Pursuant to a congressional request, GAO examined the National Science Foundation's (NSF) Engineering Research Center (ERC) Program, focusing on: (1) NSF program operation and evaluation; and (2) industry sponsors' reaction to the program.

GAO found that: (1) research quality was the most important criterion in awarding center grants, with contribution to industrial competitiveness and education following in importance; (2) NSF formally monitored ERC management and research agenda through yearly on-site reviews and ERC-prepared strategic plans; (3) NSF used outside peer reviews to evaluate individual centers once every 3 years, but believed it was too early to evaluate the overall strengths and weaknesses of the ERC approach; (4) a wide range of industries participated in the program, and most intended to continue their support; (5) participants believed that the type and quality of research was the most important reason for sponsoring centers; (6) participants expected to benefit over time through better personnel recruiting and improvement of current personnel, but not through patentable or commercialized products; (7) it was too early to determine the program's impact on engineering education because it had been in place for only a short period of time, and industry sponsors have not hired many ERC program graduates; and (8) participants believed that NSF should increase participants' influence on the ERC research agenda.