•	increased volume in existing lines of business

Target Examples continued
•	new capital investment
•	increased yields
•	reduced costs
•	improved reliability
•	reduced cycle time
•	reduced scrap/rework

Customer Milestones: 
•	Interim points of progress towards performance target
•	From the customer=s (company=s) perspective
•	Indicate whether the projects are on track to achieve economic impact

Verification:
•	Evidence of customer change
•	Implies the need for early discussion with customer about what will be different (better) for the customer as a result of the collaboration with the implementing organization

Products:  Services and deliverables that the implementing organization provides to its customers, which lead to economic impact for the customers; for example:
•	Collaborative research with industry
•	Joint product or process development
•	Manufacturing process improvement
•	Commercialization of university technology
•	Technology licensing
•	Technical problem solving
•	Insight and advice on emerging technologies
•	Education and training
•	Links to other resources

APPENDIX C:  PROPRIETARY INFORMATION

Some of the information you report about company results may be proprietary.  While the Science and Technology Foundation is subject to the State’s Freedom of Information Law (see Public Officers Law, Sections 87 and 89 and New York Code of Rules and Regulations, Title 21, Chapter LXVII, Part 5900), there are explicit provisions in the law which require the Foundation to protect from public disclosure proprietary information, such as trade secrets, which, if disclosed, would cause substantial injury to the competitive position of a firm.  However, in order to protect such information, we need to know about its proprietary nature.

To get an exception from public disclosure, you must submit, with your report, a cover letter identifying the specific proprietary information and explaining the reason for the requested exception.  The exception from public disclosure may also extend to the request itself, if disclosure of the request would defeat the purpose for which the exception is sought.   Please note that the Foundation cannot except an entire document from public disclosure; only specific information that has proprietary value can be excepted.

We recommend, in addition to the request letter which identifies the specific information which is the subject of the request for exception, that you also physically identify the proprietary information in the text by highlighting it and/or using a ACONFIDENTIAL@ or APROPRIETARY@ stamp in the margin next to the sensitive information.  Another approach would be to collect all the pieces of proprietary information into a separate CONFIDENTIAL APPENDIX.

If the Foundation grants the request for exception from public disclosure, the Foundation will keep the excepted information in secure facilities and will notify you of any request the Foundation receives for disclosure of the information.  Information that is not specifically and explicitly identified and excepted from public disclosure, as described above, will be available for public inspection under the terms of the Freedom of Information Law.