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Smart Answers

One Government Funding Source for Small Contractors

For the most part, the myth of free government money for small business funding is just that—mythology. But a handful of federal agencies contract with private companies to do research and development for new systems and products, primarily to aid the U.S. military. One is the Office of Naval Research, which is charged with contracting with small, disadvantaged business owners as defined by the Small Business Administration. Brenda Pickett, associate director of small business for the ONR, spoke recently with Smart Answers columnist Karen E. Klein about what she looks for from small business. Edited excerpts of their conversation follow.

Karen E. Klein: How does the Office of Naval Research interact with small businesses?

Brenda Pickett: The small business community provides new technology to the ONR by submitting new types of research and development ideas to us for funding consideration. The ideas are reviewed by our program officials to see whether they are ideas or concepts we’d be interested in funding.

Most of the other [military] system commands are focused on specific programs, like aircraft or submarines and ships. As the Navy Dept.’s of science and technology provider, ONR’s mission—defined by law—is to plan, foster, and encourage scientific research related to the maintenance of future naval power and the preservation of national security.

In addition, ONR manages the Navy’s basic, applied, and advanced research to foster transitions from science and technology to higher levels of research, development, test, and evaluation.

What kinds of small companies get ONR contracts?

It varies. They can be strictly small businesses, but some of them also fulfill the other socio-economic categories that we look for, like women-owned, service-disabled veterans, and small, disadvantaged companies that fall into the SBA’s 8(a) Business Development program.

How can small companies find out what kinds of ideas you’re looking to fund?

We put out what are called Broad Agency Announcements, including one in particular that stays open for 365 days from the date of issuance. Also, from time to time, our program offices will issue special opportunity notices to solicit program-specific basic research proposals.

Interested parties should periodically check the special notice sections at the ONR website.

Another place to check is at the Federal Business Opportunities site and at for new special opportunity notices.

You fund contract proposals and grant proposals. How do they differ?

We want to do business with educational institutions, nonprofit, and for-profit organizations with ground-breaking ideas and pioneering scientific research. The grants usually go to nonprofit research institutions, colleges, and universities.

The contracts are focused on industry research that would benefit the military.

What industries are good candidates for ONR contracts?

We’re looking primarily at things like robotics, medicine, environmental innovations, energy efficiency, weapons systems, computer systems, fuel technology, and water purification.

Our ONR contracts are awarded to large and small business. We do not set aside BAAs for small business.

There’s no quota for small businesses participation?

No. But almost half of the eligible dollars … go to them. There were $1 billion in total small business-eligible contract dollars last year. For the past two years, about $500 million in contracts issued for R&D and service requirements by the ONR has gone to the small business community.

So you’re getting about halfway to your target. Shouldn’t that be closer to 75 percent or 80 percent?

Almost half is a lot of money, considering the size of our command, that’s being awarded to the small business community. That speaks to our commitment.

But there’s always room for improvement, and we’d always like to see more money going to small businesses.

When you award a contract for R&D, what’s the deliverable?

A company that submits a proposal identifies what they think the outcome of the R&D will be. They also propose how long it will take them to conclude their research. We don’t give them a deadline; we look at their time frames, and if they’re acceptable we’ll agree to them.

In some cases, what they deliver is a report, or something more tangible like a prototype, but that’s not always the case.

What amounts are the contracts for?

It all depends on the project and its end results. Some contracts could be for $250,000 and some can be for $25 million and beyond.

How do you reach out to small businesses, and how can they contact you with their ideas?

I attend conferences around the country, including the Navy Gold Coast Small Business Opportunity Conference on the West Coast and the Navy Blue Coast Conference in Virginia. We recognize the fact that many small businesses don’t have the money to travel cross-country, so we also do social media outreach, including Facebook.

There’s a national conference sponsored by the Office of Small and Disadvantaged Business Utilization every year, which involves the entire federal government coming together to do procurement specifically with small businesses. It’s held every year in April in Virginia.

What about entrepreneurs who aren’t sure whether they have something to contribute to the ONR?

I will schedule appointments with them to discuss their capabilities and try to match them up with points of contact within our command. There’s a link on our website that provides information on how to contact me directly.

There is concern that the federal Small Business Innovation Research (SBIR) program, which the ONR uses to fund some of its contracts,  will expire at the end of this month unless Congress reauthorizes it.

While there is potential for ONR (and Navy) SBIR programs to be affected by the upcoming 30 September expiration date, it is impossible to comment on the unknown. We are hopeful that both programs secure authorization for their continuation.

Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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