Some things to know before sending your proposal off to the DoE

At the recent National SBIR Conference in Cleveland, Ohio, attendees heard presentations from program managers and representatives of the various federal agencies that participate in the SBIR program. Ms. Julie Scott, Program Coordinator of the Department of Energy’s SBIR and STTR Program, shared some insights regarding the DoE’s approach to the these programs, and her comments should be of particular interest to individuals who are considering applying for DoE SBIR or STTR funds.

First and foremost, there appear to be many opportunities for winning SBIR or STTR funding at the DoE. Scott noted that the DoE “has not had as much competition as we’d like,” noting that the “Data Management & Commercialization” topic in particular tends to not get many applicants. In addition, the DoE’s STTR budget for this year was increased to $10 million.

However, probably one of the most notable things that Scott pointed out was an opportunity unique to the DoE: Individuals can apply to both the SBIR and STTR programs with one application, provided they meet the requirements for both programs.

Scott also noted that 45% of last year’s (FY 2002) winners were first-time winners, putting to rest any ideas that the DoE employs a “good ol’ boy club” mentality.

With so many incentives, individuals should be encouraged to apply for DoE funding if they can find a topic that matches their technology. However, one shouldn’t assume that securing SBIR or STTR funding from the DoE is a sure thing: Scott also discussed some common reasons why applications are denied DoE funding.

According to Scott, some applications are dismissed outright due to what she called “throw out” reasons:

1. Signatures are missing from the Cover Page or Budget.
2. No topic or subtopic is identified.
3. The topic and subtopic on the Cover Page don’t match the Project Summary form.
4. Pages are not in order and/or are missing.
5. Certifications or the Cover Page are missing.

Scott also shared some common reasons for first-step declination:

1. The proposal is not responsive to the technical subtopic discussed.
2. The technical approach indicates that the proposal is not likely to stand a reasonable chance for an award.
3. The proposal duplicates work already funded.
4. The proposal presents insufficient information.
5. The proposal does not reflect true research and development.

In addition to these common errors, Scott had some encouraging news for individuals pursing Phase II funding. Awardees who feel that they need more money than the $750,000 limit to complete their project are welcome to request more funding--they need only justify their request by establishing the following:

1. Strength of scientific/technical approach
2. Team’s ability to carry out the project
3. Impact

Additionally, Scott noted that there is a minimal gap between Phase I and Phase II funding, which averages two months.

The DoE has a solicitation currently open, which will close on January 6, 2004. The solicitation can be accessed at http://sbir.er.doe.gov/sbir/. Consider taking advantage of the SBIR or STTR opportunities available through the DoE, and if you do pursue an award, take the time to ensure that you’ve avoided making the above “throw out” and first-step declination errors.

“Opportunity is missed by most people because it is dressed in overalls and looks like work.”
Thomas Edison

SBIR From a Consultant’s Point of View

“If you fail to plan, plan to fail.”

This phrase sums up what Thomas Wren considers the biggest mistake companies make when applying for federal funding. Wren, the Director of Specialized Programs for the Pennsylvania SBDC, explains: “Before even applying for it, the company should make the funding part of their business strategy, not view it simply as a means to an end. Businesses that haven’t put together a business plan are setting themselves up to fail.”

And Wren knows what he’s talking about--he has over 10 years of experience as a small business consultant from which to draw this conclusion. After retiring in 1992 from a 21-year career with the Marine Corps, Wren started his own consulting firm, specializing in advising companies that marketed goods and services to the federal government. He also held positions as vice president, general manager, and quality assurance manager of three Pennsylvania companies before joining the Pennsylvania SBDC in 1997 as Director of the Procurement Technology Assistance Program. In 2000, he accepted his current position as Director of Specialized Programs.

As part of an agency that specializes in assisting entrepreneurs and small businesses, Wren and his consultants provide a variety of services to their clients, including literature and Web resources, a variety of business courses, and one-on-one management consulting. As stated earlier, one of Wren’s main goals when working with a client is to emphasize the need for a business plan.

“Companies tend to build a much stronger package when they have a commercialization strategy,” Wren said. “SBIR managers at the federal level are really stressing the need for companies to show how they intend to commercialize their technology.”

As many small companies can attest, this is easier said than done. Wren points out that many research-oriented companies have the technical expertise necessary to support innovative projects, but lack the business skills to bring their work to market. However, “the financial side is just as important as the technical side” when it comes to obtaining SBIR funding and, on a larger scale, successfully commercializing a new product, says Wren.

Fortunately, Wren has a solution for companies that find themselves in this situation, and the source is a 2,500-year-old text on strategy, battles, and--ultimately--peace: The Art of War by Sun Tzu. Wren gives a copy of the ancient writing to each of his consultants, insisting that they read it and promote one of the teaching’s fundamental principles: Know your weaknesses and capitalize on the strengths of others.

In the case of small companies that have an unbalanced ratio of technical knowledge to financial savvy, this principle is key and can enable such a company to succeed despite a lack of business know-how.

“When you know yourself and your weaknesses, you can find somebody who can assist you,” Wren said. “If you know that you don’t have a strong business sense, you can focus on strengthening this area by seeking out people who do have this knowledge and can work with you. It’s the whole idea of surrounding yourself with people who are smarter than you.”

The SBDC serves as one of those sources of “smart people,” and in addition to the previously mentioned services, Wren reports that the organization is also “taking a long, hard look” at how it can help its clients with bridge funding--the funding required to sustain a business between Phase I and Phase II projects.

“Many companies tend to forget about where their funding will come from during the interim between Phase I and Phase II,” Wren said. “So, a significant issue the SBDC is currently facing is determining how we can serve those companies between the two projects and help them secure the necessary funding.”

In addition to the SBDC, Wren said there are a variety of economic development agencies throughout Pennsylvania that can provide business assistance to entrepreneurs and companies just starting down the path to commercialization. Wren also has been overwhelmingly pleased with the assistance the SBIR program managers have provided his clients.

“The assistance provided by the program managers has increased 100-fold in recent years,” Wren said. “I’ve not yet talked to a client who has encountered a situation where a program manager wasn’t willing to assist them. I think these people are fabulous, and they’re single-handedly responsible for helping the SBIR program grow.”

When asked about any recent trends he’s noticed in the SBIR program, Wren said there has been an increase in the number of security-related solicitations, a direct reflection of global events such as 9/11 and the war with Iraq.

“We’re seeing more and more requests for research projects dealing with security, particularly from the Department of Defense,” Wren said. “And not just physical security--we’re seeing projects dealing with Internet security, smart weapons, counter intelligence, etc.”

Regardless of the type of solicitation, commercialization potential is always an imperative factor to include in SBIR proposals. Wren estimates that it takes a client 100 to 200 hours to create a solid SBIR proposal, but the extra attention on commercialization is worth it.

“You need to have a sense of direction,” Wren said. “That’s why the business plan is so important. You need to know what you’re getting into before you jump.”

Advice, one can imagine, Sun Tzu himself would endorse.

“Carefully compare the opposing army with your own, so that you may know where strength is superabundant and where it is deficient.”
Sun Tzu