It's Not Your Father's SBIR Program Anymore!

By John Davis*

The new SBIR/STTR Reauthorization Law (buried in the National Defense Authorization Act for Fiscal Year 2012) made a number of radical changes in these programs - many of them harmful. The extent of the harm will not finally be known until the SBA finalizes its Policy Directive, which carries the force of law. The SBA has published what it calls AFinal policy directive with request for comments@ in the Federal Register Volume 77, Number 151 (Monday, August 6, 2012). But it is really not Afinal@ as 1) the comments requested therein have yet to be dealt with and 2) the document itself postpones finalizing some of the more difficult decisions to the end of this year. Nonetheless, we can determine many of the implications now.

Probably the most onerous implication is that the SBIR and STTR programs will both become VERY MUCH more competitive than in the past. Historically, about 1 of every 9 applications has won an award (average across all 11 agencies). Now, when the provisions of this new law, and the SBA Policy Directive in place, we can expect that to move to something in the range of just 1 in 20 applications can win funding. That is a awful lot of proposals to write for a $150,000 revenue prize. This situation is primarily due to the diversion of funds to a plethora of uses other than funding Phase I awards.

In addition, however, many here-to-fore prohibited players are expected to swell the number of applicants. Moreover, those applicants will be backed by serious money and resources (already have sources of co-funding and follow-on funding) to the competition. Some might even bring professional proposal teams to bear. This all adds up to making for a really serious competitive arena such as we=ve never seen before. The smaller, newer firms will have their hands full when trying to craf compelling proposals in this environment. So, the cost of entry just went up - big time! Without some sort of professional training or support, the novice firm, the start up, the firm with no native commercialization wherewithal might be prudent to just demure from applying until we see where the dust settles.

Hey, like we said, it's not your father's SBIR Program anymore!

EPILOGUE: The SBIR Resource Center(R)has formally recommended to the SBA that it modify the Policy Directive to cause the agencies identify those topics where the larger, big-money backed firms are welcome to apply. This would, at least, leave a few crumbs available where the traditional applicant could compete. We do not really expect them to comply with this request, but if enough noise is made about this, by the public, it might come to pass.
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John Davis is CEO and General Manaer of the SBIR Resource Center(R), the nation's leading provider of funding acquisition resources (software tools, training & personal services) to the SBIR/STTR community. More information, and informative articles about SBIR/STTR, can be found at .

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