Greed Drives Continued Campaign to Hijack SBIR's Funding Base

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We're getting it from all sides. Small business is being pushed by big bullies. What we get from SBIR funding is tantamount to lunch money -- just enough to keep us from starving. But they want it. Want it all. Want it bad enough to lie and cheat to get it.

Yes, lie.

The bullies make statements asserting that VC funded businesses can't participate in SBIR. Of course they can. The companies just can't be controlled by VCs and still be eligible. And they tearfully make statements asserting that VC controlled company SBIR eligibility was "taken away" in 2002. Bullfrogfeathers. It was never allowed. Tell a lie often enough and people begin to believe it. Trouble is, it's our elected officials who believe the lies. Or (tucking campaign fund envelopes in their pockets or purses) choose to ignore the truth.

And, yes, cheat.

Will someone please ask Representative Jason Altmire (D-PA-4) why he keeps trying to cheat the system by sneaking the House version of SBIR Reauthorization (HR. 2965) into other legislation? This is a bad bill. Viewed by everyone other than the NVCA/BIO bullies as being destructive to true small business innovation.

Altmire tried a couple of months ago to sneak it into the first Jobs Bill. Word is it was stopped by the Speaker after a rather rapid and loud outcry by small businesses all over the country. Altmire's on the House Small Business Committee. Isn't he supposed to be looking out for small business interests? Why is he taking the side of the bullies?

And, he's trying again. In a "dear colleague" letter sent out a few days ago, Altmire asked for support for including HR 2965 in the new "Jobs" bill, asserting that this was a "compromise" and good for small business. More bullfrogfeathers! In fact, the House Small Business Committee has steadfastly refused to negotiate with the Senate's Small Business Committee and hasn't even considered a compromise version of their much more reasonable SBIR reauthorization bill (S.1233) that was presented to it last October!

What's more, Altmire's letter was not signed by a single true small business. Lots of Universities and Big Businesses signed it though. This hijacking attempt is both a lie and a cheat!

We're appealing to the Speaker to again quash this attempt to cheat the system. (Join the Stop Altmire campaign!)

The bullies have gotten $1.5 BILLION in new funding from a combination of provisions in the recently enacted Health Care Reform Bill and the Jobs Bill. You'd think that would make them happy and they'd leave us alone for a while. All it's done is make them more greedy, emboldened to go and get it all. They're well funded and determined. And did I say greedy?

Even the Finance Reform bill inadvertently threatens small business via an unintended consequence of redefining accreditation of Angel investors and the process of doing funding deals. (Join the Save the Angels campaign!)

There have been a few voices out there on behalf of small business. The SBTC, Ann Eskesen, and Rick Shindell, for example, have tried valiantly to get out the word and counter the lies. And there are a host of other advocates who do their best to spread the word. Largely, these efforts have been ad hoc and woefully underfunded.

A new group has formed to try and organize some truth and reasonableness into this mess. It's called the Small Biotechnology Business Coalition (SBBC). Check out their website: http://www.smallbiotech.org. See everything they're into. If you're a biotech small business, join. If you're interested in supporting small biotech businesses, join. Any of you not covered by that? Join anyhow.

And, finally, in my last column, I mused about antibacterial lip balm for our legislators' excessive lip-service challenged chapped lips. Little did I know there actually is one. And, it's incredibly (some might say appropriately) branded:


Nothing to add to this, folks. I rest my case.
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Clever Clara Seeks to Close Research Gaps at NIST with SBIR TT

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You've all heard the cliched proclamation: "I'm from the government and I'm here to help you!" Rarely is it actually the truth. I have just encountered one case where, apparently, it is!

Her name is Clara Asmail. She's the SBIR Program Manager at the National Institute for Standards and Technology (NIST). She's charming, engaging, and absolutely brilliant. A multiple degreed physicist with an entrepreneurial bent. She'll talk technical with the best of you, while being a very helpful and competent administrator. A rare combination.

I attended Clara's presentation at the National SBIR Conference this week on what she's been doing to close research gaps that have prevented NIST funded technologies from achieving commercialization. She calls the program, initiated in 2008, SBIR TT (for Tech Transfer). The NIST SBIR website has a FACT SHEET to explain this innovative approach to fostering innovation.

Essentially, if you can show how you'll close the gap in some NIST research, Clara will give you a FREE non-exclusive research license to use the NIST technology in your project. On top of that, she'll fund your project with NIST SBIR money! Just as with any other SBIR project, rights to the results of the project are yours. And you get access to NIST personnel, facilities, and knowledge regarding the invention. What a deal!

Ann Eskesen was at the presentation too, and she called Clara's approach "The cleverest thing she's seen in thirty years!" Quite a statement from the lady who's seen it all, SBIR-wise!

NIST has just opened their FY2010 solicitation. See a quick list of the new NIST Regular (R) and Tech-Transfer (TT) opportunities HERE. Proposals are due by January 22nd.

We've heard rumors that there is some progress being made on SBIR Reauthorization, with the Senate offering a new compromise bill to the House. There's actually some hope that we'll get this resolved by the end of the year. I'm standing by my predictions for how it will all shake out. If you missed my prognostications, see them HERE. When we have details, I'll let you know.

And finally, we're saddened by the deplorable tragedy at our Texas' Fort Hood yesterday. The stress this incident has added to our brave soldiers and their families is immeasurable. Please join me in contributing to a phone-card initiative for helping Fort Hood soldiers communicate with their worried families.

A special website "Operation Call Home" has been established by an Austin radio station to accept donations for phone-cards. Here's the link: http://www.590klbj.com/community/OperationCallHome.aspx. Thanks for your support.
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Reflections on the Birth of the SBIR Program

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SBIR lost perhaps its greatest champion on August 25th with the passing of Senator Ted Kennedy. Relatively few know how much he did to ensure the SBIR Program became reality.

There were many back in the late 1970s and early 80s who worked tirelessly to get the legislation crafted and passed. Among them was my friend Ann Eskesen. Ann recently shared an email letter she had received that shed much light on that early process, including Ted Kennedy's behind-the-scenes role, and I'd like to give it wider exposure here.

To the SBIR Community:

Whether strong supporter or ardent foe of his political stance, the recent passing of Senator Ted Kennedy has generated among those on both sides of the aisle extensive discussion of, and comment on, the extraordinary diversity of his legislative impact.

Few are aware that the creation of SBIR is high on that list.

This weekend I was in receipt of an email from an old friend who in the early-mid seventies was the original source of the idea of a special federal R&D access by small firms - an idea that later became the SBIR program - and with whom a few of us then worked to get to the enabling legislation which took that program government-wide in 1982. My friend's email is printed below in its entirety along with, from my own files, some photographs from the Rose Garden of the White House on that very hot and humid day in July 1982 when President Reagan signed that very controversial legislation.

It is useful, I think, first also to tell you a little about Dr. Arthur Obermayer - the essence of the dignified gentleman and creative talent - who is now well into his eighties and still active in the technology development space.

Arthur was/is a highly regarded MIT PhD and his wife - Judy - also a published PhD from Carnegie Mellon, had run a very successful, research-based small firm for a long time through the sixties and seventies. Publicly traded when few small firms were, Moleculon Research was founded, I think I recall, on the research that had been Arthur's doctoral dissertation.

Their work had important medical application. However, despite a solid, research-based track record, when Arthur approached NIH for potential R&D support, he was summarily turned away. At that time NIH did not fund anyone who came from a for-profit entity - a condition that actually remained in effect until only months before passage of SBIR.

Knowing that they were probably missing out on something important, however, a few senior NIH players advised Arthur to set up a non-profit arm which they told him they would be delighted to fund. He saw that as manipulating the system - effective for his firm but not an option for many others - and he refused. Instead he had a discussion with his Senator and his friend - Ted Kennedy.

At that time, the Senator controlled the NSF budget to some extent so the decision was obviously to go with that agency, not NIH. Arthur's idea was simply that there be established a place in a federal agency where small firm applicant's research work could be considered. The Phase I-Phase II classic SBIR design was Roland Tibbetts - subsequently hired by NSF as the first SBIR program Manager - and came much later.

It is classic Kennedy that he knew how to work the system. However, I have to admit, I had not previously known that was actually a two-step process until I read Arthur's accounting of the NSF effort to avoid the Kennedy original directive and his out-maneuvering them - see below. It is also classic Kennedy that when, with two NSF SBIR offerings and one DOD under our belts, we subsequently shifted the political effort to making SBIR a government wide program, rather than being at the head of what was to become a highly contentious and, at times, downright nasty fight, the Senator opted for a behind-the-scenes role - out of the frame but very clearly, not out of the picture. Instead, that leadership role was assumed by Warren Rudman (NH.R) - a brand new Senator and a Republican.

It was also Arthur Obermayer, BTW who met with Horace Crouch in DOD in about 1979-1980. Crouch was a retired Army General working in the Pentagon but open to the interesting challenge of enabling an effort that would bring within reach of DOD, the leading-edge capabilities of small firms. It happened that Horace Crouch was Strom Thurmond's brother in law - already then a senior player on the Senate Armed Service committee. Arthur persuaded them to the idea of having a version of the NSF program in DOD. They found a spare $5M and DESAT was launched as a small-scale effort in DOD in 1981.

With the NSF and DOD experience in place and a record of achievement already becoming evident, under the able direction of the late Milt Stewart, to include Arthur and Judy and a few others some like Jere Glover and Dave Metzger - being still prominent in the SBIR space - in 1980 we all worked the halls (big time) at the White House Conference on Small Business to get SBIR and the precursor to Bayh-Dole among other things onto the agenda of that convening. I am still somewhat incredulous, when you consider how few we were, that we got that assembly of 2000 small business people - most of whom were in retail, services etc (nary a high tech firm among them) - to vote that issue (as I recall) Number 5 of the 60 top recommendations to come out of that Conference. As further testament what can happen when small firms speak together, of those 60 recommendations - well over 40 are now implemented.

Ann Eskesen, President
The Innovation Development Institute
Swampscott, MA
www.inknowvation.com

See Dr. Obermayer's letter
"The Role of Ted Kennedy in the Birth of the SBIR Program"
by clicking HERE.

L to R: The Obermayers, Senator Kennedy, and Ann Eskesen (7/22/82)

President Reagan signing the SBIR Program into law on July 22, 1982.

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SBIR support momentum increasing in the House of Representatives

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Who said that small business has a small voice? Together our voices are raising a din and the House of Representatives is hearing us.

More and more members of the House are joining in co-signing the letter to Small Business Committee Chairwoman Nydia Velazquez urging her to not change the SBIR eleigibility rules in the soon to be debated and (hopefully) enacted SBIR Reauthorization legislation.

As of Noon today, the count was up to 21, and growing. See the latest count HERE.

Ann Eskesen has mobilized SBIR awardees from all over the country, and she issued a very important message to her mailing list today. For those of you who aren't on that list, you can see the message on http://www.sbirreauthorization.com/.

For background, see my Blog column of March 29th: Small Business Advocacy Mobilizing Peer Pressure on Velazquez for First Step in SBIR Reauthorization.

We have some more time to get more signatures so please keep the pressure on.

Ann's key message today was that: "Members [of the House] need to become stakeholders in the effective functioning of SBIR in their Districts – and that means, in part, they must be told their local story and sold on the idea that SBIR is a fundamental element in the health of the economy both in their immediate area and nationwide. This is a very different way to think and talk about SBIR but it is the right way."

Monitor http://www.sbirreauthorization.com/ for daily updates.
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Hidden in the Fine Print - SBIR Explicitly Excluded from NIH Stimulus Money

[THIS STORY HAS EVOLVED SINCE THIS POSTING. SENATE TELLS NIH TO FULLY FUND SBIR DESPITE THE EXCLUSION.....READ THE POST OF MARCH 10th FOR THE STORY!]

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 (http://sbircoach.blogspot.com/2009/02/hidden-in-fine-print-sbir-explicitly.html) 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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SBIR National Conference Focuses on Technology Transition and Reauthorization

The SBIR Coach attended the National SBIR Conference in Hartford, CT, this week. The theme of the conference was "The Future is Innovation...The Future is Now!" Deb Santy, the SBIR Director of the Connecticut Center for Advanced Technology, and her committee put on a great show for we ~850 attendees. In addition to the standard presentations from sponsoring companies and Federal agencies who offer SBIR projects, we were treated to a special presentation, loaded with fascinating historical SBIR data, by one of the icons of the SBIR world, Ann Eskesen, President of The Innovation Development Institute. Ann was one of the creators of the SBIR Program back in the early 1980s. Her presentations are fast paced and intensive, and always leave me dizzy! Thank goodness she provided a copy for we attendees to study at our own speed!

We also had a presentation by Dr. Henry Lee, the renowned Forensic Scientist, who entertained us with his accounts of how powers of observation and thinking "outside the box" solved crimes and is actually the basis for Innovation. Very inspiring. Dr. Lee is an incredibly talented scientist and a fantastic speaker. He spoke to us right after lunch and no one dozed off! If you ever have the opportunity to hear him speak, jump on it!

The Department of Defense (specifically the Navy and the Air Force), The National Institutes of Health, NASA, and The Department of Energy all did extensive presentations on what they are doing to help guide the transition of SBIR-funded technology to commercialization. Highlighting their stories were representatives of most of the nation's prime contractors, companies such as Boeing, Lockheed Martin, Raytheon, Northrop Grumman, BAE Systems, United Technologies, Sikorsky, Pratt & Whitney, Bell Helicopter, Battelle, et.al.

One of the highlights for everyone was a two-hour networking session patterned on the "speed dating" concept, where you exchanged business cards and information with someone across the table for 5 minutes, and then shifted to a new partner. I talked to two dozen very interesting people in that short time and expect that several of them will become clients. Everyone who participated was hoarse and worn out at the end of the session, but all were energized with the opportunities that arose in the discussions! A great concept, Deb! Thanks!

We also heard from Jere Glover, Executive Director of the Small Business Technology Council (SBTC), on the current status of the SBIR reauthorization battle in the Congress. Ann Eskesen and Rick Shindell, owner of The SBIR Gateway, also provided comments and perspective. In a small gathering after the conference day officially ended on Thursday, Jere, Ann and Rick also presided over a strategic planning session on how to mobilize support for guiding our legislators to do the right thing. The most important thing that we can do is inform our Congressional Representatives and Senators on how important the innovation enabled by SBIR is to the economic health of the nation. Jere promised to post some guidance for this communication on the SBTC website (www.SBTC.org), and Ann has extensive support data and information on her website (www.iknowvation.com). Watch this Blog for updates and further guidance.

It is somewhat distressing that there is nothing yet scheduled for a 2009 SBIR Conference. One of the States has to step up and host this important event, and they need to start the planning for it now! Any volunteers?
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