After years of impecunious obscurity, Victor Basili's computer-science department is simultaneously in the chips and out of space.

"In the last five years, our research money has at least quadrupled" to $8 million, said Basili, chairman of the department at the University of Maryland. "Our research program has grown so dramatically over the last four years, we don't have any more room. We've created a major problem for the university in terms of space."

Coping with success is a problem that university presidents, such as Maryland's John Toll, prefer.

"According to the National Academy of Science faculty ratings, we rate the best in computer science of any public university on the East Coast," said Toll, who is securing more space for the claustrophobic computerniks.

Toll has targeted high technology as Maryland's ticket to academic excellence, and is lavishing his time and support accordingly. Maryland's computer-science department is arguably the glossiest symbol of the university's emerging reputation as a high-tech powerhouse. It is attracting top-notch faculty, top-notch graduate students and funding from multibillion-dollar giants, including IBM and the Pentagon.

"An important part of our strategy is to build up a critical mass so that this is a place people want to come to," Toll said. "We are there in computer science; we are approaching it in biotechnology."

In effect, he hopes to make Maryland a public university version of the Massachusetts Institute of Technology, Carnegie-Mellon or Stanford University -- that is, academic excellence combined with wealthy industrial partners and the high-octane fuel of federal research dollars.

In the process, Toll's actions raise questions about the role a state-financed university should play in its community: how to balance undergraduate needs with graduate research ambitions; how to forge industry links without losing autonomy over the research agenda; and how to allocate university resources between the glamorous -- and financially rewarding -- high-tech fields and traditional liberal arts areas.

Toll said he believes that research and economic development are as much a part of Maryland's role as educating undergraduates.

With a ward heeler's skill at political and financial hardball, Toll has pushed to transform Maryland into a first-rate research university. He has artfully secured more money from the state, even as the university has dramatically boosted ties with private enterprise and the federal-research establishment.

For example, he pushed for, and got, a special $1 million discretionary fund from the legislature to help the university keep key faculty members by boosting their salaries.

"One of our major issues is to develop salaries that are fully competitive," Toll said. "We still have a ways to go to do that."

Toll has been particularly successful in positioning Maryland as a regional capital of high-technology research and development.

To fulfill that mission, the university is more aggressively using its strategic geographical location by forging links with federal-research facilities.

"We're within driving distance of 50 to 60 major government laboratories," including the National Aeronautics and Space Administration's Greenbelt facility, the National Bureau of Standards and the National Institutes of Health, noted Robert Smith, vice president of university relations. "I think our location is a greater asset for the next 15 years than it has been the last 15 years."

Toll has insinuated himself into federal power circles, particularly in the defense arena, and is promoting the university as an ideal hub for agencies seeking research partners. That University of Maryland Chancellor John Slaughter once ran the National Science Foundation doesn't hurt the university's Washington profile either.

In fact, the university has parlayed its growing reputation into significant contracts. The computer-science department won a key three-year, $3 million contract from the Pentagon's Defense Advanced Research Projects Agency Strategic Computing program, which calls for creating an artificially intelligent "autonomous vehicle" that drives itself across rugged terrain.

Maryland was awarded a $16-million NSF contract to be one of six new "excellence in engineering" centers -- awards that typically go to MIT and Carnegie-Mellon -- specializing in systems research.

"The old-boy network [of schools such as Stanford, MIT and Carnegie-Mellon] has opened up, and we're getting a large share of that," said Basili.

Of course, Maryland also had lost its share of federal research dollars to other universities. For example, Maryland tried to win a multimillion-dollar Defense Department grant to build a "Software Engineering Institute" to research software design questions. But, despite pulling every congressional and Pentagon string it knew, Maryland lost the bid to Carnegie-Mellon.

The computer-science department also has a three-year-old industrial-liaison program with Digital Equipment Corp., TRW Corp., Martin Marietta Corp., GTE Corp. and other companies to foster joint-research efforts in software technology.

The university's graduate program in applied molecular biology requires students to intern in company laboratories and was designed "specifically to train people for industry," Toll said.

While computer research and technology has been the core of Maryland's recent high-tech success, the university also hopes to become the premier academic center for biotechnology, which is the commercial application of genetic engineering and other biological processes.

The university established the Maryland Biotechnology Institute -- with an initial budget of $1.4 million for fiscal 1986 -- which will comprise four centers devoted to industrial, medical, marine and agricultural applications of the new technology, each designed to take advantage of unique local resources.

The first part, the new Center for Advanced Research in Biotechnology in Rockville, fosters collaborative research between the university, government and industry, particularly in the new field of protein engineering.

Although the product of a local partnership among the university, the National Bureau of Standards and Montgomery County, CARB will be open to scholars, companies and nonprofit organizations across the country, said Kevin M. Ulmer, director of CARB. "It will be a national resource."

At the same time, it is expected to nourish and draw on the talent of the dozens of biotech companies that have sprung up in Montgomery County and are flourishing in the shadow of the National Institutes of Health.

The National Aquarium will be the university's partner in creating the center for marine biotechnology, which will be based in downtown Baltimore, while the Beltsville Agricultural Research Center will be its partner in establishing the center for agricultural biotechnology.

"The university has embarked on a path of expansion and upgrading the caliber of biotechnology-related research across the board that will, if properly implemented, make it a significant player on a national and international level," said CARB's Ulmer, who is a former vice president of Genex Corp., a Gaithersburg biotech firm.

Such partnerships give university researchers access to sophisticated government equipment that is critical to cutting-edge research in some fields. For example, CARB will be able to use NBS' nuclear reactor for neutron diffraction; the reactor is one of only three in the world, and is not available to Stanford, Harvard or MIT, Ulmer said.

"All these linkages have made it better for our faculty," Smith said. They also have helped make Maryland a wealthier school.

Since Toll arrived in 1978, Maryland has quintupled the number of its endowed chairs and professorships to 10 and five, respectively.

"In the past few years, we've gone beyond the $100 million mark in grants support," Smith said.

However, while Maryland has enjoyed significant increases in research funding, National Science Foundation figures indicate that during the past five years, the school has remained No. 12 among public universities and colleges receiving federal funds for science and engineering. Maryland officials view that as the glass being half full.

"It means we've been keeping up," Chancellor Slaughter said. Toll said he has encouraged administration and faculty to seek out partners for the university.

"I'm not sure you build alliances like these by consensus," Smith said. "But you also don't build them by wishful thinking."

Yet some people fear that too much sensitivity to these outside concerns may erode the school's quality. "There is a real danger that in the search for money, you will take on research projects that are far too business-oriented ," said Richard Cyert, president of Carnegie-Mellon University, which has been a pioneer in university-industry relations.

"There are times I'm not sure that [Toll] appreciates the difference between basic research and applied research," one professor said. "He seems to be more interested in getting the research contracts and the funds than the research itself."

But Toll responds to critics by saying, "All the research we do is fundamental research as described by the federal government. It is the faculty who originate the research proposals."

Similarly, a university's research emphasis often comes at the expense of the quality of undergraduate education. Indeed, Maryland's Basili concedes that many computer-science students rarely are taught by the department's top members; instead, teaching assistants do the bulk of the lecturing, while professors are busy with research. "You have to pay attention to the teaching side," Cyert said.