SBIR Gateway

SBIR Insider Newsletter Update
November 17, 2011

Dear SBIR Insider,

Good news, SBIR/STTR/CPP are now extended through December 16, 2011. Both House & Senate have just passed H.R. 2112 which amongst many other things extends SBIR/STTR/CPP through December 16, 2011. The President is expect to sign the bill Friday, when the current CR funding the government expires.

Reading between the lines reveals more good news judging from congressional action on this bill. The major thrust of this bill is to fund Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs through the end of FY-2012 (September 30, 2012).

That serves notice that Congress wants to complete the FY-2012 funding for the remaining government's agencies (that may include SBIR) by December 16, 2011 when they break for the holidays.

As we told you in our last Insider, Senator Mary Landrieu (D-LA), chair of the Senate Committee on Small Business & Entrepreneurship, felt the House was getting closer to striking an SBIR compromise with the Senate by the December 16 date..

Interestingly enough, a very important and neutral player in the S&T field, SPIE (the international society for optics and photonics) just came out with an endorsement for the Senate SBIR bill S.493 (see ). SPIE is a premier organization serving more than 180,000 constituents in 170 countries. Also of interest is their offices are located in Bellingham Washington, and not Washington DC. They are into science, not lobbying. Several years ago a national SBIR conference was collocated with them and they were a great partner and a huge draw.

Lots of things happen on the Hill in December. It was only last December when HR 2965, the "SBIR/STTR Reauthorization Act of 2009" was passed! Oh, did I mention that congress didn't mean it as a Christmas gift to small businesses. Instead they treated it as April Fools to the SBIR community, as they stripped out all SBIR language from the bill and inserted the "Don't ask Don't Tell Repeal."

Don't ask, don't tell has a different meaning to the likes of House Small Biz committee chair, Sam Graves, and his ranking member Nydia Velazquez. In their book, "don't ask" and they won't tell that they are working harder for the Wall Street Hedge Fund managers, VCs, and Private Equity Fund managers first, and small SBIR businesses second.

This is not only evident to the small businesses, but also many Congressmen some of which fear taking on the chair and ranking member of a committee. That may change in the evolving environment, exposing heavy lobbying and "pay to play".

I've had some people tell me that they (Graves & Velazquez) aren't so bad (to SBIR), it's their staffers. I don't buy it. Staffers are important, and we're lucky to have many good ones (especially in the Senate), but there are many self serving ones as well.

One source referred to Velezquez's staffer as having a "Svengali" type of effect on her, and that she really loves SBIR. If you know anything about Velezquez's staffer, he's more like "Svengarlic." He may steal your breath away, but he's not going to control Velezquez.

They both dislike small businesses in SBIR, and their pattern of witness selection in all the years they had control of the committee, speak to that. Under Velezquez, there was not one small business who objected to VC ownership invited to testify at any of her SBIR hearings. Her hearings concentrated mainly on biotech, with a cadre of witnesses representing or recommended by BIO or NVCA.

The actions of the House Small Business Committee has stifled reauthorization, and some of their amendments greatly dilute the power of competitive small business solutions presented in SBIR proposals.

This does not go unnoticed by some committees who know the truth, and value of the SBIR program to their areas of jurisdiction. Nothing speaks louder to this than the House & Senate Armed Services Committees. They know that life saving and money saving technologies come from many of the small SBIR businesses, and these entities often partner very well with universities and the primes in the process of integrating solutions to the armed services needs. Their SBIR commercialization success far exceeds that of the universities or primes, but together it can be greater than the sum of the parts

After today's vote on HR.2112, the Senate went back to work on the FY-2012 Defense Authorization act. They are serious about getting this done and they'll be working on it tomorrow. This is good for SBIR because unlike the House Small Business Committee (whose actions indicate a primary focus to protect and serve Wall Street Hedge Fund operators, Venture Capital companies and Private Equity firms), the House and Senate Armed Services Committees realize the value and importance of the small business SBIR contributions. They intervened and saved SBIR once before, and it could happen again.

We'll let you know what happens in the Armed Services world of SBIR, but rest assured that Graves & Velazquez will go crying to their party leaders, Boehner and Pelosi. The remedy is simple, just pass the language in S.493. It's the only SBIR reauthorization bill to be agreed to by all the major players, including BIO, NVCA, SBTC, SBBC, and NSBA. It's a compromise bill that addresses all the major issues.

Whatever happens, be prepared to take a haircut next year, as all of us need to reduce costs and spending. Budgets are being cut now and it will get more severe as we head toward FY-13 budgets (to be formulated in a few months).

I have to admit, I love watching when Alan Simpson and Erskine Bowles (former co-chairs of the presidential deficit reduction commission) get together. Two unlikely brethren worked their hearts out to try and set a course for our spending, and people paid little attention. I want to leave you with this anecdote that Bowles gave yesterday at the Wall Street Journal CEO Council meeting:

"What we're doing doesn't make common sense. We have this treaty with Taiwan, we'll protect Taiwan if they're invaded by the Chinese. There's only one problem with that, we got to borrow the money from China to do it! It's crazy!"



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

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