SBIR Gateway

SBIR Insider Newsletter
March 29, 2010 Edition



Dear SBIR Gateway Insider,

Many of us are "burned out" from all the health care legislative battles on the hill as well as the non-stop media analysis. Among what appeared to be out of control unsupervised children fighting in our government sandbox, there was one group of heroes working above and beyond the call of duty.

These heroes are made up of House & Senate staffers that work in the "well" and on the floor of the House & Senate, from clerks to secretaries, stenographers to parliamentarians. Under the strain of all those extra hours, both parties scheming to employ unusual tactics to outsmart each other, these heroic staffers took on everything that was thrown at them, and never flinched.

Conversely in the Senate session that stretched past 2:00am on Thursday, March 25, (with well over 20 roll call votes) most of the senators resembled Wile Coyote after a failed attempt on the Roadrunner. At the end of the session, President pro tempore Al Franken (D-MN) looked and sounded more like he was part of a failed Saturday Night Live skit than an actual session of congress! Nevertheless the staffers hardly missed a beat. Kudos to them for a great job.

In this issue:

Specter's New Program In The Health Care Bill Gives BIO AND VC's Much Of What They Have Lobbied For

This program has no direct relationship with SBIR/STTR funding but meets all of the needs that the big pharma lobbyists have claimed were needed in SBIR. It should take away much of the pressure of the House's rebranding efforts of SBIR. This includes eligibility for unlimited VC and/or large entity ownership, jumbo awards, and consecutive jumbo awards. Here's the skinny:

Back in April of 2009 Senator Arlen Specter (D-PA) introduced a bill (S.914) with a new program known as the Cures Acceleration Network (CAN) as part of the NIH reauthorization of 2009. The bill was sent to the Senate Committee on Health, Education, Labor, and Pensions and went nowhere, but was not forgotten.

CAN was added to the new health care legislation in the Senate back in December of 2009 and survived both the passing of the law as well as the reconciliation that followed.

CAN is established within the office of the NIH director to ''(1) conduct and support revolutionary advances in basic research, translating scientific discoveries from bench to bedside; (2) award grants and contracts to eligible entities to accelerate the development of high need cures; (3) provide the resources necessary for government agencies, independent investigators, research organizations, biotechnology companies, academic research institutions, and other entities to develop high need cures; (4) reduce the barriers between laboratory discoveries and clinical trials for new therapies; and (5) facilitate review in the Food and Drug Administration for the high need cures funded by the CAN.

To carry out the purposes described in this section, the Director of NIH shall award contracts, grants, or cooperative agreements to the entities to:

(A) promote innovation in technologies supporting the advanced research and development and production of high need cures, including through the development of medical products and behavioral therapies.

(B) accelerate the development of high need cures, including through the development of medical products, behavioral therapies, and biomarkers that demonstrate the safety or effectiveness of medical products; or

(C) help the award recipient establish protocols that comply with Food and Drug Administration standards and otherwise permit the recipient to meet regulatory requirements at all stages of development, manufacturing, review, approval, and safety surveillance of a medical product.

Eligibility is wide open to public or private entity, which may include a private or public research institution, an institution of higher education, a medical center, a biotechnology company, a pharmaceutical company, a disease advocacy organization, a patient advocacy organization, or an academic research institution.

Grant funding can be up to $15M per award per year and may include a match component of 1 to 3, which can be waived at the discretion of the NIH director.

A paid Network Review Board is established and must include at least 4 individuals who are recognized leaders in professional venture capital or private equity organizations and have demonstrated experience in private equity investing.

The program receives an authorization of $500M for the first year.

In a House Small Business Committee hearing on July 27, 2005 in the days when the stellar committee chair Donald Manzullo (R-IL) allowed more than one side of a story to be heard, representative Roscoe Bartlett (R-MD) listened to the BIO witnesses and the SBTC witnesses on the other side. Bartlett commented that it sounded as if another program should be established to address the VC ownership and orphaned disease needs because these were beyond the scope of a well working SBIR program. Mr. Bartlett, this CAN program may be just that.

BIO, James Greenwood And "Bare Knuckle" Lobbying

He's smart, professional, smooth, worldly and "slick". We're talking about BIO's chairman James C. Greenwood who covers congress as one of big pharma's most effective lobbyists.

As a former 6 term republican congressman from PA, Greenwood made and retained many friends on the hill, and used his skills and knowledge to "move on" at the right time in 2005 and become the chairman of the Biotech Industry organization (BIO).

Greenwood has been a major player in redefining the eligibility issue in SBIR to give the impression that SBA took away the right of VC majority owned companies to compete in SBIR. Although the SBIR program is rather small potatoes for Greenwood and his predominately big pharma funded organization, SBIR represents low hanging fruit. In the House he achieved big impact and returns from the Small Business Committee and House Science & Technology Committee who sanctioned majority ownership and control by VC syndicates, as well as consecutive "Jumbo Awards", direct to phase II awards, and many other items that have historically been considered anti-small business.

Many believe BIO and the National Venture Capital Association (NVCA) own Nydia Velazquez and her House Small Business committee, not to mention David Wu and the House Science & Technology Committee. Greenwood appears to be much smarter than the NVCA folks because Greenwood and BIO never came out and said they wouldn't support SBIR reauthorization if they didn't get their way. The same cannot be said for NVCA.

The lobbying dollars available from Greenwood's big pharma supporters is immense, and he knows how to direct those funds. According to CNN, last year big pharma spent more than $263,000,000 (that's more than $72,000 per day). In 2008 they gave more than $30,000,000 in campaign contributions, a record half of that to democrats.

To quote Dana Bash of CNN in her RECENT AC-360 "Keeping em Honest" report on big pharma lobbying, "To watch Jim Greenwood is to watch old fashioned bare knuckled Washington lobbying."

BASH: "You're a former member of the Club."

GREENWOOD: "Right"

BASH: "That Helps?"

GREENWOOD: "Well, it helps in this way, it helps.. I know what people want…what they need… what kind of information they need before they vote."

Bash was not speaking about SBIR, she was referring to a huge successful lobbying effort on brand name biologics to be included in the health care bill. It gave the brand names 12 years exclusivity rather than 7 years before a generic could come to market and be sold.

As a result, Senator Sherrod Brown (D-OH) told Bash that the lobbied language is anti-competitive and will help the drug companies reap billions more in profits and restrict access to all kinds of life saving drugs for people…. And too many democrats have sided with the drug industry.

That's a testament to the effectiveness not only of the lobbyist, but the money the lobbyists bring.

Is it any wonder why the SBIR reauthorization has been hijacked in the House Small Business Committee by these big pharma and Wall street lobbyists? And the committee wants only a 2 year reauthorization so they can get additional funding for their 2012 elections?

Congress In Recess - SBIR Deadline April 30, 2010

Congress is now on their Easter break, sometimes known as their home work period. Everything on SBIR will be muted compared to what the members will hear on health care. Nevertheless, if you have the opportunity to meet with your representative or senator, please do so. Let them know the SBIR will expire on Friday, April 30 unless reauthorization is reached or another CR is enacted.

We haven't heard of any movement by Velazquez or her star staffer Michael (your bill will never see the light of) Day. It's only been since October….

The next move may likely be another continuing resolution (CR). On the other hand, Velazquez may be upset enough that she lets the program drop. Nothing she could do would surprise me, but if she does the unthinkable and fails to support a CR, there is an alternative. House leadership, I hope you read the next article.

How To Circumvent A Wayward Committee Chair

We've been told that the House leadership is somewhat sympathetic with lack of action on the part of the House Small Business Committee on SBIR (and SBA loans to small businesses). There have been senior level representatives that have stood in opposition to Velazquez's terrible SBIR bill (H.R. 2965).

From our old friend Max Kidalov (formerly council with Senators Snowe's staff) we are told of a procedure that can be used in the House known as a "Discharge Petition".

A Discharge Petition is a means of bringing a bill out of committee and to the floor for consideration without a report from a Committee and usually without cooperation of the leadership.

The threat of a discharge petition can be extremely relevant and help resolve a crisis without using it.

Senator Mary Landrieu / SBA Chief Council / Dr. Winslow Sargeant

It's no secret that many of President Obama's nominations for key roles in government have been stalled in the Senate. The way the Senate works, one person can hold up the entire process.

Such is the case for President Obama's nomination of Dr. Winslow Sargeant to be the next SBA Chief Council for Advocacy. This is a very important position and it needs to be filled soon in order for our small businesses to have a strong advocate in DC.

Last week Senator Mary Landrieu (D-LA) chair of the Senate Committee on Small Business, asked for unanimous consent to accept the appointment of Dr. Sargeant as SBA Chief Council. Senator Jeff Sessions (R-AL) was on the floor for the republicans and objected. He wasn't objecting for himself, but it was for someone else (no name given).

A little later Senator Carl Levin (D-MI) issued a nomination of Michael Walsh from Brigadier General to be Major General. On the floor for the republicans was Senator Tom Coburn (R-OK) who objected but went on to agree with Levin and stated that senators can ask others to reject on their behalf and he is doing it for Senator David Vitter (R-LA). At least Coburn gave up a name where as Sessions would not.

Dr. Sargeant has picked up a good deal of support from many sectors, and we have not been able to find anyone who has dealt with him to be opposed to his nomination. He has excellent educational credentials, small business experience and success. He also has great SBIR expertise. Small businesses we talked with who had dealings with Sergeant when he was with NSF's SBIR, were all very complimentary. As for his VC experience, Dr. Sergeant's VCs were among those that qualified as small businesses and could participate in SBIR.

Many of the SBIR Insiders we've talk with believe he'll be an excellent SBA Chief Council for Advocacy.

President Obama will be making 15 recess appointments (bypassing the Senate confirmation process) because he feels these jobs need to be filled now. The position of Chief Council will not be one of those appointments. Small businesses get lots more talk than they do action from DC.

SBA FAST Solicitation Released

For our State government SBIR support readers:

The SBA has issued its FY-2010 Federal and State Technology Partnership (FAST) solicitation with a closing date of May 10, 2010.

FAST is a competitive grants program for state organizations (selected by the state's governor) to improve the participation of small technology firms in the innovation and commercialization of new technology via the SBIR program. The solicitation is available on Grants.gov and the SBA's SBIR website at www.sba.gov/aboutsba/sbaprograms/sbir/announce/SBA_FAST_PROGRAM.html

This latest incarnation of the SBA FAST program will be discussed at the National SBIR Conference in Hartford, CT, April 22 at 9:15a.

Edsel Brown of SBA's Office of Technology will conduct the session.

This session is by invitation only.

EPA & DHS's DNDO Open SBIR Solicitations

The Environmental Protection Agency (EPA) opened its FY-2011 SBIR solicitation (PR-NC-10-10251) on March 25, 2010 with a closing date of May 11, 2010. Complete details are on their web site at http://epa.gov/ncerqa/sbir/

The Department of Homeland Security's Domestic Nuclear Detection Office (DNDO) has just released their FY10.1 solicitation with a deadline for questions April 8, 2010 and a closing date of May 11, 2010. This is not to be confused with DHS SBIR that is released by the DHS Science & Technology Directorate. The DNDO is different and separate from their DHS S&T cousin. The DNDO solicitation consists of two technical topics. For complete details go to FedBizOpps at:

http://www.fbo.gov/?s=opportunity&mode=form&id=330cf474f402dd891b2cd89824219f91&tab=core&_cview=0

National SBIR Conference

Remember that the National SBIR conference is coming up soon, April 21 - 23, 2010 in Hartford CT. Many of us will be there and we'll be looking for you. Check it out at:

www.sbirnational.com/

As you can see there is plenty of activity in our world of SBIR. I'm not sure how/if this new CAN program will affect our SBIR reauthorization effort. Right now we may be best off to work for another CR, hopefully though the end of the fiscal year. There are too many high profile items that are getting congressional attention.

Thanks again for your time and we welcome your comments.

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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