According to some experts, prize competitions should be viewed as "a potential complement to, and not a substitute for, the primary instruments of direct federal support of research and innovation—peer-reviewed grants and procurement contracts." The comparative strengths of prize competitions in relation to the use of federal grants and contracts, as described by the National Academy of Sciences in a 1999 report, include (1) the ability to attract a broader spectrum of participants and ideas by reducing costs and bureaucratic barriers to participation; (2) the potential leveraging of a sponsor's financial resources; (3) the ability of federal agencies to shift the technical and other risks to contestants; and (4) the capacity to educate, inspire, and potentially mobilize the public around scientific, technical, and societal objectives. Similarly, during the Obama Administration, the Office of Management and Budget (OMB) and the Office of Science and Technology Policy (OSTP) described prize competitions as having the benefit of allowing the federal government to
pay only for success and identify novel approaches, without bearing high levels of risk; establish ambitious goals without having to predict which team or approach is most likely to succeed; increase the number and diversity of individuals, organizations, and teams tackling a problem, including nonscientists and individuals who have not previously received federal funding; increase cost effectiveness, stimulate private-sector investment, and maximize the return on taxpayer dollars; further a federal agency's mission while motivating and inspiring others and capturing the public imagination; and establish clear success metrics and validation protocols that themselves become defining tools and standards for the subject, industry, or field. 111-358 ) providing the head of a federal agency with the authority to carry out prize competitions "to stimulate innovation that has the potential to advance the mission of the respective agency." 111-358 . Agency Specific Prize Competition Authorities

Over the years, Congress has provided some federal agencies with additional explicit authority to conduct prize competitions. P.L. Prize Competition Trends

The use of prize competitions by federal agencies has grown since the enactment of the America COMPETES Reauthorization Act of 2010 ( P.L. In FY2011, the active prize competitions conducted by federal agencies under P.L. 111-358 offered a total of $247,000 and in FY2016 the total amount of prize money offered exceeded $30 million ( Figure 2 ). However, an examination of the median amount of prize money offered per prize indicates that the size of federal prizes has remained relatively steady over time with a median value of $34,500 in FY2011 compared to $41,590 in FY2016. Overall, the U.S. General Services Administration (GSA) estimates that since 2010 federal agencies have conducted more than 840 prize competitions and offered more than $280 million in prize money. Potential Policy Considerations

Federal agencies have increased the use of prize competitions to spur innovation and advance the mission of their respective agencies; however, there is limited information on the effectiveness and impact of prize competitions generally. In addition to examining current federal prize competitions and federal agency expertise, some Members of Congress may want to establish new federal prize competitions through legislation. List of Federal Prize Competition Legislation
Prize competitions are a tool for incentivizing the achievement of scientific and technological innovation by offering monetary and nonmonetary benefits (e.g., recognition) to competition participants. Prize competitions have a long history of use in both the public and private sectors, but have gained popularity in recent years. Experts view federal prize competitions as an alternative policy instrument for spurring innovation, not a substitute for more traditional methods of federal support for research and innovation such as competitive research grants and procurement contracts.
The use of prize competitions by the federal government has increased significantly since the passage of the America COMPETES Reauthorization Act of 2010 (P.L. 111-358). P.L. 111-358 encouraged the use of prize competitions by providing the head of any federal agency with the authority to carry out prize competitions that have the potential to stimulate innovation and advance the agency's mission. Congress has also provided various federal agencies, including the Department of Defense, the National Aeronautics and Space Administration, the Department of Energy, the National Science Foundation, and the Department of Health and Human Services, with additional authority to conduct prize competitions. The United States General Services Administration estimates that since 2010 federal agencies have conducted more than 840 prize competitions and offered more than $280 million in prize money. While the total amount of prize money offered by federal prize competitions conducted under P.L. 111-358 has increased over time—from $247,000 in FY2011 to over $30 million in FY2016—the median amount of prize money offered per prize has remained relatively steady—$34,500 in FY2011 compared to $41,590 in FY2016.
According to the Office of Management and Budget and the Office of Science and Technology Policy, prize competitions benefit the federal government by allowing federal agencies to (1) pay only for success; (2) establish ambitious goals and shift technological and other risks to prize participants; (3) increase the number and diversity of individuals, organizations, and teams tackling a problem, including those who have not previously received federal funding; (4) increase cost effectiveness, stimulate private-sector investment, and maximize the return on taxpayer dollars; and (5) motivate and inspire the public to tackle scientific, technical, and societal problems.
Despite an increase in the use of federal prize competitions, there is limited information on their effectiveness and impact in spurring innovation and providing other potential benefits to the federal government. Members of Congress may wish to examine the ability of prize competitions to spur innovation in comparison to more traditional policy tools (e.g., grants and contracts); the cost effectiveness of prize competitions; the metrics federal agencies are using to evaluate the success of federal prize competitions; and the capability of federal agencies to appropriately design and administer prize competitions.