SBIR Gateway

SBIR Insider Newsletter
Special Edition

December 4, 2011



Dear SBIR Insider,

There is something important going on right now that we believe you should consider acting on. Although many of you write to us asking what you should do, we refrain from making suggestions because our job is to help you be well informed about the SBIR landscape so you can make your own decisions as to what you feel is appropriate.

We are going to make an exception in this issue, and tell you what we would do if in your shoes, then explain why. This has to happen before close of business Tuesday, December 6, 2011.

Brief Background

The Senate and House have now passed their own versions of the huge National Defense Authorization Act for Fiscal Year 2012 (NDAA).

Senate version is at: http://www.gpo.gov/fdsys/pkg/BILLS-112s1867es/pdf/BILLS-112s1867es.pdf
House version is at: http://www.gpo.gov/fdsys/pkg/BILLS-112hr1540eh/pdf/BILLS-112hr1540eh.pdf

Included in the Senate version of NDAA is the complete reauthorization of SBIR/STTR/CPP, from the language of the Senate's earlier SBIR compromise bill S.493. Amongst other improvements discussed many times (see past SBIR Insiders at www.zyn.com/sbir/insider ) this extends the program through September 30, 2018.

The Senate & House will meet this week in what's known as "conference" to work out the differences in the two NDAA bills. The House is more than squeamish about including the Senate's SBIR language in the NDAA, and certain powers that be in the House are working to strike the SBIR language as we speak. They will most certainly accomplish this unless we, as individuals and collectively as a community of businesses try to intervene.

What's Being Done Right Now

The Small Business Technology Council (SBTC) is rallying its members to sign on to a letter they have composed for the House & Senate leadership, urging them to keep the SBIR language in the NDAA (full text of the letter at the end of this article and at www.zyn.com/sbir/insider/SBIR_Reauthorization_Letter_to_Leadership_12-2011.pdf ).

What You Can Do

This is your opportunity to be a strong voice and sign on to this letter. You do NOT have to be a member of SBTC, nor is anyone asking you for funds. Here's all you need to do:

Send an email to alec@sbtc.org with your name, your company name, and your company address/location.

Tell SBTC it is to be used only in support of their letter to the House & Senate Leadership (as shown in the 12-04-11 Issue of the SBIR Insider) concerning the adoption of the Senate's SBIR reauthorization language (Division E–SBIR and STTR Reauthorization) in the Senate's version of the NDAA (S. 1867).

Your email must be received by Alec at SBTC by close of business Tuesday, December 6, 2011. Feel free to copy us on the email (rick@zyn.com) if you'd like.

Why SBTC?

As you know, we cover most of the mainstream SBIR support efforts from various groups, and this action has nothing to do with joining or funding any organization.

The Small Business Technology Council (SBTC) is the oldest and most established voice dedicated to SBIR. Their executive director, Jere Glover (one of the SBIR founders) is the best known and most respected SBIR advocate on the Hill, and he is leading this effort to allow all SBIR supporters to sign on to this letter.

This does not diminish the other organizations trying to do their part, but your support on this letter is very important.

The Inside Skinny

Powerful special interests as well as the House S&T and Small Biz committees are pressing to delete this SBIR language from the NDAA. S&T and Small Biz contend that Armed Services lack jurisdiction over SBIR while others contend that SBIR is not germane to the bill. Non-germane amendments to a bill can kill the entire bill. Some House insiders are privately saying SBIR will never stay in the NDAA.

Germaneness is in the eyes of the beholder. How germane to SBIR was the amendment to S.990 (Small Business Additional Temporary Extension Act of 2011) that replaced SBIR with PATRIOT Sunsets Extension Act of 2011, or putting the IRS 1099 statute into last year's health care bill? Of course they repealed the 1099 clause this year because of overwhelming opposition (and lobbying) against it.

As for jurisdiction, more than 50% of the total SBIR program is DoD, and it should be noted that Armed Service Committee leaders in both House & Senate extended the DoD's SBIR program for 1 year in the 2010 NDAA when the House's inept S&T and Small Biz committees struggled for a series of several CRs, extending from 1 month to 3 months. House S&T and small biz not only gave short shrift to the DoD (which forced the Armed Services to act), but to the entire SBIR program.

With the Senate's SBIR language now being included in the NDAA, even BIO has come out in favor! (see http://www.bio.org/media/press-release/bio-praises-senate-passage-sbir-reauthorization ). With BIO on the side of passage, opposition is mainly sour grapes on the part of Graves & Velazquez, and a few on the S&T committee being driven by part of the university community.

The House leadership is likely to Support Graves & Velazquez to try and remove SBIR from the NDAA, and that’s why it is hoped that a letter with many small business signatures will create an environment for the leadership to support SBIR inclusion.

I can't guarantee the letter will work, but it's up to you to try. Senators Landrieu, Snowe, Levin and others did their part. Will you? Will your signature provide the impetus to HASC chair Buck McKeon (R-CA) and ranking member Adam Smith (D-WA) to support the Senate's SBIR language? With a name like Buck, you wouldn't think he'll be shy. Buck has been through this before when in the last congress, as ranking member he saw (then chair) Ike Skelton (D-MO) stand up to his party's leadership to do the right thing for SBIR in the 2010 NDAA (extending DoD SBIR for 1 year). Buck has a much bigger SBIR contingent than did Skelton.

Where's NIST?

The release date of on or about November 3 for NIST's SBIR solicitation has come and gone, but we hear that the solicitation is still in the works. Lots of legal issues plague the agencies on SBIR, and it doesn't help that the program is set to expire in a couple of weeks. I believe the NIST solicitation will be released soon. We'll let you know on our SBIR Gateway www.zyn.com/sbir

Text From SBTC Letter To House &Amp; Senate Leaders

Dear Leader Reid, Leader McConnell, Speaker Boehner and Leader Pelosi:

We write today to express our strong support for the reauthorization of two programs critical to the nation’s small business: the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs. As you may know, the most recent short-term extension of the SBIR program is set to expire on December 16th.

We understand there have been many good faith efforts to reach final legislation and appreciate the ongoing negotiations to reconcile the House and Senate bills. However, after 14 consecutive temporary extensions, it is now time to get a long-term reauthorization of these key, job-creating programs that will provide a vital economic stimulus to jump start the commercialization of new products American products and technologies.

To that end, Senators Mary Landrieu and Olympia Snowe filed the Senate SBIR legislation (S. 493) as a bipartisan floor amendment (S. Amdt. 1115) to the National Defense Authorization Act (NDAA) for Fiscal Year 2012 (S. 1867). This amendment, which was accepted by voice vote on the Senate floor, represents the best pathway by which the SBIR and STTR programs can be reauthorized this year.

We, the undersigned companies, strongly support the Landrieu-Snowe language. We therefore urge you to include in the final version of NDAA a workable, long-term reauthorization of the SBIR and STTR programs that closely tracks this language. The Senate’s SBIR Reauthorization bill is supported by both the small business and venture capital communities, including the National Small Business Association, National Federation of Independent Business, the U.S. Chamber of Commerce, the Biotechnology Industry Organization (BIO), and National Venture Capital Association.

We specifically oppose the addition of controversial provisions from the House version of SBIR reauthorization (H.R. 1425). For example, Section 505 of the House bill would eliminate the competitive, merit-based nature of the program by placing an arbitrary cap on the number of awards that can be given to the strongest SBIR participants. This runs counter to the goals and missions of the SBIR program, and would lead government agencies to invest in "second best" technology. We also oppose Section 105 of the House bill, which would eliminate the critical "Phase I" of the SBIR funding process. Since its inception in 1982, the SBIR program has utilized a three-phase process, under which no technology is given significant federal funding before feasibility is proven in an independent, peer-review process. Section 105 of the House bill would compromise this basic protection of the tax payer dollar. Finally, we oppose increasing the participation of firms that are majority-owned by venture capital interests beyond the parameters established in the Senate bill.

The SBIR program was created to increase the participation of small, high technology firms in federal research and development efforts. The program is widely recognized as having met these objectives and encouraged entrepreneurs to innovate and grow the US economy. Since the creation of the program, recipients of SBIR and STTR awards have provided small firms with $28 billion, and these firms have produced more than 85,000 patents, generating millions of well-paying jobs across all 50 states – as well as playing a key role in keeping our nation at the forefront of defense technology and scientific innovation.

In conclusion, we hope you will work with your colleagues this month to achieve final SBIR and STTR legislation that can be signed into law.

Sincerely,

Closing

Even if the letter fails, your efforts will add strength for additional bargaining power the Senate will have with the House on SBIR. NDAA is not the only issue on the congressional plate, as we have the expiration of the government wide CR on December 16. The House was scheduled to adjourn for the year on December 9, but now they reluctantly decided to move that date up to December 16 but perhaps longer.

As for other SBIR efforts, the House small biz & S&T committees have been insisting on their way or the highway. They also like the idea of 99% / 1%. They want 99% from their bill but are willing to give 1% to the Senate's.

Once the SBIR issues settle down, I hope to be able to get back to once a month or so with the SBIR Insider. I regret taking this much of 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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