After Stanford University won a Pentagon robot race through the Mojave Desert last year, engineers and students hoisted an oversized $2 million check and poured bubbly champagne over their unmanned Volkswagen SUV.
Next year's winners won't be as rich.
The Pentagon's research arm, which has twice hosted the high-tech contests since 2004, blames an obscure section in a defense spending law signed by President Bush this week. The Defense Advanced Research Projects Agency believes the law prevents the agency from awarding the $2.7 million prize money.
So instead, DARPA will hand out shiny trophies to the top three teams whose smart vehicles can weave through congested city traffic without human help.
"I promise that the trophies will be given because I'll personally buy them myself," Tony Tether, DARPA's director, told competitors earlier this year.
The absence of a lucrative cash prize has forced some teams to retool their game plan and others to drop out. Some fear it would be harder to attract corporate sponsors and hurt media coverage of the race, which drew a throng of reporters last year and inspired a PBS documentary.
"The icing on the cake is gone," said Ivar Schoenmeyr, team leader of California-based Team CyberRider, which is retrofitting a Toyota Prius hybrid.
DARPA has sponsored the cash prize competitions to spur development of smart vehicles that could be used in the battlefield. The agency, which was created during the Cold War and is best known for research that led to the Internet, is under a congressional mandate to help cut casualties by having a third of the military's ground vehicles unmanned by 2015.
Unlike previous races where robotic vehicles had to conquer the rugged desert, next year's challenge will test how well they can carry out a mock military supply mission through bottlenecked traffic.
The contest — to be held in November 2007 in an unnamed Western state — will test vehicles' ability to navigate themselves through city traffic, obey traffic laws and make U-turns — all without causing an accident.
Last year, the 195 teams that applied had to raise their own money. This year, 89 teams entered, including 11 that received up to $1 million each by DARPA to participate. The decision to fund some teams was independent of the prize loss.
At least one team that failed to receive seed money dropped out. San Diego-based AutoCommute, which raced last year under another name, has been perfecting cameras that can accurately sense lane markings. The company in talks with several teams to sell the technology.
"When you're trying to scrape together money just to buy a sensor and another team can just drop money to buy the same thing, it's hard to be competitive," said team leader Michael Vest.
Tether declined to be interviewed for this article, but said in a statement that he was pleased with the response from competitors.
"I never felt that people came for the money in the first place, although I knew they wouldn't turn the prize money down," Tether said.
DARPA's inaugural race in 2004 was a bust when all the contestants failed to complete the $1 million course. Last year's winner-take-all race produced five vehicles that crossed the finish line, but only Stanford won the $2 million check by zipping through the 132-mile course in six hours and 53 minutes.
"Having a prize money is a great additional motivator," Stanford computer scientist Sebastian Thrun said. "I'm sad to see that lost, but that's not going to affect my willingness to compete."
Some all-volunteer teams like CyberRider are inviting computer whizzes worldwide to share their computer algorithms, which tell a vehicle how to react. It has turned to Wiki collaborative software to make sharing easier. CyberRider, which lost half of its team members partly because of the absent prize money, said the communal style saves time and money.
"I'm not saying it will be successful, but it's the only way we can participate with limited resources," Schoenmeyr said.
DARPA's authority to hold cash prize competitions is spelled out in a law that expires in September 2007, two months before the competition. Earlier this year, Congress switched the authority from DARPA to its boss, the Director of Defense Engineering and Research. President Bush signed the law this week.
DARPA said the change essentially strips its power to dole out prize money. But congressional aides countered that the change actually expands the authority to other defense agencies. Jenness Simler, a committee aide on the House Armed Services Committee, said DARPA can still give out cash prizes as long as it works with its boss.
Pentagon spokesman, Lt. Col. Brian Maka, said the agencies are still working out the details.
"We are not aware of a decision to not award cash prizes," Maka said in a statement.
Tether told a House Armed Services subcommittee earlier this year that cash prizes "attract publicity and inspire excitement" and gives the little guys a chance to compete.
Groups are increasingly holding prize competitions to spur innovation. For example, the nonprofit X Prize Foundation hosted a $10 million contest that led to the first private manned spaceflight in 2004. Earlier this month, the foundation dangled another $10 million to the first company that can process the genomes of 100 people in 10 days. NASA is funding the Centennial Challenges to solve a range of space problems.
Some analysts said the absence of cash prizes likely won't hurt DARPA, which has built a cult following. Many teams have evolved from garage tinkerers to savvy challengers, pairing up with corporate sponsors to help offset costs and hiring public relations machines.
"I don't think it's going to be a death knell," said Peter Singer, a senior fellow at the Brookings Institution and author of the upcoming book "Wired for War" about robotics and warfare.
Famed robotics professor William "Red" Whittaker of Carnegie Mellon University, whose teams placed second and third last year, said the whole thing is overblown.
"No one is dreaming of big bank accounts or struck by lottery fever," he said. "People are out there to innovate."