SBIR Insider Update - December 29, 2017
Dear SBIR Insider,
Lot of items going on in the world of SBIR that you should be aware of, and I apologize for letting you down in 2017. A combination of health issues, sale of zyn.com, and other commitments have kept me away from the SBIR Insider desk. That is changing as of today.
Although we occasionally (sometimes more than occasionally) touch on political issues related to SBIR/STTR legislation, the SBIR Insider has no intent, mission, nor interest in trying to influence your political preferences. That should be based on what you prefer and what makes sense to you.
Lets briefly look at the closeout of 2017 and what's on the agenda for 2018.
SBIR Legislative Efforts in 2017 (Improvements or "Deprovements")
At the end of the 114th Congress (December23, 2016), SBIR/STTR was reauthorized for 5 years, extending the program through September 30, 2022. This happened a year earlier than the cutoff date of September 30, 2017. The brilliance of this (I'm not being facetious) was to deal with the devil you know rather than the one you don't (meaning the upcoming 115th congress).
In order to accomplish reauthorization (a huge undertaking in any congress) a quick and clean SBIR reauthorization was accomplished, allowing the base program to continue through Sept 30, 2022, but existing pilot programs from the 2012 reauthorization were to expire, or had to be reauthorized by Sept 30, 2017 by the new 115th congress (2017 - 2018). Reauthorization of those pilots didn't happen and the pilot programs were terminated as of October 1, 2017. These expired pilots included:
· Phase Flexibility - better known as "Direct to Phase II", where a phase I award is not required to go to phase II.
· Phase 0 Proof of Concept Partnership pilot program, including any civilian agency that was engaging in a commercialization pilot program.
· Expiration of all pilot programs and any increased maximum award amounts declared by those pilots.
Another lost victim was the 3% funding from the SBIR award pool to the agencies, known as the SBIR Administration Funding Pilot Program (AFPP). The AFPP allowed some of the agencies to provide important additional services to the small businesses. Items from narrowing the "Valley of Death" (speeding up the acquisition process), to improving outreach and assistance (and a lot in between). There is hope to restore this program, and we'll discuss this in depth in our next edition.
Due to pilot program shutdowns (and some didn't view all of them as losses), SBIR "improvement" bills of one kind or another were offered in the 115th congress. A total of 11 bills (9 from the House and 2 from the Senate) with some type of SBIR involvement were offered this year. At this point only the National Defense Authorization Act (NDAA) for Fiscal Year 2018 has passed both houses and become law.
The 2018 NDAA (Public Law No: 115-91) is a humongus piece of legislation that includes many areas of interest to small business. The portions dealing directly with SBIR, basically improves the opportunity for a DoD SBIR/STTR Phase I or Phase II winner to get to Phase III funding for a promising new technology of need to the DoD. The Small Business Technology Council (SBTC) has a nice synopsis of this on their website at http://sbtc.org/2018-ndaa-includes-positive-sbirsttr-provisions/
The House passed their bill H.R.2763 (The Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017). Along with some good provisions it had an ominous provision to greatly expand a pilot program, that in essence takes away a significant amount of SBIR/STTR award dollars from small businesses and gives it directly to universities, with no benefit to small businesses or the SBIR program. The SBTC with more than 100 small businesses signing on, sent a letter in opposition of this bill to the House Small Business Committee.
The Senate Committee on Small Business and Entrepreneurship, not pleased with the House's bill, created their own bill, S.1961 (SBIR and STTR Oversight and Pilot Program Extension Act of 2017). Although this bill had some good things and simple plain language to extend the pilot programs for a year, it also had provisions to increase state outreach and SBIR assistance to the states, especially the rural underserved states. It also restored the 3% admin money to the agencies and made a percentage of those funds available to the SBA to cover their SBIR/STTR outreach and expansion programs. There has been some objection to this bill in the Senate, and to date it has not been voted on.
We're getting "impressions" that pressure is being exerted in the Senate to accept the House bill, or for the Senate to offer a new/modified bill with the controversial House language on giving SBIR dollars to universities. We'll have coverage of that in the next issue.
Effect of Congressional Actions / Inactions on SBIR
We're going through it again, life in the Continuing Resolution (CR) lane. The lack of our congress to pass a budget, which is one of the top tasks they have, leaves our agencies with uncertain funding and hard choices as to who/what gets that funding. Under these circumstances, small businesses (and the SBIR program) usually get the "short end." This is especially true for the DoD who has budget issues even without "CRdom"
Some are telling us "don't worry, no problem.." others say "they are full of hooey, you better be prepared!" The Navy recently stated that it has wasted more than $4 billion due to CRs since 2011.
The bottom line is that we don't know the effect this will have on SBIR/STTR awards, including those currently being offered, evaluated, and even those being implemented. The current CR runs out January 19, 2018 and its unknown how our two parties will finish the remainder of the fiscal year.
Not to go unnoticed, we are only a few months away from our earliest primary elections for congress. A few states start as early as March/April, with many in May/June. Regardless of which side of the aisle you are on, there is great intrigue in the primaries. Will different factions of the parties rise up to challenge incumbents? Whatever the case, you'll want the candidate of your choice to be aware of the importance of small business, and the SBIR program. All politics "starts" local and a good deal remain local, but don't discount the power of getting known by your DC staffers as well. Get to know who your congressman is, and reach out to their staffers, especially if you have SBIR success to share. Likewise for your Senators.
We don't do endorsements, but the SBTC is a great organization to "consider" working with. They are the largest (and one of the few) SBIR dedicated SBIR advocacy groups. Check them out at http://sbtc.org and see what you think.
SBIR Person of the Year 2017 - Senator Jeanne Shaheen
We all know the SBIR/STTR program is very important and substantive to our country, but that is not well known to new people on the Hill. Consequently SBIR often receives the "short shrift" after major elections when a new administration, congress, and agency leadership take the reins of government.
Senator Jeanne Shaheen (D-NH), a long time SBIR supporter, immediately went to work to insure that new members of the Senate, as well as nominees for related agency leadership, understood that SBIR is recognized as an essential and valuable program for innovative small businesses and the country.
As ranking member of the Senate Committee on Small Business and Entrepreneurship (SBE), and a member of the Senate Armed Services Committee (SASC), Shaheen worked tirelessly throughout the year in support of SBIR and small business.
This included efforts by Shaheen to educate and show support for SBIR to new members of the administration in various Senate hearings such as nomination hearings for Linda McMahon to become Administrator of SBA, for Mick Mulvaney to become Director of the Office of Management and Budget, and also with Ellen Lord, Undersecretary of Defense for Acquisition, on how the SBIR program plays a vital role getting innovation to our war fighters.
Senator Shaheen has been an enthusiastic supporter of SBIR ever since she joined the Senate SBE in January of 2009. As a former governor of a rural state, much was expected, and much was delivered. Of course it helps if you have a good staff, and Shaheen has an excellent staff that includes Ms. Kevin Wheeler, SBIR Person of the Year in 2008.
Although Shaheen is a committed democrat, her experience and ability to work across the aisle has made her an effective presence regardless of which party was in power. As ranking member of the SBE, she was an important voice in helping to get SBIR reauthorization last year, working with the former SBE Chair David Vitter (R-LA). She continues as ranking member of the committee and works closely with current SBE Chair James Risch (R-ID). Shaheen is also a valued member of the Senate Armed Services Committee, which is a very important committee with SBIR oversight.
For all her hard work, dedication, promotion and support of the SBIR/STTR programs, Senator Jeanne Shaheen is the SBIR Person of the Year for 2017.
Story and videos at http://zynsys.com/sbir/articles/17poy.htm
Big Changes at DoD
We are going to see big changes at the DoD in response to last year's NDAA-2017 and this year's NDAA-2018.
The long standing Office of the Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L), 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.
Senator John McCain (R-AZ), chair of the Senate Armed Services Committee 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.
The current Under Secretary of Defense for AT&L is Ellen Lord, who will become the new Under Secretary of Defense for Acquisition and Sustainment. This is unsettling news for some DoD observers who believe that Ms. Lord's former position as CEO of Textron Systems, speak volumes as to her views of SBIR/STTR. Unlike other DoD prime contractors such as Boeing and Lockheed, Textron, (a global aerospace, defense, security, and advanced technologies industrial conglomerate), has shown very little interest or support to SBIR companies or the SBIR program.
In a recent Senate Armed Services hearing, it was clear that Ms. Lord was very high on the "Defense Innovation Unit Experimental" (DIUx), and suggested that SBIR had funding problems dealing with DIUx, inferring that some legislation should be changed or eliminated. Lord stated at the hearing that DOD wants to take the DIUx model and spread it across the Pentagon as the department looks to cut down on procurement times, save money and boost innovation.
We are not knocking the DIUx program and it appears very interesting, but not as a replacement to, or a funding source from SBIR. You can find out more about it at https://www.diux.mil/
You can see some brief but important video excerpts of this hearing at our experimental website of http://SBIR.TV or if you can't get to that you can try the mirror site at http://zynsys.com/sbir/tv Be sure to watch the top video with Senator Shaheen questioning Ms. Lord. Also Shaheen questions Lord about the new cybersecurity issues that small businesses face dealing with the government in 2018 (you'll see why Senator Shaheen is the SBIR Person of the Year, and this is but one of many hearings she represented SBIR and small businesses this year).
Other Q&A in the videos are Senator Joe Donnelly on the Role of Defense Labs Working with Private Sector; Senator Thom Tillis on Acquisition, Requirements Reform & Improving the Speed of Innovation; Senator Elizabeth Warren on How Will the Split of AT&L Speed up Acquisition of New Technologies.
Please note that our SBIR Insider email address has changed to [email protected] The SBIR Gateway is being rebuilt (after a long hiatus). It should be ready for prime time soon (as an adjunct to, not replacement of other SBIR sites).
Next month we plan on telling you about some great new tools on the net to help you find opportunities for your small business.
Wishing you a happy and healthy New Year!
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Sequim, WA 98382
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