PD INC. TESTIFIED onthe SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM BEFORE THE U.S. HOUSE COMMITTEE ON SMALL BUSINESS
June 18, 2009
On June 17, 2009, Ning Li, Chief Resource Officer and acting Chief Operations Officer of PD Inc. in Baltimore, testified on the federal Small Business Innovation Research (SBIR) program before the U.S. House Committee on Small Business. Although Ms. Li's first-hand experiences with the program constituted the basis for several of the key points enumerated in her statement, she was testifying on behalf of the U.S. Women's Chamber of Commerce.
During the time frame allotted for Ms. Li's statement, she emphasized the need to allow certain SBIR applicants to "opt out" of Phase I of the program. These prospective program participants would be those entities that had financed, out of their own pocket, the Phase I research, enabling them to demonstrate "proof of concept," without having received federal assistance. And the validity of the concept would have been certified by qualified subject matter experts (SMEs) through a peer review process. This change in the program would allow a given SBIR applicant to adopt a more flexible R&D schedule, while helping the federal government conserve precious taxpayer dollars.
When being asked by the Committee Chairman, Nydia Velazquez, to elaborate on the proposed change, Ms. Li explained that there are fundamental differences between small businesses and academic institutions. A small business is an enterprise with unique responsibilities, such as serving customers, generating profits and paying employees, as well as conducting R&D activities for future growth. In many cases, the Principal Investigator at a small firm is among those employees logging billable hours and generating revenue needed to meet corporate obligations.
Small enterprise personnel do not have the luxury of academic tenure, summer and winter breaks, and easy access to relatively inexpensive, graduate student labor. The schedule of R&D activities at a small firm must be properly aligned with the schedule of its profit-generating activities. Requiring a small firm to fit into an academically structured program places it in a disadvantaged position and, in turn, hinders its growth. If the SBIR program is intended to promote small business research and innovation, it should provide a mechanism for assisting all program participants, not just those closely associated with research universities. Ms. Li further suggested that SBA could, perhaps, develop a standard Affidavit Letter and Peer Review Evaluation Form that can be downloaded from SBA website to be attached to small business research study that would be mailed to the SMEs for evaluation.
Moreover, Ms. Li recommended that coverage of patent attorneys’ fees be deemed an eligible expenditure of both Phase I and Phase II funds. Ms. Li followed up these points by suggesting further that federal agencies be required to support SBIR participants, in efforts to protect their rights to intellectual property. She recommended having the federal Small Business Administration (SBA) promulgate rules, requiring participants' industrial partners to sign a non-disclosure agreement (NDA), prior to initiating research and development (R&D) collaboration with a given small enterprise, as a means of accomplishing this objective. Ms. Li also stated that SBA should allocate resources to support Agency efforts to assist small businesses, in their attempts to file applications with the U.S. Patent & Trademark Office (USPTO).
Finally, Ms. Li stressed her support for the enactment of provisions that would facilitate small businesses' efforts to obtain venture capital investment. This issue is among the most important matters addressed in the current version of the Chairman's bill.
Attachment: copy of the testimony