Position paper concerning the achievement of scientific excellence through fair market conditions

Summary of the main findings of the position paper

Legal regulations

Existing laws and guidelines stipulate fair market conditions in scientific research in Germany:

• The funding of research, development and innovation is an important objective of common interest. Pursuant to Article 179 of the Treaty on the Functioning of the European Union (TFEU, ex Article 163 TEC)[1], “the Union shall have the objective of strengthening its scientific and technological bases … and encouraging it to become more competitive, including in its industry ...”
• Since 2009, research organisations have to separate economic from non-economic activities. If they fail to do so (e.g. in their annual financial statements), or if the separation is unclear, non-economic activities may also fall under EU state aid law. The aim of this legislation is to prevent the cross-subsidisation of economic activities.
• Competition law also applies to collaborative research projects. This means that services in collaboration projects can only be provided at the market price. If there is competition in a specific field, the prices must be based on a proper calculation of the costs. The main aim of these strict provisions is to prevent the cross-subsidisation of economic activities through state funding in a manner that adversely affects competition.

Eight demands by BIO Deutschland to improve scientific excellence

BIO Deutschland calls for the continued, long-term improvement of scientific excellence. The following measures should be implemented as a matter of urgency:

1. The private sector should be given priority: taxpayers’ money should not be misused to subsidise services provided by academic research in a way that threatens the competitiveness of industrial service suppliers and thus puts jobs at risk.
2. Services provided by publicly funded institutions as part of collaborative projects discriminate against private sector suppliers and thus distort competition (see comments in section 3.4). They should therefore be stopped or excluded from funding.
3. Economic activities that make use of research funding should only be permitted in exceptional cases when commercial providers are unable to provide these services competitively. Commercial providers should be informed about projects involving tenders for routine services in order to allow them to submit competitive bids (tenders).
4. Public sector providers should no longer be allowed to offer services for which two price lists already exist in Germany[2] – in other words, there should be no state intervention in competition.
5. Introduction of standardised absorption costing in all academic institutes

In terms of how funds are used, the actual costs should always be identified and included. (Apart from expendable items, this primarily involves expenditure on staff, staff training, buildings, the actual use of equipment, repairs and maintenance, and efficiency and speed.) This cost accounting should then be compared with services provided by commercial suppliers.

Responsibility for efficient use of funding

Funding provided for (fundamental) research should be used appropriately. In taxpayers’ interests, distortion of competition should be avoided.

7. Scientists should be able to conduct research. Routine tasks should be outsourced to commercial suppliers, which can generally provide the same quality faster, more efficiently, and thus at a lower price. This will improve the quality of research and allow scientists to concentrate on high-quality research.
8. It should be easier to obtain funding for outsourced services.

It should be possible to apply for higher amounts of funding for outsourced services than has been the case to date in funding applications. It still seems to be easier to obtain funding for expensive equipment and staff via funding applications than it is to acquire lower amounts of funding to outsource the same services.

[1]   Article 197 of the Treaty on the Functioning of the European Union (TFEU) replaces Article 163 of the Treaty Establishing the European Union (TEC). The latter was renamed as the former and the articles were restructured under the Treaty of Lisbon of 13 December 2007, which came into force on 1 December 2009.

[2]   This is the case for fields such as antibody production, DNA sequencing, peptide synthesis and mass spectrometry.