Pondering the imponderable – how many CRC bids are out there?

Paul Kelly said it:

How many cabs in New York City, how many angels on a pin?
How many notes in a saxophone, how many tears in a bottle of gin?

How many CRC Bids in Round 16?

There are some questions that bounce around in your head for hours with no clear answer. But that doesn’t need to stop us from having a go. The consensus says a tear drop is about 0.05 mL. That’s 20 per mL, isn’t it? So a 750 mL bottle of gin has about 15,000 tear drops. Of course, then it would be a bottle of tear drops, not a bottle of gin…

Perhaps working out the number of CRC Bids in Round 16 is a bit easier. The formula should be:

Bids for extensions of existing CRCs + re-worked bids that didn’t get up in Round 15 + completely new bids = Round 16 Bids.

The potential number of extensions is relatively easy to work out. You go to the chart in the back of the CRC Directory and draw a line down CRCs finishing mid 2014. That’s 13. Of those, some are no longer qualified to bid, I make that 4. Of the remaining 9, not all of them will bid to be extended. I think 2 have probably made that decision. So perhaps up to 7 existing CRCs will bid for an extension.

Last Round, 9 submissions were made and 4 received funding. That leaves 5 bidders from the last Round potentially ready to bid. They’ll go again if they receive encouraging feedback, their participants are still ready to go and the bid team has the energy to do so. My guess is that most will bid again, but not all. I’ll say 4 out of 5.

Now it gets harder. How many completely new bids are out there and will be submitted? They are separate things, of course. There are always some bids floated that don’t get anywhere near submission. There are some that get combined. There are some that get very close to the line but fall just short of submission. My running list currently has 15 active new bids and 3 or 4 maybes. Looking hard at the list, I think a few will drop out completely and a few will defer until Round 17 when they face the reality of hitting participants for commitments and things start to slow down. I suspect the number will come down to 10 and no more than a dozen.

So according to my formula, the number of bids will be 7  existing + 4 reworked  + 10 new = 21 bids.

But there are a few additional and significant unknowns this year. These are the Government’s announcement of the amount of funding in the Round – $240 million; the quarantining of $50 million of that funding for innovative manufacturing CRCs and the new “priority public good” funding stream within the CRC Program.

Each of these three decisions by Government have definitely added to bidding activity and interest. My organisation has lobbied for several years that a bit more “top-down” direction would stimulate more activity and the evidence so far indicates that is certainly happening.

Unless the Government tells us how much money is available for the CRC Round, it is actually impossible to tell. The budget forward estimates tell us the amount available over the coming four year period. But without detailed knowledge of how much is contracted to each existing CRC over the longer term, there is too much guess work involved to determine an actual figure. Kudos to government for letting us know – bidders are much more likely to push ahead knowing there is $240 million available than if they are guessing a figure. (A bit of caution is needed because it really depends on the pattern of funding profiles across all the bids to determine the final amount available for the Minister to allocate).

Quarantining funds for one of the priorities also introduces a new element. We don’t think it has been done before. And it is having an impact. Whereas at the time of the announcement, I reckoned on 1 or 2 manufacturing CRC bids, I think there are currently more like 5 in active development. It’s likely that number will drop back, because there is only limited time to develop a bid from the announcement date. But it might bump up the new bids by 1 or 2.

The final unknown in this Round is the “priority public good” announcement. Effectively, this announcement brings back the Bushfire CRC, due to close in the middle of this year, into Round 15. The announcement doesn’t guarantee the life of that CRC, but makes it clear that the government wants a Natural Hazards CRC, into which the Bushfire CRC could be part. The question in this discussion is whether the announcement brings back currently ineligible CRCs to bid. Antarctic Climate and Ecosystems CRC and the Lowitja Institute, incorporating the CRC for Aboriginal and Torres Strait Islander Health are the obvious ones that could come out of the “ineligible” column into the bidding column.

While introducing a bit of an unknown into the current funding Round, I want to say that the “priority public good” scheme is unambiguously a good thing for the CRC Program, and more importantly for Australia. There has always been a problem with the end of CRCs that are performing well but there is no “natural” home or industry for them to go to. In Round 9 of the CRC Program the Reef, Rainforest and Coastal Zones CRCs all failed to get past the preliminary stage of bidding. The response of the Howard Government was to provide $40 million of a $100 million allocation to the Commonwealth Environmental Research Facilities (CERF) initiative to continue work from the Reef and Rainforest CRCs. CERF has evolved into the National Environmental Research Program (NERP) since then.

Prime Minister Gillard’s announcement of the priority public good funding stream has similarities to how the Howard Government faced the same dilemma. At the end of the day, taxpayers expect important research in the public interest to go on – I doubt they know or care which Federal Department funds it. I’d argue that continuing the funding through the CRC Program is a superior outcome because the key advantages of a CRC can be retained – the long-term funding (and the Natural Hazards announcement was for an 8-year period); the scale of activity in a CRC and the end-user drive. These are key to producing impact.  Of course, the advantage of the CERF program was that significant new funding was involved.

So with these unknowns, let’s bump the number to, say, 23 bids. That’s generally lower than the numbers I’m hearing from other people, but I really can’t see the 30-40 that I’m hearing about materialising into bids. It also means that bids have a reasonable chance of gaining support perhaps 1 in 3 or even better could be supported if the numbers work out as I’ve described.

Finally, pondering the chances of getting a CRC bid up in the funding Round may then alter those chances by encouraging more bidders. But rather than further pondering a Heisenburg/Observer/feeding frenzy response, my advice is to get on with it and triple check everything with your end-users.