Business development strategy for winning Government contracts/grants that fund Research and Development.
How To Get The Federal Government To Fund Your R&D
by Tom Dee and Frank Lovaglio, Sr. The Federal Government spends billions per year in early stage research and development. Most of the spending is done in defense, national security, science, energy, and health. For those small and start-up businesses looking to grow and profit from this immense funding machine it’s important to align your mission and resources prior to embarking on a government business development path. Government business is more complex than commercial business in many respects. Most large companies often separate commercial from government business entities for legal, regulatory, operational, and cultural reasons. Small Research & Development firms can not afford to make the separation and as a result are forced to make the choice to structure the company operating in a 100% government business environment, notwithstanding the commercial revenue portion or percentage. It’s a big financial commitment when deciding to pursue Federal business, specifically, the overhead and cash flow needs required to comply with regulations and government pay cycles. But if planned properly, the efforts can pay off in providing your business sustained top and bottom line growth for many years.
Grants are Not Give-Aways
Like commercial business, the company vision, mission, and goals must be in unison with the Government customer and no less competitive. Companies that are working towards a unique invention, product or process, that directly apply to the Government need, can apply for grants. Grant applications are initiated by all levels of Government (federal, state, county, city) and anyone can apply. The grant awards are often based on the merits and benefits of the applicants’ proposal as compared to the Government need. The grant is funded by the government agency and the winning entity, working under agencies pre-established guidelines, completes the work as proposed. Usually, the work is a study or research that ends up as a white-paper, however, tangible products might also be the outcome. Contractor performance standards are very loose and judged by the agency as a “level of effort” e.g., a good try is sufficient. This is a crowded field: non-profits, colleges, universities, and private entities all compete in this space. Other forms of grants are Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) administered by the US Small Business Administration. Federal agencies with certain levels of research and development budgets are required by law to set aside a percentage of it for grants or contracts under the SBIR and/or STTR programs. SBIR and STTR are designed to further R&D concepts in a private company by providing structure and funding for those deserving innovations. Slight differences between SBIR and STTR exist in how the programs are phased, project durations, award amounts, sponsoring agencies, rules for uses of subcontractors, and small business or non-profit participation. The Department of Defense (DoD) is primarily geared towards bleeding edge solutions to specific problems, military in nature, but might have commercial applications, as well. National Aeronautics and Space Agency (NASA), like DoD’s SBIR/STTR mission, seek to add capability that expand business base while delivering valuable results to NASA. Most major federal government agencies have some level of grant, SBIR, or STTR activity. Contract vehicles are typically Cost Plus Fixed Fee (CPFF) meaning the cost risk is borne by the Government. Additionally, contractor performance is “Best Effort” thereby significantly reducing risk for the contractor, an important distinction in SBIR/STTR projects, compared to mainstream Government contracts which have strict performance requirements.
Five Solid Government Business Development Tactics
1. Use this great website to educate yourself about the SBIR and STTR programs, find
workshops/conferences about the programs, and search for relevant research topics from all the participating agencies. Check federal Government DoD and NASA SBIR STTR listings and submit
proposals that matches your technology as advertised here and here. (Calling or visiting the Project Engineer before submitting SBIR/STTR is good and helping define the SBIR/STTR is even better). 2. Target Government Agencies that are involved in the same technology. Contact the Small Business offices of the Agency for leads on what funded programs are being released in the near term. Determine process for accepting “Unsolicited Proposal”.
3. Every DoD LAB has a website that lists their Mission, Goals and Organization charts. Spend time to
evaluate the mission and organizations of several Government Agencies to determine if the technology they are pursuing matches what you do and submit unsolicited proposals. Even better, visit key personnel at several Agencies, present your technology and determine what programs they are funding and determine how your technology can solve their problem. Convince them that they want you to respond to their next funded solicitation or to submit an “unsolicited proposal”. 4. Respond to “Call for Papers” from large technology trade shows or get an article published in technology journals.
5. Team up with the local university or large general contractor to get advice and develop possible
partnerships. As an example, University of Central Florida maintains several programs aimed specifically towards small business assistance for growth such as their business incubation program. Also, many economic development projects provide support and in some cases funding for innovation.
Pursuing Grants, SBIR’s and STTR’s do require a certain level of expertise/skills in the following areas: Grant and proposal writing; Federal Acquisition Regulation (FAR) and agency supplemental regulation compliance (accounting & law); business development strategists; technical/engineering; customer/prospect representation; executive leadership; and strong internal processes to manage the organization. What can you expect after building a fine tuned organization? A good three year goal might be to capture 30% of bid dollars proposed. If your company implements the five tactics above, picks the opportunities carefully, properly examines risk and provides appropriate resources, a fair share of business can be won. Happy hunting! You can contact Primus Results at 727-580-9883