SBIR Gateway

SBIR Insider Newsletter - Update
February 23, 2010 Edition

Dear SBIR Gateway Insider, It's late Monday night and I have some news you need to be made aware of right now, so I'm pulling off another "all-nighter" to inform you of some outrageous actions happening in the House, that threaten your SBIR program.

Swift action on your part is necessary (contacting the congressionals listed below as well as your representative) if you want to make an impact and not let your SBIR program get taken over by non-small business interests.

In this issue:

Altmire Attempts To Get His Radical House SBIR Reauth Bill Inserted In Jobs Bill

In a bid to negate the Senate's SBIR reauthorization compromise efforts, Congressman Jason Altmire (D-PA), the small business water boy for Nydia Velazquez (D-NY), Chair of the House Small Business Committee, is trying to get support to insert the House's radical SBIR reauthorization bill (H.R. 2965: SBIR/STTR Reauthorization Act of 2009) into a "must pass" jobs bill.

As previously reported, the Senate has worked hard on compromise issues with the House's radical bill, sending the House even more concessions back in October of 2009, and the House didn't even offer the courtesy of a response. No dialog, no nothing!

Radical features of Altmire & Velazquez's House SBIR bill includes: virtually unlimited majority ownership and control of small businesses by VC syndicates; no limitations on the overall percentage of award dollars made to these larger entities; elimination of mandatory phase I (allows direct to phase II); allowing and encouraging "Jumbo Awards", award amounts with no ceilings, only loose guidelines not requiring justification (makes possible $10B, $20B or more awards,); allowing earmarking of SBIR award dollars; only 2 year reauthorization (contributes to continued destabilization of the SBIR program but acts as a fund raising mechanism for incumbent house members, bipartisan at that); no allowance to raise the SBIR allocation (Senate raises from 2.5% to 3.5% over 10 years). There are many additional issues beyond the scope of this article.

Altmire feels that he can score a touchdown for his large investor benefactors by getting "friends" in the House to write to Pelosi in support of attaching the House version of the SBIR bill (as is) to the Jobs bill. The Jobs bill being so important that the Senate might not even attempt to remove something as "small potatoes" as SBIR run amok.

The Altmire Quagmire

What do you call someone who lies, distorts, and makes decisions in their own best interest rather than their constituents? In high ranking government, they call them "The Honorable….."

In his Dear Colleague letter (see ), "The Honorable" Jason Altmire gives the impression along with the semi-bogus support letter he passed along to his colleagues, that his legislation is a strong, bipartisan bill supported by many industry groups and stakeholders, 99 in fact.

You may ask, how can this be a semi-bogus Altmire Quagmire? Easy, SBIR stands for Small Business Innovation Research, and of the 99 signatories on the letter, only one is from a small business!! There is one other from a small business organization, but that's in question as to its authenticity.

Lets look at the makeup of the rest of the 99 (some are in more than 1 category): 60 are from medical / bio facilities & universities, 89 from universities and/or university based societies. Of course our friends from BIO are there too, why else would we have 60% of the signers come from the medical/biotech field?

Doesn't this correlate to the fact that most of the SBIR hearings the House Small Biz committee held (under the direction of "The Honorable" Nydia Velazquez), had a majority of BIO/medical witnesses? Small businesses against the Altmire and Velazquez VC language were not invited or allowed to testify.

Now let's look at the universities. Why would we have 90% of the signers be university or university components? How about the fact that the Senate's bill raises the 2.5% SBIR allocation to 3.5% while the House bill doesn't? Every time the subject of raising the allocation is even thought about, there is a tremendous, well organized response by the universities.

The Altmire Quagmire continues by virtue that most of the 435 members of the House have no idea that a key statement in the letter to Pelosi is untrue. That statement reads:

"The Enhancing Small Business Research and Innovation Act has passed both the House and Senate with overwhelming bipartisan support in July 2009, making it a candidate with appeal in both houses and both parties."

Hey Jason, if you really believe those words: "making it a candidate with appeal in both houses and both parties" , why have you, Velazquez, Pelosi et al., refused to work with the Senate since October 2009, to try and reach a compromise to pass the SBIR reauthorization?

You admit the bills were passed in July of 2009, and yet we still have nothing? Do you deny that the Senate sent the House a version back in October of 2009 containing additional compromises for your cause? But you, Velazquez, Pelosi (and let's not forget the House S&T folks under Representative David Wu (D-OR)) never bothered to respond or counter offer?

More On The Altmire Quagmire

"The Honorable" Jason Altmire is correct in believing that SBIR can, and does create jobs, yet he and his "Honorable" cronies refused to take action and help pass the SBIR reauthorization. Perhaps he and his "honorables" were too busy making 2009 the best year the Wall street community has ever seen, while many of us on Main street were (and are) hurting badly.

Jason et al., could have helped in getting SBIR inserted into the DoD authorization, but instead he, Velazquez and some of their other "honorables" wrote a letter and gave testimony to try and strip the SBIR out of the DoD authorization. You guys are really "pro jobs!"

The House & Senate could (and should) be conferencing on the SBIR bill right now, and they could reach a point where a bill could be passed and signed by the president in a matter of days. This creates jobs, NOW!

Your Turn To Be A Hero And Write A Letter

Last year at the Navy Opportunity Forum, freshman congressman Glenn Nye (D-VA) gave a brief presentation and touched on the VC issue. He assumed from his work with the House Small Business Committee that the majority of the SBIR community were in favor of the new VC proposals in the House bill. Some people piped up and Nye asked for a quick show of hands, and he was shocked to see how the crowd was overwhelmingly against the House VC portion. When asked about it later, he muttered something about the poll being unscientific.

This election is going to be a barn burner for most. Your writing may never have a better opportunity for impact. If you disagree with the letter Altmire is circulating, you need to send a firm response to the House and let them know your thoughts. Be brief, polite but firm.

If it were me, I would tell them I'm very upset that the House has made little to no attempt to work with the Senate to reach a reasonable compromise for SBIR reauthorization. Let them know the importance of the program to you, what it means for growing your business, adding jobs, retaining jobs, and stimulating the economy. Tell them you expect them to get the job done!

Although there may be more important criteria to your supporting a candidate than SBIR, let them know that their actions will affect your support of them and/or their party, and you will talk with neighbors and friends about their responsiveness (or lack thereof) to you and America's small businesses.

To offset the Altmire Quagmire, I would email your thoughts to the following:

For Altmire: [email protected]
[email protected]
[email protected]

Also, MOST IMPORTANT, call or write your congressman!

Time is of the essence, so if your interested please do this now.

If you wish, copy your email to me at [email protected]

Heroes In The House

Back in July of 2009, there was a group in the House that were not subject to the short-sighted view of the "The Honorables." Led by Congressman Ed Markey (D-MA), 26 congressionals, in a bipartisan effort sent a letter to the Senate Committee on Small Business chair, Mary Landrieu encouraging her and her committee to support the Senate's language for size standards and award amounts. The letter can be viewed at:

Also a salute to the work of both the House & Senate Armed Services Committees in standing up for what they believed in supporting the SBIR program within the DoD. This move was a major help in keeping stability in the program until a full and proper reauthorization can be agreed to (see ).

The SBIR Brand, National Academies & Dr. Charles Wessner

The House set out to, and admitted their intent to "rebrand" the SBIR program. That makes sense, let's mess up one of the few government programs that works well, as it was intended.

Studies were done on the program by various groups, but the most comprehensive to date was by the National Research Council of the National Academies, under the direction of Dr. Charles Wessner. Dr. Wessner and his study has been "selectively quoted" in ways to mislead audiences as to the overall results of the study. The SBIR Insider has always turned to Dr. Wessner's "Summary Of Key Findings." This leading paragraph of the 2008 summary states: "The core finding of the study is that the SBIR program is sound in concept and effective in practice. It can also be improved. Currently, the program is delivering results that meet most of the congressional objectives."

Several of the Senate's compromises to the House addressed areas of concern stated in the above report, but those compromises fell on deaf ears in the house.

Dr. Wessner was recently interviewed in the Federal Technology Watch Weekly Report, published February 22, 2010. In this non-SBIR specific interview Dr. Wessner was asked about his views on various S&T issues. When asked about evaluating federal programs, Dr. Wessner offered the following comment:

"Another element of our work focuses on early-stage finance, and we've completed a massive study of the Small Business Innovation Research (SBIR) program, which has shown that the program is sound in concept and effective in operation. We've been surprised how successful the program is, and there's a growing recognition of the need for federal help to cross the 'Valley of Death,' the gap between a promising idea and the proof of principle and prototype. SBIR handles that [role] and it's being emulated by countries all around the world. From ones like Finland and Sweden to places like Singapore and Shanghai, which is not a country but is almost the size of a country! India has adopted SBIR for its biotech sector, and other countries among the former East European bloc are also going to be adopting it."

Isn't it wonderful that the USA's SBIR program can only be run a few months at a time because our House insists on short term Continuing Resolutions, and desire only a short term reauthorization (2 years, while 8 years has been the norm). Is it any wonder that we're going to have quite a turnover later this year?

The clock is telling me it is 4:30a so I apologize if I'm not making sense. But then again, either is congress, and they get more sleep than do I.

Thanks again for your time.



Rick Shindell
SBIR Gateway
Zyn Systems
40 Alderwood Dr.
Sequim, WA 98382
[email protected]

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