SBIR at the Department of Defense (2014) / Chapter Skim
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7 Findings and Recommendations
7 Findings and Recommendations
Pages 200-234
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policy Directive that guides program implementation at all agencies. Section 1c of the SBA Directive states program objectives as follows: "The statutory purpose of the SBIR Program is to strengthen the role of innovative small business concerns (SBCs)
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NRC STUDY FINDINGS The SBIR program at DoD is meeting three of its four legislative and mission-related objectives. The program funds the development of missioncritical technologies that meet the specific needs of DoD components; it supports the development of products that reach the market at an appropriate rate and scale; and it encourages the development of transfer of new technical knowledge while connecting companies to universities and research organizations.
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at DoD. Nor is FPDS set up to track SBIR projects as they commercialize within DoD, beyond the first Phase III contract.
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About 60 percent of reported sales by value from SBIR projects go to either DoD directly or to DoD primes (NRC survey data)
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problems Transformed company culture to become more market oriented Drove researchers to focus on technology transition Supported feasibility testing for high-risk/high-payoff projects (Phase I) _____________________________ SOURCE: Analysis of company responses to 2011 NRC Survey.
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SBIR projects have led directly, for example, to new torpedoes at Navy, to significant components of the Joint Strike Fighter, and to bomb-disarming robots (funded by the Defense Advanced Research Projects Agency [DARPA] and other DoD components)
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2009 approximately $650 million in Phase III contracts were signed with SBIR companies.
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.21 b. The share of Phase I awards to WOSBs increased slightly in the early part of the past decade but have since remained flat.22 20 Legislative language and the SBA policy directive both focus on a slightly different way of addressing essentially the same issue, using the term "members of socially and economically disadvantaged groups." SBA in turn then defines members of these groups (see Chapters 4 and 6 for further discussion)
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Black-owned small businesses accounted for approximately 0.5 percent of all respondents; Hispanic-owned firms, about 1 percent.25 b. In the NRC survey, companies reported that 11 percent of PIs were minority (using the broad definition approved by SBA)
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The SBIR program at DoD supports the development and adoption of technological innovations.
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About 60 percent of SBIR companies reported at least one academic founder, and about one-quarter reported that the most recent prior employment of the founder was a university.31 d. Data from the survey for linkages with universities, including use of faculty as PIs, use of graduate students as researchers, licensing of technology from universities, and use of a university as a subcontractor, all increased from the 2005 survey, suggesting growing university linkages with the DoD SBIR program.
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Slightly greater than 20 percent reported filing five or more related patents.33 2. Publication of peer-reviewed articles remains the primary currency of scientific discourse, and despite the need to protect ideas in the commercial environment of small businesses, SBIR firms continue to contribute actively to scientific publication.
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i. Contracting officers may be reluctant to certify Phase III contracts in part because they confer important data rights on the company, which are by statute not negotiable.
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a. DoD contracts typically require that primes provide all data rights to the contracting agency.
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a. Data entry related to Phase III awards remains somewhat erratic.
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5. Even though contract reporting mechanisms allow DoD to track the award of sole-source contracts based on SBIR data rights, DoD does not in practice appear to track the incidence of these contracts in Phase III.
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In developing the Policy Guidance, SBA addressed section 5111 of the Reauthorization Act, concerning multiple Phase II awards.41 Under the 39 Team Subs is the single largest PEO at DoD in terms of Phase III transitions, accounting for more than $1.5 billion in validated Phase III contracts. However, a review indicated that about 30 percent of that amount was accounted for by two legacy companies that were acquired, and another 30 percent went to a single small business that reached the size limits in 2010 (but continues, correctly under SBA and Federal Acquisition Regulation (FAR)
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-- A small business concern that receives a Phase II SBIR award or a Phase II STTR award for a project remains eligible to receive 1 additional Phase II SBIR award or Phase II STTR award for continued work on that project." Public Law 112-81, 112th Congress 42 SBA Policy Directive, section 4(b)
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a. Unless a contract is officially certified as a Phase III contract, data rights are not protected as required under the legislation.
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b. No component-level staff are explicitly responsible for addressing issues related to small business data rights.
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Improve Phase III transition43 DoD has made significant strides to put in place new mechanisms to encourage Phase III transition. The Phase II.5 program adopted by Air Force and Navy is a particularly helpful innovation, bringing together funding from the SBIR program and program offices (acquisitions)
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b. Navy has operated the Navy Opportunity Forum for a number of years, bringing together selected SBIR companies and numerous representatives from the primes.
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a. For this approach to be effective, DoD will need to greatly advance its ability to track the use of SBIR companies as subcontractors to primes.
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Such an approach is not necessary to meet Congressional intent and is likely to reduce program effectiveness.
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4. Track Related Program Operations: Metrics should also track related program operations including outreach efforts.
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2. SBIR companies -- like "customers" in other markets -- are an important source of information about program strengths and weaknesses.
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b. Similarly, DoD should consider developing or expanding mechanisms through which SBCs can share information about SBIR projects, helping them to find technical or marketing partners and to navigate the often-complex regulatory and technical environment of DoD programs.
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a. Coverage of Phase III contracts can be improved by training contracting officers more effectively in the rules governing Phase III.
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2. CCR provides unique data and should continue to be used to track commercialization via self-reported data from SBIR companies.
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C Protecting small business data rights.58 Although the reauthorization provided full support to existing provisions with regard to SBIR company data rights, some companies reported cases in which these rights were breached with only limited recourse.
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annual reports on program initiatives from SBIR component program offices to OSB (which could derive from internal reporting within components that is currently not shared with OSB)
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Auditing: Auditing issues, although technical and only tangentially related to the SBIR program as such, can cause devastating damage to small business and anecdotally appear to represent a significant barrier to program participation for new applicants and to the timely award of contracts by DoD program managers.60 DoD should address DCAA on issues of concern to SBIR companies as a matter of high priority at senior levels. DoD should: 1.
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consider developing an "expert group" of senior contracting officers who can meet virtually and can provide direct advice and support for small businesses in the event of contracting difficulties.
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