New Book on SBIR is a Must Read

While the Nation Slept: The Struggle of Small Innovative Businesses in the U.S. (Mascot Books) spotlights the U.S. government’s efforts to assist small innovative businesses, particularly those engaged in the Small Business Innovation Research (SBIR) Program.

Author David Metzger is one of the pioneers of the SBIR program, having worked within the Small Business Administration and as Staff Director for a legislative subcommittee during the program’s formative years. Metzger, an unabashed cheerleader of what he describes as “gazelle” companies, explains the fascinating behind-the-scenes history of the birth of SBIR, as well as the grueling efforts to keep it alive through successive legislative reauthorizations.

While promoting the ideal and importance of innovative small businesses, the book offers an uncertain future – one that stems from decades-old rivalries with the entrenched academic research community, Congressional ignorance and incompetence, and by what the author perceives to be a blatant exploitation of SBIR contractors by large businesses.

The reader is left with the general impression that small innovative businesses are given lip service by government buying agencies for their contribution to the U.S. economy and the benefits derived from an innovative small business community. Or as the author more politely puts it, “rhetorical platitudes.” Some 40 years after its inauguration, the SBIR program is still fighting institutional hostility from both government and non-government players.

One of the more surprising chapters addresses the Defense Contract Audit Agency (DCAA). Metzger unloads a full-throated, blistering attack that seems a bit harsh until you realize the author spent some time inside government and has witnessed firsthand DCAA’s regulatory overreach. These pages go well beyond the respectful disregard most government contractors have for the agency, even calling DCAA out as a bully and claiming some DCAA audits rise to the level of “abuse.” The section ends with a touching memoriam to a client who fought and won against DCAA excesses, making one wonder if the passing of his friend informed his strong opinion of DCAA.

For all the bluster, the author fails to acknowledge instances of waste, fraud, and abuse within the SBIR community, as uncommon as that is. One might conclude the author would suggest government scrutiny would only get worse as the funding for SBIR grows and Inspector Generals look to SBIR as a means to grow their own staff.

More important in the long run for SBIR companies is the emphasis of the SBIR “Phase III Mandate”. The author reminds us that the SBIR legislation confers special SBIR competitive and data rights to its participants. Metzger also describes any number of ways government buying agencies and their lawyers attempt to avoid these regulatory principals. In a sense, Metzger argues, everyone knows a small innovative firm doesn’t have the financial ability hire counsel to unravel complex acquisition rules, so the government has the clear advantage in skirting them.

As do prime contractors; another target on Metzger’s SBIR enemies list. It’s more than a myth among SBIR firms that prime contractors make uninformed and unethical demands of SBIR firms. Metzger cites a number of examples in Chapter 7 aptly titled David vs Goliath.

One example highlights the ongoing case of Idaho firm Positron Systems, Inc., against Wyle Labs, who allegedly convinced the Air Force to award them the SBIR Phase III contract that was planned for Positron. (Full disclosure, Positron is a ReliAscent client and is mentioned with permission). It’s alleged that Wyle misappropriated technology that Positron shared with them under a Phase II SBIR contract, information allegedly covered under a Non-Disclosure Agreement (NDA).

If these claims are proved true, it’s a chilling example of a large business and the U.S. government colluding to make an end run around the SBIR contracting mandate at the expense of small business.

The list of grievances continues from there to include the Congressional reauthorization of the SBIR program battle from 2008 to 2011, where the program was extended 14 times in increments of as little as four days. It would be more than fair to say this was a pathetic example of Congress’s attitude toward small business, but in this case Metzger showed restraint.

The book concludes with a list of 30 recommendations on how to improve the SBIR program.  This is particularly timely since Congress is set to reauthorize the program in 2017. Offering many compelling arguments, Metzger provides enough evidence to suggest that Congress should permanently authorize the SBIR program.

As for our own recommendation: you don’t want to miss this fascinating insider’s examination of the SBIR program.