Fiscal Year 1999 Corporate Plan

Submission of the President
FOR THE UNITED STATES PATENT AND TRADEMARK OFFICE
DEPARTMENT OF COMMERCE

Executive Summary

Fiscal Year 1999: Emphasize Core Business

For FY 1999, the PTO is emphasizing its core businesses - granting patents, registering trademarks and disseminating the information contained in patents and trademarks. The work of the PTO affects all Americans, because the products and services that we provide to our customers enable them to get their new inventions and new ideas into the American and global market place. Our core businesses also are enablers of President Clinton's priorities for FY 1999:

The President is encouraging innovation and investment, focusing national attention on the importance of technology to the American economy. Technology - the most important enabling industry - currently represents about 50 percent of the nation's economic growth. By providing patent rights, the PTO is one of the early, crucial steps to America's prominence in the areas of innovation and technology. The PTO is seeing some of its most dramatic growth in the more complex areas of technology, such as communications, computer software and semiconductors.

The President also is challenging the Government to do more with less. The PTO is one of a small group of Federal agencies that has been working directly with the Vice President to craft a series of commitments that will enhance customer satisfaction with the PTO because we have emphasized our core businesses. As a High Impact Agency, the PTO, through this FY 1999 Corporate Plan, has commited to the following Year 2000 Commitments:

• We will reduce the PTO processing time for patent original inventions to 12 months in 2003.

• We will test reengineered processes and automated systems, and be ready to deploy electronic processing of patent applications in 2003.

• We will reduce the PTO's trademark processing time to 3 months to first action, and we will offer electronic filing capabilities to our customers.

• Electronic applications will be available on the PTO's website, and
• Trademark customers will be able to file applications and related papers electronically.

• We will partner with the World Intellectual Property Organization (WIPO) to achieve electronic filing of Patent Cooperation Treaty applications and, in 2000, electronically receive and process PCT applications at the PTO.

• We will enable customers to use the Internet:
  • to request the status of their patent and trademark applications,
  • to place orders and receive products, and
  • to access patent and trademark data when they are in a Patent and Trademark Depository Library.

• We will establish a fee schedule that encourages participation in the patent and trademark systems and which is aligned with costs.

• We will offer PTO employees innovative training programs at PTO University and work-at-home opportunities.

* During calendar year 1999, we will conduct a one-time survey of customers who received patents and trademarks to assess their satisfaction with our progress toward accomplishing these commitments. We expect results of at least 95 percent satisfaction.

Finally, the PTO is supporting the President's efforts to reduce the deficit and invest in the future. As a result of the Congressional cap on FY 1998 obligations and the strong growth in patent-related revenues, PTO will have $116 million more than necessary to offset FY 1999 program costs. To contribute to the bipartisan goal of balancing the budget, the PTO will deposit this $116 million into the Treasury General Fund.

Our activities to strengthen intellectual property protection worldwide, grant patents, register trademarks, and disseminate patent and trademark information directly support the priorities of the Secretary of Commerce as articulated in the Department of Commerce (DOC) FY 1997-2002 Strategic Plan.

In fulfilling our mandate as a High Impact Agency and in full support of the Secretary's strategic plan, we have adopted a balanced approach for processing current work and preparing for the future. Because of the Clinton Administration's success in achieving a growing economy, the demand for patent and trademark products and services is at an all-time high. This makes it imperative that we be responsive to the customers applying for patents and trademarks, as well as those requesting information products and services, by providing them with the highest level of quality and service. At the same time, we must be forward-thinking managers and invest in the patent, trademark and information dissemination systems for the next millenium.

This balanced approach to achieving our commitments centers around our four strategic directions: enhance human resources, employ better processes, leverage information technology and effectively manage resources. In constructing these commitments, PTO managers comprehensively assessed the key issues and challenges we are facing in our support for both current and future customers, and we balanced the allocation of resources to achieve both immediate and long-term solutions.

We will achieve the balanced approach by funding specific solutions that meet the performance goals articulated in the DOC strategic plan. Consistent with GPRA performance planning requirements, we also have established performance measures for each of these goals that will demonstrate successful achievement of the goals. Table 2 provides a summary of the key commitments that would lead to achievement of our strategic and macro performance goals in each of our three business areas and the policy function, along with our specific accomplishments in FY 1999. These are described in more detail in subsequent chapters of this Plan.

PTO's Year 2000 Commitments also include two cross-cutting initiatives which are being funded from base resources in FY 1999. These are described in more detail in the PTO's Annual Performance Plan, included as an Appendix.

We have adhered to the performance planning requirements of the GPRA in developing this Corporate Plan, and have fully integrated performance planning with our resource allocation plans. This Corporate Plan, including the PTO's Annual Performance Plan for FY 1999, provides the elements needed for the Department to build its annual performance plan. This Corporate Plan, including the PTO Annual Performance Plan, meet the following OMB criteria.

All components of our performance planning activities were carried out by in-house staff -- non-Federal parties were not involved.

Summary of Resource Requirements Exhibit 5

( Dollars in thousands)

Summary of Resource Requirements Exhibit 5

( Dollars in thousands)

SUMMARY OF RESOURCE REQUIREMENTS

By Business Areas

(Dollars in thousands)

SUMMARY OF FINANCING EXHIBIT 7

(Dollar amounts in thousands)

Patent Business

The Patent Business is one of our three core businesses. The primary mission of the Patent Business is to help customers get patents. The Patent Business accomplishes this mission by comparing the claimed subject matter of an inventor's application for a patent to a large body of existing technological information to determine whether or not the claimed invention is new, useful and non-obvious to someone knowledgeable in that subject matter. In the course of examining patent applications, patent examiners make determinations on patentability, prepare briefs on applications appealed, make holdings of abandonments, recommend institution of interference proceedings to determine priority of ownership, and rule on other post-interference issues in accordance with the provisions of 35 U.S.C. and 37 C.F.R.

A United States patent confers on the owner of innovative technology the right to exclude others from importing, making, using, offering for sale or selling the patented invention in the United States in exchange for a full and complete disclosure of the invention. A patent represents a valuable asset and, as such, it attracts the necessary capital to establish, grow, and maintain U.S. industries not only in the United States, but around the world. Therefore, the Patent Business plays a central role in supporting the Department's strategic goal to provide effective management and stewardship of our nation's resources and assets to ensure sustainable economic opportunities.

The Patent Business Environment

The Patent Business has experienced a steady growth and change in the technological profile and complexity of application filings in the past decade. Although the actual average annual growth rate of filings from FY 1987 through FY 1996 has been five percent, some technologies -- such as communications, computer software and semiconductors -- have experienced significantly higher growth rates. These technologies are also more complex, requiring more time to examine and a commensurate rise in the level of knowledge and skills of patent examiners. Therefore, taking into account the average historical growth rate of the past decade, the changing mix of application filings from different industries, and other economic indicators that affect patent application filings, the Patent Business is expected to continue to grow and face new business challenges well into the next century.

An added challenge to the continuous growth in application filings is presented by President Clinton's Framework for Global Electronic Commerce whereby we must make our system for protecting patentable innovations more efficient to meet the needs of the fast-moving electronic age. It is in such quickly evolving technologies as communications and information processing where the Patent Business has experienced the highest growth rate and which will require the focus of our attention in terms of resource allocation, whether by building the cadre of patent examiners specializing in these technologies, or by reengineering processes for more efficient results and improved cycle time.

Developments in the policy arena are also expected to impact the Patent Business environment. Omnibus legislation pending on Capitol Hill will, among other things, transform the agency into a government corporation, expand re-examination proceedings and provide for publication of applications at 18 months (with certain limitations). These and other international activities, such as "Wire the World" and the Patent Law Treaty, may lead to increased workloads, but will significantly transform the daily operations and culture of the Patent Business.

And finally, the Patent Business also faces the challenge of resuming reengineering and automation activities to ensure its operational effectiveness in the 21^st century. Under the provisions of the FY 1998 Appropriations Act (P.L.105-119), the Patent Business is able to begin testing reengineered processes and pilot patent process automation projects, which aim to provide the necessary impetus for the activities planned in FY 1999 and beyond.

Past filings and performance results achieved in the past five years are summarized in Table 3.

The Patent Business Case

The timely issuance of patents, as measured by cycle time for processing an invention, is critical for the Patent Business from the standpoint of the inventor as well as for ensuring the operational effectiveness and financial stability of the Patent Business. Since the term of utility patent protection begins on the date the patent is issued and ends 20 years from the filing date of the invention, cycle time directly impacts the term of patent protection for our customers. Patent customers rely on timely feedback and action on their applications in order to take advantage of the economic opportunities a patented invention affords. From the standpoint of our financial stability, because 59 (20 + 39) percent of patent revenues come in the form of patent issue and maintenance fees, Figure 1, the Patent Business must continuously strive to decrease cycle time and maintain high quality standards, while avoiding a decline in its output or patent disposals. Since patent disposals include patents issued, a decline in that number automatically leads to a decline in issue and maintenance fee revenues.

An equally important challenge for the Patent Business is to improve customer satisfaction as measured by patent customers. Based on the results of customer surveys conducted in 1995 and 1996, the Patent Business has identified critical areas that need improvement both in terms of quality and timeliness of service to customers. In 1999, the Patent Business goal is to improve customer satisfaction levels to 70 percent in four standards: directing the customer promptly to the proper office or person (1996 - 51 percent); return customer telephone calls within one business day or provide another contact (1996 - 55 percent); set forth clearly in written communications, the technical, procedural and legal positions of examiners (1996 - 50 percent); and conduct thorough search of all information (1996 - 56 percent). The overall index of customer satisfaction is targeted to improve, from the 50 percent baseline to 65 percent in 1999. This is equivalent to a 30 percent improvement in the customer satisfaction measure.

In FY 1999, the Patent Business expects to receive 243,000 utility, plant and reissue (UPR) patent application filings (or 201,300 inventions). This represents a five percent increase over FY 1998 estimates. Projections of UPR application filings for FY 1998 and FY 1999, along with key workload indicators under the Patent Cooperation Treaty (PCT), are presented in Table 4. In order to have the capability to meet the technological demands of examining patent applications as the number of filings continues to grow and applications become more complex, the Patent Business must rebuild its examiner capacity, resume process reengineering activities, and automate its labor-intensive processes.

Business Goals and Objectives

Patent Business Goals

The Patent Business macro performance goal is to grant exclusive rights, for limited times, to inventors for their discoveries. In direct support of this goal, and in concert with the mission of the Patent Business, we have delineated the following business goals.

• Reduce PTO processing time to 12 months or less for all inventions.
• Establish fully-supported and integrated Industry Sectors.
• Receive applications and publish patents electronically.
• Exceed our customers' quality expectations, through the competencies and empowerment of our employees.
• Align fees commensurate with resource utilization and customer efficiency.

Goal 1: Reduce cycle time (PTO processing time) to 12 months or less for all inventions

For FY 1999, the Patent Business proposes a budget of 5,169 FTE and $652,690,000. This represents an increase of 660 FTE and $61,310,000 over the FY 1999 base, or 661 FTE and $71,350,000 over the FY 1998 estimate. The corresponding increase in patent application filings represents a five percent increase over FY 1998 estimates, or a projected FY 1999 workload of 243,000 utility, plant and reissue (UPR) applications, compared to 232,000 applications in FY 1998. The number of original invention filings projected for FY 1999 (201,300) also represents a five percent increase over the FY 1998 estimate (191,700).

In FY 1997, the Patent Business adopted cycle time as its primary indicator for measuring patent application processing time and began transitioning away from patent pendency. As a measure, pendency was deemed somewhat limited, as it simply reported how long the average patent application took to move through the examination process. Whereas pendency tracked patent applications, including continuations or second applications filed to continue the prosecution of a parent application, cycle time tracks inventions, or the parent application. Pendency also failed to take into consideration delays attributable to the applicant, or applications that contained multiple inventions, which were allowed at different times. Conversely, cycle time measures PTO processing time only (excluding applicant response time to PTO communications), from the original filing date of an invention to its disposal.

Pursuant to the primary business goal of reducing cycle time to 12 months for all inventions, and in an effort to accomplish the four other goals delineated in this section, resources requested by the Patent Business in FY 1999 will be directed to the following business priorities:

• building the cadre of employees with the right mix of science and engineering expertise required to examine the increasing number of complex application filings;
• beginning the implementation of the reengineered process design by establishing the Patent Working Lab for validating the assumptions and testing the various phases of the To-Be process design; and
• leveraging information technology to gradually move to an electronic environment.

The projects that support these goals are described in the pages that follow.

As we stated above, some of the more complex areas of technology, such as communications and information processing, as well as physics, optics, systems components and electrical engineering, are the areas currently experiencing the highest growth in patent applications. The Patent Business must, therefore, focus on building a cadre of employees with expertise in these high technology fields. To be able to meet this business priority and compete with the private sector for a share of the limited human resources in these disciplines, the Patent Business has developed a non-traditional hiring plan that includes a comprehensive outreach program, an expanded advertising campaign, participation in career fairs, partnership with placement offices of colleges and universities, and recruitment bonuses. This hiring plan also includes use of the Internet-based job application located on the PTO home page to assist in the processing of applications. The Patent Business will keep the Office of Personnel Management informed of these novel recruitment techniques and seek appropriate authority for their implementation, if so required.

In addition to hiring the required complement of patent examiners, in FY 1999 the Patent Business will be able to resume the reengineering and automation activities described in this section which would result in significant performance improvements over baseline measures and which factor into achieving our 12-month cycle time goal. As a direct result of these activities, the number of applications disposed per examiner FTE would increase to 89.4, an improvement of about 3 percent over the baseline. Most significantly, and aside from increases in quantity measures, customer satisfaction would improve by 30 percent and employee satisfaction by 71 percent over respective baseline measures.

The Patent Business goal of achieving 12-month cycle time also makes good business sense aside from the beneficial financial advantage it provides for both the customer and the PTO. For any production operation such as the Patent Business, improving handling and processing implies greater efficiencies. However, in order to achieve the cycle time goal, the Patent Business must direct a considerable amount of its resources to major reengineering and automation projects aside from building its cadre of examining personnel. In addition to evaluating process changes that will result from incrementally implementing the reengineered patent process design in a Working Lab, the Patent Business also is committed to testing and evaluating novel human resource practices that would substantially improve performance.

The Working Lab will explore new roles and responsibilities for patent examiners and technical support staff and will test changes to key components, steps, and processes that aim to reduce cycle time (Goal 1). The Working Lab also will attempt to establish parameters for a patent application processing "work group," which is defined in the Patent Reengineering Concept of Operations as the core organizational structure in Industry Sectors. By testing and evaluating different organizational arrangements, the Patent Business expects to have a prototype that can be applied across all Industry Sectors (Goal 2). Another objective of the Working Lab is to engage customers in direct dialogue with Lab workers with regard to their assessment of the quality of patent products and services they receive (Goal 4).

The Patent Business anticipates that, under the reengineered design, performance results achieved in the Lab will demonstrate, in measurable terms, the benefits expected from the elimination of non-value added activities and from the diversion of all non-legal and non-technical tasks away from patent examiners. Establishing the Working Lab as planned and making other information technology investments now are imperative for ensuring the credibility as well as operational potential of the organization in the 21^st century. The performance results of this new direction will deliver a 15 percent efficiency gain in examination processing in FY 2001 and will, in the interim, directly contribute to the accomplishment of our goal of reducing cycle time to 12 months for 75 percent of patent inventions; maximize the business potential of patent term for inventors; and increase the awareness among patent employees of the business impact of their decisions.

Goal 2: Establish fully-supported and integrated Industry Sectors

The primary objective of creating Industry Sectors is to improve application processing by integrating related technologies into a business unit comprising pre-examination, examination, classification, and post-examination capabilities. Fulfillment of this business goal would decrease handling and produce efficiencies in the long-term. More importantly, and directly supporting the vision of the Patent Business to treat customers as partners, the clustering into Industry Sectors enables the realignment of the arts and technologies to parallel technology areas in private industry. In the long-term, this realignment would provide:

• customized resources and services to meet distinct customer requirements;
• improved access to personnel for search consultation and to the existing paper search files;
• efficiencies of scale by permitting work load surges to be distributed among a number of individuals, rather than having a backlog in one Examining Group and a surplus of resources in another;
• increased involvement of private industry in the area of technical training; and
• a streamlined application process by co-locating the initial examination and post-examination functions within the sectors.

Six Industry Sectors have been identified to replace the 16 Examining Groups that currently comprise the Patent Corps: 1) Biotechnology, Organic Chemistry and Designs, 2) Chemical and Material Engineering, 3) Transportation, Construction, Agriculture and Security, 4) Mechanical Engineering and Products, 5) Communications and Information Processing, and 6) Physics, Optics, Electrical Components and Engineering. The restructuring into these Industry Sectors will be formally presented to Congress shortly.

In the interim, the Patent Business has taken steps to implement the first phase of the creation of Industry Sectors in FY 1998 by consolidating the Groups into Technology Centers. These Centers provide for the regrouping of art units in the same manner that the Industry Sectors would, but do not incorporate the reorganization of pre-, post-, and classification functions into the examining units.

Goal 3: Receive applications and publish patents electronically

Another crucial goal of the Patent Business is to receive applications and publish patents electronically in FY 2003. In order to accomplish this goal, the Patent Business plans to conduct a series of patent reengineering prototypes that will define and refine requirements, validate assumptions, and mitigate risk. These prototypes will address both the human and technical engineering aspects of the future electronic work place and pave the way to an electronic, paperless examination process. The projects outlined below aim to contribute to our goal of reducing cycle time to 12 months or less for all inventions when fully integrated into the examination process. A more detailed description and milestones relating to these projects can be found in the PTO 1998-2003 Strategic Information Technology Plan, dated December 1997.

• Patent Image Capturing System (PICS) - PICS will provide timely capture of application images, automatic tracking and routing of patent applications through initial examination, certification, licensing and review functions. This will eliminate the use of microfiche and storage, hand delivery of paper files, and manual photocomposition in FY 1999. The proposed deployment of scanning technology into the Industry Sectors is the first step in providing examiners with the ability to process office actions electronically. This project directly supports our goal of receiving applications and publishing patents electronically for the first Industry Sector in FY 2002, and for all sectors in FY 2003. Although this is targeted to achieve Goal 3, it also contributes to our goal of reducing cycle time.
• Application Capture and Review System (ACRS) - Tightly integrated with the PICS project above, ACRS aims to maximize the use of automated tools to accomplish the review and routing of incoming patent applications. These automated tools will provide significant increases in productivity, data integrity, and efficiency. ACRS focuses on automated OCR capture of the full text of patent applications received, automated capture of bibliographic data from applicant-supplied standard data sheets with subsequent automatic loading into the Patent Application Location Monitoring (PALM) system, automated first level licensing and review screening, and automated classification for initial routing to the Examining Corps. With the resources requested for FY 1999, the Patent Business will begin deployment of application image capture and review to Industry Sectors. Like PICS, this project aims to contribute to the goal of reducing cycle time.
• Photocomposition, Publishing, Production System (PPP) - This system will automate the photocomposition process, the creation of publication-ready documents in electronic form, and the preparation of published data into the appropriate medium for public dissemination. In other terms, this system provides the functionality necessary to prepare granted patents for hardcopy and other media publication, and facilitate the dissemination of electronic patent information in a variety of media (e.g. paper, on-line, CD-ROM). In FY 1999, the Patent Business expects to complete the PPP prototype and evaluate it for further deployment. Similar to the two projects described above, PPP also will contribute directly to the goal of reducing cycle time.
• Tools for Electronic Application Management (TEAM) (Previously referred to as Patents Reengineering Prototype) - In order to mitigate risk, refine the requirements of the completed Patent To-Be process, and validate the assumptions of the re-engineered design, the Patent Business plans to develop a prototype before developing automated information systems to fully support the electronic work place of the future. Initial prototypes have already been piloted in one examining cluster of the Patent Business. The first prototype has resulted in validating the capability to accept patent documents in paper form or on disk, capture and manage the necessary bibliographic data, organize the documents into electronic file wrappers, and then support all examiner processing and communication requirements. The second prototype has resulted in validating both the concept of applicants' submitting intelligent patent applications to the PTO using Commercial-Off-The Shelf (COTS) software packages, as well as the concepts in the draft Implementation Guide for Electronic Filing. In FY 1999, TEAM will build on the knowledge gained from the first two prototypes by allowing the addition of documents to an electronic file and also providing access to on-line work tools and data bases.

• Automation of Patent Cooperation Treaty (PCT) Operations - This project will begin the deployment of a system for electronically accepting applications filed under PCT and converting paper applications into electronic format for processing. The system will permit the electronic exchange of international patent application documents between the PTO and the World Intellectual Property Organization (WIPO) and our Trilateral partners, the European Patent Office and the Japanese Patent Office. The system will also have the capability for making PCT applications available electronically to patent examiners. In FY 1999, the Patent Business expects to complete the pilot for public key encryption over the Internet for PCT applications, automate the PCT Receiving Office operations, and establish Intranet communication with WIPO and our Trilateral partners.

Operational benefits which the PTO expects to receive from these automation projects include the elimination of many manual processes such as hand delivery of paper files, and manual photocomposition. With automation, manual data entry is reduced and files can be retrieved quickly via electronic search to be rapidly sorted, reviewed, and routed. These files can then be shared to allow concurrent processing. Using desktop workstations, searches for reference data can be performed quickly and the examiner can subsequently produce correspondence with the applicant using a suite of electronic forms. With files stored electronically, the status and location of applications can be provided to an applicant almost instantaneously, customers can be provided certified copies more quickly, and formalities review and examination can be conducted more efficiently.

Goal 4: Exceed our customers' quality expectations, through the competencies and empowerment of our employees

The Patent Business environment of the future is characterized by employee ownership and accountability for the benefit of the customer. Thus, enhancing human resources (in conjunction with planned human resource activities listed below) is one of the four corporate foundation strategies the Patent Business has adopted to meet the goal of providing patent customers with the highest level of quality and service. The Patent Business views the skills, knowledge and abilities of employees as the most valuable resource. By providing essential opportunities for employees to expand their professional competencies and experience personal growth and development in their careers, our plans include developing a diverse and expert staff who genuinely are interested in, and capable of, supporting and helping our customers get patents. As employee satisfaction increases, PTO expects customer satisfaction to increase proportionately.

The fundamental purpose behind our human resource management practices is to help build organizational capabilities to support our business goals and objectives by aligning organizational values, business strategies, and core competencies. In FY 1999 the Patent Business expects to have a workforce of 5,787 employees, an increase of 1,033 over the FY 1998 estimate. A growth of this magnitude requires novel approaches to human resources management (HRM) particularly in the recruitment and training domains. Most importantly, the PTO must prepare the nearly 2,000 technical and administrative employees for a technologically challenging future in a reengineered and automated patent examination environment. Our proposed approach to human resources management includes comprehensive training and special skill-enhancement programs. The activities described below are intended to examine all aspects of HRM and explore options for optimizing the allocation of human resources to meet performance goals.

• Work Force Transitioning Strategy - The Patent Business, guided by the Office of Human Resources, will develop transition strategies for individuals affected by reengineered business processes. Strategies include retraining, career counseling, a re-careering center, and aggressive outplacement. Also included in the plan is a program that provides work opportunities for technical employees through reimbursable service agreements with other Federal entities.

Goal 5: Align fees commensurate with resource utilization and customer efficiency

In order to manage resources more efficiently and improve upon current levels of customer service, the Patent Business is adopting corporate business practices. As part of this effort, the Patent Business, with support from the Chief Financial Officer's organization, is calculating costs associated with the major PTO products and services. This data also will allow the PTO to meet the revenue standard of the Statement of Federal Financial Accounting Standards No. 7 (effective in FY 1998). This standard requires the PTO to report the costs associated with each of the products and services for which the PTO charges a user fee.

Further, the Patent organization is working closely with the Chief Financial Officer's organization to review PTO's entire fee structure as described in the Annual Performance Plan.

The surcharge on approximately 25 major patent fees, established in the Omnibus and Budget Reconciliation Act of 1990 and extended in the Omnibus and Budget Reconciliation Act of 1993, will expire at the end of FY 1998. The PTO requires legislation to increase patent fees collected pursuant to 35 U.S.C. 41, so that patent revenues continue to cover the costs of patent processing and related services.

FY 1999 Performance Goals and Measures

In FY 1999, the Patent Business will strive to achieve the PTO goals and objectives as stated in the Department's Strategic Plan. The longer-term performance results of the Patent Business will provide our customers with the highest level of quality and services. The success of the Patent Business in FY 1999 will be measured by the performance indicators delineated in Table 7.

^{*Original inventions exclude Rule 60 and 62 continuations and requests for continuing prosecution under Rule 129.}

^{**Baseline measures are derived from FY 1996 actual performance results except for the workload cost indicator estimates, which are based on preliminary Activity Based Costing models of FY 1997 actual cost accounting data.}

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Trademark Business

The Trademark Business is one of our three core businesses. The primary mission of the Trademark Business is to apply the provisions of the Trademark Act of 1946 in the examination and registration of trademarks. Federal registration of a trademark on the principal register is prima facie evidence of the validity of the registration, ownership of the mark by the registrant, and the registrant's exclusive right to use the registered mark in commerce in connection with the goods or services listed in the registration. Although registration is not required to use a mark in the United States, Federal registration of a mark permits enforcement of intellectual property rights in Federal courts for claims involving infringement, unfair competition, and counterfeiting, and also provides a basis for obtaining protection for the mark in other countries, under various treaties. This valuable intellectual property right provides protection for the owner's business investment in goods and services sold under the registered mark. Thus, the Trademark Business directly supports the Department's strategic goal to provide effective management and stewardship of our nation's resources and assets to ensure sustainable opportunities.

The core process of the Trademark Business is the examination of an application for a mark. In the course of examining an application, a trademark attorney makes a determination on the registrability of a trademark, prepares briefs on objectionable applications, approves a mark for publication in the Official Gazette, and in Intent-to-Use (ITU) cases approves the applicant's Statement of Use for registration following a second examination. Based on the Trademark attorney's decision, the PTO issues notices of allowance and certificates of registration.

The Trademark Business Environment

The growth in trademark applications has continued to exceed prior year projections. Whereas the Trademark Business historically had projected a growth rate of six percent per year, the annual growth rate since FY 1991 has averaged 11 percent. Using statistical tools applied to actual application filing data from FY 1991 through FY 1997, the Trademark Business is able to project a continuing trend in filing increases at a minimum annual growth rate of ten percent.

Over the past few years the Trademark Business has been unable to increase staffing levels commensurate with the growth in application filings. (Figure 4 depicts the lagging growth in trademark examining attorneys vis-à-vis the growth in trademark application filings.) Whereas application filings have increased at an average rate of 11 percent per year from FY 1991 to FY 1997, the increase in staff over the same period of time has averaged only seven percent. As a result, the inventory of unexamined work has risen to more than six months, causing first action pendency to rise to 6.4 months and pendency to registration or abandonment to 16.9 in FY 1997. Actual filings and performance results achieved in the past five years are summarized in Table 8.

The Trademark Business Case

The prime indicator of the steadfast importance of trademarks for the commercialization of U.S. products and services is the growing number of trademark application filings. (These workload indicators are presented in Table 9.) Registered U.S. trademarks identify a specific source of goods or services and, as such, they can be among the most valuable assets owned by a business. This identifying mark of a product or service also helps consumers to choose between one product and another and expect a consistent level of product quality characteristic of the mark. Thus, trademarks have financial and practical value for both the trademark owner and the consumer.¹ Therefore, the commensurate ability of the Trademark Business to handle the growing number of application filings has become increasingly important. The business case supporting the FY 1999 budget request focuses on the level of staffing and resources required to process 275,000 applications, achieve first action pendency of 3.9 months, begin to restore overall pendency to the 13-month goal, meet customer service standards and performance targets, and address long term operational capability by exploring process enhancement opportunities through information technology and process reengineering. The Trademark Business is focusing on improving first action pendency in FY 1999 because of its expressed importance for our customers. A timely favorable first action allows applicants to begin making plans for marketing their products and services under the mark thus allowing them a business advantage over competitors.

Together with building the cadre of trademark attorneys and staff needed for the examination of applications received comes the challenge of acquiring adequate office space during FY 1998 and FY 1999. The Trademark Business has experienced severe constraints with respect to reconfiguring its current space and acquiring additional space needed to accommodate the new positions authorized in the FY 1998 budget. Additional space is also needed for storing pending files as new application filings continue to increase. While acquisition of space is of extreme importance to the accomplishment of Trademark's goals, the leadership is exploring alternative options for meeting their FY 1999 commitments while the space issue is being resolved.

The Trademark Business also is committed to improving the level of customer satisfaction as measured by trademark customers themselves. Utilizing the responses gathered from customer surveys conducted in 1995 and 1996, the Trademark Business has identified critical areas -- clarity and promptness of communication with customers -- which are targeted for immediate improvement.

Business Goals and Objectives

Trademark Business Goals

The macro performance goal of the Trademark Business is to enhance trademark protection. This goal focuses on the ultimate outcome or benefit of a registered trademark for the owner and, therefore, serves as the principal driver of the manner in which the Trademark Business sets operational priorities, allocates resources and conducts business. Resources are directed to those activities or new initiatives that would have the greatest impact on the quality, efficiency and effectiveness of the examination process. Performance is measured by the number of applications filed; the number of trademark disposals per FTE; the unit cost of trademarks disposed; actual pendency; the percentage of files that achieve the Office's pendency goals; the level of customer satisfaction; and the level of employee satisfaction. In direct support of the mission and macro performance goal, the Trademark Business has established the following objectives:

• Maximize the business potential of trademarks for customers.

• Enhance electronic communication with customers and electronic processing among employees by transforming trademark processing into a fully electronic operation in 2002.

• Enhance electronic processing among employees while creating a balance between work and personal lives of employees by implementing trademark work-at-home.

Similarly, the Trademark Business has delineated the following business goal which will have a direct impact on performance results.

• Reduce trademark application processing time by implementing process changes and leveraging information technology to accomplish the following in FY 2002 or sooner:
  • Reduce the time to mail filing notices to 14 days.
    • Examine new applications and provide a written communication regarding registrability within three months of the filing date.
    • Determine the registrability of trademarks within 13 months of receipt of the application.
    • Issue Notices of Abandonment within 45 days of the date the file is abandoned.
    • Mail Certificates of Registration within seven days of registration.
    • Centralize the "change of address" function.
    • Incorporate ITU docketing, statement of use and extension request examination functions into the Law Office process.

The Trademark Business proposes to achieve the above listed improvements by focusing on the process, the customer, and the employees, as highlighted below and described under the activities planned for FY 1999:

Process - Implement the reengineered trademark process design and leverage information technology to automate the process in increments that deliver the highest return on investment.

Training - Train all trademark employees in all aspects of the trademark process. Create an environment where employees understand the correct course of action to take and thereby improve the methods in which they process requests or respond to customer inquiries.

Education - Provide wide access to trademark information and trade related publications to increase employee knowledge and understanding of the process, including the different uses of trademark registrations in the domestic and international market place. Create informed and responsive employees by increasing their awareness of the possible impact of the external environment on trademark operations and the roles the Trademark Business and the PTO play in mission accomplishment.

Communication - Create a data base of clearly written answers to questions most frequently asked by customers; aim to resolve all customer inquiries through a single contact; ensure the timeliness of written communication; seek to reduce the number of calls overall; ensure that all documents associated with an application are properly matched; aim to reduce or eliminate petitions and letters of protest.

"Adopt a Customer" - Enhance customer relations by understanding the customers' points of view and assessing how satisfied or dissatisfied they are with the level and quality of service we offer.

Statutory - Analyze the nature of office actions and seek to revise the rules or statutes to increase the number of applications completed accurately at time of filing, thereby increasing the percentage of first actions that qualify for publication.

Harmonization - Assist the PTO Policy specialists in pursuing international harmonization of trademark laws.

For FY 1999, the Trademark Business proposes a budget of 938 FTE and $90,011,000. This represents an increase of 71 FTE and $3,905,000 over the FY 1999 base, or an increase of 117 FTE and a decrease of $4,646,000 from the FY 1998 estimate. The corresponding increase in trademark applications represents a ten percent increase over FY 1998 estimates, or a projected FY 1999 workload of 275,000 applications. Within our overall goal of reducing trademark application processing time, resources available to the Trademark Business in FY 1998 and FY 1999 will be directed to improving the quality of output measured in actual pendency. To the extent Trademarks is able to hire the planned number of employees in FY 1998 and FY 1999, the amount of overtime worked by current staff would be reduced significantly. If there are any obstacles or delays in bringing new staff on board, the amount of overtime would need to continue closer to current levels.

Thus, if the Trademark Business is able to hire the planned additions to trademark examining staff, exercising alternative accommodation options while pursuing to resolve the space problem, pendency would begin to be reduced to the current goal of three months to first action and 13 months to registration or abandonment. With the resources requested for FY 1999, the pendency to first action would be reduced to 3.9 months in FY 1999, while the 13-month goal to registration or abandonment would be achieved in FY 2001. At the operational level, the Trademark Business would be able to adequately address the growth in trademark applications, both in examination, and in pre- and post-examination functions. The output and quality measures that would be achieved at the proposed operational level are highlighted in Table 11. The most significant results are the targeted improvements over baseline in the quality of output measure expressed in terms of a 34 percent reduction in first action pendency and a 6 percent reduction in pendency to registration or abandonment.

Aside from the improvements in productivity, efficiency and quality of output measures depicted in Table 11 below, by employing better processes and leveraging information technology, the Trademark Business would be able to improve customer satisfaction by 25 percent over the baseline, and employee satisfaction would increase by almost 80 percent.

Beyond FY 1999, personnel increases would be incrementally reduced relative to filings once the benefits of reengineering begin to be realized. Reengineering is expected to result in a more streamlined and efficient operation with improved program performance and customer service. Reengineering efforts currently in progress are geared to eliminate certain tasks once the proposed process changes are fully implemented. A few examples include mail processing, sorting, and matching; manually moving files; and retrieving paper files from the warehouse. Eliminating these paper-driven processing tasks or activities in the current examination process will lead to reduced cycle time (pendency). It is anticipated that the initial process changes will occur in FY 1998 with full implementation of the reengineered process design planned for completion in FY 2002. In addition to resource savings realized from reduced cycle time, reengineering is expected to yield other intangible benefits such as improved levels of customer and employee satisfaction. With the aggregate effect of constraints already placed on the examination process, reengineering would offer the best solution for effectively managing the projected increases in trademark application filings.

The Trademark reengineered process design assumes electronic filing; electronic data interchange among applicants, registrants, and the PTO; and electronic file wrappers with a fully integrated electronic file management system to be implemented shortly after the turn of the 21^st century. Given the required resources, the most significant result expected after full implementation of the reengineered process design would be a further reduction in first action pendency -- the processing time from receipt of a trademark application to first action -- from our immediate goal of achieving 3.9 months in FY 1999 to our future goal of ultimately reducing first action pendency to one month. This would be equivalent to an 84 percent improvement in processing time over the FY 1997 pendency.

Many of the reengineering changes proposed by the Trademark Business also support President Clinton's Framework for Global Electronic Commerce. Among these activities are: beginning an electronic filing pilot; providing the status of trademark applications over the Internet; providing access to trademark databases over the Internet; and implementing the Trademark mailbox proposal. The latter will allow owners of marks in the United States to seek protection in other countries by filing an application with the PTO for forwarding to any member country with which the United States has a mailbox agreement.

Information Technology Projects

The Trademark Business recognizes that a continued investment in information technology to support the increasing volume of trademark application filings, the examination process and ancillary production operations is necessary for the Trademark Business to achieve established performance targets and customer service goals. The Trademark Business expects a significant performance improvement from its investment in automated systems which were planned under reengineering. For example, with the implementation of electronic processing of trademark applications, the number of days it takes to mail a customer a filing receipt is expected to decrease further from the current goal of 14 days to two business days. Thus, based on anticipated outcomes, the Business has placed high priority on making incremental improvements to the following systems:

• Trademark Reporting and Monitoring (TRAM) system - TRAM contains bibliographic and prosecution history information for nearly two million applications and registrations. The system tracks the workflow, photo-composes the Trademark Official Gazette, and produces management reports. The Trademark Business plans include adding new capabilities to the existing system that will support the reengineered trademark business processes. Technical improvements include the scanning of new application drawing pages, desktop access to registration certificates, and improved text editing and data entry. Once implemented, these capabilities will provide the opportunity to improve production and ultimately reduce application processing time. Further, in order to improve customer service and to resolve century date processing issues, the current TRAM system needs to be replaced as quickly as economically feasible using open system components and with an architecture that facilitates subsequent modifications. The Trademark Business plans to have the TRAM Replacement System operational in early FY 2000.

• Electronic Filing - The implementation of electronic filing is critical to the efficiency, effectiveness, and operational cost reductions associated with processing trademark applications. In order to mitigate risk, refine requirements, and validate assumptions, the Trademark Business plans to conduct prototype tests with applicants for trademark filings. A prototype of the Trademark Electronic Application System (TEAS) was made available for public review and comment on PTO's web site in 1997. Subsequently, a pilot project that allows selected participants to submit their applications electronically using the Internet was launched in late 1997. A second project will enable customers to access forms on-line over the Internet, providing access to application forms regardless of how the application is filed. (The use of standard forms will allow applicant information to be more easily identified by the Office.)

• Trademark Information System (TIS) - The redesigned TRAM system will serve as the foundation from which to develop TIS. The Trademark Business plans to initiate development of TIS in early FY 2000 and incrementally deploy capability through FY 2002. TIS will accept electronically filed trademark applications, maintain an electronic file for application and registration, record prosecution history and production information, improve search capabilities, photo-compose the Trademark Official Gazette and registration certificates, and disseminate trademark information. TIS will allow for the complete electronic processing and file management of applications and related materials in 2003 and will result in improved quality and greater access to trademark information for examining attorneys and the public. This project will be integrated with reengineered processes.

• Trademark Search System (TSS) - The current search system component is difficult to maintain and is limited by the number of concurrent examining attorneys who can be supported. During FY 1997, the Trademark Business made significant improvements in the performance of the current system by expanding the system's ability to support a greater number of concurrent users. Additional requirements include range searching, additional fields, and the capability to stop a search in progress. The Trademark Business plans to replace the existing text search system with a modern text search product by the end of 1998. The new TSS search component will result in greater access to trademark information and faster response time for examining attorneys and customers, and will replace an aging mainframe. The new search component will require maintenance beginning in FY 1999.

• Trademark Work at Home (TWAH) - The Trademark Business deployed its TWAH pilot to 18 trademark attorneys beginning in March 1997. This is a two-year pilot under the National Performance Review. A decision on full implementation will be made following a thorough evaluation at the conclusion of the pilot in FY 1999. If the results are positive, up to 25 percent of examining attorneys for up to 60 percent of their time may choose to participate in the program beginning in late FY 1999. Based on current staffing projections of examining attorneys, the number of participants in the TWAH program could reach 80 in subsequent years.

With the implementation of the above described projects, the future Trademark Business environment will be characterized by employee ownership and accountability for the benefit of the customer. Thus, enhancing human resources will be one of the four corporate foundation strategies the Trademark Business will pursue to meet the goal of providing trademark customers with the highest level of quality and service.

The fundamental purpose behind our human resource practices is to help build organizational capabilities to support our business goals and objectives by aligning organizational values, business strategies, and core competencies. In FY 1999 the Trademark Business expects to have a workforce of 1,010 employees, an increase of 321 over the current size. New approaches to human resources management will be necessary particularly for recruiting and training new employees. Most importantly, the PTO must prepare the technical support staff for a technologically challenging future in a reengineered and automated trademark examination environment.

Our proposed approach to human resources management includes comprehensive training and special skill-enhancement programs. The Trademark Business, guided by the Office of Human Resources, will develop transition strategies for individuals affected by reengineered business processes. Strategies include retraining, career counseling, a re-careering center, and aggressive outplacement. Included in the plan is a program that provides work opportunities for technical employees via reimbursable service agreements with other Federal entities.

FY 1999 Performance Goals and Measures

Performance measures are being used to assess progress towards achieving goals. Evaluation will be based on data collected from automated systems to determine the effectiveness of the measures as well as the results achieved. Results that do not appear to directly influence PTO or Trademark goals will be redefined to more closely match business goals and objectives.

^{* The productivity measure is expected to reflect a decrease from the baseline level because of the significant increase in staffing levels in FY 1998 and FY 1999. Subsequent years will reflect the expected improvement in productivity.}

** ^{Baseline measures are derived from FY 1996 actual performance results except for the workload cost indicator estimates, which are based on preliminary Activity Based Costing models of FY 1997 actual cost accounting data.}

Information Dissemination Business

Information Dissemination (ID), the PTO's third core business, serves the fundamental purpose of patent and trademark laws to disclose new technologies and to provide public notice concerning intellectual property rights. The broad dissemination of patent and trademark information is essential to this purpose. The availability of this information stimulates scientific inquiry, promotes research and innovation, and enhances public awareness of technological advances. ID activities directly support the Department's strategic goal to keep America competitive with cutting-edge science and technology and an unrivaled information base.

The Information Dissemination Business provides products and services that are constructed from information created primarily in the patent and trademark application processing pipelines. The dissemination of patent and trademark information completes the contract with the inventor for full disclosure of the invention, and provides information regarding current trademarks in use by the business community. The timely dissemination of such information serves two purposes: provides formal notice of individuals' rights to an invention or a mark identifying a good or service; and stimulates creativity, technological advance, entrepreneurship, and overall economic development. Patent and trademark information is used by businesses each day to make decisions with respect to investments of millions of dollars. The capability to quickly and accurately access this information often shapes the way businesses perform in the marketplace, the decisions they make on new product development, and the manner in which they interact and compete for market share.

The ID Business serves a wide variety of customer groups that include the following:

• Researchers and inventors who use patent and trademark information to validate the uniqueness of their invention or mark;
• Intellectual property owners who seek information to record notice of their ownership of a patent or a trademark and to guard against infringements of their intellectual property rights;
• Intermediate businesses that obtain patent and trademark information, add value, and sell it to third parties;
• Businesses and entrepreneurs who seek patent and trademark information to make new products or launch new business ventures; and
• National patent and trademark offices around the world.

The Information Dissemination Business Environment

The ID Business seeks to be a world leader in the delivery of patent and trademark information. Utilizing the best suited technology, we will provide wide access to intellectual property information, expand our portfolio of products and services, and deliver the highest quality product to meet customer needs throughout the world.

The ID Business continues to face many challenges in the delivery and improvement of information products and services. As with the growth experienced in patent and trademark application filings, the ID Business has experienced comparable growth in the workloads of information products and services. As a direct result of the steady growth of patent issues and trademark registrations, the document filing volumes in the search facilities, requests for recordation of ownership documents (assignments), orders for regular or certified patent and trademark copies, and orders for certified copies of applications have steadily increased. In addition, other factors associated with national economic activity have also contributed to ID workload increases. Because patents and trademarks are considered assets in terms of their intellectual property value, in periods of high mergers, acquisitions or bankruptcies, customer requests to record ownership transfers are proportionately high. For example, the recent spin-off of Lucent Technologies from AT&T affected the transfer of over 10,000 patent and trademark properties.

However, the most explosive workload increase was experienced in requests for general patent and trademark information where customer requests are filled via telephone, walk-in service, Internet communication, and regular mail. In FY 1997 the aggregate workload for these services reached an unprecedented level of 798,378 requests, an increase of 51 percent over FY 1996. This growth is expected to continue as we introduce new technology into the ID process and as PTO's reengineering and marketing efforts increase enabling us to service more customers. Projections for key workload indicators are presented in Table 13.

In addition to increasing workloads, the ID Business is challenged by customer demands for new products and services, and delivery options which make use of the latest advances in technology. These requirements will soon include Internet ordering and delivery options as well as DVD-ROM. The ID Business will leverage these technologies not only to meet customer requirements, but also to assist in efforts to contain costs and facilitate new types of commercial transactions.

During the past three years, significant improvement efforts to achieve more efficient and effective processes and implement automated tools were deferred as resources were directed to sustain the most essential customer services. The Information Dissemination Business is now challenged to resume the implementation of reengineered process designs and invest in new information technology, which promise to dramatically improve performance results and ensure the future financial viability and operational effectiveness of the Information Dissemination business.

*Excludes 104,841 which represents the assignments backlog cleared in FY 1997.

The Information Dissemination Business Case

Timely availability of patent and trademark information is critical to the user community, whether it is used by individual entrepreneurs or small and large businesses to make important decisions on investing in new research and development or going into litigation to determine possible infringement of a patent or a trademark. To meet the challenge of delivering intellectual property information when, where, and in the format needed by PTO customers, the ID Business must offer its varied customer groups a diverse product portfolio supported by efficient business processes that promote the use of a variety of channels. These products are offered through on-line ordering, fax, and telephone requests by PTO, through Patent and Trademark Depository Libraries (PTDLs) located across the country (refer to map in the appendix), and through various private companies which purchase bulk data from PTO in order to resell the data to thousands of their own customers.

As illustrated in Figure 6, growth in both patent and trademark application disposals results in a proportionate increase in the demand for patent and trademark information products and services. In addition to these increases, the ID Business is also experiencing increasing customer requirements to employ varied formats, different types of media for transmitting the information, and additional delivery methods. To meet this growing and varied customer demand for intellectual property information, we must use new and creative solutions that will satisfy a broad range of customers.

Driven by the opportunities and challenges offered by President Clinton's Framework for Global Electronic Commerce, the ID Business seeks to expand Internet use for disseminating patent and trademark information. The ID Business will be able to meet the demands of an increasingly adept customer base by expanding its portfolio beyond the existing data bases and products offered via CD-ROM and magnetic tapes. Also, by leveraging information technology and further streamlining existing costly and labor-intensive processes, we will be prepared to meet customer demands in the 21^st century.

Business Goals and Objectives

Information Dissemination Business Goals

The macro performance goal of the ID Business is to promote awareness of, and provide effective access to, patent and trademark information. In direct support of this macro goal, the ID Business has delineated the following business goals which drive the activities proposed for FY 1999:

• Consistently achieve customer satisfaction by understanding and supporting our customers' needs.
• Promote the use and accessibility of intellectual property information.
• Develop the highest quality information products and services which deliver information when, where, and in the format needed.
• Promote cooperation with other intellectual property offices through cooperative projects and exchanges.
• Select, develop, and promote a work force that is skilled, productive, creative, and promotes excellence.

Organizational measures include customer evaluation of ease of access/effectiveness; customer satisfaction; unit cost of key products and services; percentage of key products being filled on schedule; percentage of metropolitan areas served by a PTDL; and employee satisfaction.

For FY 1999, the Information Dissemination Business proposes a budget of 221 FTE and $38,166,000. This represents an increase of 47 FTE and $6,825,000 over the FY 1999 base, or 47 FTE and $6,572,000 over the FY 1998 estimate. The corresponding average increase in demand for Information Dissemination key products and services is 14 percent. The Information Dissemination business proposes to allocate this increase in resources using a balanced approach that improves the accuracy and timeliness of information products and services and simultaneously achieves enhancements to our product portfolio. Planned projects to meet the goals of the ID Business are discussed below. Following the summaries, Table 15 illustrates the performance measures that each planned activity supports.

Provide Ordering and Delivery of Information Products via the Internet: In direct support of President Clinton's Electronic Commerce initiative, the ID Business proposes to implement Internet ordering and delivery of patent and trademark information products and services. The PTO expects to have in place the ability to retrieve most certified products from a central PTO "image store" of applications, issued patents, and registered trademarks in FY 1998. Beginning in FY 1999, the ID Business plans to connect to the various image stores in order to produce and transmit products electronically to major international patent offices, such as the European Patent Office and the Japanese Patent Office, as well as the World Intellectual Property Organization (WIPO). Additionally, PTO would accept orders for certified documents via the Internet from the international offices listed above as well as from end users of the patent system.

Reduce the Cost of Disseminating Patent and Trademark Information: One of our FY 1999 business objectives and success indicators is to reduce/contain the cost of disseminating information. The following activities offer opportunities to address this objective.

• Upgrade from CD-ROM to DVD-ROM to lower production costs and improve ease of use of PTO information products. This change in technology would create products offering a potential increase in information storage equivalent to 21 times current capacity.
• Complete the USAPat product backfile production using DVD-ROM. Orders received from the information industry for the backfile are currently delivered on 29,000 magnetic tapes which is costly and cumbersome for customers. DVD-ROM technology provides better management of the backfile and offers real cost and workload savings for future orders.
• Implement a system which automatically provides customer service representatives of the PTO Call Center with initial customer information.

Provide Access to Patent and Trademark Databases to PTDLs over the Internet: Consistent with the directive in President Clinton's Framework for Global Electronic Commerce, and in response to requests from 30 PTDLs, the ID Business will offer Internet access to PTO databases. This initiative is based on the results of a survey conducted by the American Library Association which reflected that one third of all member PTDLs had Internet capability. The Information Dissemination Business expects that these technologically advanced libraries with established client service interfaces would make this service available to their users. This does not provide Internet access to PTO databases to the general public. Currently, PTO has neither the infrastructure nor the resources necessary to provide and support wider public access to its search systems and databases. For those PTDLs which do not use the Internet to service patrons, the same patent and trademark information will be provided using DVD-ROM.

Improve Regional Access to Patent and Trademark Information: PTDLs serve as partners with the PTO by providing access throughout the country to patent and trademark information. They serve as local liaisons between PTO's customers and the PTO. The PTDL network is a collection of diverse institutions (state, public, and university libraries) which develop their own internal policies and operating procedures to best service their patrons who are equally diverse in their requirements and skills. The strategic expansion of these partner libraries into high population areas with significant patent and trademark activity obviates the expense of maintaining facilities outside of the Washington metropolitan area for educating individual patrons on the concepts and complexities of intellectual property systems. The library network provides the required level of support and services in major geographic regions on behalf of the PTO. During FY 1999, the ID Business plans to seek entry into six additional metropolitan areas and establish two new PTDL partnerships. In establishing new partnerships, the ID Business will target major geographic regions with high patent and trademark activity. This activity supports the ID Business objective to increase the number of metropolitan areas served by PTDLs.

Other Planned Activities (that would generate additional revenue): As the PTO attempts to operate more like a business, increased emphasis is being placed on moving toward self-sufficient business units. The deployment of additional fee collection equipment, expansion of search room hours and photocopy services, and increasing our marketing efforts are among those planned activities that hold the potential of generating additional fee revenue for the ID Business to be able to sustain the growing operating costs of the public services we provide.

All of the activities listed above will contribute toward the achievement of our performance goals, as shown in Table 15.

FY 1999 Performance Goals and Measures

The ID Business is committed to evaluating the performance of all existing and new programs. Performance will be monitored on a continuous basis to assess the effectiveness of ID activities and new initiatives. The process used to collect and manage performance data will also be reviewed periodically to determine if improvements can be made to data reliability, collection, and access.

The success of the Information Dissemination Business in FY 1999 will be measured by the seven types of measures delineated in Table 16 which support the ID macro performance goal to promote awareness of, and provide effective access to, patent and trademark information. The most significant improvement will be made in our quality measure, which is projected to improve by 27 percent over baseline. In addition, both our effectiveness and customer satisfaction measures will improve by seven percent.

*The ID Business plans to conduct customer surveys every two years. This two-year cycle is designed to allow for sufficient time for compilation and analysis of results and subsequent planning for customer service improvements.

** ^{Baseline measures are derived from FY 1996 actual performance results except for the workload cost indicator estimates, which are based on preliminary Activity Based Costing models of FY 1997 actual cost accounting data.}

Policy

The primary function of the PTO's Policy component is to advise, assist, promote, and provide expertise in the area of intellectual property rights -- patents, trademarks, and copyrights. This directly contributes to the Department's strategic goal to build for the future and promote U.S. competitiveness in the global marketplace. We recognize the important role that intellectual property rights play in promoting innovation in science and technology and in ensuring that resulting products and services reach desired markets around the world. If American businesses are to remain competitive, the effective protection of intellectual property rights must be guaranteed throughout the world. The PTO plays a leadership role in intellectual property rights policy development and in promoting the use of intellectual property rights as a means of economic prosperity and competitiveness.

The Policy Agenda

The role of intellectual property systems in stimulating the American economy has become increasingly important. International negotiations, consultations, and information-sharing efforts led by our international specialists are geared to secure, improve and expand protection of U.S. intellectual property rights throughout the world. We are committed to accomplish President Clinton's Framework for Global Electronic Commerce by continuing to work closely with other U.S. government agencies and foreign counterparts to create a consistent environment that is mutually beneficial to all parties and fosters economic development on a global scale. More specifically, our policy agenda is to update and make more efficient our system for protecting patentable innovations to meet the needs of the fast-moving electronic age and to seek agreements with other governments to protect patentable innovations worldwide. Also, as one of Vice President Gore's High Impact Agencies, our policy agenda includes partnership with the World Intellectual Property Organization (WIPO) to achieve electronic filing of Patent Cooperation Treaty (PCT) applications and, in 2000, to receive and process PCT applications electronically. Further, as the PTO business areas continue to support America's innovators, the Policy component will simultaneously pursue reforms, both administrative and legislative, that resolve problems, continue improvements, and maximize efficiencies to ensure the continued vitality of the patent and trademark systems into the next century.

As part of its primary function, the Policy component will continue to draft legislative and policy proposals concerning intellectual property matters, prepare supporting documentation to carry out legislative programs and policies of the Commissioner, and review and analyze other legislative proposals concerning intellectual property matters. Policy specialists also will continue to engage in multilateral and bilateral negotiations to strengthen intellectual property protection worldwide. Among the efforts that will be pursued through base programs are the development and maintenance of multilateral systems for the protection of intellectual property rights; assistance in the establishment of bilateral agreements with other intellectual property offices; participation in the intellectual property aspects of trade consultations; patronage in the establishment of adequate systems in developing countries for the protection of intellectual property rights; and development of international standards and procedures to make it easier for U.S. nationals to obtain rights in other countries and to facilitate access to the information contained in patent and trademark documents.

For FY 1999, the PTO proposes a budget of 30 FTE and $4,659,000 for Policy functions. This represents an increase of 5 FTE and $935 over the FY 1999 base or 5 FTE and $566,000 over the FY 1998 estimate. At the requested performance level, our international specialists will focus on the activities described below, in addition to performing their responsibilities in the realm of promoting intellectual property protection through domestic legislation and international agreements. Performance, as measured by the number of countries receiving technical assistance and the total number of technical assistance activities completed would increase by 11 and nine percent, respectively.

WIPO: Wire the World - In February 1997, the PTO sent a proposal to the WIPO to establish a WIPO Standing Committee of Information Technologies (SCIT) with the following objectives: to refocus WIPO's programs to take full advantage of modern information technologies; to ensure that WIPO's International Bureau (IB) effectively utilizes and disseminates modern information technologies and standards based on these technologies; and to coordinate such activities with the WIPO Budget Committee. The WIPO General Assembly met in Geneva in March 1997 and established a Working Group to consider the PTO's proposal. The first meeting to discuss the PTO's proposal took place in Geneva in July 1997. The outcome of this meeting was to direct the incoming Director General of WIPO to prepare a paper that establishes the SCIT, and delineates its responsibilities and the designated budget for several projects that were discussed in the PTO's proposal. The principal goal of this Committee is to establish a high speed global network to connect offices of the WIPO member countries. The Committee's recommendations were presented to the WIPO Governing Bodies at their September 1997 meeting. The "Wire the World" project has been included in WIPO's draft Program and Budget for 1998-1999. It is expected to be formally adopted at the March 1998 session of the Governing Bodies.

The PTO also has prepared an Intellectual Property Cyber Plan in collaboration with the Japanese Patent Office that proposes three initial projects that are consistent with PTO's internal information technology plans as documented in its FY 1998-2003 Strategic Information Technology Plan. These three initiatives are: develop and deploy a secure global information infrastructure, establish a network of intellectual property digital libraries, and automate the PCT system, and extend and deploy solutions based on this automated system in interested intellectual property offices. These initiatives are consistent with PTO's Year 2000 Commitment to "test reengineered processes and automated systems, and be ready to deploy electronic processing of patent applications in 2003."

Patent Law Treaty - The PTO will continue to participate in international negotiations in an effort to harmonize the formal requirements associated with patent applications and patents in different countries of the world. A committee of experts meeting under the auspices of the WIPO is developing treaty articles and regulations which will harmonize many of the formal requirements related to patent applications and patents. This harmonization, when concluded, will greatly simplify the formal obligations and reduce the associated costs for patent applications and owners of patents in obtaining and preserving their rights for inventions in many countries of the world. It is anticipated that the WIPO Governing Bodies, in March 1998, will determine the nature of the agreement that will be negotiated and whether it will take the form of a treaty, a memorandum of understanding or guidelines.

Trademark Law Treaty - This treaty is intended to benefit U.S. trademark owners by requiring that member countries dispense with most legalization requirements and limit the list of filing and registration requirements. The Treaty also requires member countries to accept multi-class applications and service mark registrations and allows for the harmonization of requirements for acquiring and maintaining a trademark registration in member countries. The proposed Trademark Law Treaty Implementation Act -- H.R.1661, passed by the House in July 1997 -- would afford the legislative vehicle to implement the provisions of the Treaty. When enacted, the Trademark Law Treaty Implementation Act would change the timing, but not the substance, of the filings needed to maintain a trademark registration at the PTO; broaden the type of documents which may be recorded as assignment documents; and make other minor adjustments to procedure.

Madrid Protocol - The Madrid Agreement on the International Registration of Marks (adopted June 27, 1989, and effective April 1996) would permit a U.S. trademark owner to file for registration in any number of member countries by filing a single standardized application, in English, with a single set of fees, with the PTO. U. S. accession is dependent on a satisfactory resolution of the issue involving the voting rights of European Union (EU) member nations and the EU itself under the Protocol. While the President has not yet forwarded the Treaty to the Senate for advice and consent to accession, the Madrid Protocol Implementation Act - H.R. 567 - has been introduced to send a signal that the Congress is serious about the U.S. becoming part of a one-stop, low-cost, efficient system for the international registration of trademarks.

Trademark Mailbox Proposal - This proposal would permit a U.S. applicant to file an application with the PTO for forwarding to any member economy with which the United States has a "mailbox" agreement. The date of filing the application in the United States would become the filing date of the application in every "mailbox" designated by the applicant. Such an application would have to meet the filing requirements of the member economy for which the application was intended, need to be in the correct language and be accompanied by the proper fees. The PTO would be charged with promptly forwarding the application and the application fees to the member country in which the applicant was seeking registration. The PTO presented a draft memorandum of understanding to the 18 member countries of The Asia-Pacific Economic Cooperation (APEC) on July 21-22, 1997. The members of APEC have submitted comments, and the PTO currently is reviewing and drafting a response to the comments. The next meeting between the PTO and APEC members will be held in Australia in March 1998.

WIPO Treaties - The agreements negotiated at the WIPO Diplomatic Conference in December 1996 will set new international standards for protection of copyrighted works, musical performances and sound recordings in the digital age. The WIPO Copyright Treaty includes provisions on the copyright protection of computer programs and databases and provisions on the rights of distribution, rental and communication to the public. The WIPO Performances and Phonograms Treaty includes provisions on the minimum rights granted to performers and producers of sound recordings, including the rights of reproduction, distribution and rental. Legislation to implement these treaties has been introduced in the House (H.R. 2281) and the Senate (S. 1121). These two activities seek the protection of copyright in the digital environment by working to achieve ratification in the United States and abroad as directed by President Clinton in his Framework for Global Electronic Commerce.

Other Electronic Commerce Activities - In addition to the above, planned activities that support President Clinton's Framework for Global Electronic Commerce include: the Domain Name Dispute Resolution -- for developing acceptable legal and procedural regimes for settlement of trademark domain name disputes; the activities of the WIPO Permanent Committee on Industrial Property Information (PCIP) -- for establishing international standards for electronic data structures and formats and exchanges; and the activities of a number of trilateral working groups which are involved in implementing electronic data exchanges among the PTO, the European Patent Office (EPO), and the Japanese Patent Office (JPO).

FY 1999 Performance Goals and Measures

In fiscal year 1999, PTO's policy specialists will be instrumental in carrying out the PTO's strategic goal of playing a leadership role in intellectual property rights policy, particularly the macro performance goal to help protect, promote, and expand intellectual property rights systems throughout the United States and abroad. The desired results of PTO's policy activities are to have a competitive America in the global market place, a strong and unimpeded economic infrastructure; and effective management and stewardship of intellectual property rights which contribute to sustainable economic opportunities.

Corporate Support - Information Technology Infrastructure

The requirements for information technology represent fundamentally necessary tools for the Patent, Trademark, and Information Dissemination business processes. The Corporate Support - Information Technology Infrastructure function enables the PTO's three businesses, Policy and Corporate Support areas to carry out their mandates by providing an integrated approach to an information technology infrastructure required for operations, proposed developments, business process improvements, and effective resource management. For example, a reliable infrastructure is needed for the successful implementation of the Application Capture and Review System (ACRS) and the Patent Image Capture System (PICS), both of which facilitate reductions in patent pendency and greatly improve dissemination services for certified documents, while also decreasing the PTO's reliance on paper to conduct business.

The business processes need an underlying information technology infrastructure to forecast the future of information technology, buy information technology, share data and access historical business data, ensure quality developmental efforts, and operate and maintain the delivered system. The Office of the Chief Information Officer is responsible for providing such an infrastructure for the entire agency -- achieving an environment where information is created once, managed effectively, used often and, which evolves over time to electronic commerce whereby most internal and external transactions are performed electronically.

PTO's Information Technology Infrastructure function is concerned with those services, hardware, and software necessary to provide the capability to (a) maintain current production and "keep the trains running," (b) support increasing workload and/or replacement of aging infrastructure components, and (c) develop new systems and support new initiatives. Funding for this function is included in the proposed budget for each of the Patents, Trademarks, Information Dissemination, and Policy areas. The following is a detailed discussion of PTO's FY 1999 information technology infrastructure initiatives to help ensure Year 2000 compliance, support an additional 1,100 employees, and provide processing capacity for an ever increasing business workload.

• Year 2000 Compliance -- The PTO's primary approach to assure that its mission critical automated information systems can accommodate the century date change is through replacing them and major components of the information technology infrastructure. PTO's replacement strategy economically achieves the needed changes in keeping with the Clinger-Cohen Act's requirement to have a managed Information Technology Architecture. PTO is replacing its mission critical legacy systems - PALM, TRAM, Automated Biotechnology Sequence Search System (ABSS), and CSIR - and proprietary mainframe information technology infrastructure components (e.g. optical storage devices, processors, operating system and data base management system software) on which they operate. PTO is also modifying or upgrading existing mission-critical systems software and hardware components.
• Increase in Number of Employees -- PTO employees and support contractors expect systems to be available and accessible in order to process applications, register trademarks, and grant patents. Key information technology infrastructure components are necessary to support an increase of 1,100 employees in FY 1999. Desktop workstations, office automation and electronic mail servers, and network access enable employees to do their jobs using office automation and business applications. PTO expects that this 20 percent increase in employees will

require an increase in customer support (e.g., help desk support and desktop troubleshooting), to include enhancements that will allow the automatic relocation of data files when an employee is relocated, and the ability for CIO personnel to update desktop computers throughout the PTO from a single location.

• Increased Business Workload -- The increased number of examiners is necessary to support a growing business workload and facilitate reductions in patent cycle and trademark pendency times. The current information technology infrastructure cannot support this dual growth (employees and workload) and the need for faster information technology to reduce cycle and pendency times.

Information technology hardware activities proposed for FY 1999 will make incremental improvements to the storage and office automation server infrastructure to reduce processing time and increase access to applications via the network. This will have the result of reducing the search time needed by examiners. For example, in FY 1997 PTO transferred all Messenger text search files to the new EMC disk storage system. The result is that prior search response times of 30.1 seconds were decreased to 9.1 seconds. Based on the approximately 6 million search transactions processed at that time, this decrease in search time ultimately resulted in more time available to examiners to do a more quality search. FY 1999 improvements are expected to support further search transaction and office automation workload increases while maintaining reductions in response time.

Incremental information technology hardware improvements also directly support and impact each business area's mission. For example, the Deputy Assistant Commissioner for Trademarks recently stated that an inability to access applications, coupled with slow response times, negatively affects some 600 employees and contractors who "...rely on systems to be available, accessible, and running fairly well to enable them to complete one of the primary missions of the PTO: the examination of applications to register trademarks."

Some incremental information technology hardware improvements reflect industry changes and PTO's need to keep up with a growing workload. The massively parallel processors to be acquired in FY 1999 support PTO's biotechnology examiner workload in which "...the growth in the number of sequences in commercial databases constitutes a 100 percent increase in size every 12 months at current rates." In 1997, the growth rate in the number of sequences to be searched by the PTO was 50 percent. Given these projected workloads, the Automated Biotechnology Sequence Search System (ABSS) will not meet 1999 production needs for the biotechnology section of the patent business.

• Electronic Commerce -- An advanced information technology infrastructure also is needed so that all PTO businesses can put into production -- in a cost effective and efficient manner -- initiatives that were piloted for the National Performance Review electronic commerce initiative. Patent automation initiatives such as ACRS rely heavily on electronic file wrappers, images, and network technology. To build such an electronic workplace requires an integrated electronic information technology infrastructure to provide the components necessary for an electronic mailroom; a secure Intranet for use among the PTO, Japanese Patent Office, and European Patent Office; exchange of PCT applications and priority documents between PTO's PCT operation and the World Intellectual Property Organization; PCT applications submitted over the Internet; biotechnology applications submitted over the Internet; and the sale of information products over the Internet. The infrastructure also enables business areas to jointly address business concerns about the security of the information and transactions.

The Patent Business development initiatives also require enhancements to provide electronic funds transfer and fee receipt under electronic filing. Development of an electronic commerce capability within the Revenue Accounting and Management (RAM) system will permit electronic fee collection, ensure accurate fee collections, and provide accurate fee and workload information for forecasting purposes.

• Inspector General Findings -- PTO information technology infrastructure efforts specifically address the Department's Inspector General (IG) recommendations with regard to disaster recovery by proposing funds for architectural support specifically for disaster recovery planning, alternate routing of the network to prevent complete outage during partial network failure, and deployment of an integrated data backup system. Further, preliminary reporting from the IG indicates that the development of an Asset Management System has enabled the PTO to correct the IG's "material weakness" finding through the integration of property acquisition management with equipment problem resolution and configuration management. This system also will ensure compliance with the Clinger-Cohen Act.

• Support Business Commitments -- To facilitate reductions in patent cycle and trademark pendency times and decrease reliance on paper, business areas have increased requests for automation development support. As defined within PTO's system development life cycle, an increase in development and deployment necessitates an attendant increase in related information technology product assurance activities to ensure that all activities are: a) performed using a standard development infrastructure, b) delivered on time, c) meet customer expectations, and d) operate on a standard infrastructure architecture.

The PTO is dependent on information technology to support day-to-day operations. We guarantee 99 percent system availability in support of PTO's mission-critical systems. The following critical success factors reflect the importance of the information technology infrastructure to the productivity of the PTO's three core businesses. The following measures are targeted for FY 1999.

PATENTS

Automated Patent System (APS)-Text

• Process over 295,000 search transactions per month, on average.
• Provide a response time of less than 30 seconds for each transaction.
• Provide 99 percent availability.

Classified Search and Information Retrieval (CSIR)

• Retrieve over 13.5 million image pages per month, on average.
• Provide a response time of less than 1 seconds for all image-page retrievals.
• Provide 99 percent availability.

Patent Application Location Monitoring (PALM) System

• Process over 3 million transactions per month, on average.
• Provide an average response time of 3 seconds for each transaction.
• Provide 99 percent system availability.

TRADEMARKS

X-Search

• Process over 140,000 million transactions per month, on average.
• Provide a average response time of less than 10 seconds for all search requests.
• Provide 99 percent system availability.

Trademark Reporting and Monitoring (TRAM) System

• Process about 1.5 million transactions per month, on average.
• Provide an average response time of 3 seconds for each transaction.
• Provide 99 percent system availability.

INFORMATION DISSEMINATION

Assignments

• Process over 95,000 transactions per month, on average.
• Provide an average response time of 3 seconds for each transaction.
• Provide 99 percent system availability.

CORPORATE

Revenue Accounting Management (RAM)

• Process 35,000 transactions per month on average.
• Provide average response time of 1 second for each transaction.
• Provide 99 percent system availability.

Corporate Support - Space

Based upon a Congressionally approved prospectus, in June 1996 the General Services Administration (GSA) issued a solicitation for offers (SFO) to acquire almost two million square feet of space for the PTO. GSA required that the offered buildings be in Class A condition and exhibit design and construction excellence in order to promote a healthy, efficient, flexible and pleasing work environment that results in enhanced worker productivity.

Because several years will have elapsed between the release of the SFO and completion of necessary construction, specifying PTO's detailed space requirements and establishing the lessor's unit prices at the time would have placed excessive risks upon the PTO and the lessor. Therefore, the lessor is to provide a building shell with core areas and base systems in place, but with the bulk of the space resembling a "cold dark shell." In the meantime, the PTO will develop a comprehensive program of requirements that reflects its desire to obtain a facility that results in enhanced worker productivity. The lessor also would provide a tenant improvement allowance or fit-out allowance to provide tenant improvements, interior finish and fit out in accordance with the program of requirements and in support of the PTO's mission. Fit-Out includes, among other things, branch and secondary distribution systems for mechanical and electrical services throughout the office areas and joint use space, floor and wall coverings, interior partitions, ceilings, interior doors, and interior window treatments.

The procurement is being conducted in two phases. In Phase I, offerors provided basic information about their site, an overview development plan, the qualifications and past performance of their design team and the developer, preliminary financial information, and a Phase I environmental assessment and questionnaire. Four sites met the SFO requirements and their offerors were invited to proceed to Phase II: Crystal City (Arlington), Potomac Greens/Potomac Yards (Alexandria), Carlyle (Alexandria), and Eisenhower Avenue Metro Station (Alexandria).

For Phase II, offerors have provided more detailed information regarding the site, the proposed design of the facility, the interior architect, the development schedule, and the operations and maintenance firms. A joint GSA/PTO team is currently reviewing the submissions for compliance with the design and performance requirements stated in the SFO. In the Summer of 1998, the GSA contracting officer will conduct negotiations, and after the offerors have presented their best and final offers, proposals will be reevaluated and the one that offers the greatest value to the Government will be selected.

Major milestones:

• Lease award targeted for the first quarter of FY 1999.
• Issuance of first Notice to Proceed (NTP) scheduled for first quarter of FY 1999.
• Phased occupancy of the first block of space anticipated to begin in October 2001.
• Occupancy expected to be completed in April 2003.

This GSA procurement continues to proceed on schedule despite an official protest filed with GAO (the protest was dismissed in September 1997 on timeliness grounds).

The PTO has acquired the services of an outside firm to formulate the financial justification and timing to support the budget for the space consolidation. This business case will take into account factors such as the projected cost of current facilities compared to the projected cost of the proposed new facility over the next 20 years. PTO has received a preliminary draft of the report and is working with the contractor to validate and refine the underlying assumptions of the report before issuing it in final form.

Funding Options

PTO is responsible for funding the "above standard items" which are those elements of initial tenant fit-out (required to prepare space for occupancy) that GSA does not provide as part of the base rent that GSA charges its client agencies (e.g., uninterruptable power system to protect the computer facility, locks on doors to safeguard proprietary data, bumper guard in hallways to protect from cart damage, etc.). Per GSA's regulations, the GSA contracting officer cannot give a notice to proceed on interior construction until he has received a reimbursable work authorization covering the agency portion of interior fit-out. Design of all phases of the interior construction at the PTO's consolidated location is scheduled to commence before the end of FY 1999. Therefore, the PTO must obligate funds to GSA in FY 1999 or before.

PTO also must be prepared to provide funding for its furniture needs for public spaces (such as the Public Search Room) and for employees' offices. In deciding whether or not to replace all of the current furniture at the time of the move, we must consider things such as investment in new furniture between now and the move, the actual cost of moving old furniture to the new facility, the suitability of existing furniture for increasingly automated work processes, and the efficacy of acquiring standard furniture that will reduce the need to move furniture after occupancy, thus reducing future "churn" costs. Following the completion of the business case for replacing all the current furniture, the PTO will include relevant furniture costs in the FY 2000 Corporate Plan.

Composition and Justification of the Increase

The increase requested for FY 1999 for Space 2000 totals $15,000,000. A separate increase of $2,600,000 is included for short-term space requirements in FY 1999. This increase is directly related to the new positions requested in this Corporate Plan.

"Above Standard" Funding - $15,000,000

• GSA defines "above standard" items as those elements of initial tenant fit-out (required to prepare space for occupancy) that GSA does not consider "standard" for the type of space being constructed and which are, therefore, not provided as part of the base rent that GSA charges its client agencies. There has been much debate between GSA and the agencies over GSA's definition, in the Federal Property Management Regulations (FPMR), of the standard fit-out levels (e.g., uninterrupted power systems, which most data experts consider an essential part of any computer facility, and isolated ground computer outlets, required to protect against service interruptions, are "above standard").
• GSA contracted with Heery International for a detailed (1200 plus pages) cost estimate of the build-out of PTO's consolidated location, and then adjusted the estimate to account for design fees and lessor profit. Heery applied the FPMR guidelines to its estimate and concluded that the PTO's "above standard" costs will total approximately $29 million (as adjusted by GSA for design and lessor profit). The PTO's independent contractor will validate these costs.
• GSA advises that PTO's planned "above standard" costs ($29 million/1,989,116 occupiable square feet (OSF) = $14.58 per OSF) are lower than those incurred by other recently consolidated agencies. For example, the Federal Energy Regulatory Commission's cost at Union Center Plaza was approximately $16.50 per OSF and Customs' cost at the Ronald Reagan Federal Building was $18.26 per OSF. EPA's cost at the Ronald Reagan Building (not including security) was $37.50 per OSF, which, however, included complete replacement of the base building lighting offered by GSA with "green lights" (energy-efficient lighting). GSA gave EPA no credit for the base building lighting not used.
• As described above, the total estimated costs for "above standard" items is $29 million. Of that amount, $15 million is included in the FY 1999 budget request. The $29 million total "above standard" items that the PTO plans to include in the Space 2000 project fall into two categories: those that are programmatically driven and those that are designed to improve the work environment and are driven by the nature of our work processes. Briefly described, they include such items as:

In summary, this space consolidation is being conducted by GSA, as an agent for DOC/PTO and in accordance with the Congressionally-approved prospectus, as a competitive procurement action that complies with the Competition in Contracting Act (CICA). This Act and its implementing regulations prescribe a process by which Government requirements for property and services are solicited and acquired.

The solicitation sets forth the Government's (and PTO's) minimum requirements which all offerors are required to satisfy. In addition, the solicitation sets forth evaluation factors which will be considered, together with price, to determine which offeror presents the greatest overall value to the Government. This evaluation and determination will be conducted by a Source Selection Advisory Board (SSAB) which will eventually present a recommendation for award to the GSA Source Selection Authority, who has the final and ultimate responsibility for selecting the successful offeror. While the ultimate responsibility for making the award determination is GSA's, it is common for GSA client agencies to be represented on the SSAB, as is the case in this procurement.

The Department of Commerce, Office of the Secretary, has a designated representative appointed to the Source Selection Advisory Board.

ADJUSTMENTS TO BASE APPENDIX A

(Dollars amount in thousands) Exhibit 8

JUSTIFICATION OF ADJUSTMENTS TO BASE APPENDIX B (Dollars amount in thousands) Exhibit 9

JUSTIFICATION OF ADJUSTMENTS TO BASE APPENDIX B (Dollars amount in thousands) Exhibit 9

JUSTIFICATION OF ADJUSTMENTS TO BASE APPENDIX B (Dollars amount in thousands) Exhibit 9

JUSTIFICATION OF ADJUSTMENTS TO BASE APPENDIX B (Dollars amount in thousands) Exhibit 9