SBIR Program Diversity and Assessment Challenges Report of a Symposium (2004) / Chapter Skim
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Panel I — SBIR at the Department of Defense
Panel I — SBIR at the Department of Defense
Pages 45-71
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From page 45... ...
Bonvillian introduced himself as legislative director and chief counsel for Senator Lieberman, who served on both the Armed Services Committee and the Small Business Committee. The senator, he said, "has been a close observer of this program, as have I, since the time he arrived in the Senate.
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From page 46... ...
Is there a need for a real "Phase III," with a continuing role for government? 3The term, "creative destruction" originates with Schumpeter, See Joseph Schumpeter, Capitalism, Socialism and Democracy, New York: Harper, 1975, (orig.
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From page 47... ...
In the SBIR re-authorization of 2000 Congress required participating SBIR agencies to work with the National Research Council to develop program metrics and conduct a six-year assessment of program quality. Many of the SBIR agencies were not enthusiastic about this additional exercise in oversight, he said, and it took about a year to agree on an evaluation and another year to initiate the necessary funding.
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From page 48... ...
Aside from several coldwar updates, notably DARPA, it still overwhelmingly depended on large platforms and the large defense contractors that could support these platforms. But in using this model, he said, DOD was having "profound problems" with technology transition -- with moving technologies from the R&D stage to the service acquisition stage.
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From page 49... ...
According to Sue Payton, Deputy Undersecretary of Defense for Advanced Systems and Concepts, the primary role of her unit at the Pentagon "to rapidly transition technology from defense and commercial developers into the hands of the war fighter." 6The Joint Strike Fighter, according the a DoD announcement, will be the world's "premier strike platform beginning in 2008, and lasting through 2040." A production contract was announced in Fall 2001 for a multi-version, "all-aspect stealth platform" designed to "replace the aging fleet of Air Force A-10s and F-16s, the early model Navy F/A-18s, and the Marine Corps AV-8Bs."
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From page 50... ...
8"Asymmetric threat" describes the almost limitless range of challenges posed by groups or individuals unable or unwilling to oppose conventional military strengths directly ("symmetrically")
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From page 51... ...
He also listed several areas in which the Department of Defense is placing additional research funding in order to "capture what's really going on in the basic research community": · Nanoscience and advanced materials; · Advanced power; · Human dimensions and psychological factors; · Directed energy. Planning Research Investments He said that the way the department ensured an adequate, coherent investment in critical research areas was through joint planning across the military services and defense agency efforts.
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From page 52... ...
Of the ten components, the five largest, in order, were the Air Force, Navy, Army, Missile Defense Agency, and DARPA. He said that his office controlled a small amount of SBIR money for programs such as the University Research Initiative Program and the DoD High-Performance Computing Modernization Program.
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From page 53... ...
53 budget million STTR participating $42 5 components: programs. budget SBIR/STTR million SBIR participating FY2002 $773 10 components: DoD 1 FIGURE
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From page 54... ...
54 10- 100 2.5- 10 Dollars of 1- 2.5 Millions 1999) - Investment 1 Under (1994 ercent P Projects II 10- 100 Transition Phase investment.
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From page 55... ...
A DEFENSE SUPPLIER PERSPECTIVE Richard Carroll Digital System Resources10 Richard Carroll said that he would speak on the SBIR program and "the impact of small, high-technology businesses and competition." He said first that innovation and competition were concepts "basic to America itself." Whereas the history of other countries is dominated by kings, queens, princes, barons, generals, and perhaps religious leaders, he said, American history is rich in inventors, entrepreneurs, innovators, scientists, engineers, and tinkerers of all kinds. Pioneer inventors include such familiar names as Benjamin Franklin, Eli Whitney, George Washington Carver, Thomas Edison, Samuel Morse, Alexander Graham Bell, Henry Ford, and the Wright Brothers.
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From page 56... ...
"Creative Transformation" He returned to IBM as an example of what has been called "creative destruction," or, a phrase he preferred, "creative transformation." This process occurs when -- through creativity, innovation, capitalism, intellectual property protection, and competition -- a new paradigm emerges and destroys or transforms an old paradigm. Creative transformation happens to businesses and the marketplace they serve when the basic assumptions, concepts, values, and practices of their business changes to a new reality.
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From page 57... ...
Are these few practicing engineers and scientists under adequate competitive pressure to keep all their creative juices flowing, he asked? He suggested that one way to determine whether adequate competitive pressure exists is to look for signs of creative destruction or creative transformation.
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From page 58... ...
SBIR Enables Creative Transformation Luckily, he said, the SBIR program itself was designed to enable creative transformation; he said that he now thought of the SBIR program as "Government Engineered Creative Transformation." The new SBIR Policy Directive that implemented the provisions passed by Congress in the SBIR reauthorization in December 2000 would permit small companies to provide a much-needed competitive challenge to the status quo. He guessed that within five years, some large new companies would have emerged from the SBIR program to sell their inventions in the federal government marketplace.
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From page 59... ...
· Rights to data: The new SBIR Policy Directive also clarified that data rights associated with Phase I and Phase II SBIR awards continue in a Phase III award. This holds true for as long as the government continues to fund further development that is based on an extension of the research and development conducted under previous SBIR contracts.
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From page 60... ...
With this support, the company was able to develop some significant technology that has greatly improved safety in the manufacture of night vision and sensing equipment. A key safety issue in these manufacturing processes had been the danger of toxic gases used to provide essential coatings.
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From page 61... ...
12 National Research Council, The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative, C Wessner, ed., Washington, D.C.: National Academy Press, 2000.
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From page 62... ...
As an example, he cited a DoD initiative led by Jacques Gansler to collect data whenever a company submitted a proposal for a new DoD SBIR proposal. The company would be asked to list all its previous Phase II awards, along with the sales, both commercial and DoD, that resulted from the awards and any additional investment the company had received.
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From page 63... ...
One positive change, he said, was the Fast Track initiative: a company that receives some matching funds from an outside investor toward the end of Phase I is awarded continuous Fast Track funding between Phase I and Phase II, along with the highest priority for a Phase II award. A National Academies study examining the Fast Track program found that the rate of preliminary commercialization was about seven times higher than the rate of a control group of regular SBIR participants.
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From page 64... ...
"The SBIR program is a politically popular program," he said, "and it was put in place because our political leadership liked the concept of having R&D dollars spread a little more widely than they were being spread before. I think you have to start with that acknowledgment." Addressing Capital Market Imperfections Having said that, however, he noted that the SBIR did seem to address a number of legitimate purposes.
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From page 65... ...
These can be commercialized in the sense of selling them or their output to the DoD, but the services are too specialized to stimulate a large commercial market. There is essentially only one very large customer for weapons systems in the United States, so a certain proportion of agency missions have nothing to do with selling commercial products, and the R&D that supports those missions, by itself, is not related to selling commercial products.
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From page 66... ...
It did not seem useful to try to fit everything into a single mold if that would mean squeezing out firms that primarily performed specialized services for the DoD. The study panel, he suggested, should consider the continuing need for such firms when evaluating the SBIR program.
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From page 67... ...
To program managers, this is tantamount to a tax on the JSF program itself. Jacques Gansler of the University of Maryland added that some programs, such as the Missile Defense Agency, actually keep SBIR dollars within the program to increase its flexibility.
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From page 68... ...
In other words, the impact in DoD had been that a large firm was now presenting alternatives to the products of a small SBIR firm, and the resulting "creative transformation" benefited the DoD by bringing a choice of products.
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From page 69... ...
This kind of output is never developed into a product or used to increase the knowledge of the Department of Defense. Definition of Commercialization and Competition William Bonvillian of Senator Lieberman's office asked whether, given the loss of competitive factors in defense contracting, SBIR should be described more explicitly as a competitive factor in the defense contracting business.
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From page 70... ...
He said that participants had already discussed interesting examples where SBIR grants did provide some competition. However, he cautioned that this may be only a minor degree of competition "at the margins." He said it was unlikely that the Small Business Innovation Research program would truly provide competition against the large systems integrators and platform builders.
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From page 71... ...
The size and configuration of the defense industrial base is an issue of national importance, and I don't think that relying on SBIR to provide competition at the margins is going to fix it." Richard Carroll said he did not disagree with Dr. Flamm's general statement-that the SBIR could not be the only strategy for invigorating the procurement system -- but he reaffirmed his view that SBIR companies can provide significant competitive pressures against large companies.
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