Saturday, February 21, 2009

Hidden in the Fine Print - SBIR Explicitly Excluded from NIH Stimulus Money


SBIR's long time friend and advocate Ann Eskesen has alerted us to the fact that hidden (YES HIDDEN) in the new "Stimulus" bill is the provision that the money being provided to the NIH for additional R&D ($7.4 Billion) must NOT be used for SBIR or STTR projects. Huh? What were they thinking? As Ann said in her alert, "Such an exclusion is underhanded and entirely inappropriate." There's the understatement of the year (so far)!

Entirely inappropriate for sure. Does it make sense for the NIH to not seek additional innovative solutions from our small businesses -- a sector hailed by President Obama himself as being the most likely one to create the jobs that we so desperately need? 2.5% +0.3% of $7.4B is $207.2M that's been inappropriately withheld from our small businesses. That could be used to create a whole bunch of jobs!

And underhanded to boot! They snuck the wording into the fine print in "code" so we wouldn't spot it. A search for "SBIR" or "STTR" won't turn anything up. Here's the relevant section from page 62 of the Stimulus Bill - H.R. 1 (rub your eyes, it's hard to read):

National Institutes of Health / national center for research resources ...... For an additional amount for `Office of the Director', $8,200,000,000: Provided, That $7,400,000,000 shall be transferred to the Institutes and Centers of the National Institutes of Health (`NIH') and to the Common Fund established under section 402A(c)(1) of the Public Health Service Act in proportion to the appropriations otherwise made to such Institutes, Centers, and Common Fund for fiscal year 2009: Provided further, That these funds shall be used to support additional scientific research and shall be merged with and be available for the same purposes as the appropriation or fund to which transferred: Provided further, That this transfer authority is in addition to any other transfer authority available to the NIH: Provided further, That none of these funds may be transferred to `National Institutes of Health--Buildings and Facilities', the Center for Scientific Review, the Center for Information Technology, the Clinical Center, or the Global Fund for HIV/AIDS, Tuberculosis and Malaria: Provided further, That the funds provided in this Act to the NIH shall not be subject to the provisions of 15 U.S.C. 638(f)(1) and 15 U.S.C. 638(n)(1): Provided further, That $400,000,000 may be used to carry out section 215 of division G of Public Law 110-161....

Spot the coded reference to SBIR and STTR? No? Not even with the "clue" I gave you? Well, you probably didn't know that 15 U.S.C. 638(f)(1) and 15 U.S.C. 638(n)(1) are those parts of the law which address the funding of SBIR and STTR. Yes, the "code" was citing the US Code of Law references without annotation. I agree, Ann, that was underhanded.

Getting steamed? Want to know who put this language in the bill? Ann says that it evidently was included at the initiative of Senator Arlen Specter (R-PA). Why? We don't know. We'd love to find out why he would have allowed such an overtly hostile act against small businesses to have been perpetrated out of his office. If you're in a position to query Senator Specter's office, please do so, and let me know what you find out.

Nothing short of a special bill repealing that exclusion provision can be done about this now -- the bill is law. Maybe we should mount a campaign to promote that. {Senator Kerry - you voted for the Stimulus bill - did you know that provision was in it? If not, please sponsor a bill repealing it!} All you folks from Massachusetts - put some pressure on!

As Ann says, "[This] Sets a strong and dangerous precedent. Once in place, such a provision sets the precedent for every other agency to adopt a similar approach at best to limit, at worst to destroy, the SBIR program." The SBIR Coach joins Ann, and others who advocate on behalf of SBIR, to do everything we can to prevent this from happening.

So, please send everyone you know who's an SBIR supporter a link to this Blog posting ( so that they'll be informed of this outrage. Encourage them to be vigilant, and please please please, don't be silent!

UPDATE - Sunday, February 22, 2009: I sent out a FLASH Newsletter to my 250+ subscribers today with some additional information on this. See a copy of it (and other back issues) on my SBIR Coach's Newsletter webpage.

UPDATE - Tuesday, February 24, 2009: My friend Rick Shindell issued an SBIR Insider letter last night that provides some more clues for solving our SBIR Stimulus Exclusion whodunit. You may not like the light it sheds. He also provides some good information to help you support our getting that Continuing Resolution (CR) to keep SBIR alive. Please read it!

UPDATE - Thursday, February 26, 2009: I have crafted a letter requesting repeal of the NIH Stimulus exclusion provision that I will be sending to all of the members of the Small Business Committees in the Senate and the House, as well as to the Leadership of both houses of Congress, my Representative and Senators, and other selected influential legislators. I have posted it on my website in template form. Click HERE to see it. Copy and paste it into your word processor, tailor it as you wish, print it on your letterhead and let 'er fly! Remember, faxing it to the attention of the legislator's "Policy Advisor for Small Business Issues" is the most effective way to get their attention. We can do this.

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