SBIR Gateway

SBIR Insider Newsletter - Update
March 9, 2010 Edition
See March 10 Update after you read this issue



Dear SBIR Gateway Insider,

I just learned that a good number of our >8,000 subscribers work for, own, or partner with "marginal companies" that are recipients of corporate welfare. If you think I'm shocked, wait till you read on!

Of all the SBIR Insider issues I have addressed over the years, this may well be the most outrageous. It brings to light the true feelings of Nydia Velazquez, the House Small Business Committee Chair, and her disdain for the thousands of small businesses participating in the SBIR program.

Velazquez And Her Committee, Insults And Demeans America's Small Businesses Participating In SBIR

On March 4, 2010, Nydia Velazquez (D-NY) Chair of the House Small Business Committee, sent a letter to John M. Spratt, Jr. (D-SC), Chair of the House Committee on the Budget. Velazquez's letter was a congressionally mandated exercise to submit the views of the Small Business Committee, pertaining to the SBA's FY-2011 budget. The operative insulting statement she made concerning SBIR is quoted below:

"Without the participation of venture-backed companies, the SBIR program has become little more than corporate welfare for marginal companies who are unable to secure external market-based funding."

This statement is not only an outrage, but is untrue and ignorant! Velazquez is debasing thousands of small businesses and SBIR projects that have provided significant results, more often than not resulting in innovations exceeding that of any other sector including large business and academia.

SBIR success is universally acclaimed by numerous sources, including extensive studies by the U.S. General Accounting Office (GAO) and the National Research Council of the National Academy of Sciences, not to mention many other countries that are now emulating the program.

Further, it should be noted that small businesses with venture funding can and do participate in SBIR, and their numbers have increased over the past few years, a fact that Ms. Velazquez chooses to ignore.

One could ask Ms. Velazquez, if her legislation to allow companies that are majority owned and controlled by large VCs (syndicates), coupled with her plan to allow unlimited (jumbo) award amounts, with direct access to phase II awards (totally bypassing phase I), doesn't amount to corporate welfare for her wealthy investment community lobbyists?

On the other hand I wonder if the investment community (i.e., BIO and NVCA) donations to Ms Velazquez's re-election campaign doesn't amount to political welfare? Historically the investment community has been Velazquez's largest source of re-election funding, by a factor of 3 to 1 (according to the Center for Responsive Politics), most of which comes from out of state. Could that be why Ms. Velazquez and her staff would not allow even one small business to testify against her SBIR VC majority ownership and control provisions?

Is Velazquez's Opinion Shared By The Entire Committee?

The 22 page Views & Estimates document containing the offending SBIR language was presented to the full committee for markup (amendments) on March 4, 2010 by Nydia Velazquez and ranking member Sam Graves (R-MO) . There were no objections nor amendments so the document was approved/passed by unanimous consent with only a few committee members present. That suggests the committee read the document before allowing it to be approved.

However, Sam Graves did not agree with all of the democrat's views and asked that the republicans submit their own independent Views & Estimates document. We have not seen that document but we do know that Graves concurs with Velazquez on SBIR and VC. Perhaps Graves has more "couth" than Velazquez and would not make such a ludicrous statement about SBIR small businesses.

Small business committee democrats who allegedly signed on, or didn't object, or perhaps were not aware of Velazquez's view includes:

Dennis Moore, KS; Heath Shuler, NC; Kathy Dahlkemper, PA; Kurt Schrader, OR; Ann Kirkpatrick, AZ; Glenn Nye, VA; Mike Michaud, ME; Melissa Bean, IL; Daniel Lipinski, IL; Jason Altmire, PA; Yvette Clarke, NY; Brad Ellsworth, IN; Joe Sestak, PA; Bobby Bright, AL; and Deborah Halvorson, IL

We'll follow up on the republican side when we see Graves' statements.

Where Is The House Leadership On Velazquez's SBIR Assault?

I'm not sure the House leadership is aware of what transpired. If Velazquez's insults were hurled at an audience deemed by the House to be more important than small businesses, this story would be all over the main stream news and Velazquez would be looking for cover.

This incident shows the true colors of the House Small Business Committee leadership, and suggests why Velazquez won't even attempt to conference/compromise on SBIR reauthorization with the Senate Small Business Committee.

In our last issue, many of you stood tall to fight the "ALTMIRE QUAGMIRE" which was a direct assault on your SBIR program. You made a difference, and it stopped Jason Altmire in his tracks, at least for now. I also understand that a by-product of your efforts resulted in my first name being changed from a proper noun to a verb in some House circles.

It is possible that if enough small businesses voice strenuous objection to Velazquez's insults, she could be taken to the "woodshed" by House leadership. There are a good number of representatives in the House that are not fans of Velazquez's actions, and this could be the straw that breaks the camel's back to force the committee to start substantive talks between House and Senate on SBIR reauthorization.

I would encourage you to send emails and/or call to voice your outrage about Velazquez's comments.

Please include Ms. Velazquez's "star" staffer, Michael Day in your email. Day is the senior staffer to the committee as well as Velazquez's "chief of staff". It was most likely his language in the document.

Velazquez: michael.day@mail.house.gov (Nydia's star staffer)
Pelosi: Anne.macmillan@mail.house.gov
Hoyer: fallon.shields@mail.house.gov

Where Is The House S&T Committee On Velazquez's SBIR Assault?

The House Science & Technology's Subcommittee on Technology and Innovation led by Chair David Wu (D-OR) has been conspicuously absent in the SBIR reauthorization conferencing with the Senate. They have subordinated themselves to Velazquez and her small biz committee even though S&T also has oversight of SBIR.

Mr. Wu, people want to know, do you endorse Velazquez's SBIR language about small businesses in her SBA views and estimates? We know Bart Gordon is not an SBIR fan, but lately we've been seeing more concern about SBIR from the likes of subcommittee members Paul Tonko (D-NY), and Ben Ray Luján (D-NM) than we have from Wu.

Where Is SBTC On The Velazquez Issue

Currently the Small Business Technology Council (SBTC) is evaluating the most effective strategy to respond to Velazquez. I'm hearing that SBTC will provide a semi-automated "Capwiz" email responder to make it easy for you to reach your representatives. Check them out on Thursday afternoon at www.sbtc.org SBTC is a council organization to the National Small Business Association (NSBA) www.nsba.biz

I'm sure other organizations such as the American Small Business League (ASBL) www.asbl.com will weigh in as well. I can feel the temperature rising in Petaluma.

How The National SBIR Conference Can Help

The National SBIR Conference will be held April 21-23, 2010 in Hartford, CT. This is an ideal conference for "marginal companies" to become corporate welfare candidates… (how's that Nydia?)

OK, I'm kidding, this is a great opportunity to demonstrate the viability of our small business, high tech community. Novices will have the chance to learn the basics of how to become successful in SBIR/STTR programs, intermediates to learn the advanced methods for growing your business in SBIR/STTR, and advanced companies can network, find expanded opportunities, meet with primes, VCs, and Angel investors. You can all attempt to dazzle the federal program managers in your own personal one-on-one sessions.

Some people tell me that they don't need the sessions. From my experience over the years, networking is the single greatest feature of these conferences. The old adage of "who you know" is very important in this business.

On the downside, I'll be there speaking on changes to the SBIR program, and the status of reauthorization. On the upside, I'll be with Jere Glover in this session, and if you've seen us before you know we are as unpredictable as rubbing two boy scouts together to start a fire.

Please visit the conference web site to get all the details, it's at www.sbirnational.com Folks new to SBIR conferences should spend the extra couple of minutes to view the video to get a small business perspective on the value of the conference.

There is still a discounted registration fee available but register quickly while space and reduced fees are available. I hope to see you there.


We have to quit meeting like this. Sometimes things are too serious to take seriously, and many of you have told me you appreciate a little humor in the midst of our SBIR challenges.

I know the SBIR Insider has become a little "too frequent" of a publication, and I hope we can return to something more like once a month. Nevertheless we'll publish whenever SBIR developments warrant.

Keep your comments/questions coming in. I'll try to answer everyone.

Thanks again for your time.

Sincerely,

Rick

Rick Shindell
SBIR Gateway
Zyn Systems
40 Alderwood Dr.
Sequim, WA 98382
360-681-4123
rick@zyn.com
www.zyn.com/sbir

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