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April 28, 2008

Wyoming SBIR/STTR Initiative (WSSI) Newsletter
No. 05-08
(Past Newsletter Issues)

This Wyoming SBIR/STTR Initiative (WSSI) Newsletter is available in its entirety at http://www.uwyo.edu/sbir/newsletter/nwsltr_080428.htm.

It is published by the Wyoming SBIR/STTR Initiative (WSSI). Please visit our website at www.uwyo.edu/sbir for complete program information (including links to participating federal agencies, support agencies, conferences, archives of this newsletter, etc.) Contact WSSI@uwyo.edu to be added to or removed from the Distribution List for this newsletter.

SOLICITATION COUNTDOWN

WSSI Phase 0: due 5:00 p.m., 5/1/08; 3 days – submit to WSSI@uwyo.edu
EPA SBIR Contracts: due 5/21/08 - 23 days
DOT SBIR Contracts: due 6/3/08 - 36 days
NSF SBIR Grants (STTR to follow): due 6/10/08 - 43 days
DoD 2008.2 SBIR Contracts: due 6/18/08 - 51 days
HHS/NIH 2008 SIBR/STTR Grants: due 8/5/08 - 99 days
2007 SBIR/STTR SOLICITATION RELEASE SCHEDULE  – All Agencies; Courtesy of ZYN Systems at www.zyn.com

CONTENT

1.0 Congratulations To Our April Phase 0 Award Winners
2.0 House SBIR Reauthorization - Devastating for Independently Owned Small Businesses, Especially for those in Rural States
3.0. Acknowledgements and Publication Information

1. The SBIR program will thrown wide open for access by entities majority-owned and controlled by large financially endowed organizations such as universities, non-profits and venture capital syndicates.

2. The total SBIR R&D budget across the 11 participating federal agencies will remain fixed at 2.5% of their total extramural R&D budgets ($2.4 billion in FY09).

3. The total available for SBIR projects will be decreased by a 3% agency administrative levy (to just over $2.3 billion in FY09).

4. Phase I award levels will be tripled to $300,000; Phase II award levels will be nearly tripled to $2.2 million.

5. Phase II awards can be made without a prior Phase I award.

6. Multiple Phase II awards can be made for the same project.

Under H.R. 5819, Phase I & Phase II award recipient totals will be reduced by more than 2/3!

In principle, under the current SBIR legislation assuming all SBIR Phase I awards are capped at $100,000 and Phase II awards are capped at $750,000, and assuming that 50% of the Phase I awards convert to Phase II projects, there would be approximately 5,000 Phase I awards ($500 million) and approximately 2,500 Phase II awards ($1.875 billion) for a total of 7,500 awards and $2.375 billion in FY2008. (These idealized award totals are estimated to be some 20% higher than has been the recent actual experience due to the proliferating practice of agencies making unauthorized multi-million dollar ‘jumbo’ awards). If H.R. 5819 were currently operative, the total number of Phase I and Phase II awards would be approximately 1,600 and 800 respectively! This outcome will result in the SBIR program becoming even more “elitist” than it already is by crowding still more ‘little guys’ (entities having fewer than 20 employees) off the bottom of the ladder. The SBIR program was instituted 25 years ago because these little guys, who create most of the new jobs and are the engine of technology innovation, weren’t receiving federal R&D funding – is this no longer to be the principal purpose of the program? Are we to revert to the ‘status quo ante’?

But it gets worse!

The number of award recipients will be reduced even further because the agencies will have the discretion to make Phase II awards without a prior Phase I and to make multiple Phase II awards for the same project, further greatly reducing the total funding available for Phase I awards, the entry point into the program for the little guys. There is also a provision for Phase III commercialization assistance funding, further reducing the total funding available for Phase I awards, again limiting the opportunity for entry into the program.

And worst of all, under H.R. 5819, the SBIR competitive landscape will be completely altered for the benefit the big guys.

Currently, and from the inception of the SBIR program 25 years ago, to be eligible for the SBIR program a business must be independently operated by individuals owning at least 51% of the enterprise and having no more than 500 employees, including affiliates. Under H.R. 5819, this rule is amended to allow businesses owned or controlled by large financial entities such as universities, non-profits and venture capital syndicates to compete with conventional small businesses for SBIR funding. Under this provision of H.R. 5819, the little guy will be now be competing against organizations that are able and willing to fund the preparation of proposals at the level of tens, even hundreds of thousands of dollars. This level of funding can provide professional and consulting services (including Nobel laureates) that no legitimate small business can compete with (Wyoming participants are fortunate to have access to a $5,000 Phase 0 award as a proposal preparation resource). As all SBIR participants know, the program is merit-based and extremely competitive as it is presently configured. If H.R. 5819 is allowed to stand, the heightened competitive economic barriers will accelerate the process already underway of driving the little guys out of a program that was originally devised for their benefit – in other words, a nearly total retrogression to the ‘status quo ante’. What this legislation will really accomplish is to provide an exclusive playing field for a select class of special interests to compete with a diminishing group of small businesses, free from the nuisance of having to compete with other large organizations less favored.

What you can do to thwart this take-over of Wyoming’s only source of seed capital for our emerging tech-based small businesses.

The Senate is our hope of last resort!

Let Senator Enzi know of your concerns – Washington phone 202.224.3424 – FAX 202.228.0359 – Toll Free 888.250.1879.

Legislative Director, Randi Reid randi_reid@enzi.senate.gov.

Legislative Assistant for Small Business, Travis Jordan travis_jordan@enzi.senate.gov.

Senator John Kerry is the Chairman of the Senate Committee on Small Business and Entrepreneurship. Let him know of your concerns – Washington phone 202.224.2742 – FAX 202.224.8525

Join the Small Business Technology Council, our most effective representative in Washington

As the deadline for SBIR reauthorization draws near, small-business owners across the country that receive SBIR grants should ask themselves several important questions: Do I have the time and resources to maintain a continuous presence in Congress to defend SBIR from incursions by venture capitalist and foreign investors? Do I fully and completely understand the political implications in the daily administration of the SBIR/STTR programs? Can I put in the time it takes to build relationships and alliances with those people that would stand and speak out in defense of SBIR? Can I make the commitment to constantly monitor the program, to restore cuts in SBIR funding, to prevent cuts in funding, protect intellectual property rights, successfully oppose changes in the SBIR law and regulations that negatively affect small business, and still deliver innovative, cutting edge technologies to the market place? If you cannot answer yes to all of these questions you need to join an organization that can. The Small Business Technology Council (SBTC) is the pre-eminent voice in Washington, DC that fights for the enhancement and preservation of the Small Business Innovation Research Act (SBIR). Strong leadership and a diverse, knowledgeable, and experienced membership is the key to our success. Join SBTC today www.sbtc.org.

Further Information on H.R. 5819 and SBIR Reauthorization

SBTC 4-7-08 Letter to House Small Business Committee

SBIR Reauthorization Passed in House 4-23-08

SBIR Insider Reauthorization Alert 4-22-08

SBIR Reauthorization letter from Ann Eskesen, Innovation Development Institute 4-22-08

SBIR Insider Reauthorization Alert 4-14-08

SBIR Insider Newsletter 4-14-08

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