SBIR Gateway

SBIR Insider Alert
June 26, 2006 Edition

Dear SBIR Gateway Insider,

This difference between our Insider Newsletter and our Insider Alert is that the Alert is a single topic document that is extremely time sensitive. This is an Alert.

SBIR Eligibility Issue to be included in SBA Reauthorization Bill

The Senate Small Business & Entrepreneurship Committee (SBE) under the leadership of its Chair, Olympia Snowe (R-ME) and Ranking Member, John Kerry (D-MA), has been working feverishly in a bipartisan effort to draw up the bill needed for reauthorization of the SBA.

Included in this effort is language to change the SBIR eligibility rules for small businesses that are majority owned and controlled by VCs. This has been a hot button issue for several years, and will come to a head when the SBE votes on the SBA reauthorization bill on Thursday, July 27, 2006.

On July 12, 2006 the SBE Committee held a hearing entitled "Strengthening Participation of Small Businesses in Federal Contracting & Innovation Research Programs" that included testimony on the SBIR VC issue. The Small Business Technology Council (SBTC) is representing small business wanting to preserve the eligibility structure that has been in place for decades, while the Biotech Industry Organization (BIO) wants the rules changed to allow small business entities that are majority owned and controlled by VCs to qualify for unrestricted SBIR access.

Senators Snowe and Kerry urged both sides to find a compromise and SBE committee staffers had been working hard in writing compromise language to bring both sides together. As it appeared to be getting close, BIO rejected it, and in comes Senator Kit Bond (R-MO) at the 11th hour to submit his own language on a very short fuse for comment.

Senator Bond is a well liked and powerful Senator (he sits on the Appropriations Committee) who once chaired the SBE committee. His close relationship with the big pharma funded BIO organization has been in evidence since they started working together on the eligibility issue in the Fall of 2003.

Déjà vu all over again
In May of 2004, working with BIO, Senator Bond wrote a bill, S.2384, to allow VC owned companies to be eligible to compete for SBIR awards. The bill with its House companion H.R.4149 (from Congressman Graves R-MO), languished until September of 2004, when Senator Bond tried to get his bill pushed through as a rider to the SBA reauthorization bill. It was not successful.

In June of 2005, again working with BIO, Senator Bond introduced S. 1263 (Save America's Biotechnology Innovative Research Act of 2005' or `SABIR Act'). Just as the previous example, the bill with its House companion H. R. 2943 (from Congressman Graves R-MO), languished until now when Senator Bond is trying to get his bill, or revised version thereof, pushed through as a rider to the new SBA reauthorization bill.

We received several comments from our readers stating that this was a Biotech issue and was of little interest to those outside that arena. Interestingly enough, Bondís earlier 2004 bill S.2384, had no mention of Biotech, and the current version from 2005, S. 1263, is called "Save Americaís BiotechÖ." but has no mention of Biotech in the language. This clearly means that the Bond/Grave bills are not restricted to Biotech issues, but indeed impact the full spectrum of all 11 agency SBIR programs.

The Good News
Your Senate Committee on Small Business and Entrepreneurship has been open and available to hear comments on both sides of the issue, from large and small concerns. The hearings were well balanced and the staffers were well informed on both sides of the issue.

The Bad News
BIOís dismissal of a compromise, and the subsequent utilization of their old friend, Senator Bond, who is again introducing language at the 11th hour, will result in precious little time (if any) to modify Bondís BIO submission. It has been suggested that Bond's latest approach will be different from his earlier bills.

The Vote
Our insiders reflect this will be a very close vote. If you want your voice heard, it will have to be done on Wednesday, July 26, 2006. The committee will vote on Thursday, July 27, 2006. Below is a list of SBE committee contacts.

Olympia J. Snowe, Maine, Chair - (202) 224-5175
Christopher S. Bond, Missouri - (202) 224-5721
Conrad Burns, Montana - (202) 224-2644
George Allen, Virginia - (202) 224-4024
Norm Coleman, Minnesota - (202) 224-5641
John Thune, South Dakota - (202) 224-2321
Johnny Isakson, Georgia - (202) 224-3643
David Vitter, Louisiana - (202) 224-4623
Michael Enzi, Wyoming - (202) 224-3424
John Cornyn, Texas - (202) 224-2934

John F. Kerry, Massachusetts, Ranking Member - (202) 224-2742
Carl Levin, Michigan - (202) 224-6221
Tom Harkin, Iowa - (202) 224-3254
Joseph I. Lieberman, Connecticut - (202) 224-4041
Mary Landrieu, Louisiana - (202) 224-5824
Maria Cantwell, Washington - (202) 224-3441
Evan Bayh, Indiana - (202) 224-5623
Mark Pryor, Arkansas - (202) 224-2353

Whatever the vote, it must also pass muster with the House Small Business Committee under the leadership of Chair Donald Manzullo,(R-IL), and Ranking Member Nydia Velázquez, (D-NY).

Thank you for your interest and I look forward to your comments. 



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

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