SBIR Gateway

SBIR Insider Newsletter
April 14, 2008 Edition


Dear SBIR Insider,

Our last edition dealt only with SBIR reauthorization, which is of primary importance, but there is much more SBIR news that will be of interest to you. Reader's response to our SBIR reauthorization issue has been overwhelming and I apologize for not being able to personally respond to each of you. I do read them all, and your comments are important and appreciated. Comments and Q&As on reauthorization will be included in the next issue of the SBIR Insider.

Many of you have asked us for help finding the politicians most relevant in SBIR reauthorization. Rather than add all that information to this newsletter, we have created a web page on the SBIR Gateway with the committee political hierarchy, including contact links. It is located at www.zyn.com/sbir/articles/sbir-cong08.htm I strongly suggest you let these folk know your feelings about SBIR reauthorization.

SBIR REAUTHORIZATION UPDATE

Not much has happened lately above the surface, but in the labyrinth of political mayhem, it is hinted that the House Small Business Committee is giving reconsideration to some areas of their draft bill before they submit their final version. On the Senate side, the rumor mill reflects that Senator Kit Bond (R-MO) is up to his old BIO/VC support tactics of "all or nothing". For years (since 2004), the SBIR Insider has chronicled what we referred to as the B&B boys (BIO & Bond), and the word "compromise" does not seem to appear in their lexicon. A fight will surely ensue in the Senate, but unlike the House, Senate democrats may be more open and friendly to a reasonable compromise. Your Senators need to hear from you.

The SBTC has sent the House Small Business Committee a nice letter commending them on the improvements the committee offered in their draft legislation, but SBTC also carefully pointed out the problems in the areas of jumbo awards, and VC/university expansion as proposed in the draft. The letter cites an important fact that may have been overlooked in raising the award amounts. Although the 1992 SBIR reauthorization raised award amounts to $100k phase I, and $750k phase II, it was coupled with a raise in the percentage set aside that funds the SBIR. The raise was from 1.5% (of the extramural research budget) to 2.5%, in .5% increments over a few years. This ensured that larger award amounts would not result in fewer awards, a fact overlooked by the House SB committee.

We'll let you know if SBTC makes this document available. It will be on their web site along with their "Action Alert" mechanism to make it easy for you to contact your Senators and Representative via email. Their web site is at: www.sbtc.org

SBIR BIO/VC SBA HISTORY

In 2003, shortly after the BIO VC brouhaha started, we covered the story and set up a discussion group for the small businesses and a mechanism to allow SBIR Gateway readers to vote on the VC Issue. These articles and voting results are still available at:

www.zyn.com/sbir/articles/bnews-bio-1.htm

In 2004 there was an effort to push a Bond/BIO amendment through congress without allowing discussions or holding hearings. There was a very insightful guest editorial by Dr. Chris W. Busch, a legendary figure and success story in SBIR. It was well worth reading then, and I believe still significant today. You can read it at: www.zyn.com/sbir/articles/bnews-vc2-1.htm

JUMBO SBIR AWARDS CLAIM REINFORCED

In our last SBIR Insider, we noted a $9.8m SBIR fast track award. The jumbo award discussion peaked the interest of Ann Eskesen, of the Innovation Development Institute. Ms. Eskesen has been a major force and contributor in SBIR field since the start of the program. Over the years she developed one of the most important SBIR databases in the field with unique information on award winner's companies.

When a database supports your claims, you call it good data, but when it doesn't, you try to invalidate it. Ms. Eskesen has been on the receiving end of both, but to her credit, as well as her data, several government agencies, including the General Accountability Office (GAO) have considered it relevant and adequate for inclusion in their reports (the GAO doesn't offer superlatives to laud products).

I received a call from Ms. Eskesen last week and she informed me that there were many jumbo awards => $5m. Most were in the NIH, but a few were in the DoD. I don't know of anyone who tracks the financial picture of SBIR as does Eskesen. She is very concerned that the consequences of unlimited jumbo awards, as enabled in the House draft reauthorization bill, would destroy the fabric of this small business program.

You can visit Innovation Development Institute's web site at www.inknowvation.com

CHANGES IN NSF SBIR/STTR SOLICITATIONS FOR FY-2009

The National Science Foundation (NSF) has made some significant changes in their SBIR program solicitation for FY-2009. Their current solicitation, NSF 08-548 is for SBIR ONLY! In previous years the NSF has coupled SBIR and STTR in the same solicitation, but NSF is suggesting they will have a separate STTR solicitation later in the year.

In what appears to be somewhat NIH in manner, this NSF solicitation utilizes one set of topics with two separate receipt dates (due dates), June 10, 2008 and December 4, 2008. NOTE: You must not submit a proposal prior to 30 days before the due date, that would be May 10, 2008 for the first cycle, and November 4, 2008 for the second cycle.

Also new is the fact that NSF now requires at least one letter of technology support for each submission. You are encouraged to contact the cognizant program officer to get feedback on your potential project. The NSF retains its policy of no more than 4 proposals per organization per solicitation. Complete details are on the NSF SBIR web site at www.nsf.gov/eng/iip/sbir/

NO TIBBETTS AWARDS FOR 2008

The SBTC has announced that there will be no Tibbetts Awards Program for 2008. The program formerly run and administered by the SBA was shelved in 2002 due to extreme budget cuts. The SBTC, with support from some of the SBIR agencies and others, revived the Tibbetts Awards in 2006 and the award program was a great success for 2006 and 2007.

However, due to the extreme demands of SBIR reauthorization efforts, the time and resources are not available to properly execute this prestigious awards program. It is planned that the Tibbetts Awards will return in 2009, assuming there will be an SBIR reauthorization.

Additional details will be posted on the Tibbetts Awards web site at: www.tibbettsawards.org

DIMINISHING INTEREST IN SBIR?

A question being posed on the hill and by some SBIR agencies is; Why are we seeing fewer new first time applicants competing for SBIR awards? The most relevant reduction in new company participation is in the NIH SBIR program. Let's look at some of the reasons suggested.

BIO, NVCA and even NIH have been quick to point out that the drop has occurred since 2003, when the VC issue supposedly reduced the eligibility of many companies. Some have cited that the NIH has become more risk adverse, demand significantly higher scores and concentrate on fewer but larger awards. Others have noted that the submission process is so complex and restricted that many small businesses simply choose not to fight the battle. A lack of quality state & local outreach has also been mentioned, as a result of the termination of the SBA's FAST and ROP outreach programs.

At the SBIR Gateway, the complexity issue is one that we most often hear about from the small business community. One of the larger roadblocks is the government-mandated kludge known as Grants.gov. If your entity is large enough, and fortunate enough to have an IT department, or computer geek (in computerdom the term "geek" is used affectionately), it's not so bad. Once you have the proper grants.gov compatible hardware and software, and have used it a few times, it's manageable, but for the smaller shop and first time users, it's a nightmare and it consumes an immense amount of time to troubleshoot.

Many grants based federal agencies had to scramble to try and provide guidance concerning the many work arounds for companies whose systems couldn't communicate properly with Grants.gov. Problems with grants.gov grew as the site became mandated and agencies turned to it as their sole point of grants entry. This coincides with the slope of the SBIR submission downturn. Lets look at a few of these issues:

Allegedly, the discerning "high brow" computer user prefers the Macintosh. However, the Mac was not compatible with Grants.gov and eventually a Citrix solution became available or a windows emulator, neither of which was for the faint of heart, nor were they very stable.

Windows users weren't exempt from troubles. Grants.gov was incompatible with Microsoft Vista! In addition, users of Microsoft Office 2007 had to learn to operate the program in a non-standard manner in order to be compatible. This doesn't even address the various versions of Adobe's Reader that were incompatible with Grants.gov. Many systems that were modified to work with Grants.gov, would become incompatible again due to the user's automatic system/software updates.

In defense of Grants.gov, there is a hard working technical staff that tries their best to be responsive to the user community. However, the frustration the small business community is suffering with Grants.gov's growing pains is hard to measure. It surely is a significant element in deterring new first time applicants.

It should be noted that although NSF SBIR is a grants based program, they use their mature, but complex "Fastlane" for submittals. Complexity aside, NSF has worked hard to make their system cross platform independent, and it works, with minimal problems. We hear very few complaints about Fastlane failures.

The DoD SBIR is a contracts based program and utilizes their own submission system. This system had some growing pains in the earlier years, but for the last few years it has earned high marks, with few complaints, and very good reliability. By the way, the DoD has not suffered the decrease in new applicants, as has the NIH.

The NIH has additional complexities such as their ERA Commons, which must be used in combination with Grants.gov for a SBIR grants submission. We have not received many complaints about this system.

Reducing needless complexities has been a topic of SBIR reauthorization, but the situations as those described above have not been a part of substantive dialog. The House Small Business Committee was so focused on BIO/VC sponsored complaints, they ignored having actual small business participants testify about their problems and impediments while utilizing the current systems.

TROUBLE IN PATENT REFORM LAND

Of course you know politics are not confined to SBIR. Codependency of unrelated issues can have unexpected consequences. We hear from our friends at Federal Technology Watch that patent reform legislation may be stalled in the Senate due to a dispute on delayed confirmations of judicial appointments. It was hoped that the Senate's work on patent reform would have been completed last week. Now it's anyone's guess.

Further details as well as great overall coverage of federal technology news is available in the weekly Federal Technology Watch newsletter. For details contact Neil MacDonald, Editortekcomm@aol.com

THE WINDS OF CHANGE FOR FEDBIZOPPS

If you are one of the many users of Federal Business Opportunities (FedBizOpps) web site, you will notice that things have changed. A few years ago FedBizOpps replaced the government's Commerce Business Daily (CBD) as the "single point of entry" for federal business opportunities.

Although single point of entry is still a dream, many of the government's contract related opportunities get posted on this site, and that includes the contracts based SBIR/STTR solicitation notices.

If you are mainly interested in SBIR, you're in luck. The new interface is quick and easy. Simply go to www.fbo.gov and enter SBIR in the Quick search box (upper right). There is also an advanced search where you can filter for many variables.

WHAT'S SO IMPORTANT ABOUT THE NATIONAL SBIR CONFERENCES?

For many years the biannual (Spring & Fall) SBIR conferences have been the most important event for small businesses to acquire SBIR knowledge, training and networking opportunities. It has been the number one point of access for companies new to SBIR/STTR, and the conferences have matured to include intermediate and expert levels as well.

These conferences are a great opportunity to meet one-on-one with agency program managers and their staffs, get a sense of what they want and how to work with them, network with potential partners, from other small businesses, academia, primes and federal labs.

Although all the agencies participated in these events, the NSF underwrote the conferences and provided a contractor to work with the states and regions in the planning and execution of the conferences. This ended in 2007 when an NSF guidance committee decided this was not a wise use of NSF's resources.

With a broken and "broke" SBA, there was no agency to head up the national conferences and the responsibility was given to the states, to bid on hosting the national conferences. A loosely based group of SBIR feds came to the forefront to have an ad hoc selection and criteria committee. The first brave state to step up was the SBTDC of North Carolina. In April of 2007, John Ujvari, Mary Beth Thomas and their group did a fine job, although some agencies didn't provide the level of support expected.

Texas was the second state to step up, headed by Joe Morin with great support from his state and the Governor. Although the conference was excellent, there were complaints that too much was "state specific" to Texas, and Texas was showing small businesses why they should relocate to the lone star state. In defense of Texas and/or North Carolina, why would a state want to take the financial risk of a national conference if there wasn't some payback to the state?

Connecticut via their Connecticut Center for Advanced Technology (CCAT), led by dynamo Deb Santy has stepped up to the plate for the Fall National Conference (November 12-14, 2008 in Hartford), but the original spring conference plans by another state fell through, leaving the SBIR community with only one conference (Hartford) for 2008.

These conferences require significant lead time and there was a sense of panic because there was to be no Spring 2008 SBIR National Conference. Florida came to the rescue, headed by Lew Attardo, aided and abetted by great support from NASA, who is celebrating their 50th anniversary. I recently interviewed Lew about the conference and what could be expected.

AN INTERVIEW WITH LEW ATTARDO, SBIR CONFERENCE MANAGER

RICK: Tell me a little about the national SBIR conference, dates and who it is targeted to?

LEW ATTARDO: The dates are May 27 - 30, 2008 and we have a unique program planned for this year's National Conference in Orlando, Florida.

First, our target is of course those innovators who have a unique product, process or ideal that is either commercially viable or meets the need of one of the federal contracting agencies, such as DoD. We want them to learn about the SBIR/STTR process AND what to do after the R&D is completed.

We will have 4 information tracks:

Track I A & B will be the (2) traditional SBIR/STTR Information Sessions presented by the federal SBIR program managers.

Track II is focused on Phase III Commercialization. We will have venture capitalist, angel investors and secondary market lenders talking about what it will take to scale up from R&D to commercialization. Some very exiting topics, including how to present your venture to prospective investors and lenders, the due diligence process, advantages of a blended debt/equity deal, and information on term sheets.

Track III is our SBIR Phase II Award Winner's Showcase. We are currently accepting nominations of companies to participate in the Showcase. They must have successfully competed for Phase II awards and are now attempting to scale up their ventures. Preferably they will have a finished product and hopefully a list of prospective customers. The Showcase companies will have an opportunity to exhibit and stage 10 minute presentations for prospective investors, partners and lenders who will be attending the conference, so if you or your readers know of successful Phase II firms who may be interested in showcasing their research results or attending the conference, refer them to the conference website www.sbirflorida.org.

RICK: Can we expect robust agency support and opportunities for companies to have one-on-one meetings with the SBIR program managers and/or their staff?

LEW: As you know, our theme for this years conference is a Celebration of the 25th Anniversary of the SBIR Program and NASA's 50 Years of Space Exploration. In keeping with this theme, we are also expecting this to be the largest gathering of federal physical and bioscience grant and contract funding agencies in the history of the SBIR/STTR Program.

We have received tremendous support for this conference from the SBIR agencies, and commitments from SBIR Program Managers to be there to staff one-on-one resource tables, exhibit booths and to share their information during the Track I briefing sessions. We have some agencies that have reserved 2 one-on-one tables to keep things moving.

When registering for the conference, participants can check off that they are interested in scheduling one-on-one appointments. They will be allowed to schedule up to (3) 15 minute interviews in advance.

RICK: What are the costs of registration?

LEW: Early Bird registration is $325 and continues until 18 April. Members can receive an association members discount. Hotel accommodations at the Rosen Centre Hotel, which is where the primary the conference sessions will be convened, are guaranteed at $99/night if booked by 18 April, and can be booked via our web site or by phone.

RICK: Anything special you'd like the people to know?

LEW: Anything special??… This is Florida Rick! Everything we do is special, and we really know how to put together an extravaganza! For example:

On Wednesday morning, 28 May, we have confirmed Shana Dale, NASA Deputy Administrator for our Plenary Session. She will give the Keynote Address on NASA and future space missions. Great opportunity for us to share NASA's vision and for our participants to explore the next round of innovative products and services that will be needed to support our future space missions.

Also on Wednesday afternoon, a special NASA Panel of experts, assembled by Carl Ray, NASA's PM, will drill down and provide us with details on what they are planning, their needs, and a look at how we can contribute to future space missions. From the Constellation, our next generation of spacecraft, we will resume our next round of Manned Space Missions to the Moon, then on to Mars, future Robotics and Science missions. Very exciting stuff… all The Right Stuff!

Then on Thursday morning, Larry James, DOE's SBIR PM will convene a Symposium on Innovations in Alternative and Renewable Energy. Experts from DOE, other agencies and from outside the government will discuss what we will need to do to contribute to our nation's energy independence.

RICK: That's the last time I ask you about "anything special." Are you related to John Davis?

LEW: You want more? The weekend preceding the conference is the Memorial Day Holiday Weekend, so we decided, this is Florida so come and play! We have a very special deal for early arrivals,… an offer you can't refuse. Find another group offering $79 hotel rates that weekend in Orlando…

In addition to the Rosen Centre hotel offering $79/night weekend rates exclusively to our conference participants, they also own Shingle Creek Golf Resort, so there are special golf packages and tee times available for our weekend guests.

OKAY, the is the big one! Brought to you by NASA, co-host for this conference. Since we are Celebrating NASA's 50 Years of Space Exploration, if you can stay an extra day or two, you could have the opportunity of a lifetime.

On Saturday, 31 May, the Shuttle Discovery is scheduled to launch at 5:01 PM ET. STS-124 will be the 26th U.S. mission to the International Space Station.

No Rick,…you can't go with them, but you can watch. Kennedy Space Center is about 45 minutes away from the hotel. More details on the launch at http://www.kennedyspacecenter.com/launches/launchDetails.asp?calendarId=372.

RICK: Lew, I don't know how you pulled this off in such a record time. I see there will also be participation from the DoD, DHS, DOT and others. This should be quite a unique National SBIR Conference. Thanks Lew.

WILL THE REAL JIM GREENWOOD PLEASE STAND UP?

In an old game show named "To Tell the Truth", there were 3 contestants all claiming to be one person, and the panel would have to guess who the real person was by questioning the contestants. The real person had to always "tell the truth."

In last week's Insider, I inadvertently made mention of Jim Greenwood, president of BIO (instead of James C. Greenwood) and there was some confusion because in the land of SBIR, there is a popular and important person named Jim Greenwood, of the Greenwood Consulting Group.

I apologize for any confusion, but in this game of "To Tell the Truth", the real Jim Greenwood is the one from Greenwood Consulting, who with his wife Gail, have conducted more SBIR/STTR training classes throughout the country than anyone, and they always tell the truth.

To learn more about Gail and Jim, and their training schedules, visit their web site at http://g-jgreenwood.home.att.net

NAVY 2008 OPPORTUNITY FORUM – JUNE 2-4, CRYSTAL CITY, VA

The Navy Opportunity Forum is the premier event for serious Navy SBIR participants. Last year about 1700 people participated in this event, encompassing Navy leaders, small businesses, prime contractor representatives, equity investors, first and second tier suppliers, and fortune 500 companies.

This year NASA has joined with the Navy to present a special NASA Showcase. 19 NASA SBIR projects that participated in the NASA Glenn Pilot will be showcased at the forum.

Registration is limited, and you must qualify in order to receive an invitation to attend. Visit the Opportunity Forum web site and review registration page to see if you qualify. The web site is located at: www.navyopportunityforum.com The web site is also home to the Navy's Virtual Acquisition Showcase.

Next issue we will address your Q&A's, discuss some tools and tips for finding SBIR opportunities, and we will pass along many of your comments on reauthorization from the last Insider.

Your comments, both pro and con are most welcome. Please respond to this email if you want to be removed from the list.


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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