The American College Theatre Festival, which for 18 years has been showcasing the best of that particular genre, has concentrated considerable effort on nurturing new playwrights, hoping to uncover the Eugene O'Neills or Neil Simons of the future.

In the case of this year's prize-winner, "Dancers," Neil Simon is more likely, albeit late, empathetic Neil Simon. The play opened a three-performance run last night as part of the festival, which runs through April 12.

Student playwright Michael Grady of the University of Arizona has set his 12 scenes in a nursing home for the elderly, a typically dismal warehouse with plastic couches and formica everything else. The nurses, with one exception, are patronizing or self-centered, and the patients are treated like dim-witted children. One of them, Julia, has reacted by becoming "a sweet old lady," choosing to see her glass half-full rather than half-empty to attract kindly attention. She has selected as her roommate -- in an unusual cohabitation the playwright tosses off with no explanation -- a crusty old man named Jack, who has "spirit."

This means he insults everyone, uses dirty words and plays pranks on a nasty old nurse. In one rather distasteful episode he arranges for his full urinal to tumble onto the nurse, or rather onto a hapless visitor who enters the room before her.

Much of the debate centers on the nature of compassion. Is Kevin, a young man whose mother dies a few minutes after the curtain goes up, visiting Julia so he can feel saintly? Or is he genuinely trying to be her friend?

There is also the secondary theme of survival: Clearly Jack and Julia benefit from each other's company, and rules should be bent to allow them their friendship. Clearly Jack should fight the pointless and demeaning rules that nurse Raymond insists on. And, clearly, Grady has taken on a few more subjects than he can fully explore.

Grady writes with graphic punch and can set up and produce a joke impressively. But he hasn't solved the problem of ending scenes, choosing instead to have them simply fade away. Likewise, simply eliminating one of the central characters between scenes, not even giving her a proper on-stage death, seems a primitive device for triggering the conclusion.

But his characters, particularly the crotchety Jack and the intelligent nurse Sutton (both helped by solid performances from Christopher Wilken and Elise C. Wagner), are well defined. The play needs some focusing, but it does have heart.

Dancers, by Michael Grady. Directed by Rhonda Tinsley. With Steven P. Yates, Arlene Toohey, Andy Davids, Nancy Howards, Christopher Wilken, Elise C. Wagner, Elaine Rewolinski. At the Terrace Theatre today at 2 and 7:30 p.m.