The Department of Defense has developed numerous ways to modify the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to rapidly secure solutions for the warfighter. From Commercial Solutions Offerings (CSO) to $50,000 Phase I awards that make a company instantly eligible for a government Phase III, DoD has demonstrated its ability to use both traditional and nontraditional methods to secure technologies that it needs for the warfighter more rapidly.

However, it appears that some small businesses that have benefited from the application of DoD’s tool kit, often become proponents of applying these same methods to all agencies. For example, the Phase 1A concept in the INNOVATE Act bears a striking resemblance to DoD’s Commercial Solutions Offering (CSO).  This is an optional approach used by DoD – not a mandated one – which enables companies with an existing commercial solution to make modifications to meet a DoD need.“CSO can be used to acquire innovative commercial items, technologies, or services that directly meet program requirements, whereas BAAs are restricted to basic and applied research.[1]”

The proposed Phase 1A is intended to speed upon the entry of new applicants into the SBIR/STTR programs, by asking them to submit a two-page proposal in response to an “open topic” for which they could receive a $40,000 award. The proposed guidelines for the Phase 1A application includes: (1) Identification of the Problem, (2) Description of the Solution, (3) Impact of the Solution, (4) Differentiation and (5) Commercialization Strategy including both the commercial and government markets. The requirement for an “Open Topic” and the proposed outline suggests that very little is known about how civilian agencies differ from the Department of Defense. Here are a few of the differences:

1. 1. Most of the SBIR/STTR topics from civilian agencies ARE focused on basic and applied research.
   2. Many civilian agencies already have developed their own methods to quickly enable potential applicants to discern if there is a fit between their skills and the agencies needs. The National Science Foundation uses the Project Pitch, the Department of Energy uses the Letter of Intent, and the National Institute of Health uses Aims.
   3. Civilian agencies already conduct outreach to bring in hundreds of new applicants each year and provide support in proposal preparation through federally funded Phase 0 programs. The Department of Energy has provided the DOE Phase 0 support for more than 10 years, as has the National Institutes of Health through its Applicant Assistance Program. These programs are comprehensive and cost effective.
   4. Most civilian agencies have funded I-Corps and make this available in various forms in order to assure that small businesses speak with their potential customers.
   5. Although Government Phase IIIs are theoretically available to all agencies, granting organizations tend not to use this mechanism as their mission is focused on “public good”, as opposed to being focused on a government mission.

The bottom line is that there is no need to substitute effective solutions that agencies have already developed with an approach that will overwhelm their staff and require more taxpayer money. Existing federal Phase 0 programs cost between $5,000 and $7,000 per company, as opposed to $40,000 as proposed by the INNOVATE ACT.  It is important to note that the Department of Defense, which accounts for more than half of the available SBIR/STTR funding, has far more staff to manage and implement its programs than smaller agencies with less resources.