SBIR Insider Newsletter
April 3, 2006 Edition
Dear SBIR Gateway Insider,
Major news to report in this issue. If you are interested in
retaining small business programs, read on.
In this issue:
SBA and Small Business Programs in Peril?
Depending on who you want to listen to, Congress and the
Administration may be trying to eliminate the SBA and most of its small
business programs, or they are merely evaluating the effectiveness of the
agency and its programs. Either way, this is a
The U.S. Senate Committee on Homeland Security and
Governmental Affairs, Subcommittee on Federal Financial Management,
Government Information, and International Security, is holding a hearing
titled: The Effectiveness of the Small Business
Administration. This hearing requested by committee chair
Senator Tom Coburn (R-OK), will examine the effectiveness of SBA programs
and the financial impact of them on the budget and economy.
Senator Coburn, or Dr. Tom, as he likes to be called, is known to
vigorously oppose earmarks, plus-ups and the rapidly bulging budget
defect. However, the manner in which he called this hearing had the
"earmarks" of a railroad job to kill SBA and many of its
programs. Its existence was kept especially quiet as were the list
This fact didn't go unnoticed by some small business insiders including
Jere Glover of the Small Business Technology Council (SBTC), and LLoyd
Chapman of the American Small Business League (ASBL). When it was
discovered that one of the witnesses would be Veronique de Rugy, of the
American Enterprise Institute (AEI), Glover immediately referenced de
Rugy's controversial AEI paper "Are Small Businesses The Engine Of
Glover, former SBA Chief Counsel for Advocacy and current Executive
Director of SBTC took great exception to de Rugy's writing and published
opinions. SBTC is currently formulating a response to her
"opinions." On the other hand, Chapman, who some say
often "shoots from the hip", takes no prisoners and knows how
to spread the word, authored and widely distributed a press release on
March 28, 2006 entitled "Oklahoma Senator Calls for Hearing to
Abolish Small Business Programs" see
This infuriated Coburn, who sharply criticized the ASBL press release
that Coburn claims included a false and deliberate distortion of the
Senate oversight hearing he plans to hold on the Small Business
Administration. By the same token, Chapman didn't take delight in
Coburn's response where he said, "If the ASBL believes the SBA
represents the pinnacle of economic perfection and efficiency and is
beyond scrutiny, then they should be confident that their perspective
will be vindicated during this hearing.”
Claims of Illegal SBA Lobbying - In an article published by
GovEXEC.com, a Coburn spokesman reflected that some SBA employees had
lobbied some Oklahomans to put pressure on the Senator. At the time
of this writing these charges were unfounded. It is an illegal
activity for an agency to spend federal funds for lobbying
The Hearing Witness Veronique de Rugy - If Senator Coburn wonders
what precipitated this brouhaha, he need only look at the choice of Dr.
de Rugy for a witness at this hearing. She possesses distinguished
educational credentials from the University of Paris-Sorbonne and
directed academic programs for the Institute for Humane Studies in
France. In a recent Forbes magazine article, Small-Firm
Idolatry, Stop Babying Small Businesses, Dr. de Rugy demonstrated how
wonderful academe prose could be contrary to common sense and actual
fact. Her lilting phrasing, "The President's latest budget
proposes to shower a budget of $605 million on the SBA.." is
void of the fact that the actual SBA budget has been reduced again, as it
has for the last 6 years, and no federal agency has had to endure those
severe level of cuts.
Dr. de Rugy also states: "Because everybody loves small
businesses, everyone wants to do something for them, whether it's
targeted tax credits, special regulatory treatment or preferential access
to government contracts." What planet is this person on?
If her statement were even remotely true, you wouldn't need small
business advocacy, SBTC, ASBL, or the SBIR Gateway News. I could
actually enjoy my evening and you wouldn't be burdened with my
Of highest importance to most of our readers would be de Rugy's comment
including small business "preferential access to government
contracts" [that should be abolished]. Of course, that would
include the SBIR/STTR programs.
Coffee with Dr. Tom - I must admit that in talking with one of
Senator Coburn's staffers, I became convinced of the staffer's loyalty
and admiration for the Senator. Dr. Tom hosts morning coffee for
his constituents on Thursdays from 8 am to 9 am EST (call for R.S.V.P.)
and he seems genuinely interested in serving his constituents and the
country. If I were privileged to have coffee with the Senator, I
would ask him the following questions pertaining to Dr. de Rugy's comment
on "preferential access to government contracts":
Bottom line, small businesses need government help to compete in
federal government contracting, especially in the research and
- Is it true that all 50 Senators are from above average income
households (millionaires), and do you think an intelligent citizen who
only makes $60k per year could be successful in competing and being
elected to the U.S. Senate? If so, are there any recent (last 10
years) examples? If we apply this same principle to federal
government contracting, do you feel that high tech small businesses could
compete straight up with large well-funded companies? If yes, can
you show me the small business success rate in such a competition?
Senator Coburn's hearing will take place April 6, 2006 at 2:30 PM in the
Dirksen Senate Office Building, Rm. 342. We will cover that for you
in our next Insider.
You can visit the SBTC web site at
www.sbtc.org and the
ASBL web site at
National Academies' Symposium on Innovation Awards and
Entrepreneurship: SBIR, the States, and the Innovator.
On April 7, 2006 the National Academies is holding a symposium on the
topic listed above. This event will take place in Room 100 of the
National Academies Keck Center at 500 5th Street, NW, Washington, DC, beginning at 8:30AM and concluding at approximately 5:45PM with a
This important symposium, part of the Congressionally-mandated study of
the SBIR program, is designed to bring together representatives of
selected state programs to discuss state-level initiatives and their
interaction with the SBIR program. In addition, the meeting will
provide an opportunity to review empirical measures of innovation at the
state and regional level. The meeting will also provide the
opportunity to discuss the role and effectiveness of outreach programs
for best practice lessons for both SBIR and regional programs.
Fundamentally, the goal is to better understand SBIR's role in regional
innovation systems and how their interaction might be enhanced.
More information on this symposium can be found on the SBIR Gateway at
Senate SBE Hearing - More Woes for SBA's Barreto -
On March 9, 2006 the Senate Committee on Small Business and
Entrepreneurship (SBE) had a hearing on "The President’s Budget
Request for the Small Business Administration for Fiscal Year 2007”
The only witness was SBA's Administrator Hector V. Barreto.
In a bipartisan spirit, SBE Chair Olympia Snowe (R-ME) and Ranking Member
John Kerry (D-MA) delivered opening statements critical of the
administration's continued cutbacks of the SBA's budget. Senator
Both Snowe and Kerry were extremely tough on SBA Administrator
Barreto and his management. Listening to the various Senators on
the committee it seemed as though they saw Barreto as an impediment
rather than an enabler. This was totally apparent in Kerry's
opening statement where he stated:
- The SBA argues that it “does more with
less,” but the Agency’s resources and employees are stretched too thin.
We cannot, on one hand, cite how important small businesses are to our
country and our economy, and, on the other hand, refuse to provide the
Small Business Administration with the resources it requires to meet its
Kerry went on to say:
- Madam Chair, thank you. Thank you for this
hearing and that important opening statement. I was listening to your
statement and it’s a pretty remarkable statement to come from the Chair
of this Committee, where you are in the majority that represents the same
party as the Administrator. This is not a party issue. When you think of
the past hearings that we’ve had over the last years with the same
Administrator and the same Administration, it just seems like a
Johnny-one-note process of repetition of the same old, same old. You
don’t seem to hear what anybody sitting at this table or on this
Committee is saying. I see this chart that shows increased loans and I
know what you’re going to say. You’re going to come in here and say
we’ve had this big increase in loans. But you didn’t do that, we did
that. You didn’t propose these lending levels. You didn’t ask for it. You
didn’t fight for it. We had to fight for it over your objection.
The SBIR Gateway News has been critical of Administrator Barreto
since his 2004 transfer of Maurice Swinton from the Office of Technology
(see www.zyn.com/sbir/articles/sba-sw1.htm ). The morale and
effectiveness of SBA has diminished greatly under Barreto's leadership
but some see it as his following orders from the Administration rather
than his inability as a leader. Regardless, in a fall 2005 survey
of government employees, the SBA was considered the worst federal
government agency to work at. It came in number 30 of 30 agencies
overall. In leadership SBA came in 27th. Although there are
many good employees at SBA, under staffing and poor top management are
contributing to the inefficiencies and ineffectiveness of the
- I take a look at this and I say to myself,
are you trying to get rid of the SBA? Is that really what’s going on here
over a period of time?
All in all, SBA is becoming less relevant to the SBIR program as many
agencies go off and do their own "thing" in order to satisfy
their own agency interests. This is often counter to the policy
directives, and in some cases the legislation. As one insider once
put it, "You have one program with eleven different agendas."
Note to SBA: Help is on the Way... Maybe...
On March 16, 2006 the U.S. Senate passed a bipartisan amendment to
the budget resolution by Senators John Kerry and Olympia Snowe, Ranking
Member and Chair of the Committee on Small Business and Entrepreneurship,
that will add $130 million to the President’s budget request for the
Small Business Administration (SBA), bringing the agency to a total of
$754 million for next year. This compromise amendment was also sponsored
by Senators Mary Landrieu (D-LA), Joe Lieberman (D-CT.), Carl Levin
(D-MI), Bill Nelson (D-FL), Norm Coleman (R-MN), and David Vitter
Although this amendment includes $4 million for SBIR/STTR outreach, don't
get overly excited because a similar measure last year was eliminated by
Congress, strangely enough, during National Small Business
The Return of the Tibbetts Awards Program
The Tibbetts Awards Program has been revived after a three year
hiatus. The awards ceremony will be held September 26, 2006 at the
Wyndham Hotel, Washington, DC.
Due to SBA woes as listed previously, the Tibbetts Awards are being
organized by the SBTC with sponsorship including DoD, DARPA, Navy SBIR,
NASA, NSF, Boeing, The Association for Manufacturing Technology, Gregg
Olson, ATF, Homeland Ventures, RDM, and Physical Sciences Inc.
Named for Roland Tibbetts, the person acknowledged as the father of the
SBIR program, these prestigious, national awards are made annually to
those small firms, projects, organizations and individuals judged to
exemplify the very best in SBIR achievement.
The emphasis is on recognizing those accomplishments where, in the
judgement of those closely involved and often most immediately affected,
the stimulus of SBIR funding has made an important and definable
The Awards Committee will start accepting award nominations on May 15,
2006. Nomination packages and complete information will be
available on the web site at
A Personal Note
When we started this SBIR Insider odyssey we never imagined we would
be covering so many political issues. It is not our intent to try
and influence your view of a political party. Our way of teasing
that we are non-partisan is to say that we hold both parties in equal
Unfortunately this one time joke has become the feeling of many
Americans. Public support for Congress is at an all time low.
We often feel so distant from our elected officials that we don't bother
to let them know how we feel about issues. By providing meaningful
feedback, we can help our politicos do a better job. If you don't
agree with your elected official, don't just complain, offer
solutions. If you agree with your elected official, let him/her
know they have your support. When it nears election time, support
those whom you like, and support the opposition of the ones you
Thank you for your interest and look forward to your comments.
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Sequim, WA 98382
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