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Case Study #3:

R&D Abuse: an Expensive Decontamination Project

A ranking member in the municipal council had her suspicion. The industrial outfit appeared so convincing in its presentation, offering a rational alternative to the order to clean the ground from the assorted chemicals that contaminated it for years. Instead of right away applying the current cleaning technology, which is scheduled to last three years, the outfit proposed to wait for the research and development effort with respect to a newer technology which should be cleaning the same area in less than a year. The remaining R&D effort should be done within one year tops, so they said, and the end result would be a cleaner park. So better, cheaper, and faster -- a clear winner, so they said.

But one council member remained suspicious and turned to D&G Sciences -- Virginia Technology Corporation, with a request to appraise that "one year" R&D effort. We did. Using our sophisticated tools we concluded that the project was so ambitious, and in such preliminary stage that it would last at least five years before it achieves its stated goals.

"I knew something was fishy here" exclaimed the council member. Once we approve the alternative plan, first the corporation would win a full year of not paying anything on account of waiting for the new technology. When the year would pass and the expected technology would still be "in research" then an extension would be filed for, followed by another one, and on and on. The council would loath to be exposed for its mistake, and upohold the original decision. Meanwhile the corporation would postpone its cleaning expenses, making financial contributions, probably, to a more favorable team of elected officials that would take it off the hook.

Unfortnately, we see many instances of such an abuse because even careful and mindful examiners would likely pass the question of how valid is the assumption for the duration of the R&D.