ARPA-E is a new organization within the Department of Energy (“DOE”) that was created to foster research and development (“R&D”) of transformational energy technology in the model of DARPA, the Defense Advanced Research Projects Agency. ARPA-E is among the signature programs associated with Energy Secretary Chu, a former scientist at AT&T Bell Laboratories and Director of DOE’s Lawrence Berkeley National Laboratory. The recently enacted American Recovery and Reinvestment Act (P.L. 111-5)(“Recovery Act”) economic stimulus package provided ARPA-E with $400 million.

On April 27, DOE released a Funding Opportunity Announcement (“FOA”) that makes available an initial $150 million, which will be used for awards ranging between $500,000 to $10 million with a possible $20 million award for “extremely exceptional” projects. ARPA-E anticipates that a typical award will range between $2 million and $5 million.

ARPA-E is willing to work with any research and development entity that has a transformational technology. Eligible applicants include for-profit entities, academic institutions, research foundations, not-for-profit entities, collaborations and consortia. According to the FOA, this first announcement is primarily aimed at prospective applicants who already have a relatively wellformed R&D plan for a transformational concept or technology. Special consideration will be given to those projects that enhance job creation and economic recovery.

Applicants must submit eight page concept papers outlining their “kernel” of an idea between May 12, 2009 and June 2, 2009. The concept paper is capped at 8 pages, with a set format of information to be provided that includes an abstract, technical section, mission impact section, and cost summary. ARPA-E will review these papers and indicate whether a full proposal is likely to receive funding. Following the submission of concept papers, the second stage of the FOA will consist of a much longer full application. Applications that pass this initial review based on eligibility, completeness, and satisfaction of mandatory requirements, will be subject to merit review based, in order of importance, on (i) impact to the ARPA-E mission areas and (ii) overall scientific and technical merit. Concept papers and applications will not be evaluated against each other.

Funding may consist of grants, cooperative agreements, and technology investment agreements (TIAs), with cooperative agreements and TIAs as the most likely instruments to be used because of the need for government interaction during the performance of the R&D project. Awardees will typically be required to provide a 20% cost share, although TIA awardees will be required to match 50% where practicable. There is discretion for the contracting officer to reduce the TIA match to 25%. Further, it is possible that in-kind contributions may be counted toward the matching requirement.

Projects funded through this round will have 36 months for performance, but the FOA indicates that ARPA-E has a strong preference for projects that will be completed within 24 months.