SDEE Member Letter to Congress re: SBIR Reauthorization
Legislation that authorizes the Small Business Innovation Research program is stalemated in Congress. SBIR is a federal competitive grants program that brings more than $30M to San Diego County life sciences companies every year.
What is at stake here?
A key House committee hopes to make one-half (or possibly all) of this precious allocation of research funds accessible to companies owned and controlled by Venture Capital firms, hedge funds or private equity firms. This would cause major damage to SBIR as we know it. Fledgling technology companies, that have traditionally been supported by SBIR to tackle high-risk projects with slim capital resources, would lose.
Reauthorization of this successful program is still in limbo in Congress after three years of continuing resolutions. The program now extends only until Nov. 18, 2011. To help end this impasse, please sign and send the letter below to your Member of Congress and send a copy of your letter (with your name) to us at publicpolicy@sdee.org. (To find your Representative, click on House Directory or on Congressman Brian Bilbray, Susan Davis or Darrell Issa to access District Maps.) Consider also cc’ng Senators Barbara Boxer and Dianne Feinstein, and enlisting the support of friends and colleagues on Facebook or LinkedIn. We’ll follow up with our local House members to remind them of the breadth of support for this issue.
The Honorable (fill in name of representative here)
United States Capitol
Washington, DC
Re: Reauthorization of the SBIR Program
Dear Rep. __________:
I am writing to support reauthorization of the Small Business Innovation Research (SBIR) program. This program supports American small businesses that possess the agility to develop and bring to market new technologies that large research universities and major industries miss. External evaluations have shown repeatedly that the SBIR program is a powerful engine for innovation and job growth.
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, since SBIR allocates 2.5% of pre-existing external research funding from all major federal agencies to competitive grants and contracts for small businesses, the SBIR program is virtually 100 percent revenue-neutral except for minor administrative costs.
Yes on Senate Bill S. 493
House Bill H.R. 1425—the Creating Jobs through Small Business Innovation Act of 2011—is not the right way to reauthorize SBIR. The bill is severely flawed and the proposed legislation would hurt the SBIR program and undercut a key attribute—funding of high-risk technology. I urge you to use your influence to persuade your colleagues in Congress to support Senate Bill S. 493 instead.
No on House bill H.R. 1425
House bill H.R. 1425 would make the grave mistake of opening the entire SBIR program to companies owned and/or controlled by private-equity firms, hedge funds or venture capital (VC) firms. The Small Business Administration has ruled that such firms are not “independently owned and operated” and should not qualify. By gutting this regulation, precious federal research funding will flow from high-risk/high-return technologies to low-risk technologies already well-supported privately.
S. 493, on the other hand, limits the 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 an increasingly challenging environment. More importantly, it proposes a slow but steady increase in the SBIR allocation of 0.1% per year.
Build on SBIR success
I trust you will help to break the logjam over SBIR reauthorization, and vote to protect and even expand a very successful program. Technological innovation leads to the creation of new, well-paying job opportunities. The SBIR program is a proven path to both.
Thank you in advance for supporting SBIR reauthorization as written in S.493!
Respectfully,
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cc: SDEE