SBIR Proposal Writing Basics: SBIR/STTR Reauthorization vs. Reality
Gail
& Jim Greenwood, Greenwood Consulting Group, Inc.
Copyright © 2012 by
Greenwood Consulting Group, Inc.
In
January, we summarized the key changes in the SBIR/STTR programs that will occur
as a result of the 2011 reauthorization. The agencies and the Small Business
Administration (SBA) are diligently working on implementing the requirements and
opportunities put forth in the reauthorization. While we are “in process” of
this happening, you should expect some glitches along the way.
Case
in point: Section 5105 of the Reauthorization states that the SBIR/STTR agencies
“shall not include any invitation, pre-screening, or pre-selection process for
eligibility…” which
suggests that the agencies have to accept proposals from anyone, and give them
an equal and fair chance of getting funded.
But
recently one of the agencies announced release of a 2012 SBIR/STTR
solicitation/funding opportunity announcement (FOA) in which they “are
requiring pre-applications for this FOA. The pre-application contains a
project description that is limited to 2000 words and 5 pages. Following the
pre-application review, only those who receive a letter encouraging a formal
application may submit a formal application.”
So how do we resolve this apparent contradiction between the rules of the
reauthorization and the reality of these instructions?
There are a couple of plausible explanations, and some inherent lessons
therein:
First, SBA has told the agencies to conduct “business as usual” with
their SBIR/STTR programs until it can develop and issue policy and other
guidelines for the many provisions and requirements of the reauthorization
legislation (a notable exception is the funding set asides: the agencies can
immediately increase their SBIR set asides to 2.6% of their extramural R&D
budgets, and 0.35% for their STTR programs). As we reported earlier, the
reauthorization gave SBA a lot of responsibility, but didn’t give it any
additional funding with which to carry it out. That means it may take some time
for SBA to develop its guidance, and by its own admission, it may come out with
“good” but not “perfect” guidelines. Therefore, it is possible to see
agencies continuing past practices that violate the reauthorization’s
requirements, until such time as SBA issues policy guidelines.
Second, not all of the provisions of the reauthorization are compatible or
consistent with the others. At the same time that Section 5105 tells the
agencies to not “pre-select” applicants, Section 5126 tells most of the
agencies that they must make funding decisions within a mere 90 days of an SBIR/STTR
proposal due date. Given some
agencies will receive 10 times the number of Phase 1 proposals that they can
afford to fund, and now must “down select” to the winners within 90 days, we
should expect them to find ways to meet this goal—and one of them could be to
quickly screening out proposals that have little chance of being among the 10%
that will be winners. Therefore, as agencies try to meet one requirement in the
reauthorization, they may run afoul of other requirements.
Third, it turns out we were “selective” in our quoting of Section 5105 of
the reauthorization legislation. The legislation actually reads that the
agencies “shall
not include any invitation, pre-screening, or pre-selection process for
eligibility for Phase II…” When
we first saw the above quoted agency’s Phase I pre-application requirement, we
thought it was contrary to the reauthorization. But then upon rereading Section
5105, we could see that it is not.
Of
course, some might argue that, while the agency’s Phase 1 pre-application
requirement does not violate the reauthorization, it does violate the spirit if
one believes the intention was to prevent the agencies from denying a small
business the opportunity to submit an SBIR/STTR proposal. What will SBA think as
it develops policy guidelines for this provision of the reauthorization? And how
will individual agencies interpret the legislation and SBA’s policy on it? We
could see some agencies refusing to use any pre-selection techniques on Phase I
or Phase II (following the belief that the Congressional intent was to prohibit
such practices), while other agencies may use them in Phase I because they are
not specifically prohibited from doing so, and see them as valuable tools to
meet the 90 day selection mandate.
All
of this could give you a massive headache. But we think the discomfort as the
reauthorization is implemented is manageable if you keep several things in mind.
First,
recognize that, for whatever reason, there may be some agency and SBA actions
that are confusing and perhaps even appear contradictory to the reauthorization.
This is natural, because implementation of the reauthorization is like sausage
being made: it ain’t pretty to watch, but hopefully what comes out in the end
is good.
Second,
recognize that agencies will decide to implement the reauthorization in
different ways. Some of this comes back to provisions that are agency-specific
in the reauthorization legislation. For example, the reauthorization gives NIH
and NSF a full year to make decisions on SBIR/STTR proposals, while the other
nine agencies have only 90 days. And some of this will be based on how the
agency interprets the reauthorization, and whether it wants to follow “the
letter” or its interpretation of its “intent.”
Third,
you really can’t get around reading, studying, and understanding the
reauthorization legislation. You can find it at in various places, including
http://www.zyn.com/sbir/insider/SBIR_Pages_from-HR1540conf.pdf.
If you don’t know what’s in the reauthorization, then you will be at
a serious disadvantage as the SBIR/STTR world evolves. And as we demonstrated
earlier, you will need to REREAD it periodically to make sure you don’t miss
anything important like the “…eligibility for Phase II…” qualifier on
the ban on pre-selection of proposals.
Finally,
we offer one silver lining in all of this: If you stay on top of the
reauthorization and the agencies implementation thereof, you will be better
prepared to submit proposals that reflect the latest nuances and regulations
that come about as a result of the reauthorization. Some of your fellow
competitors will not be as informed, and will not write a competitive proposal
(or even one meeting minimum standards), which puts you at an advantage over
them. With change comes opportunity, but you’ve got to be on top of the
changes to be able to take advantage of the opportunity.