A Sinking SBIR Ship

NASA's Seed Money Program Faces Shutdown

In a continuing saga, the NASA Small Business Innovative Research office will find itself without support contractor staff June 1 unless a new contract is started.

That would leave only three full-time NASA employees the task of program outreach and the processing of an estimated 1,400 Phase I SBIR proposals due on June 15-- a job agency sources say is impossible. NASA's 1994 SBIR set-aside is $110 million and includes a new element called the Small Business Technology Transfer program, or STTR. In all, the office receives about 3,000 proposals a year.

An April 25 letter from support contractor Futron Corp. of Bethesda, Md. to NASA's Acquisition Division notified the agency it will begin contract termination May 16, and emphasized the lack of any follow-up or extension: "This termination will mean that the SBIR and STTR programs will cease their basic operations, causing serious problems for the agency, the small high-technology business community, and Futron."

At press time, Futron had heard no response from NASA.

An agency contracting official told Washington Technology that much of the support contract will likely be brought in-house.

"We'll make sure the office is supported," said Tom Luedtke, deputy associate administrator for procurement. Futron may be used to bridge the gap until the situation is settled, he said.

But the program appears to have slipped between administrative cracks. Agency sources say there is a decision-making vacuum and that no new NASA personnel are on tap to handle the workload.

"I'm not sure [NASA] fully understands the significance," said Ben Watada, director of finance and administration for Futron. If a new contract is not signed with Futron or another contractor, the incoming SBIR proposals will be returned to their senders.

Under the present $1.2 million support contract, 12 Futron employees handle the receipt and processing of proposals and ready them for agency SBIR decision-makers.

The company also operates the SBIR/STTR electronic bulletin boards and a database that tracks the lengthy selection process.

The $702 million SBIR program, which makes research and development grants to promising small high technology companies, is congressionally mandated and must be carried out by federal agencies.

However, since last fall, the NASA program has been beset with problems. Last November, several members of Congress became concerned that NASA was crippling its SBIR office in a general purge of support contractors at agency headquarters. [See WT Nov. 18, 1993 P.1.]

In a Jan. 6 letter to Rep. John LaFalce, D-NY, Chairman of the House Committee on Small Business, Associate Administrator Jeff Lawrence guaranteed NASA would "maintain the high standards of operation and service" of its SBIR program.

There is also an imminent turnover of NASA SBIR program management. Program director Harry Johnson is retiring this month and second-in-command John Glaab will take early retirement July 3.

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