Tuesday, July 28, 2009

Aaargh! Two more months of SBIR Reauthorization torture!

You'd think they already had enough time to do this. But no such luck.

We're talking about SBIR Reauthorization, of course. It's not going to happen by the end of the month. Surprise! Hah.

Word is that we'll have another Continuing Resolution that will extend the deadline one more time to September 30th. So we've got two more months of torture to endure.

The SBTC put out this notice on Monday:

The Senate passed a continuing resolution on Friday that would extend the SBIR program another two months. That would make the new expiration date for the SBIR program September 30th, 2009. This CR also needs to pass the House of Representatives to be enacted, and we expect it to pass the House on Tuesday.

Currently, the staff from the House Small Business and Science Committees are in negotiations in conference with the staff from the Senate Small Business Committee to produce a compromise SBIR reauthorization bill that will incorporate elements from both the House and the Senate Reauthorization Bills. We have heard and have reason to believe that both sides are negotiating in good faith, and that no party is acting unreasonably or otherwise sabotaging the process. Because there is an agreement between the staffers in the conference, we won't know what's in the compromise bill until it is finished and released to the public.

The SBTC will be hosting a conference call on Thursday to discuss these developments. Contact Alec Orban if you'd like the call-in number and code.

Thankfully, it appears that our Committee Staffers are not following the Conyers model and are taking time to actually read and analyze the provisions of the two bills.

We'll stay on top of the continuing madness, both with updates here, and on www.SBIRreauthorization.com.

As a side note, one of my clients has been following the DOD's history of topic offerings and has made the following startling observations: "There are 15.6% fewer DoD topics in FY09 than the average over the two previous years. Air Force had a staggering 44% reduction in topic count, MDA had a 23% reduction, and DARPA had a 17% reduction." Anybody have any ideas as to what's driving this? Might it be the uncertainty over reauthorization?

And finally, I'm pleased to report that two Texas editions of the Business Journal featured articles about the SBIR Reauthorization struggle last week. The SBIR Coach was interviewed and quoted in a front page article by the Austin Business Journal, and was featured on the Editorial page in the San Antonio Business Journal.

Wednesday, July 22, 2009

Final SBIR Strategy Set - Urgent Action Needed

We're in the bottom of the Ninth. Score is tied. Wall Street (House Team) 1, Main Street (Senate Team) 1.

There's very little sentiment to send this to extra innings, and we don't want the whole game to be called off.

Fellow SBIR Advocist Les Bowen presents the strategy to break the tie and win the game for Main Street:


Dear SBIR Advocates:

Click HERE: (SBIR_Conferee_Letter.pdf) to see the letter that will be sent from House Representatives to Senator Landrieu, Chair of the Senate Small Business and Entrepreneurship Committee, expressing their support for S. 1233, the Senate SBIR Reauthorization Bill.

We need about fifty House Representatives to sign on in order to swing the SBIR House/Senate conference deliberations to support the Senate bill.

As you know, the Senate SBIR reauthorization bill, unlike its House counterpart, H.R. 2965, preserves most of the SBIR program for genuinely small businesses like ours, while the House bill sells out the SBIR program to large venture capital-controlled businesses. You will recall that several House representatives, including those who have already signed on to this letter, proposed amendments to H.R. 2965 that would have made it less onerous to small businesses, but this amendment was shot down by the House Rules Committee. We believe the reason was that your prior outreach efforts to your House representatives caused widespread consternation in the House that the Markey/Tsongas/Hodes/Welch amendment would pass, much to the consternation of the VC-lobby that has taken over the House SBIR reauthorization process.

By signing onto this letter, your representatives get a second bite of that apple. Their signature supporting the Senate bill gives much better insight into what most House representatives really felt about House bill H.R. 2965 and its bad consequences for true small businesses. It provides Senator Landrieu and the Senate conference committee delegates with much-needed leverage to achieve a compromise SBIR reauthorization bill that is more like S. 1233 than its House counterpart. We need SBIR to remain a program that works for innovative, independently-owned small businesses like ours, rather than becoming a bail-out fund for well-heeled venture-capitalists.

You do need to take action today. These negotiations will be over early next week. Your representative has already received a copy of this letter. Please call your House representative’s small business staffer, email the letter and ask him or her to bring it to their boss’ attention and get them to sign on this week.

Thank you for this last effort in support of the 2009 SBIR reauthorization.

We will keep you posted as information emerges from conference.

Leslie J. Bowen, President
Materials Systems Inc.


The SBTC's Jere Glover adds this suggestion, which was provided by another ardent supporter:

I ask that you urge your Congressional Representative to sign onto the Markey letter today. (Next week will be too late.) I also ask that you ask him or her to personally contact members of the House Small Business and Science Committees and ask them to consider how they are going to explain to small businesses in their state why they voted to kill jobs on Main Street so more Wall Street billionaires could have access to more Federal funds.
Here's a Dear Colleague letter sent to all Members of the House of Representatives by Rep. Niki Tsongas and others: Tsongas Dear Colleague Letter.pdf. Get your Representatives to sign onto this letter! They can do that by contacting Mitch Robinson (Rep. Markey) at 5-2836 or Mitchell.Robinson@mail.house.gov, or Kate Lynch (Rep. Tsongas) at 5-4311 or Kate.Lynch@mail.house.gov.

If you'd like to write your own letter to make a point, and would like some talking points, here's a letter from the SBTC to Senator Landrieu: SBTC Letter to Sen Landrieu.doc

Updates to all of this and links for contacting your Representatives and Senators can be found on www.SBIRreauthorization.com.

Thursday, July 16, 2009

Conferees: Please Don't Harm the SBIR Program

If I had my druthers, the soon to be convened SBIR Reauthorization Conference Committee would be required to swear a Hippocratic style oath of "Primum non nocere" - First, do no harm.

There is potential that harm will be done. There's also potential for significant improvements. The problem is that it's not clear which provisions of the two SBIR Reauthorization bills on the table (H.R.2965 and S.1233) improve and which harm. It all depends on your perspective. Both sides of every issue think they're promoting improvement.

So what should we do? We're encouraged to write to our legislators and offer irrefutable logic to support a position. Does that work? Do they actually vote based upon our logical presentation? Evidently not very often.

We can argue details and numbers and statistics ad nauseum. Actually we have. I'm tired of that. Aren't you?

So let's take a different view. A qualitative view. My view of Primum non nocere. Without any numbers or statistics.


SBIR is a technology development stimulator. It's not a jobs program, although it does result in jobs being created. The competition for project selection is based upon whether the innovation furthers the mission of the sponsoring Agency, whether advancement of the state of the art is likely, and whether the company proposing the work is capable of executing the plan and eventually making money from it. No other criteria should be applied to project selection. Applying criteria that are unrelated to the innovation defeats the purpose of the program and will do harm.


SBIR provides the seed funding for jump-starting an innovation's development. The Government is the investor. In Phase I the innovation's feasibility is vetted. If the proof-of-concept after Phase II proves out, then it's up to the company to find the commercialization money to carry the innovative technology further. It may take additional investment. If the Government is eventually to become the customer for this, then it may be in the Government's interest to provide additional investment -- but not from the seed-funding pot. Keep SBIR money strictly for feasibility vetting (Phase I) and one proof-of-concept project (Phase II). Any other use of these funds harms the program by reducing the number of jump-start projects that can be funded.


Eligible companies for SBIR grants should be those who are unlikely to find seed funding anywhere else to demonstrate that the proposed technology innovation will actually work. Providing grant money to companies who have other sources for funding harms the program by reducing the funds available to those who need it.


The number of projects funded should be an appropriate number so that we're not leaving worthy projects behind, but also not providing funds to companies who really have no chance or intent to move to commercialization. This is a balancing act of making the allocation base (the set-aside percentage) and the funding caps (project maximums) appropriate to permit the funding of as many truly worthy projects as possible. Any provision that arbitrarily upsets this funding balance does harm to the program.


There needs to be a way of evaluating the return on the SBIR investment. There are three interested parties here -- each with their own perspective on ROI: (a) the Government agency making the investment, (b) the company receiving the grant, and (3) the taxpayer. If we can't measure ROI there's no way of evaluating whether anything we do improves or harms the program.

Just about every SBIR issue on the Conference Committee table can be related to one of these five categories.

So, Conferees, as you look at the details, please relate them to one of the above quality considerations and ask:

  • Do we preserve the purpose and intent of SBIR as Roland Tibbetts and others envisioned it?
  • Are we providing seed funding appropriately to worthy recipients, in the proper numbers, at the proper levels?
  • Can we calculate the return on this investment, so that when we go through this process again we have some real data to evaluate?
  • Does this provision do harm to the quality of SBIR?

OK, let's get to work. Please raise your right hand, and say after me: "Primum non nocere ut SBIR".

Hippocrates would be so proud!

Tuesday, July 14, 2009

Senate passes SBIR Reauthorization Bill - Conference Committee is Next

It was unanimous. The Senate wasn't swayed by pressure from the special interest lobbies and stuck to their guns.

Yes, a few amendments were added to S.1233, but they're constructive. (The full text of what they passed will be on on GovTrack soon.)

Rick Shindell's Insider of 7/14/09 has a good summary of the amendments:

Senator Tom Coburn (R-OK) issued an amendment that basically prohibits earmarking of SBIR award funds, and that SBIR funds must be competitive and merit based. His changes also include better metrics, and an 8 year reauthorization period, as has been customary for SBIR reauthorizations.

Senator Russ Feingold (D-WI) also had an amendment passed that reads: .."SBIR program or STTR program shall encourage the submission of applications for support of projects relating to security, energy, transportation, or improving the security and quality of the water supply of the United States to such program.’’.

So, S.1233 is now "engrossed" and passed, along with H.R.2965, to a yet to be named Conference Committee.

We have heard that Representatives Ed Markey and Nikki Tsongas will be circulating a Dear Conferee Letter encouraging that provisions in their disallowed amendment to H.R.2965 be considered by the Committee.

The SBIR Advocacy, led by the Small Business Technology Council (SBTC), is formulating a strategy, a position paper, and template letters for you to send. We'll have them available soon.

Keep tuned to this Blog and to to www.SBIRreauthorization.com for updates.

Wednesday, July 8, 2009

Wall Street wins House SBIR Fight by TKO - But It's Not Over!

Wall Street won the House SBIR battle today by default. The House Rules Committee disqualified Main Street's avatar. They refused to allow the Markey Amendment to be voted upon. Why? Good question.

The House Parliamentarian declared the Markey Amendment "germane and pertinent" to H.R.2965. But the Rules Committee Chairwoman Louise Slaughter (D-NY) decided that the Amendment was "out of order" and not to be voted upon, so it was blocked.

Do you suppose she did that because it may have actually passed? After all she is a New Yorker, just as is Chairwoman Velazquez, who was adamantly opposed to the Amendment.

I hear rumors that there will be some Dear Colleague letters sent from the House Members who were in favor of the Amendment and are very unhappy about what's happened. Who the letters will be sent to remains to be seen.

So, H.R.2965 passes the House. Final vote was 386-41. Text will be up on GovTrack tomorrow.

Now it goes to the Senate, which of course has S.1233. Markedly different.

This skirmish was lost, but the battle is not over. A Conference Committee will ultimately decide this.

Oh goodie. Are we in for more behind closed doors shenanigans? We'll try and figure out what to expect and keep you posted.

Thanks to all of you who so tirelessly kept the pressure on. You are appreciated.

I'm going out for a beer.

7/9/2009 UPDATE: Rick Shindell published a new Insider letter last night that has details on the amendments to H.R.2965 that the Rules Committee did and did not accept. What a crock! This has nothing to do with partisan politics. It's simple. Please tell me we don't have some of the best Committee Chairs that money can buy! That Hefeweizen I had almost took away the bad taste that's in my mouth. Almost.