American Political Divide Tugs at the Seams of SBIR STTR Act.

 A disconnect at the core and failed implementation reflects the partisan divide in contemporary politics


Yesterday, I had my scheduled appointment with the agent listed as a federal contact for help with SBIR grants.

I did as the instructions said and dialed at 3:45 and my phone call went immediately to hold, with no message of introduction. I assumed that was the way it works with the government. About two and a half hours later I checked my email and found a message sent at 3:47 by the agent. saying he was standing by on the call and to dial back within three minutes. I wonder what he thought I was doing during that three minute window of opportunity?

I replied that I had been waiting on hold for two and a half hours and included the instructions which say that I am to call the agent at the designated time and asked for a new appointment.

The response I received said “I’ve reviewed your abstract and don’t feel it will be a good fit for the 8.6 topic area.” and I asked what does “8.6 topic area” mean.

The answer was “Small Business Innovation & Research — 8.6

Community & Rural Development”

I thought he should have said that in the first place.

I ask for a reason why we are not a good fit and the agent said “The proposed idea was not particularly innovative.” I wondered how he could possibly know that since the innovation takes place during the process and projected that he defines innovation as a product rather than a process.

(t) Innovation. Something new or improved, having marketable potential, that includes the development of new technology, the refinement of existing technology, or the development of new applications for existing technology. Definition in the SBIR/STTR Policy Directive

Public Law 114–328 (SBIR/STTR Reauthorization Act of 2017) was sponsored by Senator McCain as a defense act but was patched together with many amendments and compromises before it was finally passed.

The final result is an act which reads as ideologically schizophrenic, much like the state our entire country is in today. The act is one part economic central management and one part the free market economy, the latter having a special emphasis on women owned businesses and the economically disadvantaged, likely added as a compromise to the Democrats to get the bill passed. However, from what I experience, both in interactions and trying to get through the maze of the website, purpose (3) is ignored in practice and implementation.

SBIR/STTR policy is provided by the Small Business Administration (SBA) through the SBIR/STTR Policy Directive,

In the following paragraph (2)and (3)express the schizophrenic core of the program: (2) implicates that the program is driven by the needs of the federal government acting in the manner of a corporation pursuing its own agenda, and (3) allows room for a individualistically-determined free enterprise system, where the government serves the interest of the people rather than the other way around as in (2), and attempts to be inclusive.

© The statutory purpose of the SBIR program is to strengthen the role of innovative SBCs in Federally-funded research or research and development (R/R&D). Specific program purposes are to: (1) stimulate technological innovation; (2) use small business to meet Federal R/R&D needs; (3) foster and encourage participation by socially and economically disadvantaged SBCs (SDBs), and by women-owned SBCs (WOSBs), in technological innovation; and, (4) increase private sector commercialization of innovations derived from Federal R/R&D, thereby increasing competition, productivity and economic growth.

Based on the minimal information the agent was willing to communicate, I connected his response to the list of projects solicited by the federal government on the SBIR website. These projects are not the sort that an economically disadvantaged small business concern can apply for as they require a considerable capital investment in facilities, equipment, and staff.

One needs only to observe the company logos on the SBIR power point presentation to see that these are not economically disadvantaged companies:

The power point presentation states:

Focus is on performing R&D — Not purchasing equipment, commercializing a technology that has already been developed, or one that has very low risk and only needs capital

Clearly that intends well capitalized companies- and not economically disadvantaged small business concerns.

The phrase “one that has very low risk and only needs capital” leaves ample room for arbitrary interpretation. Risk is relative to economic circumstance.

Solicited projects only?

The SBIR website seems like a maze. Its very easy to lose one’s place in it. Today, I found what is shown below, for the first time. It says, that, in effect, the federal government mandates what projects are eligible for awards. The agent did not mention the mandate as a disqualifying reason. I am not sure if it applies to a special section or it generally applies. There is not a helpful source to answer questions, since agent #1 was useless, and none others are listed.


You must respond to a funding solicitation from a particular agency, because the SBIR/STTR programs do not accept “unsolicited” proposals (a proposal that does not address a topic specified in a currently open agency SBIR/STTR solicitation). …. (emphasis mine)

The above is the essence of an economy in which the people serve the interests of government rather than government serving the interests of the people. We tell you what to do, period. Its a one way street.

And so I decided to go to the source, SBIR/STTR Policy Directive
There I found this:

(3) SBA does not intend that the SBIR/STTR Program Solicitation replace or be used as a substitute for unsolicited proposals for R/R&D awards to SBCs. In addition, the 83 SBIR/STTR Program Solicitation procedures do not prohibit other agency R/R&D actions with SBCs that are carried on in accordance with applicable statutory or regulatory authorizations. (emphasis mine)

And yet the instructions in the first example specifically state that unsolicited projects are not accepted. Is there an intentional rewrite of the enacted law taking place during implementation?

Economic Versatility

Our research and development project fits purpose(3) foster and encourage participation by socially and economically disadvantaged SBCs of SBIR/STTR Policy Directive because the capital investment for a ceramic studio is considerably less than the expected investment for the projects on the solicited list. Our project is simple, involving an ancient technology but that does not mean the practice of ceramic development is not innovative. Creativity and innovation are not specific to any industrial sector. It is state of mind.

Andersen Design SBIR Grant Research and Development Project.

Develop a new ceramic body that can be slip cast at a thin weight and fettled to a very thin lip with high resistance to chipping and to develop glazes that work with the body. The original idea grew out of the concept of a ceramic mug. A very thin lip is possible in our original stoneware body but it is not as chip resistant in use as desired. Our original body was designed in the 1950’s. Since then the availability of materials has changed both because some materials are no loner available and because new materials have become available.

An additional goal is to create a body in which larger pieces can be thinly cast without sagging in the kiln, or breaking under a slight pressure in the greenware state. The targeted body will be moderately delicate in appearance but not easily broken.

Ceramic glazes interact with the ceramic body so that glazes must be specifically designed to work with a new body.,,,,,

We will likely develop glaze additives as well, to be used at the discretion of the individual artisan for targeted effects. Our aim is to retain consistency with our midcentury roots while engaging the sensibilities and technology of the 21st century.

Our project is affordable compared to the projects on the solicitations list. It is highly improbable that an economically disadvantaged small business concern can apply for the solicited projects requiring facilities built with large capital investments. Do the math!

The key to understanding the eligibility of © The statutory purpose of the SBIR program is at the beginning of the paragraph previously quoted:

© The statutory purpose of the SBIR program is to strengthen the role of innovative SBCs in Federally-funded research or research and development (R/R&D). Specific program purposes are to: (emphasis mine)

This says in short that the SBIR program provides federally funded grants to small business concerns involved in innovative research and development and that the program has several purposes, but it doesn’t say that every project must serve all of the purposes.

If government serves a common good, investment in innovation should be considered as a complete cultural environment with innovative opportunities at all levels of society, with different strokes for different folks, as the old adage says.

I pointed out to the agent that I fit into the latter category of purposes and wagered that those that fit the solicited projects list don’t meet the fostering the economically disadvantaged SBC purpose. I said I did not expect to convince him but at least he could recommend a resource dealing in my category.

He referred me to my state resources in the manner that bureaucrats do when they want to get rid of one. I’ve been there and done that. I spoke with another state resource today who knew less about the SBIR grants than I do.

In my experience Public Law 114–328 (SBIR/STTR Reauthorization Act of 2017) is being rewritten in practice. Adding purpose (3) was a compromise, now being erased in implementation. That can be done because the act is a hodgepodge, possibly due to the process of negotiations that go into passing an act.

Public Law 114–328 (SBIR/STTR Reauthorization Act of 2017) started as a defense bill, National defense is an enumerated power of the federal government. Technological research and development is justifiably a component of national defense.

There would be no need for a compromise if it were strictly a national defense act, but perhaps to get the national defense act funded the right had to throw some other apple in the pot and so it becomes economic development for the private sector. When a national defense act spills over to centrally managing the economy through public private relationships and developing products for the commercial market, it is no longer operating within the clear territory of national defense.

One could argue that a strong economy is also a matter of national defense but then we slide down the slippery slope into a totalitarian ideology. Ironically, our national defense exists to defend our constitutional government premised on individual freedom from which the free enterprise system is the naturally emergent economic policy, and ideologically diametrical to a centrally managed economy.

The SBIR literature also states that although the rural economic development program is run by the US Department of Agriculture. an applicant does not have to be in an agriculture business. However a search for information pertaining to the non-agriculture business category has so far produced no results. Non-agricultural rural business does not seem to have a category of its own.

So once again I find I am on my own, but writing this post has been clarifying. The way to understand this act is by reading SBIR/STTR Policy Directive. At least I will have learned something. I am not sure what yet. That is the nature of research. One finds out where one is going when one gets there.

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