Dear SBIR Insider,

Shortly after sending you our April 14, 2008 Insider, the House Subcommittee On Technology and Innovation introduced a draft SBIR Reauthorization bill that will marked up by the committee Wednesday, April 16, 2008, from 2:00pm � 4:00pm edt.

Subcommittee chair David Wu (D-OR) requested that all proposed amendments to the bill be submitted to him (hand carried) by 2:00 pm, and he would be "disinclined" to support any amendments that he could not thoroughly review.

Time is too short to do a thorough evaluation for you, but here are some of the highlights and lowlights of this draft:

• Reauthorization of both SBIR and STTR to 2010
• Legitimization of majority ownership of small businesses by VC syndicates or other "qualified" entities (a hole large enough to drive a Mine Resistant Ambush Protected "MRAP" vehicle through)
• Funding cap for SBIR is raised from 2.5% to 3.0%
• Funding cap for STTR is doubled from .3% to .6%
• Phase I Award amounts are tripled from $100k to $300k SBIR/STTR
• Phase II award amounts are tripled from $750k to $2.2m
• The award amounts listed above are a ceiling, not to be exceeded
• Additional flexibility for Fast Track and cross agency awards
• Waiver of minimum work requirement (by the agency) to allow greater share of the $$$ to go to the small business partners
• Administrative money for the agencies of up to 3% of SBIR budget
• Increase in discretionary technical assistance funds for awardees to $5k for phase I and $8k for phase II
• Abolition of a continuing NRC study update.
• Interagency SBIR/STTR Policy Committee headed by NIST and OSTP.

This is a far smaller and less complex bill than the draft offered by the House SB committee. It does not contain the DoD commercialization and testing & evaluation sections as did the House SB.

It is evident that this subcommittee listened closely to the needs of the agencies as testified in the subcommittee's June 26, 2007 hearing: SBIR and STTR � How are the Programs Managed Today?

It's a shame, and in my opinion, an abolition of duty on the part of this committee, that they only held one hearing (described above) and never allowed small businesses to provide input on their experiences and needs.

They obviously listened to BIO and NVCA because their Section 204 is so loose that it all but removes the SB from SBIR! Why not just change the name to the Innovation Research program?

The raise in the cap from 2.5% to 3.0% is a help but does not adequately compensate for the tripling of the award amounts, and 3% admin money to the agencies. Plain and simple, far fewer awards will be made to small businesses. However, kudos to the committee for at least creating an award ceiling. It's questionable if the language was constructed properly to eliminate continuing sequential Phase II's as the House SB committee wanted.

The STTR raise is dramatic and the minimum work requirement waiver will allow greater participation by the Universities and FFRDCs, but perhaps it should be monitored/regulated to avoid abuse.

For our State outreach readers, unfortunately there is no mention of FAST or any other outreach program in this bill, although they do use the term outreach as a heading only.

There is no additional support for the SBA's Office of Technology. In fact, it looks as if the OT is being subordinated by the creation of the Interagency SBIR/STTR Policy Committee, to be headed by NIST and OSTP.

I don't know about you, but I'm going to send faxes to these committee folk and provide some of the comments and feedback that I've heard from you. I think you should too. I created a special page just for this occasion. It is located at:

www.zyn.com/sbir/articles/sbir-sandt08.htm

We'll report back to you after the markup session.

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