Dear SBIR Insider,

We have some very encouraging news for you on the status of SBIR reauthorization, but contrary to what you may have read, SBIR has NOT been reauthorized.

We have been deluged with calls and emails tonight by those who said they read in another newsletter that SBIR was reauthorized. Although a deal was struck this afternoon, SBIR reauthorization has not yet happened, but we're closer than we've ever been in this iteration of the reauthorization process.

YOU DID IT! (or, many of you did it..)

An agreement between the Senate and House on SBIR/STTR reauthorization has been reached. Reauthorization is in the form of negotiated modifications to an amendment offered to the Senate's version of the National Defense Authorization Act for 2012 (NDAA), by Senator Mary Landrieu (D-LA), chair of the Senate Committee on Small Business & Entrepreneurship.

It was thought by many that chances for the SBIR reauthorization to stick in the NDAA was very remote. However, last week, more than 1,000 small businesses and affiliates responded to a collective plea, to sign on to a letter to Congress (about 950 prior to the cut off time), encouraging congress to keep the Senate's SBIR reauthorization amendment in the NDAA. This was a combined effort, led by the SBTC, and supported by several organizations. But the credit must go to those of you who offered to sign. Your voice was important!

That action provided much needed leverage to our SBIR champions to keep SBIR in the NDAA, and "encourage" the House to be on board. We'll discuss the heros in the next issue.

Those of you who are long time readers of the SBIR Insider, have an idea of how difficult this journey has been. Although the bountiful and beautiful operatic soprano has yet to sing, House Small Business chair Sam Graves (R-MO), and House S&T chair, Ralph Hall (R-TX) made a joint announcement of agreeing to a deal on Landrieu's SBIR amendment this evening.

Because this agreement is part of the much larger NDAA, it was asked that details be kept to a minimum until the entire NDAA conference agreement is forthcoming (hopefully tomorrow, but soon).

A few details we can present include:

• Authorization for 6 years (through 2017)
• Majority ownership by VC, private equity and hedge funds allowed up to 25% for NIH, DOE and NSF, and up to 15% for the others.
• Increasing the SBIR allocation from 2.5 to 3.2 percent and the STTR allocation from .3 percent to .45 percent incrementally over the 6 years of reauthorization.
• Allows 3% of SBIR funds for the agencies to use for administration, outreach, and increasing participation from "have not" states, and minorities.
• Does not include House section 505, limiting awards to companies, but develops guidelines to measure success of a firm's participation.
• Does allow (at an agency's discretion) skipping of phase I (limited to DoD, NIH, and ED).

We will provide the details once it all comes into focus.

Dr. Winslow Sargeant has been confirmed by the Senate for the position of Chief Counsel for Advocacy at the SBA. Dr. Sargeant has been very active serving in that position under a recess appointment by President Obama since August of 2010.

The Office of Advocacy is an independent voice for small business within the federal government, and Dr. Sargeant is the sixth person nominated by the President and confirmed by the Senate to be Chief Counsel for Advocacy.

Two of the previous Chief Counsels are SBIR giants, the late Milton Stewart, and Jere Glover. Dr. Sargeant becomes the third with an SBIR background to hold this position.

Dr. Sargeant has been a success in small high tech business, having co-founded a company (Aanetcom ) that was ultimately acquired by PMC-Sierra, a publicly traded company. He earned a Ph.D. in electrical engineering from the University of Wisconsin, Madison, was well known and liked as an SBIR program manager at the NSF, then later was managing director of Venture Investors, LLC, in Madison, Wisconsin.

Although the position of Chief Counsel for Advocacy keeps Dr. Sargeant extremely busy, he is still a friend and supporter of the SBIR program.

The SBIR Insider congratulates Dr. Sargeant on his appointment and Senate confirmation.

Closing

This is the most optimistic I've been in many years about keeping the SBIR program alive and well. However, I've had one of my readers respectfully, but firmly suggest to me that either they have pulled the wool over my eyes (on the reauthorization terms), or I'm a sellout.

I can agree with my reader that there are some provisions in the SBIR reauthorization that are not good for small business, and I'm not happy about those. However, there is much more good than bad. Only those of us on the insider know how very close we have come to losing the SBIR program. The difference between having an SBIR or not, has been in the hands of a very few dedicated people on the Hill, and they were severely battered and worn down.

We were all told that failure to reach a compromise would result in the loss of the program, so the challenge became trying to get as good a deal as possible (you've been witness to this struggle for several years).

Keep in mind that the program can be changed at any time (even after reauthorization), and there will be continuing studies such as those by Dr. Charles Wessner and the National Academy to measure the success of the program and those changes that have been made to the program.

Overall, I think we're in pretty good hands.

Sincerely,

Rick

Rick Shindell
SBIR Gateway
Zyn Systems
40 Alderwood Dr.
Sequim, WA 98382
360-681-4123
[email protected]
www.zyn.com/sbir

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