Re-inventing SBIR?

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They've been meeting for almost a year with good intent: make SBIR more "effective and efficient". They're calling it SBIR 2.0 - borrowing on the Web 2.0 lexicon that heralded the shift from passive viewing of web content to active interaction among all elements of the web community (from content creators to content users) in a collaborative fashion.

Don't be fooled. It's not the same thing. Not even close. They're talking the talk. But not walking the walk.

Collaboration? Among newbie Agency SBIR Directors (the content creators) - maybe. Are SBIR funded companies (the content users) involved? Nope. Were past and retired SBIR Program Directors consulted? Nope. Were SBIR's founders consulted? Nope. (I'm certainly not in the loop -- not that I should be, although I do have ideas that could have merit -- so if some of the "Nopes" are erroneous, I apologize. But I bet the Nopes are pretty accurate.)

The SBIR 2.0 effort is being spearheaded by Sean Greene, the SBA's Associate Administrator for Investment and Special Advisor for Innovation. (Don'tcha just love government titles?) He's a good guy, a true friend to SBIR, and, as I said, well intentioned. But the naivete here is disturbing.

Here's a quick outline of what's included in the SBA's SBIR 2.0 initiative:

Simplification and Streamlining
- Shortening the contract/grant initiation period after award
- Building a web portal to search for available open topics
- Clarify and simplify SBIR Data Rights
Shared Best Practices
- Expanding bridge financing programs (between Phases)
- Expanding SBIR to facilitate tech transfer (ala NIST)
- Issuing joint agency solicitations
Better Performance Management
- Implement common performance metrics across agencies
- Share performance data publicly

Ambitious for sure! It would be marvelous to get all of that to work. But, folks, it ain't gonna happen quickly. Some aspects may not happen at all. The challenges are daunting. Some of the issues have been debated for years without consensus!

Every one of the agencies can improve the efficiency of project initiation after award. All it takes is money allocated to pay for administration. They haven't got any for this. Current SBIR law doesn't allow use of SBIR apportioned funds for admin. Unfortunately, last I knew, SBIR reauthorization which may fix that provision, hasn't happened yet.

And, at least for DOD, the SBIR Program Managers have NO CLOUT WHATEVER with component contracting authorities, who completely control the contract initiation process. I've seen contracting delays of as much as two YEARS! And, if they did have some clout, the current Army default of Phase I payments every two or three months (instead of monthly) wouldn't be the practice. Can you spell "cash flow"?

A "one-stop-shop" portal with a topic search feature? Gee, don't we already have one? It's called The SBIR Gateway. Not a penny of government money funds it, by the way. The "official" SBIR website (SBIR.gov) certainly could use some work - and a topic search engine - but why waste taxpayer money re-creating something that already works? Or is it simply a control issue?

Getting agencies to work together for improved SBIR efficiency? Don't make me laugh. The agencies are too different and too bureaucratically rigid to make any "one style fits all" approach work. Just the difference in competition compliance requirements between contracting and granting agencies alone makes the whole effort quite unlikely.

Clarifying SBIR Data Rights? PLEASE DO! But this involves getting lawyers to agree. Good luck with that. Ron Cooper, another good guy from the SBA, is at the point for this. If you have ideas, he'd like to hear them.

They're trying a working-together experiment - a five-agency (NIH, DARPA, DHS, NSF, and USDA) joint solicitation on Robotics. Just announced. Here's the info: http://grants.nih.gov/grants/guide/pa-files/PAR-10-279.html. Warning: Take two aspirin before reading, and call me in the morning. Heaven help us, the NIH SBIR application system will be used to collect all five agencies' Robotics proposals!

The NIH's system? Yikes! Y'all know what I think about it: It Sucks! For those of you who are used to doing DOD SBIR proposals, be prepared for EXTREME frustration! I've even put out an SBIR Coach's Newsletter issue about what to expect.

Regarding expanding bridge and commercialization funding, Kristina Johnson, the person at DOE who got their first of its kind Phase III funding initiatives in place, is apparently and suddenly leaving the agency. And the NIST "SBIR TT" program cited as the example for innovative SBIR tech transfer just lost it's creator, Cara Asmail, who's moved on to another NIST post. We have a leadership gap.

The turnover issue also extends to agency SBIR Program Director/Manager roles, as many newcomers are sitting in those chairs this year. I wonder how many of them have actually read the SBIR Policy Directive? Probably about as many as our legislators who actually read the bills they vote for.

Finally, common performance metrics? Oh, please! The agencies don't currently have ANY meaningful SBIR performance metrics. At the Beyond Phase II Conference last week, we were shown some (I thought suspicious) statistics on alleged SBIR performance, but there's no consensus on what constitutes SBIR success and no data gathering that has integrity or accuracy. I'm sure the SBIR funded companies have quite a different view of "success metrics" than do the agencies. Who provides the data? Who collects it? Who is to analyze it? What's to be done with the results? All still undefined.

I'm not usually pessimistic, but it's hard to have optimism about SBIR 2.0. Just being well intentioned doesn't cut the mustard. Maybe I'm jaded. Maybe I'm tired of being told to "trust" and "have hope" for "change" we can count on.

Change huh? This Administration's idea of "change" makes me shudder. (And make no mistake about it, the SBA is an arm of this Administration.) Will "simplification" mean adoption of the NIH's horribly complex SBIR collection and evaluation system? Will "best practices" for laying SBIR eggs (and making them into omelets) be defined by the eggs rather than the chickens? Will "performance metrics" have anything to do with creating jobs and producing innovative technology by giving small businesses access to Federal R&D opportunities?

Until SBIR is reauthorized, much of this is moot. Any efficiency changes will be limited and intra-agency. And, Lord knows, intra-agency efficiency changes are sorely needed! Effectiveness changes? Who knows what that even means?

I do applaud what Sean Greene and the Agency SBIR Program Directors (with a special nod to Chris Rinaldi at DOD) are trying to do with SBIR 2.0. They're sincere and trying hard to do what's best for SBIR. I just entreat them to do it smart and not ignore the user community and what's been tried in the past. Involve Roland Tibbetts, Ann Eskesen, and Jere Glover in the dialog and listen to what they have to say. Involve small business and their advocacy arm, the SBTC, too. Make SBIR 2.0 truly collaborative.

If you're going to talk the talk, please walk the walk.
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SBA Raises SBIR Award Caps

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NOTE: STTR was not changed by this move -- only SBIR (for now).
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The SBA announced the intent back in 2008. They sought comments. They sat on it for almost two years and did nothing. Until now.

The SBA decided not to wait for Reauthorization and kicked the cap for Phase I awards up to $150K and Phase IIs up to $1M. It's been published in the Federal Register (http://budurl.com/SBAraisesSBIRcaps) so it's official.

Rick Shindell has some background in the March 30th Issue of his SBIR Insider. Check it out on the SBIR Gateway's Insider page.

This doesn't mean that an agency must raise their award levels, nor does it mean that they can't exceed these caps. The agencies can (and do) do what they please. What changes is the level at which they have to explain themselves.

It remains to be seen which agencies will immediately change their funding policies. Note that the NSF actually made this change (at least for Phase Is) last fall.

Making SBIR awards that exceed the authorized caps means the agency must include a justification in each case in their Annual Report to Congress. Making awards below the caps requires no justification.

Some agencies (notably NIH) frequently make awards in excess of the caps. Now they'll have less work to do writing justifications! That should make our hard working public servants happy!

I expect we'll find out what the agencies will do at the SBIR National in Hartford (April 21-23). It'll be a hot topic of conversation. Another reason for you to join me in attending. Check out the agenda for this important Conference and register HERE.

So what about Reauthorization? Does this affect the likelihood of it getting done by April 30th?

Yes it does, and my feeling is: NO, it won't get done. It actually takes the pressure off Congress to act quickly.

Given this development, I now predict another Continuing Resolution, probably to September 30th. Unless Nydia gets her usual way and makes it shorter. Or just lets it die. After all, remember, she thinks SBIR awardees are just "marginal small businesses" on "corporate welfare", and don't matter much.
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Senate Calls for FAST SBIR Action

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Well, not exactly. But it's a wonderful idea! We've only got a week before SBIR fades away or gets extended -- again.

What the Senate did do this week is call upon the SBA to swiftly implement the allocated funds for the Federal and State Technology (FAST) Partnership that provides funding for SBIR outreach support for the States. Senators Mary Landrieu (D-LA) and Olympia Snowe (R-ME) co-signed a letter from the Senate Small Business and Entrepreneurship Committee to Karen Mills, SBA Administrator, requesting a schedule by February 12th for the implementation of FAST. View the official Press Release about the letter HERE.

Now, why push for FAST implementation when SBIR's Reauthorization hangs undone? Is this a signal that we can expect some action next week before it expires? I think so. I hope so.

There is the argument that the DOD has independently extended SBIR through the end of FY2010 and this FAST allocation is for FY2010 as well. With DOD having half of the SBIR pot, some FAST funding to support it would surely be put to good use. So, it's being pushed by folks behind the scenes. I support the push and the Senate's advice to the SBA.

But I do see this as a bigger signal. We have ten federal agencies whose SBIR programs will fade away on January 31st without some legislative action. Lack of action would represent a congressional and Obama administration failure.

After the Miracle in Massachusetts this week, our shell-shocked congress and the Obama administration needs something positive to accomplish. They don't need another failure.

Why not make SBIR Reauthorization a shining example of bi-partisan accomplishment?

Best of all worlds? The House accepts the Senate's SBIR Reauthorization Bill and passes it. There was talk of this sort of action for the Health Care Bill, but they didn't have the votes. Nydia Velazquez' expected opposition notwithstanding, they just might have the House votes to do this!

But the alleged compromise (whatever it is) would work too. Just PLEASE get something done by next Friday! Another Continuing Resolution would be better than nothing, but EVERYONE is tired of this.

FAST action..... what a wonderful idea! Call/email/fax your Senators and Representatives today. Give them something productive to work on.
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SBIR Reauthorization Redux? No Such Luck.

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Here we are -- just a few days from expiration of the third SBIR Reauthorization Continuing Resolution. Is there any hope for resolution by the end of the month? Nope.

Word from behind the scenes is that discussions are pretty much at a standstill. Staffers on the various Committees are standing firm on their bosses' positions. Provisions to significantly open up eligibility, provide special preferences having nothing to do with technology, eliminate the Phase I vetting process, have multiple Phase II awards possible, and increase funding caps without increasing the funding base just aren't going away. There's as much spirit of compromise here as there is on the health care debate. Nada. Zilch.

The University lobby has been pushing hard for just plain letting the SBIR program expire. They've been consistent over the years on this. They want "their" $2B back! Research is "their" game. Tech Transfer royalties from commercialization of innovations is "their" reward -- never mind that they, for the most part, can't figure out how to do it!

The VC/BIO lobby has been keeping up the drumbeat too. BIO had a press conference yesterday where they expressed how they were "very pleased with the result of the vote on the reauthorization bill in the House." They repeated the "Big Lie" that the bill was "an attempt to overturn "fairly arbitrary" administrative agency decisions that prevented venture capital-funded companies from participating." Arbitrary? Participating? Sheesh! Perception management at its best.

There are actually provisions in the House bill that move SBIR administration out of the SBA and into the Department of Commerce with oversight controlled by the White House Office of Science and Technology Policy. If this happens, SBIR becomes a politicized innovation economy program, with true small businesses frozen out of participation.

Some will argue that this is a good thing; that it will improve the Government's ROI on R&D investment. Perhaps it will. But, the vision of Arthur Obermayer, Roland Tibbetts, the late Ted Kennedy, and many others, for fostering innovation from true entrepreneurs, will be lost. That would be a shame.

The SBA is in trouble folks. SBIR isn't the only SBA administered program that is languishing in Committee and facing expiration. Will they survive as an independent agency? I fear not. SBIR being moved out is, in my opinion, an omen.

My prediction, shared by many in the SBIR Advocacy: we'll get another SBIR Continuing Resolution. How long? I say six months -- taking us to next March.

Some of the Agencies aren't waiting for Congress to act. Some are independently increasing funding caps. DOE and NSF, for example, are now providing $150K for Phase I, and DOE is doing $1M for Phase II. Others, like DOD and NASA, are standing pat. NIH generally ignores caps anyhow. It's really getting confusing -- helps justify the need for a coach! (smile)

So, the SBIR game is still being played, although the rule book is being very liberally interpreted. Check out the Gateway for proposal opportunities, and monitor www.SBIRreauthorization.com for updates on what Congress is (or isn't) doing.

The SBIR Coach will be at the NASVF Conference next week, and at the DOD sponsored Beyond Phase II Conference the week after that. My columns will report on what I learn there. Stay tuned.
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Whither Goest Seed Funding?

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SBIR's future is uncertain. The VC industry is hunkering down and tightening the screws on their portfolio companies. They even look to SBIR's "reform" as a way to "prop up portfolio valuations".

So what is the future of seed funding? We're about find out what those who are in the forefront of the seed funding world think about that.

The National Association of Seed Venture Funds (NASVF) international conference, which brings together hundreds of the most prominent seed and angel investors with technology transfer and economic development professionals, takes place September 14-16th in Oklahoma City, Oklahoma. Here is a partial list of some of the world class experts that will be speaking:

-Honorable Secretary of Agriculture Thomas Vilsack, will talk about his department's big investments in research and development to improve the food industry.

-Rick G. Wade, deputy chief of staff for the US Department of Commerce, will talk about the various programs and ways his department supports entrepreneurship.

-Wendy Kennedy, founder of WendyKennedy.com, Inc., will explain how to turn ideas into financial opportunities.

The SBIR Coach (a member of NASVF) is an invited speaker, and will be on a panel with Wendy Kennedy. Our topic is:

Translating Science into Business When Funding is Tight

History has proven that during times of economic stress is when we see a garden of opportunities – ideas that have the ability to transform markets – witness the Ipod, Google and Amazon during the recession of early 2000. Spotting winning ideas and business models in these uncertain times takes a disciplined, yet creative approach. Savvy investors are even more rigorous in their assessment of risk and return. But what else is needed besides a sound technology and business plan? What types of technologies are being funded at the state and federal levels? This panel will address some key issues funders should consider before they invest in a technology venture in the near future.

For information on the NASVF Conference, go HERE.

There are a whole bunch of SBIR opportunities out there at the moment:

• USDA SBIR (due Sept 3rd)
• NASA SBIR/STTR (due Sept 4th)
• DOE SBIR/STTR (due Sept 4th)
• NIH SBIR/STTR AIDS related (due Sept 7th)
• DOD SBIR/STTR (due Sept 23rd)
• NSF SBIR/STTR (due Nov 17th)
• NIH SBIR/STTR (due Dec 5th)

See the details on The SBIR Gateway, including a matching service for DOD and NASA STTR partnerships.

By the way, Boeing has issued its Interest List for the current DOD SBIR and STTR rounds. If you'd like a copy, send me an email.

I had the opportunity to meet Karen Mills, the new SBA Administrator, at the SCORE National Leadership Conference in Salt Lake City this week. We were both speakers. Her message: DON'T STOP TALKING TO LEGISLATORS ABOUT SBIR!

So, keep on educating House and Senate members. SBIR reauthorization isn't over until it's over.
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Some SBIR Predictions for 2009

For my first Blog of 2009, with the SBIR Program in flux at the same time that our leadership in Washington DC is about to undergo a major shift and with our nation's economy on life support, I thought it would be fun to offer some predictions and ask those of you who follow this Blog to offer your own contributions.

Prediction #1: The SBA will not raise the funding caps on Phase I and Phase II SBIRs independent of reauthorization activities. They announced the intent to do it last fall, and solicited comments, but we haven't seen any action yet. I doubt we will. The SBA has no real authority over the agencies, and the agencies will resist any efforts to interefere in their administration of their R&D budgets. The new SBA chief, Karen Mills, won't allow her boat to be rocked by this issue.

Prediction #2: The Grants.gov submission portal will undergo some major changes as the agencies rebel against being forced to use it. The SBIR grant application submission process is tainted by the extreme hassles of dealing with the vagaries of the arcane processes involved in using this portal. The Dept of Education has gone back to paper submissions rather than use it. Others will follow. Major changes will be announced in how Grants.gov works this year, increasing confusion. Problems will continue.

Prediction #3: The SBIR landscape will become even more competitive as entrepreneurship grows at the same time that agency R&D budgets are being trimmed. Whenever the economy receeds, and talented people find themselves without salaried positions, entrepreneurs emerge. SBIR is just about the only game in town for getting no-strings high-risk seed funding. There are some State initiatives (such as the Texas Emerging Technology Fund) that provide some early seed money, but the amount of money they make available is a drop in the bucket. The net result is more proposals competing with a shrinking pot as agency R&D budgets are trimmed as money is diverted to supporting operations. Remember, the SBIR pot is a percentage of the extramural R&D budget, not a fixed amount.

Prediction #4: Reauthorization of the SBIR program will not be finalized by the March 20th deadline, and we'll see a new continuing resolution to extend it, probably for a period of up to two years. This Congress has much more critical elements than SBIR to deal with, and this issue just won't generate sufficient buzz to rise to the surface in the short time between now and mid March. Besides, we need the full attention of our legislators to get things done right. With new players on key small business committees in both the House and the Senate, we need to educate them on the issues and garner support for improving the program, not weakening it. There's just not enough time to do what's needed, and we MUST avoid knee-jerk rammed through actions such as was done in House last summer, and in misunderstandings that result in obstruction such was done in the Senate this fall. The path of least resistance will be to delay action. That will give us time to marshal our forces to really evolve SBIR in a direction that will stimulate technology innovation rather than stifle it.

OK, that's enough of The SBIR Coach's neck sticking for today. What say you? Any comments on my predictions? Care to offer your own predictions? Let's get some dialog going! Click on the Comments link below and put your two cents worth in! If you'd rather comment in private, email me.

One more thing -- my monthly SBIR Coach's Newsletter provides education on SBIR issues. The January Issue will be available by clicking on the following link: SBIR Coach's Newsletter - Jan-2009. If you have a subject for which you'd like to see some special coverage in an upcoming issue, email me and suggest it.
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SBA Announces Intent to Raise SBIR Award Limits - They Want Your Comments

The SBA has announced the intent to raise SBIR award limits to $150K for Phase I and $1M for Phase II. See the announcement on the Federal Register by clicking here.

In their announcement, they say: "SBA is authorized by statute to adjust the award amounts once every 5 years to reflect economic adjustments and programmatic considerations." Note that the SBA has never before chosen to take such action.

Your comments are being solicited. Here's the information you'll need:

DATES: Comments must be received on or before September 15, 2008. SBA intends to make these comments available to the public.

ADDRESSES: You may submit comments, identified by "RIN 3245-AF61" by any of the following methods: (1) Federal Rulemaking Portal: http://www.regulations.gov, follow the instructions for submitting comments; (2) Mail: Office of Technology, 409 Third Street, SW., Washington, DC 20416; or (3) Hand Delivery/Courier: Edsel Brown, Assistant Director, Office of Technology, 409 Third Street, SW., Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT: Edsel Brown, Assistant Director, Office of Technology, at (202) 205-7343. You may also e-mail questions to technology@sba.gov.

Thanks to my friend Rick Shindell at The SBIR Gateway for having provided this information via his SBIR Insider Newsletter. Before you provide your comments, you might want to read his August 20th issue for an analysis of why the SBA chose to take this action now with the reauthorization bill being considered by the Senate (S.3362) having the same new limits.