SBIR Gateway

SBIR Insider Newsletter
December 23, 2010

Dear SBIR Insider,

I promise this is the last SBIR Insider of 2010. As most of you know, we try to not burden you with too many issues, but these extraordinary circumstances warranted it.

I'm sorry to report to you that for all your efforts to help pass the SBIR reauthorization act of 2010, we collectively failed. It was so close, within our grasp, or so we thought. The Senate indeed did its work, while the House did its best to do its worst.

Two of the usual suspects, Nydia Velazquez (D-NY) and her cross aisle counterpart Sam Graves (R-MO) helped derail the efforts. Nydia from a distance due to family health reasons. However, there is now reason to believe that the White House was also involved. Not the President himself, but some in his administration at the White House Office of Science & Technology Policy (OSTP). Fact checking is in progress, but this wouldn't be the first time OSTP took a grim view of SBIR.

Some university organizations are claiming that these greedy SBIR small businesses are trying to steal R&D funds away from them by raising the SBIR allocation from 2.5% to 3.5%. In an emergency letter (Dec 22, 2010) to the House leadership, The Federation of American Societies for Experimental Biology cried out "This bill would increase the SBIR set-aside by 40 percent…"

What these groups won't tell you is that well over 1/3 (closer to 38%) of all the scientists and engineers in the US work for, or own small high tech businesses but these businesses get only about 4.3% of the government's research dollars, and that's inclusive of the 2.5% SBIR allocation!

In actuality, universities and SBIR small businesses are helping each other more than ever before. Each entity has its strengths and they can leverage each other's assets to improve chances for success.

The 111th congress is now history and we need to look at what's next for the 112th and we'll do that in next year's first issue. However, we have some news that is still pertinent.

In this issue:

Current Status Of SBIR

The SBIR/STTR/CPP programs are currently running on a continuing resolution (CR) that expires January 31, 2011. Many of you are letting us know that some agencies are "stalling" in their contracting/granting process.

The SBIR Insider can't speak for the agencies, but suffice to say that it is very difficult to run a program (or a country for that matter) when you don't know how much, or if, you will have funds. Our entire country is running on a CR,( H.R. 3082) mostly at FY-2010 levels, and that CR runs out on March 4, 2011.

Meanwhile your expired 111th congress is holding press conference after press conference about what a great job they have done in this lame duck session. Keep in mind, one of their primary jobs is to fund our government, and in your SBIR Insider's opinion, they failed miserably!

DOD FY-2011 Authorization Has Some SBIR Implications

Because the CR that's funding our government is inadequate in structure for running our department of defense, both bodies of congress felt the need to pass a stand alone defense authorization bill for FY-2011.

This bill was named and passed in honor of the departing chairman of the House Armed Services Committee (and great friend to SBIR), Mr. Ike Skelton. It is appropriately named "Ike Skelton National Defense Authorization Act for Fiscal Year 2011" aka H.R. 6523.

This bill originally contained the framework for congressman Norm Dicks' (D-WA) Rapid Innovation Program (RIP) which was to be a $500+ million program to help commercialization and rapid insertion of SBIR technologies to the warfighter. This would have been a great program for SBIR companies in DoD going to phase III. However, the final bill was greatly reduced and vast changes occurred. Here is some of what remains about the RIP:


SEC. 1073. Defense Research And Development Rapid Innovation Program.

PROGRAM ESTABLISHED.-The Secretary of Defense shall establish a competitive, merit-based program to accelerate the fielding of technologies developed pursuant to phase II Small Business Innovation Research Program projects, technologies developed by the defense laboratories, and other innovative technologies (including dual use technologies).

The purpose of this program is to stimulate innovative technologies and reduce acquisition or lifecycle costs, address technical risks, improve the timeliness and thoroughness of test and evaluation outcomes, and rapidly insert such products directly in support of primarily major defense acquisition programs, but also other defense acquisition programs that meet critical national security needs.


(3) The total amount of funding provided to any project under the program shall not exceed $3,000,000, unless the Secretary, or the Secretary's designee, approves a larger amount of funding for the project.

The issuance of an annual broad agency announcement or the use of any other competitive or merit-based processes by the Department of Defense and by each military department for candidate proposals in direct support of primarily major defense acquisition programs, but also other defense acquisition programs as described in subsection….


The bottom line is that no experts have yet weighed in on the value of what's left, and it appears that items that previously were restricted to SBIR companies may now be open to all.

We hope to have more for you in the next issue when some of our SBIR Insider experts offer comments.

SBIR Person Of The Year 2010

Charles Russomanno
Often times our SBIR Person of the Year is someone you know, or have heard much about. This year we honor someone probably unknown to you but who is nonetheless important, especially for his work at DOE in 2010.

Mr. Charles Russomanno of the Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) has been a long time SBIR advocate behind the scenes, and has played an important role in the development of the new DOE SBIR Phase III Xlerator project.

The Xlerator project is a competitive grants program that builds off the SBIR and STTR programs to give qualified small businesses around the country the staying power they need to bring their clean energy technology projects to commercialization.

Of course, major credit of any agency's programs also belong to the executives who have the power to bring a program to fruition, and the DOE's Xlerator project is no exception. People such as Samuel Baldwin, Chief Technology Officer, EERE, Kristina Johnson, (former) Under Secretary of Energy, Cathy Zoi, Acting Under Secretary of Energy, Henry Kelly and Steve Chalk, EERE, and of course Steven Chu, Secretary of Energy.

However, a program that is brand new and never tried before, needs a champion, someone who has historical knowledge and vision to initiate the idea and will work their hardest to sell the concept to their management.

Such is the case with Charles Russomanno, who was the initiator, proponent, coordinator, and a selection official of the Xlerator project. Russomanno and his upstream fought hard to bring this unique program to life.

The DOE SBIR Phase III Xlerator project obtained funding in early 2010, and they released a competitive funding opportunity announcement, targeted to phase II winners with promising technologies. The DOE awarded small SBIR businesses $57 million (of which 11 million was from Recovery Act Funds) in this Phase III Xlerator competition.

It is interesting to note that a year after we saw a major agency (NIH) congressionally "sneak" SBIR out of their "recovery act funding" (2009), the DOE's team that created the Xlerator project, released two special DOE SBIR Phase I and Phase II Solicitations utilizing recovery act dollars! This was indeed extraordinary, and Russomanno was a major champion.

Charles Russomanno started his S&T adventure in the private sector as a product development chemist, developing and patenting two inventions before moving to the government sector at DOE in 1989. He transferred to the DOE's Office of Energy Efficiency and Renewable Energy in 1993. and started having involvement in SBIR programs around 1995.

He has a great understanding of the needs of small high tech business as well as those of his agency. When you have a motivated, knowledgeable and passionate person in the proverbial trenches of a federal agency, championing unique ideas can be a risky venture.

Mr. Russomanno's courage, commitment, and success in assisting the DOE in their outstanding 2010 SBIR projects, makes him very special to our SBIR community. Those of us who have observed the DOE's SBIR program for decades, know that this year's success wouldn't have happened without him.

Congratulations to Charles Russomanno, our 2010 SBIR Person of the Year!

( see the story with pictures at )

DOE Has New SBIR Program Manager

After quite a long search, the Department of Energy has name Dr. Manny Oliver as their new SBIR/STTR program manager.

Dr. Oliver, an MIT graduate, has a long and varied history of R&D experience at Motorola specializing in Intrapreneurial R&D, technology strategy, program and project management.

Note: Intrapreneurial is not a spelling error. Intrapreneurship refers to employee initiatives in organizations to undertake something new, without being asked to do so (I didn't know that).

Manny, welcome to the wondrous world of SBIR. The question I have for you is a personal one, but I'll ask it publicly: Are you in the class of Droid or iPhone? MIT would suggest iPhone, but Motorola?????

You've heard me say nice things about SBIR the framers such as Jere Glover (who is like my brother), Ann Eskesen, Roland Tibbetts, and Milt Stewart. One person I haven't mentioned much is another of the framers, and that's David Metzger, a renown SBIR attorney at Arnold & Porter LLP in McLean, VA.

Dave has often taken the time to compose very meaningful thoughts and letters of support to me, and I want to take this moment to thank him publicly.

It gets pretty lonely here at 3:00am putting together these dispatches, but as long as many of you find these of value, I'll do my best to continue for you.

I hope you have a great holiday and a happy, healthy new year.



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

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