One topic of interest and importance to most entrepreneurs is funding, and one popular form of funding is through SBIRs (the Small Business Innovation Research Programs). My colleague Jesse Erlich focuses much of his practice on assisting clients with SBIR and STTR programs, as well as the intellectual property issues associated with SBIRs and STTRs and other government funding.  This week he has provided some information on how he anticipates the sequestration will affect these programs. 

– Orlando

The below information is a summary of a more detailed analysis presented by Rick Shindell in his recent newsletter, “SBIR Insider.”  This and back issues of the “SBIR Insider” are available here. 

“Just the threat of sequestration has already had a negative impact on some SBIR awards, and that is likely to worsen unless congress and the administration “acts” on how the $85 billion in across the board budget cuts are to be handled for the remainder of FY-13…  The smart money is now saying that sequester will be here for a while, perhaps through May or longer. Most may not see much happen until April. However, many experts agree that the $85 billion in cuts for FY-13 will stay, but there is hope that something will be done to allow a more targeted approach to the cuts rather than the broad based across the board meat cleaver approach the sequestration calls for…  To our SBIR community, the net effect of these threats have resulted in many new SBIR awards being slowed down or halted. We hear reports from SBIR selectees that agencies want to fund their proposals but are unable to due to lack and/or uncertainty of funds…  Don’t blame the agency SBIR program managers because it is not their fault. Orders come down from “on high” i.e. agency comptrollers, who offer the spending guidance within their agency.

In light of the sequester (as described above) the Small Business Technology Council (SBTC) is concerned that small business programs such as SBIR may be disproportionately targeted for cuts.  Small business programs are often lower on agencies’ lists of priorities than they should be, and in fact many of their members have already reported that awards and contracts have slowed down or even stopped.  Some firms have even been given stop-work orders on contracts they already have in anticipation of budget cuts.  In response to these concerns, the SBTC has drafted a letter to the President and Congress urging them to take steps to ensure that small businesses are not disproportionately and unfairly targeted by the upcoming cuts.  SBTC is asking every technology-oriented small business to read this letter, and if you agree with it, add your company’s signature.”