SBIR Gateway

SBIR Insider Update
Update on SBIR Reauthorization

May 19, 2008 Edition

Dear SBIR Insider,

All is not quiet on the SBIR front, and the focus has now shifted from the House of Representatives to the Senate. Many insiders believe the Senate will give the SBIR reauthorization more balanced consideration.

I had a few people suggest that I was a little too severe in my comments about the H.R. 5819 vote in the House. Perhaps that criticism is correct, and I was too short sighted to realize that the House found it too confusing and time consuming to listen to more than one side of an issue.

The process of the House's SBIR Reauthorization was every bit the three ring circus described in our last Insider, and was nothing short of an outrage. Rather than burden you with more details, I am creating a new video web site, that will show those of you who are interested, how ridiculous this process was. The site will open later this week.

For an independent informed view, visit D&B's All Business web site and read Keith Girard's article, Velázquez Champions VC Firms at Small Business Expense Also note the readers' comments at the end of his article.

The Senate Committee on Small Business & Entrepreneurship (SBE), under the leadership of its chair, John Kerry, has been going over the House's bill, as well as looking at the SBE's previous SBIR hearings in order to try and find areas of common ground as well as methods for reasonable compromise.

The most contentious issues are based around the changing of small business size standards to allow non-small business entities to have major access to SBIR funding, and to triple the award guidelines as well as add loopholes to greatly surpass the tripled award amounts. Even the biggest supporters of this change admit it will result in fewer awards. Opponents estimate that it will reduce the number of awards by more than 50%.

Due to the leadership in the House supporting H.R. 5819, and the lopsided vote that ensued, the Senate faces a difficult task to balance this reauthorization. The vote in the House was:

368 Ayes (219 dem - 149 rep)
43 Nays (5 dem - 38 rep)
20 No Vote

There are many changes in the House bill, some very welcome. A thumbnail of the changes include:

Contentious Items
* Two year extension authorizing both SBIR and STTR through FY-2010
* The VC issue, changes in size standards allowing VC ownership and control
* Raise in award levels to $300k / $2.2m (can exceed these levels as desired)
* Allow direct Phase II awards (both SBIR and STTR)
* Allow Consecutive Phase II Awards
* SBIR cap funding remains at 2.5%

Welcomed Items
* Increase in the number of topics
* Shorter times from evaluation to awards
* Better unsuccessful proposal debriefing methods
* Funding for Commercialization programs; Authorization of $27.5m for agencies
* Movement to increase "fast track awards"
* Restoration of the FAST outreach program (can be individual states or regions) - maximum $250k matching awards funded by SBA @ $10m.
* Raise commercialization assistance $4k to $5k for phase I, and not to exceed $8k for phase II
* Opt-out clause for companies that want to use their own commercialization assistance (capped at $2.5k)
* Comptroller General audit of how agencies calculate their extramural research budgets.
* Creation of an SBIR advisory board
* Initiatives to increase small business awardees participation with Primes, large businesses and VCs and business incubators
* Prohibition of awards to aliens unlawfully present in the United States
* Minority institution pilot program
* Interagency Policy Committee
* Permit crossover between SBIR and STTR awards

* Include energy related and rare disease topics
* Emphasis on Nanotechnology-related research topics
* Priority to increase awards to small businesses in rural areas
* Priority for small businesses in areas that have lost a major source of employment
* Priority to veteran owned small businesses
* Preference to small businesses that are making significant contributions towards energy efficiency, including reduction of their carbon footprint

Other Items
* Waiver of minimum work requirement (at agency's discretion)
* Funding for commercialization programs; authorization of $27.5m for agencies
* Increase accent on agency commercialization programs
* Adding awardee ownership structure info to the SBIR database (both at the time of award and at completion of award)

As you can see, there are many welcomed items in this legislation. However, the contentious items were not open for the possibilities of compromise, and were part and parcel of the Polosi/ Velázquez special interest railroad for BIO and NVCA. These items not only make it possible for larger entities to siphon off the majority of SBIR $$$, but with the House rules committee not allowing Jeff Flake's amendment to be raised (disallowing the possibility of earmarking SBIR $$$), one must wonder if some congressionals are looking for some easy pickings for their own special interests.

Former House Small Business Committee Chair and major SBIR supporter, Donald Manzullo (R-IL) eloquently stated his opposition to H.R. 5819 for the Congressional Record. See why this small business champion thinks this legislation is seriously flawed. See:

The bottom line is that the House, under the leadership of Nancy Pelosi, and Small Business Committee Chair Nydia Velázquez have demonstrated their willingness to sell out the small business community, not just in SBIR, but in all small business federal government contracting see H.R.3567 at Their actions aim to allow non-small business entities to compete against small business concerns for federal government small business contracts and grants.

If you want to join the fight to save SBIR as a true small business program, you need to get involved now. Here are some options to consider:

* If your representative voted for H.R. 5819, let them know you are unhappy with their vote (see for the role call vote)

* Contact the Senate - this includes your Senators, Senate Leadership, and the Senate Small Business Committee members. A list of these people is on our web site at

* Send letters to the editor of your newspapers. BIO and NVCA get most of the press, now it's your turn.

* Visit the Small Business Technology Council's SBTC's web site at Click on the ACTION ALERT. This will allow you to send a group email message to your Senators and show you are united with an organized group of small businesses participating in SBIR and opposed to the House legislation. (also a great place to borrow verbiage for your own personal letters).

* Visit the American Small Business League's (ASBL) web site at , under Action Center (lower left), click on Contact Keith Olbermann, MSNBC Countdown program.

We will keep you informed on the reauthorization progress.

SBTC to Host SBIR Congressional "Fly-in"

The SBTC is hosting what they term a Congressional "Fly-in" on June 4 -5, 2008 in Washington DC. The meeting starts on June 4, at 3:30p with a briefing, training session and discussion of talking points for the Congressional visit he next day.

On the June 5, the meeting starts at 8:30a in the Small Business Committee room 424 Russell Senate Office Building with a breakfast for attendees and Senate Staffers. At 10:00a attendees will visit their Senators and Congressmen.

Registration for the event is There is no cost for SBTC members. Others only pay $25. In the mean time everyone is urged to contact their Senators and Representatives to schedule an appointment and let them know how concerned you are with the House changes to the SBIR.

Additional information will be on the SBTC web site at or you can reach Jere Glover via email at [email protected] .

Ann Eskesen's Innovation Development Institute's State Database Goes Live

The most complete and up-to-date data on SBIR awardees by state is now available on the Innovation Development Institute's web site at This easy to use (and free) service is made available by Eskesen to help demonstrate the importance of SBIR and why it should be reauthorized. This is a "must" for state outreach representatives and hill staffers. You can also check their other information by going to the home page at

Homeland Security Web Site Gets Blasted - SBIR Dates Changed

The Department of Homeland Security's (DHS) SBIR web site was attached by what the "geeks" call an SQL Injection Attack. The result is their web site is down and a mammoth reconstruction job including a revamping of their own security structure is in progress.

DHS stated earlier that their web site would be back on line the week of May 12, but as of the wee hours of May 19, it's still down, now stating "until further notice".

On May 6, 2008, the DHS S&T Directorate announced that their FY-08.2 solicitation closing date has been extended to June 27, 2008. Also the TPOC communication and opening date was extended to May 23, 2008.

In the mean time you'll have to stay in touch with DHS via FedBizOpps, at

You can also check our SBIR Gateway for updated information at

NOTE: The DHS no longer has their entire SBIR program managed by the S&T Directorate. DHS's Domestic Nuclear Detection Office (DNDO) now runs their own SBIR program, and hosts their own SBIR web site (which is currently down). DNDO has no topics in the current DHS SBIR solicitation.

Still Time to Register for the Spring National SBIR Conference in Orlando Space is still available for those interested in attending the National SBIR Spring Conference in Orlando, FL May 27-30, 2008. Check out the web site at The SBIR.TV Experiment

I made mention of our proposed launch of SBIR.TV, a web site to give you audio and video coverage of SBIR. Although the first postings will be concerning congress and the reauthorization process, we hope to produce podcasts in a more positive vein, that may broaden your SBIR horizon.

We are currently working on interviews with industry experts over a variety of important SBIR subjects ranging from data rights to the False Claims Act.

We are very interested in ideas you have as to your areas of interest that the multi-media services of the web can provide.

Please respond to this email with your comments, or if you want to be removed from the list.


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

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