Public Competitive Funding
Declining generic funding increased the importance of competitive public funding. The DFG is the most important public Drittmittel provider, followed by the Bund. The DFG funds research in all disciplines and interdisciplinary research on the basis of applications by German research organisations or individual researchers within these. Purely commercial research organisations are generally not eligible. Next to non-specific funding on the basis of applications, the DFG also maintains more specific funding programmes as well as programmes for international collaborations. A board of volunteer experts assesses the proposals on the basis of scientific criteria. The DFG encourages collaborations with users of research and funded projects can apply for additional ‘transfer’ funding. However, the research has to stay at the ‘pre-competitive’ stage and thus may not go beyond the development of a prototype. 
One of the most important programmes by the Bund is the ‘Excellence Initiative’ (Exzellenzinitiative), an institutional funding programme aimed at strengthening HEI research, changing the German HEI landscape and creating synergies between HEIs and other actors by financing graduate schools, excellence clusters and so-called ‘future concepts’ (Zukunftskonzepte) which aim to create elite universities. Decisions regarding which HEIs will be funded are taken by a common commission of the DFG and Wissenschaftsrat.191 Reactions to the Exzellenzinitiative have been mixed. Seckelmann expresses the thought that it has a reparatory purpose (because Lander have come into financial difficulties since the federalism reform), while at the same time encouraging inter-HEI competition. Others believe that the ‘Excellence Initiative’ might have actually infringed the constitution in its form after the federalism reform and before the recent revision of Article 91b GG. The Bund asked an expert commission to evaluate the Exzellenzinitiative who presented their findings in early 2016. Following the recommendations, the programme will be continued beyond 2017 under the name Exzellenzstrategie (Excellence Strategy), but without the graduate school funding stream, as these has been considered as ‘ambivalent at best’.
In addition to the Exzellenzinitiative, the Bund provides project funding in those areas it deems relevant for future development and economic growth. The Bund also encourages contract research by HEIs. The High-Tech Strategy, for example, from 2006 to 2009 included a measure (Forschungspramie) which allowed HEIs and other public research organisations to apply for a 25 % premium on certain kinds of contract research for SME from the public purse. This money was then supposed to be used to establish further competences regarding knowledge transfer. The Lander also started to introduce additional competitive funding programmes including for the interplay of research organisations and the private sector, though the share of such programmes in all Drittmittel is rather small. Finally, other public sector entities may provide some Drittmittel for HEIs.
-  See Statistisches Bundesamt 2015, Table 2.6 (p. 240 seq) and 2.7 (p. 261 seq).
-  Wissenschaftsrat 2007, p. 65 seq, DFG (n 174), DFG (2016) Erkenntnistransfer (Englishtranslation: Knowledge Transfer). http://www.dfg.de/foerderung/grundlagen_rahmenbedingungen/erkenntnistransfer/index.html. Accessed 14 August 2016.
-  On the excellence initiative see Enders 2007, p. 23; Edler and Kuhlmann 2008, p. 270;Kehm and Pasternack 2009; Hinze 2010, p. 172; Schubert and Schmoch 2010, p. 250;Seckelmann 2010, p. 228 seq, 239; BMBF (2016) Die Exzellenzinitiative starkt die universitareSpitzenforschung (English translation: The Excellence Initiative strengthens leading universityresearch). http://www.bmbf.de/de/1321.php. Accessed 14 August 2016.
-  Seckelmann 2010, p. 228 seq, 239.
-  For a short summary see Kuhne (2010) Zweifelhafter Wettbewerb (English translation:Questionable competition). Zeit Online (14 January 2010) http://www.zeit.de/studium/hochschule/2010-01/exzellenzinitiative-verfassungswidrig. Accessed 9 November 2011 withreferences to the work of S. Sieweke.
-  Internationale Expertenkommission Exzellenzinitiative 2016.
-  Ibid p. 6. On the Exzellenzstrategie see BMBF (2016) Die Exzellenzstrategie (Englishtranslation: The Excellence Strategy). https://www.bmbf.de/de/die-exzellenzstrategie-3021.html.Accessed 14 August 2016.
-  BMBF (2016) Bekanntmachung des Bundesministeriums fur Bildung und Forschung zurForderrichtlinie “Forschungspramie” (English translation: Announcement of the Federal Ministryfor Education and Research regarding the funding guideline “Research Premium”) https://www.bmbf.de/foerderungen/bekanntmachung-217.html. Accessed 14 August 2016.
-  On competitive public funding see Enders 2007, pp. 22, 28; Wissenschaftsrat 2007, p. 64,p. 248 seq, 251, 253; Hinze 2010, p. 169 seq; Jaeger and In der Smitten 2010, p. 6; Schubert andSchmoch 2010; Statistisches Bundesamt 2015, Table 2.7 (p. 261 seq).