NIH Tosses Small Business a Few Crumbs

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I'm not ungrateful. Really. Small technology businesses appreciate any funding opportunities, and the NIH is doing the right thing. But why did it take so long for them to do it? And why is it so pitifully small?

Want to see what they tossed us for Stimulus-funded SBIRs?: RFA-OD-09-009, Recovery Act Limited Competition: Small Business Catalyst Awards for Accelerating Innovative Research

Small business (via SBIR) should have been allocated 2.5% of the NIH's Stimulus pop for R&D. That's something over $200 million. What are they offering us? $5 million. (Hmmmm.... That's 2.5% of 2.5%! Huh! Coincidence or are they sending us a not-so-subtle message?) Funding on these is for up to one year not to exceed $200K. That means a scant 25 awards. Big deal.

Yeah, there's an alleged pot sweetener. Another $35 million to "Spur the Acceleration of New Technologies". But this isn't a small-business only competition. Sure, we can apply. Gee, thanks. Another Challenge Grant-type competition?

Here's that announcement: RFA-OD-09-008, Recovery Act Limited Competition: Biomedical Research, Development, and Growth to Spur the Acceleration of New Technologies (BRDG-SPAN) Pilot Program

Well, whaddya know? Valley of Death funding! This is a whole new category for NIH, and I do congratulate them for introducing this. It's a good start. For a company extending SBIR funded technology, to get this award means it's a Phase III by definition. But it's not limited to SBIR funded companies or subject to SBIR eligibility rules. It's NOT an SBIR program. It even has a new NIH Grant Code: RC3.

You see, there's some interesting wording in the Eligibility section that says: "Applications received under this FOA may be given funding priority if the applicant is associated with an enterprise/commercial organization that is of small size (e.g., 500 or fewer employees), and/or of limited resources, such as an early-stage company, and/or one positioned for receiving funding or in-kind support from a third-party investor and/or strategic partner, etc." The key words are "MAY BE given funding priority". And there sure are a lot of conditions to be sorted out by the NIH funding decision makers.

A friend of mine is the savvy CEO of a small bio-tech company that has won several SBIR awards. He recently made the following very astute observation: "For many years the SBTC and others opposed to BIO’s legislative efforts have argued that VC owned firms should procure NIH funding from outside the SBIR set aside. BIO and NIH have always responded that there are no business funding opportunities outside of SBIR. This new RC3 program -- not SBIR -- is precisely where VC owned firms should be competing for NIH support."

Indeed, there's enough on the table here to attract a VC funded (dare I say controlled) company -- $3 million over 3 years. Much better than SBIR and more focused on where they probably are in their product development life-cycle.

RC3 is a new sandbox for the bigger boys to play in. (Now will you please stay out of ours?) How this new NIH funding category will color the SBIR Reauthorization debate remains to be seen.

But we have had some crumbs tossed our way, so let's get busy. Due date for grant applications in both of these programs is September 1st.
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NIH Slowly and Reluctantly Yielding to SBIR Pressure on Stimulus Funding

Letter writing works! A small victory was won by small business yesterday, as The National Institute of Neurological Disorders and Stroke (NINDS), an NIH component, has reversed their previous decision to deny SBIR granted companies receipt of Stimulus funds for "administrative supplements" per the exclusion that was included in the ARRA Stimulus Bill. These supplements were announced on March 16th in NIH Notice NOT-OD-09-056, and are designed to "promote job creation and economic development along with accelerating the pace and achievement of scientific research". Nineteen other NIH Instutues had already decided to allow the granting of supplements to SBIR grantees despite the exclusion.

A letter writing campaign, spearheaded by a Seattle small business called Icogenex, produced a reversal of policy from Dr. Story Landis, NINDS Director, who said, in a brief note to Fred Hagen, Icogenex CEO, "This is to let you know that the NINDS will now accept requests for supplements from grantees with SBIR and STTR funding. The new information should appear on our website in the next day or two". We applaud Dr, Landis' decison and encourage all NIH Institutes to follow her lead.

However, we still have not seen where the NIH or the HHS has complied with the Senate's request for a written response to how they will be funding additional new SBIR and STTR projects despite the ARRA exclusion. If a letter has been received by Senator Landrieu's Small Business and Entrepreneurship Committee, they have not shared it with us as of the time of this posting. If anyone knows of such a response, please let us know.

But the lesson here, is that, again, a letter writing campaign has produced positive results. We're going to continue to use this approach in the SBIR Reauthorization effort that's about to be launched. Keep up with the progress and get template letters at www.SBIRreauthorization.com.

And, in a related note, I had the distinct pleasure of spending a good deal of time with Jim Jaffe and Kelly O'Day of the National Association of Seed and Venture Funds (NASVF) at the World's Best Technologies Showcase conference that was held this week in Arlington, TX. We found much that we agree upon, including the basic issues involved in the SBIR Reauthorization debate, and they will be encouraging an attitude of reason and compromise to their VC membership as the SBIR debate unfolds. I became a member of NASVF this week, and plan to be an active contributor to their mission.

PS: Due to a bad link in a newsletter that features my columns, some of you wrote me that you were unable to read my "Movers and Shakers" column of March 18th. Click HERE to see the full posting.

"Getcha SBIR Stimulus Contracts While They're Hot!"

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Now that the Senate has told the NIH, in no uncertain terms, to provide our nations' small businesses the full measure of SBIR R&D funding to which they are entitled under the law, we can turn to some other Stimulus opportunities for SBIR companies. Hold on to your hats, what I'm about to reveal may startle you....

If you peruse the ARRA Stimulus Bill you'll find something for just about every Federal agency. Every one of them of them has been given a pile of money to spend quickly. One of the problems these agencies are having is getting the stimulus contracts issued fast enough. Remember the whole idea behind this Stimulus deal is a quick infusion of capital into the economy.

Procurement law under Section Six (Competition Requirements) of the Federal Acquisition Regulations (The FAR) requires that, except for special circumstances, all Federal government contracts must be issued only after a "fair and open competition." That takes time and lots of effort on the part of the government procurement officers to create and issue RFPs and collect and evaluate bids before the contract can be issued. They'd love to have a way to bypass the competition requirement and just issue contracts. Well, guess what, we have a special circumstances solution for them!

We who are members of the Small Business Technology Council (SBTC), an arm of the National Small Business Association (NSBA), participated in a national conference call this morning. Our leader and SBIR advocacy mentor, SBTC's Executive Director, Jere Glover, laid out the following very simple strategy: leverage your SBIR awards into Phase III contracts with Federal agencies needing to spend stimulus funds quickly.

Here's how it works... It turns out that once you have a Phase I SBIR award for developing a technology, all subsequent government contracts (or grants) for work that "derives from, extends, or logically concludes" that work are SOLE SOURCE JUSTIFIED. This means that if you can find something that ANY one of the Federal agencies is looking to have done, and you have had an SBIR (or STTR) award that you can show has such a relationship to that desired work, you can call up that agency, find the procurement officer who's responsible for issuing stimulus contracts (here's a website that makes your search easier: http://www.recovery.gov/?q=content/agencies), and let him/her know that you have a "sole source justification" for the work. The contract can be immediately issued to you, styled as a Phase III SBIR, without the need for a competition. Truly.

And, believe it or not, whether or not you've gotten a Phase II is completely immaterial to this discussion. Of course, you do need to have something of value to offer the government in this deal, and there needs to be a match with agency needs and company capabilities.

I'm not saying that this will be easy. You'll have to play detective. It may be a challenge to find the "wires" to connect for getting to the funds. If you have an internal agency champion they may have to help you in navigating that agency's process. They'll probably have to use the Recovery.gov site themselves. But, the fact is that procurement officers in every agency have the responsibility to spend a LOT of money in a relatively very short time. Do whatever it takes to find them. They're motivated to make things happen.

We've already heard about one such contract issued -- The Department of Transportation issued a Phase III contract to a small business that had a DOD Phase I for some work that applied the same technology. Yes, it doesn't matter who issued the Phase I to you -- ANY other Agency can issue you a Phase III -- even ones who don't do SBIRs at all!

Get the idea? Yes, this is HUGE! GINORMOUS, as my granddaughter would say!

If you're not sure what a Phase III SBIR award is, download a copy of my SBIR Coach's Newsletter of Novermber 2008 that answers the question: "What is Phase III?"

Then download a copy of the ARRA Stimulus Bill from http://readthestimulus.org. Search it for anything that one of the Federal Agencies needs that may relate to what your company has done with its SBIRs. Make some calls. Do some negotiating. Sign some deals. Get some money.

We do expect to see a Continuing Resolution introduced and passed before the March 20th SBIR expiration deadline, but it will likely be short term -- maybe 60 days. So we'll have some hoop jumping to do to get an acceptable SBIR re-authorization bill crafted, passed and signed, but we will git er done!

Jere has promised to put some additional information on all of this on the SBTC website: http://SBTC.org. They put the really good stuff in the "Members Center" section, so please join the SBTC and help support our advocacy.

This ARRA deal is a short term opportunity. Make the best of it. "Getcha SBIR Stimulus Contracts While They're Hot!" (Opening day is just a couple of weeks away and I'm getting in the mood. Maybe this will be the Rangers' year! Someone please pass the mustard!)
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Key Senators join the call for NIH to "IGNORE" SBIR Stimulus Exclusion

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We got some action! Perseverance pays off!

The Senate's Small Business & Entrepreneurship Committee's Chairwoman, Mary Landrieu (D-LA) and Ranking Member, Olympia Snowe (R-ME) joined my call for the NIH to effectively IGNORE the ARRA Stimulus Bill's SBIR Exclusion in a letter sent today to Charles Johnson, the Acting Secretary of the U.S. Department of Health and Human Services (HHS), the parent organization of the NIH.

The PR Newswire story about the letter can be viewed by clicking HERE.

The headline is:

Landrieu, Snowe Emphasize Importance
of Small Business Innovation
to Economic Recovery

The subtitle is:

Call on HHS to fund SBIR/STTR despite
exemptions in economic recovery plan.

Quoting from the letter:

"While the $8.2 billion allocated through Title VIII of the Recovery Act is relieved from specifically funding SBIR and STTR projects, the Act does not exempt the HHS from its continued statutory obligation of allocating a minimum of 2.5 percent and 0.3 percent, respectively, of its total extramural budget for research and development for SBIR and STTR projects. At stake is as much as $229 million."

"The SBIR and STTR programs allow small research and development firms -- our nation's innovation lifeline -- to create high-quality jobs and cutting-edge products and therefore are fundamental to our country's economic recovery. Consequently, it is of great concern to us that the NIH maximize the benefits of the Recovery funding and provide not less than the statutory percentages of the Department's extramural research and development funding to the SBIR and STTR programs."

All I can say is THANK YOU Senators Landrieu and Snowe, and the rest of the Senate SBE Committee. I know for a fact that, due to the letters that many of us wrote, some of you also had a hand in this.

The HHS has until March 24th to respond to the Senate Committee in writing. Frankly, I don't think they need two weeks to decide to do the right thing. I sugest that we keep the pressure on the NIH to respond quickly and favorably.

Of course, March 24th is after the March 20th expiration date, so we MUST get that Continuing Resolution to make this really be other than a hollow promise.

UPDATE, March 11, 2009: Check out Rick Shindell's SBIR Insider Newsletter of this date. It provides some more information on activities concerning the Continuing Resolution, and some additional background on the NIH deal, including an actual copy of the Senate SBE letter.
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SBIR Exclusion From NIH Stimulus was even more underhanded than we thought!

[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!]

The campaign is working folks! Everyone is incredulous that such a counter-productive restriction would have been made in these politically charged times, effectively excluding ARRA Stimulus money from small business, the ONLY sector of the economy that's currently creating jobs! And they're angry that it was intentionally done in such a manner as to escape scrutiny.

But you haven't heard anything yet. My original posting on this only scratched the surface of the underhandedness. It was even worse than we thought. I suggest that you take your blood pressure meds before reading any further.....

I gleaned a very disturbing fact today: The version of the ARRA Stimulus Bill that was engrossed (that's the term for being voted on and passed to the next step in the process) by the House, and the version that was amended and engrossed by the Senate, DID NOT CONTAIN THE NIH SBIR EXCLUSION CLAUSE! That means that when your Representative and Senators voted on this bill, SBIR and STTR were, as they should have been, a part of the NIH's Stimulus funding to the tune of some hundreds of millions of dollars in new projects for worthy small businesses.

The engrossed Bills differed in some minor elements, including the amount of money that the NIH was to receive, so they were sent to a Conference Committee (five Members each from the House and the Senate) to have the differences resolved. The Committee did its business and produced the final copy of the now enrolled Bill for the President's signature. Guess what!

THAT FINAL COPY, AND ONLY THAT FINAL COPY, DOES CONTAIN THE NIH SBIR EXCLUSION CLAUSE, and the President signed it into law, thereby taking away, without a vote, the money for those SBIR and STTR projects that effectively had been authorized by your legislators.

Check it out for yourself. All of the versions of the Bill can be found at: http://www.govtrack.us/congress/billtext.xpd?bill=h111-1. Look at each version. (To find the pertinent section, search for "HIV". It turns out that that term only appears in the same paragraph as the one that contains (or doesn't yet contain) the SBIR exclusion clause.)

When I was alerted to this, I was momentarily speehless. (Those of you who know me know how unusual that is!) I couldn't believe that anyone would have the guts to try such skulduggery and that the rulebook would allow this. So I did some research. They did; I'm not sure if it does; but that's indeed where and when they did it!

What about the Rulebook? According to the official government document "How Our Laws Are Made", Conferees are limited in their authority to make substantive changes: "Furthermore, they may not insert new matter that is not germane to or that is beyond the scope of the differences between the two Houses." Does this exclusion clause qualify as being germane or within scope? I'll leave it up to the legal eagles among you to weigh in on that. But what's done is done. The question now is how to best undo it, or at least undo the effects of it.

The legal eagles can advise us on what would need to happen to get this exclusion lifted, either by an action of the Congress with some sort of Bill, or by the President himself with an Executive Order. I just don't know what our next step should be in a procedural sense (someone please help me on this), only that we shall not sit by and let this stand unchallenged.

Of course, the NIH can choose to unilaterally undo this injustice and do the right thing by simply deciding to add an equivalent amount to what would have been newly authorized funds to their regular Allocation Base for SBIR and STTR, dust off those projects that scored well in recent evaluations but just missed the pay-line due to lack of funds, call up the companies, and issue the grants! VOILÀ! Instant stimulus. Shovel-ready job creation, as they say. What about it NIH, y'all up to doing the right thing? Legally you can do it. So please just do it!

OK, the list of suspects in our whodunit has suddenly gotten much shorter. Call in CSI. The ONLY people who could have introduced that clause into the bill were in that Conference Committee room. Who were the Conferees? Here's a source of that information: http://neinuclearnotes.blogspot.com/2009/02/stimulus-bill-conference-committee.html. [Hmmm.... Seems that Senator Specter wasn't on that Conference Committee, so our previous information may have been incorrect, and, if it turns out that we were wrong, and he had nothing to do with this, we hereby apologize to the Senator for that.]

All right, will the real culprit please fess up? Unlikely. Probably not even CSI can solve this crime. These sneaky-snakes tend to cover their tracks too well and close ranks when challenged. But someone in that Committee room did this, probably at the request of some misguided individual high up in HHS/NIH who thought they were doing something in the best interests of their Agency. At least I certainly hope it wasn't done maliciously. Frankly, at this point, I don't care who did it, just that the effects of it be undone.

I've been receiving lots of emails from people who want to know what they can do to help. Hits on this Blog and on my website's SBIR Reauthorization section are up more than tenfold from before this story broke. At least a dozen other Blogs and News sites have picked up the story and spread the word. It's almost viral!

So, let's keep up the pressure. Send out links to this Blog posting, including to other media. Send letters. Make phone calls. Armed with these new revelations we might get some attention from the right people, either in the White House, in the Congress or at the NIH, and turn this around.

And, one final word. That Continuing Resolution must still be secured. SBIR expiration is only two weeks away without it. The House Small Business Committee is the one that will introduce it, so focus on them. We hear rumors of a CR bill being prepared there, but nothing official has surfaced yet. I know it's a lot to ask, but please keep that pressure on too.

We shall persevere.

UPDATE - Sunday, March 8, 2009, 2:00 PM CDT:

An email letter addressed to the "Small Business Research Community" was sent out today by Jo Anne Goodnight, NIH's SBIR/STTR Program Coordinator, wherein the opportunity for small businesses to apply for grants in a new ARRA funded opportunity called "NIH Challenge Grants in Health and Science Research" was touted with the statement in bold face: Small businesses are eligible to apply for grants under this program.

Yes, Jo Anne, eligible, but competing with who else? You have to drill into the announcements a ways to see the list. Here's a shortcut. Among others, the eligible organizations include Public and Private Institutes of Higher Education, For-Profit Organizations (Other than Small Businesses), Not-for-profits of all types, and City, County, and State Governments. Hardly a level playing field! Good try NIH, but no cigar.

If you didn't get the NIH's email letter and would like a copy, write to me and I'll forward it.
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Four Federal Agencies Announce New SBIR Opportunities

Even though we haven't yet seen that Continuing Resolution issued for extending the expiration date of the SBIR Program beyond March 20th, I'm happy to report that the Federal Agencies aren't holding back on issuing their announcements for new SBIR opportunities, and four of them: Transportation, Homeland Security, Environmental Protection and the National Science Foundation have recently published new topics.

Department of Homeland Security (DHS) - due by April 6th

Domestic Nuclear Detection Office (DNDO)
- X-ray Generators to Enhance Material Discrimination for NIT Imaging
- Innovative Training Technology for Preventive RadNuc Detection

Department of Transporation (DOT) - due by April 15th

Federal Highway Administration
- Shockwave Mitigation On Roadway Systems
- Thermographic Device for Nondestructive Evaluation of Bridge Integrity
- Vehicle Detection, Counting and Tracking System
- Pedestrian Detection, Counting and Tracking System
- Self-Sustaining, Intelligent Pavement Systems
Federal Motor Carrier Safety Administration
- Individualized Fatigue Risk Management in Trucking Operations
Pipeline And Hazardous Materials Safety Administration
- Development of in-field pipeline inspection tools
- Hazardous Materials

Environmental Protection Agency (EPA) - due by May 14th

A) Green Building Materials and Systems
B) Innovation in Manufacturing
C) Nanotechnology
D) Greenhouse Gases
E) Drinking Water and Water Monitoring
F) Water Infrastructure
G) Air Pollution
H) Biofuels and Vehicle Emissions Reduction
I) Waste Management
J) Homeland Security

These are anticipated topic areas. Details will be available March 19th.

National Science Foundation (NSF) - due by June 9th

Broad Area Topics are:
- Biotech and Chemical Technologies (BC)
- Education Applications (EA)
- Information and Communication Technologies (IC)
- Nanotechnology, Advanced Materials and Manufacturing (NM)

Note that all of these Agencies do state that awards are subject to "availability of funds", and we all know what that means!

Even the NIH is continuing to announce new opportunities, and they have promised that there will be small business participation in ARRA Stimulus funding, although what form that will take is still not apparent. It's important that small businesses compete for R&D funds on a level playing field, and if it's not via SBIR or STTR it's hard to imagine how that will be managed.

And, DO KEEP THE PRESSURE ON FOR THAT CONTINUING RESOLUTION! The SBIR Coach's website's SBIR Reauthorization section has all the information you'll need (including a recently added Excel file of the key legislators' contact data) and the template letter to send. So, please just do it!
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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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Clean & Renewable Energy SBIRs - From the NIH!

I expect Clean and Green SBIR topics from the DOE and the EPA, and even from the DOD, but today's email from the NIH was a real surprise. The NIH is looking for clean and renewable energy SBIR and STTR proposals for projects in a wide variety of applications. This could be a great economic stimulus for small businesses who never considered applying for an NIH grant before. Here's a partial list:

• Technologies to optimize battery usage and/or energy consumption by medical devices (e.g., hearing aids, dental hand-pieces, chairs, lights), imaging technology (e.g., dental X-ray technology, magnetic resonance imaging systems), radiation therapy equipment (e.g., accelerators for proton radiotherapy), or chair/bed-side information technology (computers and displays).
• Technologies to optimize energy consumption during production and delivery of medical radioisotopes and radiopharmaceuticals.
• Development of batteries with increased storage capacity and/or increased number of charge/discharge cycles.
• Patient monitoring technology that decreases transportation to medical facilities.
• Remote diagnostics and medical care.
• Technology development for manufacture of medical device power sources, such as increased energy density, increased number of charge/discharge cycles before battery failure, solar cells, kinetic to electrical current conversion, and fuel cells.
• Circulatory support systems: Implantable rechargeable batteries and alternate power sources and transcutaneous energy transmission systems
• Compact Implantable Defibrillators
• Respiratory support systems (e.g., artificial lungs, ventilators, CPAP machines): Implantable rechargeable batteries and alternate power sources
• More portable oxygen delivery systems with alternative energy sources
• Robotics and computer assisted surgery
• Mathematical and computer modeling of biological systems
• Information systems to coordinate patient management
• Bioinformatics and interactive databases

And that's only about half of the list! Here's the links to the announcement with the full list:

SBIR: http://grants.nih.gov/grants/guide/pa-files/PA-09-100.html

STTR: http://grants.nih.gov/grants/guide/pa-files/PA-09-101.html

As you can see, this opens up the NIH funding opportunity to a whole new array of technology companies. It's not just bio-tech and pharma anymore! NIH SBIR and STTR proposals are due by April 6th, so don't delay getting started on this. You'll have to download special Grants.gov templates for preparing proposals for these topics. Use the PA numbers in the URLs in the FON block of Basic Search to do it. Confused? You know who to call for help!

My friend Rich Hendel at Boeing sent me their interest list for the DOD's 2009.A STTR round today. Proposals for that are due by March 25th. Send me an email if you'd like a copy of the Boeing list.

I sent out the SBIR Coach's Newsletter for February yesterday. The Special Topic is "How to Protect Your SBIR Data Rights". Copy is downloadable from the website's Newsletter page.

And, finally, please don't forget to send those Legislator Letters on SBIR Reauthorization. Template letter is on the website. As they say at Nike: JUST DO IT!
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SBIR is a strategy, not an end game.

We're in the midst of a campaign to get the SBIR Program reauthorized by the Congress. Everyone agrees that the opportunity that SBIR’s early stage high-risk funding gives to emerging technology businesses is unparalleled. SBIR has been a stimulus for such small businesses since it was created in 1982. Nowhere else can a fledgling business get no-strings money for developing new and innovative technology. Much of the current debate is pretty prosaic: it’s mostly about how much money should be made available by the participating Federal agencies, how much can be awarded for the phases of a project, which companies are eligible to compete for it, and how efficient should the funding process be.

But some of the debate is correctly and appropriately centered on whether the SBIR program is being effective in producing results. Some say that should be measured by computing a comparative Return on Investment (ROI) for the Federal agencies that provide funds. Others say that it’s more a matter of how much revenue derives to a company that begins selling products developed with SBIR funding. Gathering data to compute either of these metrics has proven difficult. But, either way, what it comes down to is that SBIR isn’t going to be effective unless companies use SBIR awards as a strategy for effecting business growth, not as an end game.

Only in the past couple of years have any of the agencies focused resources on improving the likelihood that SBIR funded technology ever evolves to something suitable for end use. The recently established DOD’s CPP and the NIH’s CAP Programs, for example, are good starting points but it’s too soon to see if they’ll produce any definitive results. But fact is that these agency “commercialization” programs won’t produce results unless the companies treat their SBIR funding as a strategic infusion of capital to spur technology development and not just revenue.

The agencies won’t help them do this. Why should they? That’s not their responsibility. If the company completes the work that they proposed to do, the agency is satisfied. And, only some of the agencies ever intend to be customers of the final product that evolves from the funded development. To be blunt, since the SBIR agencies (really they’re your investors not yet your customers) have no equity stake in your future, if they’re not interested in buying the end result (and actually becoming customers), they don’t care if you survive beyond the term of your grant!

For many (some would say most) SBIR companies, the top priority is first getting money in the door to pay expenses before the credit cards are maxed out, and if that’s successful, then to continue to submit proposals and win awards to support the lifestyles of the principals until such time as development is done. SBIR is used as a tactic to produce revenue. And being “done” is some nebulous future event that, for many, means, “Now that I’ve built it, someone will buy it”. It wasn’t envisioned to be that way, but it’s what has evolved to be a pervasive SBIR paradigm. Unfortunately, it only rarely produces commercialization success.

I propose that an innovative shift in thinking must take place to change the paradigm. If you win an award, think about the SBIR funds as a grant. (Yes, I know it’s already a grant – but keep reading!) Now think of that grant not as operating revenue, but as capital that you’re investing in developing a marketable product. Only propose SBIR projects that have a chance to actually produce a marketable product to a pulling market. Yes, it means passing on topics that you might be able to win, but have a very limited market to sell to. To do this means thinking strategic. It’s the only way you’re going to maximize your Return on Invested Capital (ROIC) – a metric you can compute and track.

Unfortunately most small businesses are so strapped for cash that they don’t think they can afford to think strategic. And they’re more wrapped up in the thrill of invention than they are on what’s got to be done to move the technology along to market readiness. Indeed many haven’t even assessed whether there actually is a viable market (try and get away with that from an equity investor!). It’s hard for a struggling entrepreneur to face up to over-the-horizon realities. But it doesn’t have to be that way.

As a coach, I’ve helped many of my clients through the strategic thinking exercises that can help improve their SBIR ROIC, but it can be a hard-to-sell engagement. Frankly it takes no less than a culture shift to make the changes in thinking that are necessary. Sometimes the heels drag and the toes dig in. But persistence does pay off, and I’ve enjoyed some true successes.

I’ve been talking for some time about my view of a strategic approach to seeking funding while working informally with the Arlington Technology Incubator (managed by the Arlington Chamber of Commerce), and the University of Texas at Arlington’s Office of Technology Management. I’m proud of how forward thinking both of these entities are, as they have decided to form a unique public/private joint venture to synergistically lead ideas hatched at either venue to marketability.

We formalized our working relationship this week, and I’ve been retained as their Business Coach. See more about this in the official joint Press Release by clicking HERE. (Note that this arrangement is a contract with my Commercialization Funding Coach company, and, lest you think otherwise, The SBIR Coach will continue coaching successful navigation of the SBIR opportunity on the national scene.)

In my Business Coach role, I’ll be working with those who are served by the UT-Arlington's brand new Venture Innovation Partnership and with the client companies of the Arlington Technology Incubator to help them make the appropriate strategic (and tactical) decisions to facilitate business growth and improve the likelihood of success of their fledgling companies. Of course, going after SBIR funding will be one of the possible strategies that will be considered (would you expect the SBIR Coach to do otherwise?), but charting out the path to commercialization and guiding the maximization of the company’s ROIC will be the focus of my coaching from day one.

If all SBIR awardees took this same approach to how they applied SBIR funds, we might just build evidence that a comparative Federal Agency ROI would favorably reflect on SBIR effectiveness, and the companies would be more likely to fulfill the visions of their founders. The potential is there. Let’s reauthorize SBIR, improving it of course, and continue to provide the opportunity for small technology businesses to get their no-strings seed funding. At the same time, let’s also encourage them to always take a strategic approach to the application of SBIR funds, not just think that by winning SBIR awards they’re being “successful”.
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Focus on Economic Stimulus Revitalizes SBIR Reauthorization Push

Everyone says that creating jobs is the key to turning around the economy. It’s probably the only thing they do agree on! We evidently can’t look to big businesses to create jobs – they’re all cutting back and standing in line with palms outstretched – the modern day ironic equivalent of the bread line of the 1930s. So it seems to be up to small businesses to do the job creation. That’s easier said than done. Everyone knows that too. Slowly but surely the country is realizing that unless we figure out a way to innovatively stimulate small business better than we’ve ever done it before, we won’t get out from under this economic mess we’re in any time soon. So how do we do that?

Those of us who have been involved with it since the 1980s have always known that SBIR stimulates small business. SBIR itself was the stimulus for forming my two companies -- without that avenue of funding having been available neither one would have ever been launched. Together they created over 200 jobs and pumped tens of millions of Federal dollars into the Texas economy. Multiply that by the thousands of other small companies that have earned SBIR funding (yes -- SBIR money is competitively earned not just handed out) and created innovative technology solutions in response to expressed needs, and you begin to see the magnitude of the potential. What’s been missing is the stimulus to take the technology through its final evolution to make the transition from the laboratory to the marketplace.

Seems pretty obvious to me – we have a successful 27-year-old mechanism for stimulating small business innovation already in place. It’s called Small Business Innovation Research. (Gee, even the name is right!) Pump it up (both with money and improvements to administrative process to speed the money flow) and add to it the stimulus to take that final commercialization step. Do this now and we have the potential to create a significant number of jobs in a relatively short time frame.

I’m by no means alone in this thinking. Led by Jere Glover, a DC attorney (at one time the SBA’s General Counsel) who’s the Director of the NSBA’s Small Business Technology Council (SBTC), there’s a revitalized focus on getting the SBIR Program reauthorized and improved. In fact, if we don’t keep the pressure on, there’s a chance that SBIR could get lost in the shuffle and die. Jere puts it succinctly and bluntly: “Currently, the SBIR is set to expire on March 20th, 2009. Unless it is reauthorized, this program will go away, and Federal Agencies will no longer be required to allocate any of their R&D money to small businesses. We need your help to make sure this important legislation is taken up before it is allowed to expire.”

The SBTC is sponsoring a “Washington Fly-In” on February 9th and 10th, where those of us who understand SBIR’s importance and are willing to commit resources to support it, will make a coordinated effort to educate our legislators in both the House and the Senate on the importance of SBIR as an economic stimulus for small business. The SBIR Coach will be there, of course. We’ll be visiting with the small business liaisons of many of our Senators and Representatives to provide recommendations on how to improve the SBIR Program’s effectiveness so as to stimulate the maximum potential for private sector job creation. The objective will be to garner support and sponsorship for SBIR reauthorization as an economic stimulus.

Join us if you can. Click HERE to register to be a part of the group. The headquarters will be at the Westin DC City Center. You DC locals have no excuse not to participate! We’ll have a planning session at the Westin on Monday evening (Feb 9th). There’s to be a breakfast Tuesday morning (Feb 10th) in the Senate Small Business and Entrepreneurship Committee Hearing Room (Russell 432). We’ll be having a conference call on February 3rd to get everyone briefed on the event. Once you’ve registered you’ll get the details of that and more.

Some of you may be unfamiliar with the complex and somewhat contentious SBIR reauthorization issues. If you'd like to see my view of what the issues are, go to the "SBIR Reauthorization" page under the "SBIR Program" tab on my website: www.SBIRcoach.com. (Refresh your screen if the page doesn't show up under the tab. It's new and your cache may need clearing.)

I’m helping coordinate a Texas delegation. Executives from some of Texas’ most successful SBIR companies have already committed to attend. If you’d like to join our delegation, please let me know ASAP. We’ve already got appointments with both Senatorial offices and quite a few of those from the House. Add your voice to the chorus. In this game, there’s strength in numbers!

Here’s an idea: If you can’t attend the Fly-In, send me a letter to present on your behalf. Letters from all States are welcome!

And if you think that it’s only a few of us SBIR wags who are arguing for such small business economic stimulus, think again. I’ve seen several articles in the past couple of weeks that promote this thinking. To wit: “Use broader definition of shovel-ready in weighing economic stimulus”, “Entrepreneurs are key to job creation”, “Economic Recovery and the SBIR”, and “Nurturing The Soul Of America”.

I predicted earlier this month that SBIR wouldn’t get reauthorized by March 20th, but would simply be temporarily extended without improvement. How quickly my thinking has changed (on the timing, not the issues). Help me be wrong on this prediction!

Stay tuned…..
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Will President Obama's Techonomics Program Impact SBIR?

Well, we now have a new President, and he's hit the ground running. The Obama administration has proposed federal legislation with an aggressive techonomics [click on the word if you don't know what that means] stimulus package that emphasizes innovative science and technology and calls for dramatic increases in short-term funding levels for R&D. Very significant increases over currently authorized amounts are proposed for the National Science Foundation (NSF), the Department of Energy (DOE), and the National Institute of Standards & Technology (NIST).

This got my attention, as any increases in funding for R&D in the NSF, DOE, and NIST should translate directly into increased funding for SBIRs in those agencies. That means more potential projects for all of us to work on!

Both the R&D and education provisions of the new House initiative harmonize with President Obama's promise to enhance innovation by providing short-term stimulus spending where it is needed, while providing a long-term basis for economic growth. But will it work?

I had a conversation with Dan Loague today. Dan is the Executive Director of the Capital Formation Institute (CFI), an educational organization whose mission is to be the "premier international research and educational entity in the fields of early stage capital financing and enterprise creation and growth." Dan's take on the Obama Techonomics stimulus package, and what it will take to make it work, is:

"Science, technology and research help create the raw materials of innovation, but it’s the buyers, sellers and markets, not inventions, that create jobs and income. Think about it: filling the barn with better paint will not get the barn painted. It’s going to take specific actions, not just hope that new ideas can somehow be turned into U.S. companies that find success the competitive global market.

We should now ask the following key questions: (1) What part of the funding will actually help to produce jobs and new capital from science and technology? (2) How much of the money will be used to increase the launch of new products into the marketplace and the numbers of new consortia of science, technology and corporate solution seekers? (3) How much of the money will be devoted to helping create high impact jobs that will produce new subject matter experts?"

To focus attention on this, the CFI is sponsoring a RoundTable Teleconference on "Obama's Techonomics Program". It's tomorrow, Wednesday, January 21st, at 2PM EST. See the details at http://www.cfi-institute.org/Roundtable. You'll find the call-in number there, along with pictures of the discussion leaders: Robert Boege (ASTRA), Ray Felts (Nine-Sigma), Connie Luthy (Medical Products Innovation), and Marc Oettinger (SURA).

The SBIR Coach will be participating in the call, raising issues pertinent to SBIR of course. I encourage you to join in as well.

Dan and I are now working on a CFI Roundtable Teleconference, to be scheduled in February, to focus on "Reinventing SBIR: Effecting order of magnitude scale improvements in Federal economic stimulus programs designed for small business." Improvements in SBIR will be the goal in the SBIR reauthorization activities to be undertaken with this new Congress, so this is timely and important. Stay tuned for details in upcoming Blog postings, and on the CFI website (http://www.cfi-institute.org).

And, finally, to tie this all together, Tom Still of the Wisconsin Technology Network, highlighted the impact of SBIR on the country's economic health in his just published article (http://wistechnology.com/articles/5389/) on suggestions for economic stimulus priorities:

"[Congress must] Reauthorize the federal Small Business Innovation Research (SBIR) program. Launched 25 years ago, this program has enabled 700,000 small businesses to develop cutting-edge products. Eleven federal agencies granted about $2.3 billion in the latest year for merit-based research and development projects. Over time, SBIR and related programs have created 1.5 million jobs in small companies that typically employ high-wage scientists and engineers. It's a program that works - so why not reinvest?"
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Indeed! Tune in to tomorrow's Teleconference, and participate! Please!
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UPDATE: Wednesday, January 21st, 5PM CST
We had the Techonomics Teleconference this afternoon and it was great! Lots of good commentary and questions. The intended hour actually stretched to almost 90 minutes, and Dan said that he'd explore having an ancillary session to continue the discussion. If so, I'll report on it here.
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