December 21, 2016

Dear SBIR Insider,



This is the third SBIR Insider I've written for December 2016. Fortunately I deleted the first two, since new developments brought additional perspective to the stories and how they may affect you. With the election over, we can now concentrate on the future.

Good news on two fronts: a) The government avoided a shutdown by passing a medium-short term continuing resolution (CR) to fund the government through April 28, 2017; b) Congress passed the 2017 National Defense Authorization Act (NDAA) which contained language that keeps SBIR/STTR authorized through September 30, 2022.

However, both of these issues have significant upsides and downsides (gosh, we're sounding like traditional media) that will have an effect on our SBIR/STTR and small business programs. Let's investigate.

Congress Passes CR to Keep Government Running Through April 28, 2017

I'm sure you've heard all about this in the news, but the fact is that the CR is merely a Band-Aid, and not a solution to the problem that basically requires actual agency appropriations. In short, most everything remains basically flat at FY-2016 levels. Funding for the remainder of fiscal year 2017 (after April 28) is not known nor assured.

The 114th Congress kicked the can for their appropriations responsibility to the incoming 115th which will take over January 3, 2017. The new congress, (in spite of the news media touting "America Wants Change") largely consists of reelected incumbents, who will have to adjust to the new administration and political environment. They will have to finish out the remainder of a FY-2017 budget by April 28, 2017 (or do another CR) and pass a new FY-2018 budget by September 30, 2017. (Want to place any bets??)

The real story to the SBIR community is that these fiscal uncertainties put agency comptrollers and agency program managers at odds in determining what gets funded, and for how much. Usually SBIR/STTR programs remain low on the totem pole, so perhaps we'll once again get the "short end" of the deal.

Considering the short terms of these CRs and the uncertainty of future funding, you'll see why agencies are hesitant to award contracts, let alone fund those that would extend out further than the CR would cover. They also have to deal with a flat budget at FY-2016 levels. The good news is that we've been this way before and survived. Just remain prepared and expect some delays.

SBIR/STTR Reauthorized for 5 Years

In the last issue we posed the question: "Can SBIR Reauthorization be Passed in the Waning Days of the 114th Congress?" The answer is YES! However, this is more of an extension than a reauthorization.

Once again Congress used the National Defense Authorization Act (NDAA) as the vehicle, this time to extend SBIR/STTR from September 30, 2017 to September 30, 2022. Most of the "base" SBIR/STTR program remain the same, but "pilot" programs expire September 30, 2017. These include (from 15 USC 638):

(cc) Phase Flexibility - better known as "Direct to Phase II", where a phase I award is not required;

(jj) Phase 0 Proof of Concept Partnership pilot program, including any civilian agency that was engaging in a commercialization pilot program.

(gg)(B)(7) Expiration of all pilot programs and any increased maximum award amounts declared by those pilots.

NOTE: The DoD Commercialization Readiness Program (CRP) remains active and in force until September 30, 2022.

The funding levels (allocation set aside amounts) remain at current levels which is 3.2% for SBIR and .45% for STTR, of a qualifying agency's extramural R&D budget.

The DoD's Rapid Innovation Fund (RIF) which has been awarding more than $250M in phase III funding, has now been made permanent. However, there was no authorization of appropriation (nor appropriation) so it is basically unfunded after September 30, 2017.

Another unfortunate victim of the extension will be the loss of an agency's ability to set aside up to 3% of its SBIR funding to help with improved administration, outreach, technical assistance, etc. This will affect some of the services/programs the agencies have been able to offer since this 3% agency option was enacted in the SBIR reauthorization of 2012. The 3% remains in effect until September 30, 2017.

AGENCIES PLEASE NOTE: This 3% program was for you to perform new and/or enhanced services you were not performing prior to December 31, 2011. Consequently, upon expiration of the 3%, you will be expected to do no less than you were providing in December of 2011. (See 15 USC 638 (mm)(1)(C) Although we were able to see the positive effects of this 3% program (mostly anecdotally), adequate reporting data has not been made available to this point in order to save it. We hope that will come soon so it may be reevaluated and hopefully restored. Many of us know it is needed.

So the bottom line is everything stays "as is" at least until September 30, 2017, then, if no legislative improvements are forthcoming in the new congress, the pilot programs will expire BUT the SBIR/STTR programs will continue.

The Small Business Technology Council (SBTC) and others are looking into ways and opportunities to offer improvements to the programs. They will work closely with the new congress and will solicit help from the SBIR community. We'll talk more about that in an upcoming edition. Visit for their details.

NDAA and DoD SBIR Outlook

If you're not interested in DoD SBIR, you can skip this section but it may be important to those of you who are in the world of DoD.

In the small business mindset, the DoD SBIR program differs from the civilian agencies in that the pot of gold at the end of the rainbow is actually "insertion," or selling your SBIR outcome to the service/warfighter. In DoD speak, an SBIR product or service that benefits the warfighter (and is purchased by the service) is synonymous to "commercialization".

Therefore when we look at the National Defense Authorization Act (NDAA) with DoD SBIR glasses, there's much more to the 3,000+ pages than just the few lines of SBIR reauthorization language. What's the health of the DoD budget and buying power going to look like?

Sorry to whip a dead horse, but once again we have a conflict between and Authorization and an Appropriation. The NDAA (amongst other things) is a giant Authorization. Intent of legislation does not always translate to reality of implementation. Stick with me for a little bit and you'll understand the problem.

In an oversimplification, an Authorization is the congressional mechanism to authorize a program and budget for that program, but provides no actual funds. It does create an authorization of an Appropriation whereby a separate appropriation bill is the vehicle that provides the funding. You can authorize $5m for a particular program, but if the appropriation bill is only for $1m, all you get is the $1m.

In the case of the new NDAA, budgets in DoD spending are significantly increased (for 2017 levels), BUT under the current CR (which is really a continuing appropriation at 2016 levels), the numbers are actually many billions of dollars lower than the NDAA allows for FY-2017. So expect lower spending and somewhat inadequate funding for new programs and purchases (until or unless congress passes real FY-2017 appropriations, which in lieu of a new CR is needed by April 28, 2017).

As a result of the current CR, the pentagon has identified more than 150 programs that will be disrupted by the flat funding. Congressional fixes may be made for only a few. Some R&D efforts have been diminished, while some bean counters estimate less than $16B rather than the $24B budgeted will be awarded. The effect from these CRs is a budget frozen for 7 months at last year's level.

Further, there are significant other changes in the DoD acquisition community. The long standing Office of the Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L), (artfully managed by Frank Kendall, who has been a good supporter of SBIR) will be shutdown. It will be replaced by two new entities: a) Office of the Undersecretary of Defense for Research and Engineering; b) Office of the Undersecretary of Defense for Acquisition and Sustainment.

Although we don't know what changes may be expected for the acquisition community, Senator John McCain (R-AZ) stated that this change was necessary because AT&L had grown so large, and the work they did was focusing too much on compliance, which was at the expense of innovation. The change is to be made by February of 2018.

FYI, the NDAA was passed overwhelmingly, 375 - 34 in the house and 92 - 7 in the Senate.

SBIR Person of the Year 2016 - SBA Administrator Maria Contreras-Sweet!

In context of the many programs and services the SBA manages for small businesses, SBIR is so small that it is barely a blip on the SBA radar screen. Over the years most SBA Administrators have given polite but measured support for the program. SBIR advocates would often have to fight to try and get the Administrator's attention to insure SBIR got its fair share of attention and resources from SBA in order for them to lead the program.

In April of 2014 that all changed, as Maria Contreras-Sweet was appointed by President Barack Obama (and confirmed by the Senate) to become the 24th SBA Administrator, and she wasted no time getting familiar with the SBA's many programs, including SBIR.

Struggling with lack of resources due in part to sequestration, Contreras-Sweet found a way to make sure that some additional funding went to supporting the SBIR program.

What clearly set Administrator Contreras-Sweet apart from previous administrators is that she became a big time SBIR emissary, the likes of which had not been seen before. While touring the country speaking out for small business, she usually found a way to bring SBIR into the mix, in an interesting way and to diverse audiences.

Ms. Contreras-Sweet would also attend SBIR events, not just the big ones, but smaller ones sponsored by the smaller agencies. Her presence meant so much to SBIR companies displaying their STEM and educational wares at ED Games Day in Washington, D.C. She spent considerable time visiting the small SBIR businesses, viewing demos and listening to the stories of these talented SBIR women game developers. She also complimented and encouraged the SBIR program mangers there such as Ed Metz (Dept of Ed) and Charles Cleeland (USDA).

In non-SBIR settings Ms. Contreras-Sweet would often highlight SBIR as "One of the five great Under-the-Radar SBA offerings." It could be on network or cable TV, a Trade Export Conference in Tacoma, WA, a Global Entrepreneurship Conference at MIT, or even a presentation in Washington DC to the Council on Foreign Relations! SBIR was there.

Contreras-Sweet also knew her way around Capitol Hill and the politicos she had to deal with in the committees. Even there, she would often refer to and promote the SBIR program and its success. That's just scratching the surface.

For her work, passion, dedication, and promotion of the SBIR/STTR programs, Maria Contreras-Sweet is the SBIR Person of the Year for 2016.

Story and pictures at

New SBIR Technology Transition Pilot Opportunity

We have just been made aware of a program for SBIR winners (from any agency), and it's from good people we know and trust from NAVAIR, a Navy Systems Command (SYSCOM). Thought you might like to know about it.

The program is SBIR Technology Transition Pilot (STTP) and is only for SBIR awardees (from any agency, even non-DoD). It centers around the needs of NAVAIR's Fleet Readiness Centers (FRC). The mission of the FRCs (depots) is to produce quality airframes, engines, components, and support equipment, and to keep fleet aircraft operational.

The STTP objective is to find SBIR solutions to fill high-priority technology gaps and save operation and support costs. Awardees for STTP will receive funding to transition innovative solutions to FRCs. NAVAIR is seeking mature technologies that require minimal development prior to final development, testing, evaluation, and integration into the FRCís.

NAVAIR will be releasing a Request for Information (RFI) via FEDBIZOPS in January 2017. It is anticipated that the RFI will hit the streets around Jan 9, open for submissions Jan 16, and close Feb 10, 2017.

Complete details will be in the RFI. This is not a well known program, so if you have a quality solution to one of their needs, this could be a real opportunity for you!


We had a lot more to tell you about, and we wanted to do an SBIR year in review but we ran a long in this issue (surprise) so we'll have to save some for later. We received good feedback on the Q&A's and I'll include those in the next issue.

We plan on having the new SBIR Gateway (Zyn) web site ( functional right after the holiday. Your votes for what you wanted us to keep include simple Solicitation Calendar, the quick link page to agency web sites, the SBIR Insider, and notices of opening solicitations and opportunities. As we told you earlier, I'm not wanting to do the solicitation topic database searches anymore UNLESS you tell me the newer sites are not serving you. Then I'd give it a second look. But some of these new tools blow me away, much better than my old "Mister Rogers" (get you into the neighborhood) search engine.

Here's hoping you and your family have a great holiday (be it Christmas, Chanukah, Kwanzaa, and my holiday, Tsimis). Also wishing you a happy, healthy and prosperous new year!



Rick Shindell
SBIR Insider
Zyn Systems

40 Alderwood Dr.
Sequim, WA 98382
[email protected]

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