An Assessment of the SBIR Program at the Department of Defense (2009) / Chapter Skim
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From page 290... ...
Of the 4085 firms that received Phase II SBIR awards from DoD, NIH, NASA, NSF, or DOE from 1992 to 2001, an additional 7 firms were identified as out of business (total of 25) and no email addresses could be found for 893.
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From page 293... ...
, when did the first sale occur, and what is the approximate amount of total sales resulting from the technology developed during this project? If multiple SBIR awards contributed to the ultimate commercial outcome, report only the share of total sales appropriate to this SBIR project.
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From page 294... ...
Select all that apply. 4 Please note: If a NASA SBIR award, the Prime contractors line will state "Prime contractors for NASA".
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1% 2% 1% 1% 37% Part III. Other outcomes UNEDITED PROOFS
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From page 296... ...
69% Behind 20% No response UNEDITED PROOFS
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From page 297... ...
Number Applied Number Received/ For/ Submitted Published Patents 836 398 Copyrights 71 62 Trademarks 211 176 Scientific Publications 1028 990 UNEDITED PROOFS
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From page 298... ...
20. How many SBIR awards has your company received that are related to the project/technology supported by this Phase II award?
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From page 301... ...
0% Other UNEDITED PROOFS
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From page 302... ...
Was your company founded because of the SBIR Program?
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From page 303... ...
b. Phase II: ________ Average number of Phase II reported was 7 27% 1 Phase II 44% 2 to 5 Phase II 15% 6 to 10 Phase II 8% 11 to 20 Phase II 5% 21 to 50 Phase II 1% >50 Phase II Four firms reported >100 Phase II UNEDITED PROOFS
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From page 304... ...
5. What percentage of your company's growth would you attribute to the SBIR program after receiving its first SBIR award?
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From page 305... ...
11. Which, if any, of the following has your company experienced as a result of the SBIR Program?
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From page 306... ...
11% None of the Above UNEDITED PROOFS
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From page 308... ...
, seeks to determine both the extent to which the SBIR programs meet their mandated objectives, and to investigate ways in which the programs could be improved. Over 1200 firms have participated earlier this year in extensive survey efforts related to firm dynamics and Phase II awards.
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From page 309... ...
Phase I only Received Phase II Assisted/Most Useful Assisted/ Most Useful 10/3 State agency provided assistance 11/10 15/9 Mentor company provided assistance 21/15 31/17 University provided assistance 34/22 16/8 Federal agency SBIR program Managers 25/19 or technical representatives provided assistance 3. Did you receive a Phase II award as a sequential direct follow on to this Phase I award?
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From page 311... ...
14 % Although the company did not receive the direct follow on Phase II to the this Phase I, the company did receive at least one other subsequent Phase II SBIR award in this technology. 12 % The company received subsequent federal non-SBIR contracts or grants in this technology.
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rights to technology, sale of spin of company, etc.) 2 % Licensing fees UNEDITED PROOFS
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From page 313... ...
, when did the first sale occur, and what is the approximate amount of total sales resulting from the technology developed during this phase I? If other SBIR awards contributed to the ultimate commercial outcome, estimate only the share of total sales appropriate to this Phase I project.
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From page 314... ...
75 % Reduced scope 4 % Increased scope 21 % No Response to scope 5 % Faster completion 51 % Slower completion 44 % No Response to completion rate 14 % Uncertain 40 % Probably not 16 % Definitely not 4 % No Response to question 12 UNEDITED PROOFS
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From page 316... ...
316 Appendix D: Case Studies UNEDITED PROOFS
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From page 317... ...
- 75 # SBIR Awards-Phase II (DoD Phase II) - 18 # Patents 1 Draft based on interview with Dr.
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From page 318... ...
These two products were a direct result of a NASA Phase I SBIR program entitled "Laser Induced Thermal Micro-cracking for Ductile Regime Grinding of Large Optical Surfaces." While the program did not go on to Phase II the commercial sales generated from the first two products was significant for the growth of the company. The firm also saw market potential in developing products from advanced ceramics.
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From page 319... ...
The firm's R&D also has been underwritten by revenues generated by its manufacturing operations. Its primary use of SBIR awards was to develop specific application technologies based about its core technology.
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From page 320... ...
The larger number of awards have been from DoD, followed by NASA, with a few from the other agencies such as NSF and DOE. Products based on SBIR awards received from DARPA and NASA have had commercial sales of approximately $14 million.
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From page 321... ...
ACR's diligent following to what it learned in the Navy's TAP program has assisted it in receiving 3 separate Indefinite Deliverables, Indefinite Quantities (ID/IQ) Phase III contracts totaling $75 million.
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From page 322... ...
Approximately eight percent of the company's revenue comes from SBIR Phase I and II awards. The SBIR awards have been integral to the firm's current position.
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. IMPROVING SBIR Surviving Funding Gaps Concern has been expressed regarding the delay between Phase I and Phase II awards.
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From page 324... ...
When companies begin writing proposals, without understanding exactly the customer's needs, they invest valuable time and resources in a process deemed to failure. Venture Capital Participation Small publicly traded companies should be allowed to participate in the SBIR program, even if they have access to private sources of funding, because the SBIR's objective is to promote innovation.
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From page 327... ...
; the firm is no longer eligible for the SBIR program. AST located in Sunnyvale in part because the founders lived in the Bay Area, but also because at the time of its founding, Silicon Valley was the place to be for cutting edge technologies, especially those related to miniaturization, a key factor in expanding the use of digital signal processing to the needs of signal intelligence organizations.
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From page 328... ...
2 One patent was sold UNEDITED PROOFS
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From page 329... ...
: 10 # SBIR Awards Phase II: 9 (DoD Phase II Awards) : 8 # Patents: 0 # Publications: 20 # Presentations: 33 Awards: 4 *
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From page 330... ...
Bihrle's work under SBIR awards has centered mostly about the development of new testing techniques for wind tunnel testing and the development of new simulation techniques. These new technologies are broadly applicable across several DoD programs, including the joint strike fighter and the Navy's V-22 program, as well as for NASA.
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From page 332... ...
There, he started writing proposals for SBIR awards, finding eventual success with four Phase I awards. Based on this funding, which approximated $200,000, he founded his firm and started hiring his first employees.
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From page 333... ...
The company also sells products to the agencies that made the SBIR awards. About 15% of their outcomes go back to the agencies.
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From page 334... ...
US Patent Pending. IMPROVING SBIR Surviving Funding Gaps Brimrose notes that it is extremely committed to the development of their technology.
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From page 335... ...
In this case, there is little personal interaction and it is very hard for the technical monitor to understand the full benefits of the innovative technology that the company is able to provide. SBIR program management is not funded in some agencies, which results in poor follow-up and communication with the companies.
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From page 336... ...
• SBIR awards provide funding to more high-risk technology than most other sources of funding.
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From page 337... ...
CFDRC has developed state-of-the-art simulation methodologies under SBIR awards from several agencies. The resulting software has been adapted and applied to a wide range of problems, mostly during commercialization phases.
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From page 338... ...
Of these about 70 were Ph.D.s. SBIR awards are also credited with playing a critical role in developing CFDRC's hallmark technological innovations, long-term research, and advanced applications.
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From page 340... ...
Agencies should avoid limits on the number of awards or proposals and exceptions for VC's as this will hamper overall success of the SBIR program. Funding of venture backed firms is fair only if a company has already proved success, has shown discipline in creating profit, developed some technological edges, or is ready to commercialize.
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From page 341... ...
It is very beneficial for small companies to pursue SBIR awards in partnership with primes. Finally, it ultimately benefits the government to leave data rights with small businesses.
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From page 342... ...
Its core technology remains centered about the development and application of photonic sensors and instrumentation, and it continues to conduct R&D on defense-related topics. Increasingly though it has directed its efforts towards biotechnology, biomedicine, and environmental monitoring.
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From page 343... ...
However, it has not succeeded in attracting Phase III awards from DoD or NASA. Ciencia also notes that the SBIR programs of NIH and NSF, 2 other sources of SBIR funding for the firm, do not provide Phase III awards.
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From page 344... ...
Some topics may lead to Phase III awards; others not tied to mission needs, fall into a "nether world." SUMMARY The SBIR program played an important role in the initial launching of Ciencia, and continues to be an important source of its new R&D funding as the firm has sought to widen the range of government and domestic markets to which its core technological expertise can be applied. Improvements in coupling the topic selection process with mission and end user needs are seen as needed to increase and accelerate the transition of technologies emerging from Phase II projects into operational deployment.
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Phase II: 7 (+1 pending) Phase III: 4 # Patents: 1 provisional; 2 pending Awards: National Tibbetts Award *
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From page 346... ...
The difficulties it has encountered in transitioning Phase I and Phase II awards into Phase III awards or subsequent acquisition contracts is seen by the firm as caused by the disconnect between DoD's management of the SBIR program and its acquisition programs. The two are organizationally separate, with SBIR and acquisition programs in effect having different missions.
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From page 347... ...
RECOMMENDATIONS The SBIR program needs to improve coordination between its SBIR and acquisitions programs to facilitate the transition to Phase III awards, and more generally, to DoD's acquisition programs. To accomplish this, acquisition program officers need to be involved in a systematic manner in the generation of SBIR topics.
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From page 349... ...
The firm's establishment is an outgrowth of her educational, professional and family experiences, which Jacobus describes as a female version of an Horatio Alger story. Cybernet's establishment also is a distinctive example of the contribution of the DoD SBIR program in launching a firm.
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From page 351... ...
She managed this from reading manuals obtained at the regional SBA office, through purchasing technical assistance from local consultants, such as a retired, former DCAA contracting officer, and though assistance in understanding Federal Government contract procedures provided by the regional Small Business Development Center, located in a community college in Livonia, Michigan. As described by Jacobus, one of the side benefits of the SBIR program is that it forces "business discipline" on technologists.
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From page 352... ...
Cybernet's current revenues are derived approximately 70 percent from the Federal Government and 30 percent from the civilian sector. The firm remains active in the SBIR programs of several agencies.
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From page 353... ...
They are not seen as focused on firms working on high-tech defense technologies. In combination, the difficulties that it has experienced in securing venture capital while simultaneously developing new products for the DoD, as exemplified by its recent delivery of an automated tactical ammunition classification system in Kuwait for the Army, leads it to question the thrust of Federal agency SBIR program managers to interpret the language in SBIR regulations on commercialization to mean venture capital investment whereas the appropriate interpretation would allow for non-SBIR government sales, such as the sale of their special purposed machinery for the Army in Kuwait.
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From page 354... ...
The challenge is seen as especially formidable for such firms under the SBIR program as their technologies course through Phase I and Phase II stages and begin to enter Phase III production. Large firms, including major DoD prime contractors, are seen as aggressive in seeking to trespass on the intellectual property of small firms.
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From page 355... ...
For example, according to the firm, since approximately only 10 percent of venture funded companies become successful growth companies leading to IPO or buy-out – using these measures as performance measures would set a relatively low success rate towards which the SBIR program might aspire. The timeliness of the DoD SBIR review process has improved considerably over the past 15 years, especially as it has shifted from hard copy submissions and processing to computerized systems.
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From page 356... ...
. DoD's SBIR program needs to strengthen the relevance of its topic selection process to the "end users." SBIR awardees tend to work only with their Service's technical monitor, who may provide no clue about the "bigger picture" of how a topic or technology fits into larger systems or how it will be used.
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From page 357... ...
Prime contractors would prefer to have add-on contracts to their work to develop the technologies listed in SBIR solicitations. One recommended approach to improving links between the SBIR program and procurement and acquisitions programs would be to o have SBIR program managers report directly to DoD major weapons/systems program managers.
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While at Science and UNEDITED PROOFS
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From page 359... ...
He started bidding on SBIR projects in 1989 and won awards from the Army, DOE, DARPA, NASA, DOA, NIH and SDIO. With the end of the Cold War, DRT began to lose its market niche in defense consulting and refocused its operations to pursue medical applications via NIH SBIR awards.
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From page 360... ...
IMPROVING SBIR Surviving Funding Gaps DRT has had to cope with funding gaps, using its own money to bridge this gap during work on the Mud Pulser, the company used. DRT has diverted staff into other projects between 1987 and 1994, when ¾ of his funding was derived from the SBIR program.
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From page 361... ...
Start-up companies thrive on $½ million funding, larger companies cannot survive on one award. There are firms that receive 15-20 SBIR awards in a year, and the SBIR program is their sole source of revenue.
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From page 362... ...
While the SBIR program is very good in providing seed money and getting a concept developed, it has an inefficient and ineffective strategy for commercialization. DRT licensed its mud pulse telemetry system to a Canadian company, but slow commercialization process allowed other technologies and suppliers to break into the market first.
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From page 363... ...
The firm is privately held, with ownership distributed among Farzin Lalezari, Shirley Lalezari, his wife, and Theresa Boone, a former co-worker, at Ball Aerospace. Lalezari was born in Iran, and emigrated to the United States in 1971, while a high school student, following the imposition of a death sentence on his father, Iran's Minister of Education, by the Khomeini regime.
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From page 364... ...
EXPERIENCES WITH SBIR In the brief period since it founding, from approximately early 2003 through mid2005, the firm has had considerable success in competing for SBIR awards. At its inception, FIRST RF viewed the SBIR program both as a major opportunity to conduct the technologically innovative work that led to its founding and as a source of needed revenue.
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From page 365... ...
It is a needed antidote to the innovative lethargy and atrophy that has beset large defense and aerospace contractors. The SBIR program also has provided opportunities for FIRST RF to collaborate with researchers at the University of Colorado.
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From page 366... ...
The DoD SBIR program has provided the US Army with a new countermeasure technology to meet the threat that IED's pose to US military forces in Iraq. If not for the SBIR award, FIRST RF never would have had the resources to work on the technology.
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From page 367... ...
The company's success in the SBIR program was reflected in its 2000 selection to receive the prestigious Tibbetts Award from the Small Business Administration (SBA) for excellence in technology research ROLE OF SBIR Founding the Company The company grew from a $10,000 investment by its founders.
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From page 368... ...
In addition, IAI's management invests considerable time in trying to team with appropriate universities and win SBIR awards. The SBIR program provided IAI the opportunity to network and make connections that may ensure the company's survival if SBIR funds were withdrawn.
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From page 369... ...
Details of such partnership are negotiated in terms of each party's responsibilities and share of contract funds. Partnering is constrained by the SBIR program subcontracting limit of 33% for Phase 1 contracts and 50% for Phase 2 contracts.
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From page 370... ...
IMPROVING SBIR Surviving Funding Gaps Intelligent Automation, Inc. manages the delay between Phase I and Phase II funding by managing several contracts at the same time.
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From page 372... ...
Pullman, WA 99163 Ph: 509-366-78701 Year Started: 1988 Ownership: Privately held Annual Sales: $45 million Number of Employees: 275 SIC Code: 3679 # SBIR Awards-Phase I 13 # SBIR Awards-Phase II 3 # Patents 28 *
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From page 373... ...
The firm received a series of Phase I and Phase II awards, mainly from the Navy and Air Force for designing and assessing the applicability of its spray cooling technology for a diverse set of weapons systems. Success in these Phase II projects led to Phase III funding from the Air Force and Navy.
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From page 374... ...
Selected firms are receiving repeated awards to work on topics that at times don't represent new technological advances. ISR reports little success in its more recent efforts to get back into the DoD SBIR program after having not submitted proposals for several years.
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From page 375... ...
In return, ISR highlights that the SBIR program has produced a lot of good technology both for DoD and the commercial sector.
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From page 376... ...
A Key Source of Funding From 1995 to 2000, SBIR awards served as the company's principal source of funding and -- complemented by personal resources and private investment -- helped drive the company's technology development and expansion. Throughout its history, JENTEK has submitted 87 Phase I proposals and received 25 Phase I awards.
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From page 377... ...
For example, the company's Phase III commercialization award from NAVAIR is included in JENTEK's marketing materials. Building Relationships In addition to providing funds, SBIR also provides JENTEK the opportunity to build relationships with OEMs and with government customers, such as NAVAIR, WR-ALC, OO-ALC, NADEP Cherry Point, NADEP Jacksonville, Kennedy Space Flight Center, etc.
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From page 378... ...
The company holds the trademarks for GridStation, MWM, IDED, and JENTEK Sensors. Reflecting the scope of its innovations, the company has received numerous awards, including the NAVAIR Phase III commercialization award, Outstanding Phase III Transition Award, 2004, awarded by the Navy Transition Assistance Program; Outstanding Paper Award for Materials Evaluation: "Eddy Current Sensor Networks for Aircraft Fatigue Monitoring," published in the ASNT Materials Evaluation Magazine, July 2003, Aerospace Health Monitoring, Volume 61, No.
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From page 379... ...
Other agencies are more research focussed and UNEDITED PROOFS
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From page 380... ...
There are groups that push for openness and devalue companies that hold SBIR data proprietary. The SBIR program should help primes, and particularly government employees, understand that the lifeline of small UNEDITED PROOFS
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From page 382... ...
Support for non-traditional ideas According to Dr. Fraas, if a company is fairly well established with an ongoing product and still wants to do R&D, then participation in the SBIR program can be very useful.
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From page 383... ...
SBIR awards funded the development of prototypes for use by DoD. The company's related civilian products are being sold mainly outside the US.
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From page 384... ...
They also hold four achievement awards: 1 from NASA and 3 best paper awards IMPROVING SBIR Surviving Funding Gaps Delay between Phase I and Phase II funding makes the survival of small businesses difficult. Even if the company survives, it can loose important capabilities as it diverts staff to other projects or even loses staff.
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From page 385... ...
According to JX, the heavy focus on DoD SBIR awards and associated defense systems limits the development of related commercial products for peaceful appications. There is also a lack of follow-through for commercial applications used beyond the military prototypes.
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From page 386... ...
Irwin Feller American Association for the Advancement of Science Company Facts at a Glance Marine Acoustics Inc VoxTec International, Inc. 809 Aquidneck Avenue 706 Giddings Avenue Middletown, RI 02842 Suite 2A Phone: 401-847-7508 Annapolis, MD 21401 Fax: 401-847-7864 Phone: 410-626-9825 E-mail:info@marineacoustics.com Fax: 410-626-9851 www.ace@sarich.com Revenues: $10.6 Million in 2004 $2.5 million Employees: 35 6 Number of SBIR Awards: 11 Phase I: 6 Phase II: 4 Phase III: 1 Number of Patents: 1 Pending: 2 *
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From page 387... ...
Following 9/11, and the subsequent deployment of American military forces in Afghanistan and Iraq, Marine Acoustics received a Phase III award to tool up to begin limited production of the handheld translator. Initial field deployment of the technology began in 2002.
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From page 388... ...
Marine Acoustics thus began and has remained a privately held firm, with its stock distributed between its founders and an ESOP. VoxTec also is privately held.
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From page 390... ...
A Source of Early-stage R&D funding The company realized, very early in its history – winning two SBIRs in its first year of operation -- that the SBIR program was a valuable source of non-equity diluting R&D funding. Even when venture capital funds are available for early-stage R&D, the 3 He earned a masters degree in from MIT and a doctorate from Stanford University, all in electrical engineering.
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From page 391... ...
Winning numerous Phase I and II, and two Phase III, SBIR awards allowed the company to attract additional funds and to advance the technology to a more mature state. Over the course of its history, MSSI has received in excess of $30 million in Government R&D funding, largely as a consequence of techniques and products which it developed under SBIR grants.
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From page 392... ...
The company was a leading responder under the docket and was heavily referenced throughout the proceeding by other respondents. Multispectral Solutions continues to apply for further SBIR awards but has been selective in responding to solicitations.
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From page 393... ...
Fellow of the IEEE for "contributions to short pulse electromagnetics as applied to ultra wideband systems". IMPROVING SBIR Surviving Funding Gaps Factors in surviving funding gaps include good management (and sometimes good fortune)
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From page 394... ...
Firm representatives believe that some multiple award firms develop human resource infrastructures for the sole purpose of writing proposals that knock out commercially promising proposals from firms like Multispectral Solutions. CONCLUSION In sum, SBIR awards seem to have played a significant role in the firm's development of its technologies and subsequent growth.
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From page 395... ...
One of them, John McBeth, had formerly been employed with a sequence of computer software firms that had gone through a series of acquisitions. He was first with Century Computing, a company formed in 1979, and a recipient of SBIR awards for several agencies.
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From page 396... ...
Moreover, Next Century does foresee the possibilities of spinning off 1 or more firms if its R&D leads to viable products requiring volume production. EXPERIENCES UNDER SBIR A central thrust of New Century business strategy has been to be pro-active, that is to decide who they want to target, in contrast to what is seen as the reactive-simply respond to customer requests -strategy of the firms with whom its founders were formerly involved.
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From page 397... ...
As a source of the firm's revenue, however, even after its Phase II and Phase III awards, SBIR contracts have seldom exceeded 10 percent of the firm's total annual revenues. Next Century continues to see SBIR topics as a fruitful source of R&D funding, and as a means of developing new products and markets, both in the Federal government and commercial sectors.
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From page 398... ...
Next Century's outputs under its Phase I and Phase II SBIR awards have already been field tested and advanced to Phase III funding. Although a relatively small percentage of the firm's total revenues, SBIR serves as a repeated signal to the firm UNEDITED PROOFS
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From page 400... ...
As the parent company, Pearson Education, exceeds the size limit that defines a small business, Pearson Knowledge Technologies, as the company is now known, is no longer eligible for the SBIR program. Pearson Knowledge Technologies focuses on the application of advanced software tools to products for the education, publishing, government, and defense/intelligence markets.
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From page 401... ...
SBIR AND THE FIRM The SBIR played an important role in the formation of Pearson Knowledge Technologies and its subsequent growth. The founders of the company first came in contact with the SBIR program while serving in the capacity as subcontractors to other SBIR award grantees.
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From page 402... ...
When a school system purchases a suite of textbooks, it is also given access to the services on the Pearson Knowledge Technologies' web site. Teachers are then able to tie in lesson plans from the textbooks directly with on-line essay review.
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From page 403... ...
For Pearson Knowledge Technologies, a major lacuna with the SBIR program is that the individuals within agencies who approve the grants are not the same or are not connected to those individuals who handle procurement (providing contracts to purchase final goods or services)
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From page 405... ...
; sales to the private UNEDITED PROOFS
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From page 406... ...
program. As the breadth of its technical competencies kept pace with rapidly changing advances in laser and optics technology, and as it become more actively involved in the SBIR program, it was able to expand its range of technological expertise as well as of Federal governmental and private sector customers.
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From page 407... ...
In keeping with its pursuit of autonomy and a concentration on contract R&D, PSI has limited its involvement with venture capital firms. Its engagement with them has generally involved the launching of spin-off firms to commercialize products derived from PSI's R&D technological developments, all of which flowed from SBIR funding.
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From page 408... ...
For example, PSI's development under SBIR awards of sensor technology to detect methane gas leaks has been sold to gas companies. In general, sales to the private sector are largely based on technologies developed for DoD under SBIR awards.
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From page 409... ...
As of 2005, summed across all Federal agencies, it had received an 435 Phase I and 176 Phase II awards, placing it among the top 5 recipients of SBIR awardees. PSI has received SBIR awards from multiple agencies, including several DoD services, NIH, NSF, NASA, DOE, NIST and EPA.
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From page 410... ...
Similarly, NIH is held to have a highly effective SBIR program. It is seen as truly viewing small firms as contributing to technological innovation, and as understanding that multiple Phase II awards are frequently necessary to convert findings generated from Phase I awards into marketable products and processes.
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From page 411... ...
While the proposals are arguably of equal quality, the scoring system used for SBIRS is different from that used to evaluate an RO1. At the other end of the distribution, NSF's SBIR program is said to be the worst among Federal agencies, both because of its protracted review and award processes and the confusing commercial emphasis of its (mostly academic)
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From page 413... ...
The core technology had broad applicability, being useful to the Navy in coating surfaces as well as to the plastics industry in forming molds. At about this time too, Procedyne purchased a nearby failing metal working firm, that extended its capabilities into the production of equipment that embodied its technical designs.
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From page 414... ...
The firm had been performed prior work with DOD and was familiar with its contracting system. Once it became aware of the SBIR program from general sources, it saw it as a useful means of extending the applications of its core technology.
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From page 415... ...
SBIR is seen as an excellent program. In the firm's view, Nanodyne would not have been established if not for the SBIR program.
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From page 416... ...
: $3.8m; FY 2005 (estimated) $7.6m Number of Employees: 39 full-time; 11 part-time 3-Year Sales Growth Rate: Compound annual doubling SIC Code: 7371 Technology Focus: Software development for monitoring smart machines # SBIR Awards-Phase I: 12 # SBIR Awards-Phase II: 9 # Patents: 1 pending *
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From page 417... ...
This process however dilutes the founders' ownership of the company. The SBIR program fills an early stage funding gap when a technology is too risky for industry to invest in and when the perceived market is too small or too uncertain.
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From page 418... ...
The SBIR program however has distinctive features that make it attractive to small firms, and RLW plans to continue to submit proposals. In particular, SBIR award provide good protection for intellectual property, that enhances the position of small firms in negotiations with larger firms, especially DoD prime contractors.
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From page 419... ...
From the late 1980s through the early 1990's, the firm's experienced modest growth. Its growth has increased rapidly since then, especially after adoption of its technology by the Army, UNEDITED PROOFS
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From page 420... ...
In 1999, Savi's management entered into a buyout agreement, purchasing the firm from Raytheon for $10 million. CAPITAL FORMATION Begun as a start-up operation, augmented with an infusion of angel capital in 1992, Savi remains a privately held firm, albeit with several rounds of venture capital since its management buy-out.
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From page 421... ...
Savi credits its subsequent technological and business success to these early SBIR awards, even though they did not commercialize the technology identified in the initial SBIR projects. Rather, in its formative period, essentially between 1989-1991, SBIR awards were critical in helping Savi build the organizational infrastructure, engineering teams and knowledge base that undergirded its subsequent growth.
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From page 422... ...
national innovation system than to its specific programmatic details. In its view, the SBIR program accords with the Federal Government's role of financing R&D before a technology is commercially viable, and before a fledging firm can attract external capital.
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From page 423... ...
With fifteen locations throughout the U.S., SRC offers products and services in Communications, Signal Intelligence, Radar Systems and Test & Evaluation. The company's Atlanta operations, which account for approximately 15% of company revenue, participates in the SBIR Program and focuses on research, product development, technology insertion and engineering services to enable Assured Communications for Deployed Warfighters.
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From page 424... ...
The program also provides intellectual property protection in the form of SBIR Data Rights. Developing Innovative Products SRC has utilized the SBIR awards to develop technology, products and engineering product support in three areas: (1)
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From page 425... ...
SRC was recently awarded a five year $25 million Phase III IDIQ contract (a type of contract that provides for an indefinite quantity of supplies or services during a fixed period of time) for "Assured C4ISR Wireless Networks for the Deployed Warfighter" from AFRL/IF (Hanscom Air Force Base)
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From page 426... ...
, MobileRoute®, BandShare®, IPOverdrive®, and EasyConfig®. The company has published a number of technical papers: • SDR Forum 2003 Technical Conference, November 2003 "Hardware-in-the-Loop Simulation Techniques for Validating SDR Software" • MILCOM 2003, October 2003 "Energy-Efficient Networking Techniques for Wireless Sensor Networks" • MILCOM 2003, October 2003 "Exploiting the Synergies of Circular Simplex Turbo Block Coding and Wavelet Packet Modulation" • SPIE Wavelets X Conference, August 2003 "Enabling Time-Frequency Agility: Wavelet Packet Modulation in Practice" UNEDITED PROOFS
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From page 427... ...
IMPROVING SBIR Surviving Funding Gaps SRC was large enough and well established in other business opportunities prior to the SBIRs so that personnel could be assigned to other efforts during the delay between Phase I and Phase II. A key component for this was a strategy of selecting new Phase I contracts that leveraged prior technologically related Phase I/II efforts so that a common work force could be shared as needed.
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From page 428... ...
For a Phase I topic to be advertised, there must be a program willing to advance the effort to production. NAVAIR in particular has significantly advanced this with the use of Phase III IDIQ contracts and direct program office participation.
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From page 429... ...
The Army also does not couple their R&D efforts to program offices making Phase III transitions difficult. Bridging the Small Business Definition SRC recommends that firms retain their small business status if they grow over the course of their involvement in the SBIR program.
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From page 430... ...
Noster had been working at BAE Systems, Austin, Texas on the design of chips for sensor technology, but found that BAE's business strategy and areas of research emphasis were shifting away from his vision of designing chips capable of onboard signal processing for detection purposes. Noster was joined by a few former colleagues to launch what was described as a "garage start-up" The firm started with "sweat equity" by Noster and his colleagues; they wrote 14 proposals during the course of the firm's first 6 months, submitting them to DARPA, Army, and MIT.
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From page 431... ...
It employs an array of R&D contracts, including SBIR awards or subcontracts with other SBIR awardees, to develop new products, primarily for the defense and aerospace industries, but also, over time, for the commercial sector, such as the oil and gas industry. System Process and Engineering's initial contract was with MIT's Lincoln Laboratory, which had a DARPA contract on detection processing.
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From page 432... ...
Since 1987, the firm has received SBIR awards from several Federal agencies, including NASA (fiber optics) , Air Force (connected wireless)
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From page 433... ...
Incentives to Program Executive Offices (PEO's) and prime contractors to transition Phase II SBIR technologies and products more efficiently to Phase III applications in major "programs of record" are needed.
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From page 434... ...
These technologies have increased DoD's ability to fulfill mission needs, and have also found use in the commercial sector. The main issue confronting the SBIR program, in its view, relates to the dynamics of the Phase III/acquisition and procurement processes.
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From page 435... ...
Specialty Devices started out as a one person firm, operating out of Higley's spare bedroom. He drew on his previous business contacts with oil firms and Department of UNEDITED PROOFS
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From page 436... ...
Given these market realities, its sees its most viable business strategy as one of licensing its technology to the larger firms that dominate either the medical equipment industry, such as GE, or the flat display industry, such as Sharp, Samsung, or NEC. Specialty Products also has considered spinning off its display technology into a new firm, using venture capital as a source of funding.
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Key Terms
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