MSGI Congressional Hearing Recap - House Small Business Committee Hearing “Prioritizing Small Underserved and Rural Businesses in the SBIR/STTR Programs”

MSGI Congressional Hearing Recap

Committee: House Small Business Committee, Subcommittee on Underserved, Agricultural, and Rural Development 

Hearing Title: “Prioritizing Small Underserved and Rural Businesses in the SBIR/STTR Programs”

Subcommittee Chair: Jared Golden (D-ME)

Ranking Member: Jim Hagedorn (R-MN)

Date: June 23, 2021

Witnesses

Dr. Joshua A. Henry
President and Founder
GO Lab, Inc.
Testimony

Ms. Nancy Min
Founder
ecoLong
*Testifying on behalf of the Clean Energy Business Network (CEBN)
Testimony

Dr. Angelique Johnson
Founder and Chief Executive Officer
MEMStim LLC
Testimony

Dr. David Green
Chief Executive Officer
Physical Sciences Inc.
*Testifying on behalf of the New England Innovation Alliance (NEIA)
Testimony

Main Issues Discussed

Targeting SBIR/STTR to Rural and Underserved Communities

• Ranking Member Hagedorn (R-MN) Question:
• To all witnesses, I am concerned that these awards would be given based on preference on identity or race, like what we have seen with the Restaurant Revitalization Fund having a “priority group.” 
• Response from Dr. Johnson: The program needs to stay merit based. These are not research grants; they are small business research grants. The merit should come from impact on economy and environment. Provide more assistance on the front end, such as "Phase 0" programs that businesses can use to develop a prototype and be successful in Phase 1. 
• Chair Golden (D-ME) Questions: 
• Dr. Henry and Dr. Johnson, can you gauge the impact that SBIR/STTR funding has on rural and underserved communities?
• Response from Dr. Henry: Representation is an issue because rural communities have different values than big cities. The people reviewing these applications are viewing them with a "city" lens. They are looking at scientific merit rather than economic merit.
• Response from Dr. Johnson: There is no consideration of an applicant’s background when determining who will get the grant. We need to look at ways to widen the array of applicants.
• Dr. Johnson, how could the SBIR/STTR programs be better targeted to underserved communities?
• Response: They need to go beyond the academic population and partner with startup ecosystems like SBDC's. 

Difficulty of Grant Applications

• Chair Golden (D-ME) Question: 
• Dr. Henry, can you discuss the bureaucratic struggles of the SBIR application?
• Response: We found it to be the hardest of the federal grants to apply for, it varies across agencies and includes numerous addendums to the questions. Maine has full time consultants that work on this. There is no feedback from reviewers when a feedback is denied from consideration. 
• Rep. Tenney (R-NY) Question:
• Ms. Men, some businesses have trouble getting through the technical and bureaucratic process of the grant applications, should we provide additional technical assistance?
• Response: Yes, we have taken advantage of technical support services in other circumstances, it has been very useful. 
• Rep. Williams (R-TX) Questions: 
• Dr. Green, is there an agency that administers this program the best? How can others follow?
• Response: The Department of Defense (DOD) has a very effective program because it ties the SBIR to agency needs. Department of Energy (DOE) & the National Institute of Health (NIH) have very deep peer review processes, which is helpful. 
• Dr. Henry, could you elaborate on changes that could be made to streamline the application process without compromising security?
• Response: Process is unnecessary, we have won bigger awards with smaller applications.

Best Practices for Success in the Program

• Ranking Member Hagedorn (R-MN) Question:
• Dr. Green, can you explain how you have done well with the SBIR program? 
• Response: We look at all aspects of the problem and the best path to market. There are many stages, this often involves partnerships with other businesses.
• Rep. Tenney (R-NY) Question: 
• Dr. Green, what can New York do to ensure we get more SBIR/STTR grants?
• Response: It is essential for small businesses who are peers to come together and share best practices.
• Chair Golden (D-ME) Question:
• Dr. Green, how did you start your company in the 1970's?
• Response: We existed for a decade before there was SBIR, we supported the government through research and development contracts. We learned that it is better to partner with companies that can do things we can't.

Strengthening the SBIR/STTR Programs

• Rep. Stauber (R-MN) Question:
• Dr. Green, as we look toward reauthorization, what would you recommend we include or remove in these programs?
• Response: No more barriers that make the programs more difficult. I would urge the Congress to continue to make sure that award decisions are made in a timely manner and keep the programs merit based. 
• Ranking Member Hagedorn (R-MN) Question:
• To all witnesses, do you have comments on whether we need to do more to help people?
• Response from Dr. Green: 3% administrative funds are adequate, but they can be administered differently to target other populations. I also suggest reauthorizing the pilot programs and making them permanent.