Harvard is in the midst of a battle with representatives of small business over a Congressional bill that would allocate one to three per cent of the federal research and development budget to small business.

The research and development budget is presently divided between universities and corporations making bids for funding projects. The proposed legislation would set aside a specific amount for small business bids, reducing the amount available for institutions like Harvard.

Basic scientific and engineering research account for about $5.5 billion of the $40 billion total research and development budget.

The bill proposed in the House--approved already in a similar version by the Senate--would "threaten Harvard's basic research programs," Parker L. Coddington, director of government relations, said yesterday, adding that the bill's quota would diminish the quality of the total national research effort.

Basic research is a "risky" venture, more suitable to large institutions, because it can take ten years or more before its benefits are realized, Coddington said. Basic research differs from other forms of research because of its emphasis on long term projects, he said.

Small business can more profitably invest its research dollar in the application of previously made discoveries, he added.

Since last spring, Coddington and other members of the academic community have discussed with legislators eliminating the basic research quota, part of the bill which seeks to provide funds for small businesses in all forms of research.

Representatives of the Association of American Universities--of which Harvard is a member--criticized the bill before the House Committee on Small Business in September, Coddington said.

Presidents of several universities will testify at House hearings on the bill later this month, but President Bok will not, Coddington said.

Small business is not equipped to conduct fundamental science," Coddington said.

He added that small business would use any allocated funds for "applied science," reducing the total amount of new innovations.

Fishy

Universities are using the basic research issue as a "red herring," Anne Eskesen, director of Small Business Resource Development Center, said yesterday.

Her group did not oppose an amendment to the Senate bill which provided the basic research be excluded from the program of research aid to small business, she said, adding it would not oppose a similar measure in the House bill.

The House must conduct "sequential hearings" because four House committees--Energy and Commerce, Arms Services, Science and Technology, and Veteran's Affairs--have stated that the research and development issue overlaps their authority. The committees must hold the hearings and suggest amendments by March 1.

Eskesen called the sequential hearing procedure "an effective way to make potholes" in the process of getting the two Houses to agree to and to pass a final bill.

The main thrust of the bill focuses on innovation rather than basic research, Eskesen said. She added that small businesses would do minor amounts of basic research with the extra money, and she challenged University assertions that business could not or should not carry out such work.

Eskesen also cited research findings that business is the only format in which to "marry technological competence with mar- ket savvy." Business research is also a prime resource of innovation, jobs, and "other goodies," she aded.

The Senate, by a 90-0 vote, approved last December a bill setting aside one per cent of the total research and development budget for small business. The version the House is debating is similar, but it contains a three-per-cent allocation.

Princeton's President Donald Kennedy will be among those who will testify at the House hearings, a Princeton spokesman said yesterday. Bok's schedule will not allow him to attend, Coddington said, adding that Harvard's current fund-raising campaign makes the president unusually busy