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Technology Acquisition. Norm Thorpe General Motors Corporation April 22, 2002. Gov’t Funded R&D Over Time. Pre-World War II Air Corps Act of 1926 World War II Manhattan Project Post World War II (Cold War) National Labs, NASA, DARPA Post Cold War Searching for solutions.
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Technology Acquisition Norm Thorpe General Motors Corporation April 22, 2002
Gov’t Funded R&D Over Time • Pre-World War II • Air Corps Act of 1926 • World War II • Manhattan Project • Post World War II (Cold War) • National Labs, NASA, DARPA • Post Cold War • Searching for solutions
Commercial R&D over Time: GMC • Technology Driving Market Success • Electric Starting/Lighting/Ignition • Interchangeable Parts • All steel bodies • Automatic Transmission • Diesel Electric Locomotive • 1939 World’s Fair: Futurama
GMC R&D, cont • Firebirds: gas turbine cars • Commercial gas turbine Class 8 trucks • Patriot Missile Gen sets • Electric Vehicles and Advanced Batteries • Fuel Cell Vehicles • Catalytic Converters • Light Weight Structures • Crash Test Dummies
Institutional R&D Model • Large free standing research institutions • Academic outlook • Metrics: papers published, patents obtained • Prestige factors, cadre of professionals • Cost center approach • high costs typically buried by allocation over multiple business units • Vertical integration: Corp. self sufficiency
Commercial R&D in C 21 • Large institutional R&D labs gone • or greatly reduced • Alternate solutions: • “leverage” • at best: cost share • worst case: dilution of goals/results • transfer to suppliers • contract out • move expense down supply chain
GM Approach to R&D • Advanced Technology Work [ATW] • Science Lab • Innovation Programs • WWP/Purchased R&D/LOTM purchasing • Single Mission Challenge Teams • Product Engineering Centers • Collaborative Labs • USCAR
R&D Acquisition Methods Continuum • Purchase Order • Modified P.O.s: • Non evaluation commitments • IP flexibility • Joint R&D Agreements • Teaming Agreements • Equity Relationships
Purchased R&D and Engineering Services • Not joint R&D • Not difficult or unusual • unless buyer is a government agency! • Engineering/R&D in Source Selection • price/pay methodology • follows SOW • negotiated at market rates
Collaborative Labs • Universities • Institutions • Equity Partners • Automotive OEM Alliance Partners • Joint R&D Partner Companies
Joint R&D Agreements: Non-Standard ! • Embedded within larger relationships • Teaming Agreements • Equity Investments • Strategic Alliances • Consortia • Umbrella/Master agreements • Free standing projects • Walk before running?
Joint R&D Agreements: Variable Factors • Who is paying? Is there cost sharing? • Who is bringing IP? Other resources? • What is the pre-existing relationship? • What future relationship is expected? • Are there anti-trust issues? • Can program results be shared/allocated? • Is there a need for leadership by one party?
Joint R&D Agreement: Content • Statement of Purpose • Funding Agreements • Program Management Process • Competition Issues, if any • Confidentiality/Intellectual Property • SOW w/Payment Milestones, Deliverables • Legaleze
Joint R&D: Issues (Usual Suspects) • Confidentiality/Non-Confidentiality • Ownership/control/allocation of program IP • Commercialization issues • allocation of upside • access to/compensation for background IP • free riding competitors
Conclusion • Between companies, pricing issues are important as they effect budget, but are rarely controversial or difficult • Commercialization issues which are so difficult for collaborating companies, should be no-brainers for Gov’t/Corp • But only if gov’t negotiators are competent and empowered
And a modest proposal: • Melt down R&D Acquisition regs • Repour with goal of permitting user of new products/technologies to buy what is needed on terms necessary to get it • enforce business discipline by holding buyers accountable for success of their deals • de-emphasize pricing issues, focussing efforts on real issues in negotiation