SDEE Advocates SBIR Program Reauthorization (Letter to Congress)
December 1, 2011
The Honorable _____
United States Capitol
Washington, DC 20515
Re: Reauthorize SBIR Program
Dear Rep./Sen. __________:
External studies have shown that the Small Business Innovation Research program is a powerful engine for innovation and job growth. That’s why I’m writing to respectfully request you work to reauthorize the SBIR program and encourage your colleagues in the House and the Senate to do the same.
As you know, the SBIR program supports new technology research and development at small businesses throughout the US. San Diego County, in particular, is a hotbed for these companies, which consistently bring new technologies to market—technologies large research universities and companies often miss.
SBIR virtually revenue-neutral
Since its inception almost 30 years ago, the SBIR program has received very high marks from the National Academy of Sciences and others for its record of company formation, commercialization of innovative technology and job creation. Moreover, aside from minor administrative costs, SBIR is virtually 100 percent revenue-neutral. The program allocates 2.5% of pre-existing external research funding from all major federal agencies to competitive grants and contracts for small businesses.
Keep SBIR alive long-term with S 493; vote ‘No’ on HR 1425
Congress has passed more than 12 short-term continuing resolutions over the last three years to keep SBIR alive. I urge you to support long term reauthorization of SBIR with an immediate allocation increase from 2.5% to 3.5%. SBIR is a highly competitive grants program, and funding success rates for grant applications in such key areas as cancer research have dropped to as low as 10%.
The Senate Small Business Committee proposes to increase the SBIR allocation by 0.1% per year over eight to ten years—in 2021 the allocation would be 3.5%. SBIR has a strong track record in innovation and job creation so it makes sense to support S. 493 with an immediate allocation increase to 3.5%.
House Bill HR 1425 (The Creating Jobs through Small Business Innovation Act of 2011), on the other hand, is severely flawed and the wrong way to reauthorize SBIR.
HR 1425 would undercut a key SBIR attribute—funding of high-risk technology—by opening up the entire program to companies owned and/or controlled by private-equity firms, hedge funds or venture capital firms even though the Small Business Administration has ruled such firms should not qualify because they are not “independently owned and operated.” HR 1425 ignores this SBA ruling and transfers precious federal research dollars from high-risk/high-return technology research, which is dependent on SBIR funding, to low-risk technology research, which is already supported by private investment.
In contrast, S 493 limits eligibility of VC-controlled firms to 25% or less of the total SBIR program, thus preserving much of the flexibility that has made SBIR so successful and continuing to support the development of early-stage companies in this challenging economic environment.
Technological innovation leads to the creation of new and well-paying jobs so I trust you will work to break the logjam over SBIR reauthorization, and use your vote and influence protect SBIR and expand its success during this critical time. Thank you in advance for supporting SBIR reauthorization as written in S 493, and for supporting an immediate increase in the SBIR allocation to 3.5%!
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