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Exploratory Research on Engineering the Service Sector (ESS)

NSF 02-029

Program Announcement

NSF 02-029





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Program Title: Exploratory Research on Engineering the Service Sector (ESS)

Synopsis of Program:

The National Science Foundation announces a focused solicitation for Exploratory Research on Engineering the Service Sector (ESS). The service sector of the U.S. economy dominates both GDP and employment, and provides critical infrastructure on which much of the nation depends. The goal of this ESS effort is to stimulate the development of a community of academic researchers in engineering and allied branches of the mathematical and social sciences, and a corresponding body of research findings, that address the service sector across a scope commensurate with its critical and dominant position. Specifically, this effort will support research on application of the rigorous computational problem-solving techniques that define engineering to improving the quality, productivity, safety, reliability and competitiveness of service operations. The research will thus explore opportunities for extending engineering-oriented research to newly emerging types of service enterprises and to those where it has been relatively under-utilized, seek out new ideas on more established service engineering research topics, and begin building an understanding of issues and opportunities common to different types of service operations.

Cognizant Program Officer(s):

Applicable Catalog of Federal Domestic Assistance (CFDA) Number(s):




A. Proposal Preparation Instructions

B. Budgetary Information

C. Deadline/Target Dates

D. FastLane Requirements





    1. Proposal Preparation Instructions
    2. Budgetary Information
    3. Deadline/Target Dates
    4. FastLane Requirements
    1. NSF Proposal Review Process
    2. Review Protocol and Associated Customer Service Standard
    1. Notification of the Award
    2. Award Conditions
    3. Reporting Requirements


The service sector of the United States economy dominates both Gross Domestic Product (GDP) and employment. It is also the fastest growing part of the economy, and the one offering the most fertile opportunities for productivity improvement. For example, service activities now approach 80% of U.S. employment, far outstripping sectors like manufacturing (14%) and agriculture (2%). One service industry alone, health care, constitutes 14-15% of GDP when all its dimensions are included. A decade of decline in the 1970's followed the ten-fold growth in real GDP per labor hour over the prior century, but intensive research and development efforts through the 1980's and 1990's (some of them aided by NSF-funded research) restored manufacturing productivity growth to a healthy 4.5% per year. Still, overall non-farm productivity has continued to decline because of the increasing dominance of service sector employment where recent annual productivity growth has been estimated as low as 0.5%.

The mere scale of the service sector makes it a critical element of the U.S. economy, employing, as it does, many millions of workers producing trillions of dollars in economic value. However, secure and reliable U.S. services provide much of the key infrastructure on which the whole nation, and indeed much of the world's commerce depends. For example, disruptions of transportation industries following terrorist attacks on September 11, 2001 have devastated not only the companies directly involved and their employees, but other elements of the economy ranging from hotels, restaurants and tourist attractions to global supply chain and lean manufacturing systems dependent on just-in-time arrival of parts and components. Tremendous new challenges have arisen as changes in processes and operations are evolved to better assure the safety and reliability of critical services.

Engineering and allied branches of the mathematical and social sciences have made contributions in virtually every service sector, and engineering is pervasive in some fields. Notable examples of the latter are transportation, logistics, and public utility and infrastructure systems. In other sectors, such as finance/insurance, engineering approaches have been broadly applied in private enterprises, but a corresponding academic engineering research community has not fully evolved to integrate results into an expanding and teachable body of knowledge. Furthermore, many critical and growing service sectors such as health care delivery, retail, and hospitality/entertainment have gone mostly overlooked. Finally, new service activities are continually emerging throughout the economy as forces like globalization, e-commerce, and environmental/reuse concerns produce ever more decentralization and outsourcing of operations and processes.

Movement toward an engineering and science research effort commensurate with the breadth and importance of the service sectors in the U.S. economy requires more than just straight-forward extension of ideas and tools developed for other sectors. Fundamentally new issues are posed by unique features of service enterprises:

Beginning with a workshop held July 23-24, 2001 (see, NSF is undertaking an effort to stimulate the development of a community of academic researchers in engineering and allied branches of the mathematical and social sciences, and a corresponding body of research findings, that address the service sector across a scope commensurate with its critical and dominant position in the U.S. economy by applying the rigorous computational problem-solving techniques of engineering and science to improve the quality, productivity, safety, reliability and competitiveness of service operations.

The next step is this solicitation seeking proposals for exploratory research to pursue opportunities for extending engineering- and science-oriented tools and approaches to newly emerging types of service enterprises and those where it has been relatively under-utilized, seek out new ideas about more established service engineering research topics, and begin building an understanding of issues and opportunities common to different types of service operations. Awards will be limited to $100K ($150K for investigator teams), and durations of 18 months in the interest of gaining the widest possible participation and directing grants to lines of investigation that are new and distinguishable from ongoing efforts already sponsored by NSF or other agencies.

The breadth and variety of aspects of the service economy offer a host of industrial and governmental operations on which research under this solicitation might focus. These include, but are not limited to transportation, logistics (forward and reverse), construction, public utility and infrastructure systems, equipment and product maintenance and repair, health care delivery, finance and insurance, retail, hospitality and entertainment, and a variety of classic government services. However, the education, energy marketing and distribution, and software development and maintenance sectors are explicitly excluded because they are already the subject of major NSF investments elsewhere.


Proposals are sought that explore novel lines of basic research that promise to extend the range of focused empirical, analytical and computational techniques for design, planning and control of service products, operations and processes, and/or advance policy insights with relevance to implementable solutions in service enterprises. These could include, but are not limited to modeling and representation of processes, data gathering and exploitation, methods and metrics for assessment, and decision tools for planning and control. Some issues will parallel those already dealt with successfully in manufacturing, and creative adaptations of corresponding tools and concepts may prove fruitful. Other lines of investigation will be unique to services or particular sectors. Analysis and computation with operations models will be at the heart of the research effort, but behavioral, economic, mathematical and statistical issues will be central to some topics.

Topics. Any exploratory research addressed to this broad agenda may be appropriate for support under the initiative. Emphasis is on novel and high risk ideas with the potential for high payoff. Some topics appear worthy of special attention because of unique characteristics of service activities.

Distinguishable Research Efforts: The limited funds and exploratory goal of this ESS initiative make it essential that proposed research involve lines of investigation that are new and distinguishable from ongoing efforts -- especially from research activities already sponsored by NSF and other agencies. Promising ideas and topics that have not been fully explored are welcome from all qualified researchers. ESS support should not be sought simply to better fund research efforts that are already well established.

Subsequent Support: Awards under the ESS solicitation are expected to explore novel ideas with the potential for high payoff. Because the grants will be limited in budget and duration, it is recognized that many topics may justify subsequent investigation. Such follow-on research in operations modeling and analysis topics could prove to be of interest to the permanent Service Enterprise Engineering (SEE) program being established in the Engineering Directorate Division of Design, Manufacture and Industrial Innovation (DMII) which will begin full operation October 1, 2002. Other aspects could fall within regular programs in the respective NSF divisions joining in the ESS solicitation, or be cofunded by two or more of the ESS participants on a case-by-case basis. However, there is no direct linkage or other assurance of subsequent funding of any topic. ESS researchers are expected to seek research results that have free-standing value independent of future grants. Furthermore, research teams should be sized for the scope of the project proposed under ESS rather than anticipated follow-on activity.

Progress Workshop: One goal of this effort is to stimulate the development of a community of academic researchers in engineering and allied branches of the mathematical and social sciences research working together on tools and methods for engineering the service sector. To that end all grantees will be expected to budget funds for and present their progress in a workshop held in connection with the annual NSF Design, Service and Manufacturing Grantees & Research Conference in January 2004.  The location of this conference, which is presently undetermined, will be communicated to all awardees in early 2003.


Proposals may be submitted by U.S. academic institutions eligible under the NSF Grant Proposal Guide ( in support of individual investigators or small groups. Synergistic partnerships with industries and related institutions are encouraged when appropriate; however, NSF awards will be made only to U.S. academic institutions. 


The program budget, number of awards and average award size/duration are subject to the availability in FY2002 of funds and the quality of the proposals received. However, approximately $3.0M is expected to be awarded in standard grants of up to $100K  ($150K for investigator teams) with durations of 18 months. 


A. Proposal Preparation Instructions

Full Proposal:

Proposals submitted in response to this program announcement/solicitation should be prepared and submitted in accordance with the general guidelines contained in the NSF Grant Proposal Guide (GPG). The complete text of the GPG is available electronically on the NSF Web Site at: Paper copies of the GPG may be obtained from the NSF Publications Clearinghouse, telephone (301) 947-2722 or by e-mail from

Proposers are reminded to identify the program solicitation number (NSF 02-029) in the program announcement/solicitation block on the NSF Form 1207, Cover Sheet For Proposal to the National Science Foundation. Compliance with this requirement is critical to determining the relevant proposal processing guidelines. Failure to submit this information may delay processing.

B. Budgetary Information

Cost sharing is not required in proposals submitted under this Program Announcement.

C. Deadline/Target Dates

Proposals must be submitted by the following date(s):

Full Proposals by 5:00 PM local time: March 5, 2002

D. FastLane Requirements

Proposers are required to prepare and submit all proposals for this Program Announcement through the FastLane system. Detailed instructions for proposal preparation and submission via FastLane are available at: For FastLane user support, call 1-800-673-6188 or e-mail

Submission of Electronically Signed Cover Sheets. The Authorized Organizational Representative (AOR) must electronically sign the proposal Cover Sheet to submit the required proposal certifications (see Chapter II, Section C of the Grant Proposal Guide for a listing of the certifications). The AOR must provide the required certifications within five working days following the electronic submission of the proposal. Further instructions regarding this process are available on the FastLane website at:


A. NSF Proposal Review Process

Reviews of proposals submitted to NSF are solicited from peers with expertise in the substantive area of the proposed research or education project. These reviewers are selected by Program Officers charged with the oversight of the review process. NSF invites the proposer to suggest, at the time of submission, the names of appropriate or inappropriate reviewers. Care is taken to ensure that reviewers have no conflicts with the proposer. Special efforts are made to recruit reviewers from non-academic institutions, minority-serving institutions, or adjacent disciplines to that principally addressed in the proposal.

Proposals will be reviewed against the following general review criteria established by the National Science Board. Following each criterion are potential considerations that the reviewer may employ in the evaluation. These are suggestions and not all will apply to any given proposal. Proposers are reminded that both the intellectual merit and the broader impacts of the work to be accomplished should be addressed. While reviewers are expected to address both merit review criteria, each reviewer will be asked to address only considerations that are relevant to the proposal and for which he/she is qualified to make judgements.

Principal Investigators should address the following elements in their proposal to provide reviewers with the information necessary to respond fully to both of the above-described NSF merit review criteria. NSF staff will give these elements careful consideration in making funding decisions.

A summary rating and accompanying narrative will be completed and submitted by each reviewer. In all cases, reviews are treated as confidential documents. Verbatim copies of reviews, excluding the names of the reviewers, are sent to the Principal Investigator/Project Director by the Program Director. In addition, the proposer will receive an explanation of the decision to award or decline funding.

B. Review Protocol and Associated Customer Service Standard

All proposals are carefully reviewed by at least three other persons outside NSF who are experts in the particular field represented by the proposal. Proposals submitted in response to this announcement/solicitation will be reviewed by Panel Review.

Reviewers will be asked to formulate a recommendation to either support or decline each proposal. The Program Officer assigned to manage the proposal's review will consider the advice of reviewers and will formulate a recommendation.

NSF is striving to be able to tell applicants whether their proposals have been declined or recommended for funding within six months for 70 percent of proposals. The time interval begins on the date of receipt. The interval ends when the Division Director accepts the Program Officer's recommendation.

In all cases, after programmatic approval has been obtained, the proposals recommended for funding will be forwarded to the Division of Grants and Agreements for review of business, financial, and policy implications and the processing and issuance of a grant or other agreement. Proposers are cautioned that only a Grants and Agreements Officer may make commitments, obligations or awards on behalf of NSF or authorize the expenditure of funds. No commitment on the part of NSF should be inferred from technical or budgetary discussions with a NSF Program Officer. A Principal Investigator or organization that makes financial or personnel commitments in the absence of a grant or cooperative agreement signed by the NSF Grants and Agreements Officer does so at its own risk.


A. Notification of the Award

Notification of the award is made to the submitting organization by a Grants Officer in the Division of Grants and Agreements. Organizations whose proposals are declined will be advised as promptly as possible by the cognizant NSF Program Division administering the program. Verbatim copies of reviews, not including the identity of the reviewer, will be provided automatically to the Principal Investigator. (See section VI.A. for additional information on the review process.)

B. Award Conditions

An NSF award consists of: (1) the award letter, which includes any special provisions applicable to the award and any numbered amendments thereto; (2) the budget, which indicates the amounts, by categories of expense, on which NSF has based its support (or otherwise communicates any specific approvals or disapprovals of proposed expenditures); (3) the proposal referenced in the award letter; (4) the applicable award conditions, such as Grant General Conditions (NSF-GC-1)* or Federal Demonstration Partnership (FDP) Terms and Conditions;* and (5) any announcement or other NSF issuance that may be incorporated by reference in the award letter. Cooperative agreement awards also are administered in accordance with NSF Cooperative Agreement Terms and Conditions (CA-1). Electronic mail notification is the preferred way to transmit NSF awards to organizations that have electronic mail capabilities and have requested such notification from the Division of Grants and Agreements.

*These documents may be accessed electronically on NSF's Web site at Paper copies may be obtained from the NSF Publications Clearinghouse, telephone (301) 947-2722 or by e-mail from

More comprehensive information on NSF Award Conditions is contained in the NSF Grant Policy Manual (GPM) Chapter II, available electronically on the NSF Web site at The GPM is also for sale through the Superintendent of Documents, Government Printing Office (GPO), Washington, DC 20402. The telephone number at GPO for subscription information is (202) 512-1800. The GPM may be ordered through the GPO Web site at

C. Reporting Requirements

For all multi-year grants (including both standard and continuing grants), the PI must submit an annual project report to the cognizant Program Officer at least 90 days before the end of the current budget period.

Within 90 days after the expiration of an award, the PI also is required to submit a final project report. Approximately 30 days before expiration, NSF will send a notice to remind the PI of the requirement to file the final project report. Failure to provide final technical reports delays NSF review and processing of pending proposals for that PI. PIs should examine the formats of the required reports in advance to assure availability of required data.

NSF has implemented an electronic project reporting system, available through FastLane. This system permits electronic submission and updating of project reports, including information on project participants (individual and organizational), activities and findings, publications, and other specific products and contributions. PIs will not be required to re-enter information previously provided, either with a proposal or in earlier updates using the electronic system.


General inquiries regarding  Exploratory Research on Engineering the Service Sector  should be made to:For questions related to the use of FastLane, contact:


The NSF Guide to Programs is a compilation of funding for research and education in science, mathematics, and engineering. The NSF Guide to Programs is available electronically at General descriptions of NSF programs, research areas, and eligibility information for proposal submission are provided in each chapter.

Many NSF programs offer announcements or solicitations concerning specific proposal requirements. To obtain additional information about these requirements, contact the appropriate NSF program offices. Any changes in NSF's fiscal year programs occurring after press time for the Guide to Programs will be announced in the NSF E-Bulletin, which is updated daily on the NSF web site at, and in individual program announcements/solicitations. Subscribers can also sign up for NSF's Custom News Service ( to be notified of new funding opportunities that become available.


The National Science Foundation (NSF) funds research and education in most fields of science and engineering. Awardees are wholly responsible for conducting their project activities and preparing the results for publication. Thus, the Foundation does not assume responsibility for such findings or their interpretation.

NSF welcomes proposals from all qualified scientists, engineers and educators. The Foundation strongly encourages women, minorities and persons with disabilities to compete fully in its programs. In accordance with Federal statutes, regulations and NSF policies, no person on grounds of race, color, age, sex, national origin or disability shall be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving financial assistance from NSF (unless otherwise specified in the eligibility requirements for a particular program).

Facilitation Awards for Scientists and Engineers with Disabilities (FASED) provide funding for special assistance or equipment to enable persons with disabilities (investigators and other staff, including student research assistants) to work on NSF-supported projects. See the program announcement/solicitation for further information.

The National Science Foundation has Telephonic Device for the Deaf (TDD) and Federal Information Relay Service (FIRS) capabilities that enable individuals with hearing impairments to communicate with the Foundation about NSF programs, employment or general information. TDD may be accessed at (703) 292-5090, FIRS at 1-800-877-8339.

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The information requested on proposal forms and project reports is solicited under the authority of the National Science Foundation Act of 1950, as amended. The information on proposal forms will be used in connection with the selection of qualified proposals; project reports submitted by awardees will be used for program evaluation and reporting within the Executive Branch and to Congress. The information requested may be disclosed to qualified reviewers and staff assistants as part of the proposal review process; to applicant institutions/grantees to provide or obtain data regarding the proposal review process, award decisions, or the administration of awards; to government contractors, experts, volunteers and researchers and educators as necessary to complete assigned work; to other government agencies needing information as part of the review process or in order to coordinate programs; and to another Federal agency, court or party in a court or Federal administrative proceeding if the government is a party. Information about Principal Investigators may be added to the Reviewer file and used to select potential candidates to serve as peer reviewers or advisory committee members. See Systems of Records, NSF-50, "Principal Investigator/Proposal File and Associated Records," 63 Federal Register 267 (January 5, 1998), and NSF-51, "Reviewer/Proposal File and Associated Records," 63 Federal Register 268 (January 5, 1998). Submission of the information is voluntary. Failure to provide full and complete information, however, may reduce the possibility of receiving an award.

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