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news and views of MDA

Star Wars was SDIO, became BMDO, and is now MDA

Year 1996..... Year 1997  Year 1998  Year 1999   Year 2000   Year 2001 

Ready. the tracking radars and interceptor rockets of a new American missile defense system can be turned on at any time to respond to an emerging crisis in Asia, senior military officers said  ... While the new system is limited, it is the most extensive anti-ballistic missile system the Pentagon has fielded since the Safeguard ABM system ... in 1975 which Congress immediately voted to shut  down  [Thom Shanker, New York Times, Oct 3]

Send More Billions. success when an interceptor collided with a mock warhead high over the Pacific, Pentagon officials said. A target missile was launched from Kodiak Island, Alaska, and tracked by radar at Beale Air Force Base, near Sacramento. The interceptor missile was fired from Vandenberg Air Force Base, north of Santa Barbara, Calif., striking the target warhead about eight minutes later, officials said. “This was a very operationally realistic test,” said  MDA. The technology has been steadily advancing since the 1960s; send more billions.

Love That Analysis. MDA's new list of Phase 1 SBIRs teems with a strange mix of analysis and electronics materials.  Automated Interceptor to Target Assignment Based on Proven, Advanced Techniques for Planning, Resource Allocation, and Constraint Satisfaction , IM Modeling/Simulation Tool for KEI Dynamic/Thermal Loads Associated with Stage Separation , and Linear-mode, Wide FOV, Single Photon Counting APD Ladar Array . Hard to find a single mind at the helm, more like a mere internal competition for a piece of the budget that lets each sub-department have its own SBIR philosophy after which the so-called program manager staples together the list.

 

Back to the Future.  MDA SBIR announces a NEW! program - it will match up to $500K in Phase 2 SBIR follow-on money from either DOD mainline funds or private investment. Well, it's not the least bit new, only re-discovered.  SDIO started that policy about 1991 and it continued for a decade until the bureaucrats captured the program because they knew better how to run it. As other agencies copied it, MDA abandoned it. The idea brought in tons of money to advance the missile defense technology way beyond what SDIO/BMDO/MDA would ever invest directly. The SBIR advocates roundly condemned the policy because it disadvantaged the life-style service contract companies in the SBIR competition. Applications for the matching money will be considered in February 07. One measure of how well such a policy worked comes from MDA itself in its Tech Applications quarterly newsletter. Business Valuations: More Realistic? lists companies that were acquired, presumably for their marketable technology. MDA (also as BMDO) did earlier similar evaluations that showed how well chosen SBIR projects in market oriented companies produced outsize economic gains while missile defense gained new technology. Unfortunately, MDA itself chose to ignore the findings for the last five years and plodded on with standard DOD R&D procurement. These evaluations could have been (and could still be) the basis for economic evaluation of SBIR itself. But, equally unfortunately, the politics of small business handouts is likely to block any realistic economic ROI calculation.

Program As Usual.  MDA's most recent round-up of invitations for Phase II SBIR proposals asked five questions: 1)  Prototype/Demonstration: What is being offered at the end of Phase II?; Benefits/Capabilities: Why is it important? This is specific and quantitative.;  Program Benefit: Why it is important to a MDA Program. This is specific and quantitative.; Partnership: Who are the partners and what are their commitment? Funding? Facilities? Etc?;  CostA classic search for immediate program benefits including a table for projecting the outcome into the manufacturing schedule (presuming there will even be such manufacturing).  With no curiosity on such aspects as degree of innovation, technical risk, and spin-off potential, which are the legislated (but often ignored) objectives of SBIR, MDA sees SBIR as merely a small business portion of its mainline programs. What's more, MDA has repeatedly tried to cut its SBIR program below the mandated minima. If you are looking for imagination and support for your innovative ideas, don't expect MDA to show much enthusiasm until you can predict exactly when your idea will fit into its planned production schedule.

MDA also accepts as innovation a Little Smart Engineering. The Phase 1 SBIR company will surely succeed in a scheme that will team up with Lockheed Martin Missile and Fire Control (LMMFC-D) to manufacture and evaluate lightweight hybrid composites for MDA’s applications. ... In particular, develop and manufacture IM shipping containers for SRM up to 50-in in diameter.   In addition to using SBIR for what sounds like routine engineering, Phase 2 will probably shift a hunk (could be half) of the SBIR money to a large DOD aerospace contractor - a long held MDA financial goal. Don't worry though, when and if challenged (unlikely) both MDA and the company will shriek in defense of the high degree of innovation since there are hardly any objective standards for innovation.  I wonder why MDA thinks a small company would have any advantage over the scillions of established US container companies in designing and building a box from known materials. The likely answer is that MDA does not think so, but they need a box and don't want to spend mainline R&D funds when they can use the distasteful SBIR.

MDA Seeks Knowledge. Innovation in SBIR? It's whatever the agency says it is, and MDA regularly says it as mere knowledge, as in the expected product from conventional math model projects such as  Advanced models and codes are required to account for all relevant chemical/physical phenomena from propellant combustion through engine performance to plume signature. To that end, relevant phenomena are identified and grouped by category (engine/core flow chemistry, plume/atmosphere molecular interaction, core/interaction spectral radiation) and evaluated against existing models and codes. Applicable tools and current deficiencies are identified and described. Methods are outlined to fill all apparent gaps and remedy all known deficiencies as the basis for a complete physical model incorporated in seamless simulation software supported by documented validation demonstrations.  Math models of reacting flow? Been going on at universities for as long as computers could make numerical scientific calculations. Every respectable technical university has at least two professors doing it. Future market potential? Who cares?  MDA gets another math model it may use and the performing company gets some money. No doubt it will "succeed" in Phase 1 in showing that such calculations are feasible. Would a Phase 2 produce the perfect model? Ask all those professors.  Will the company get a Phase 2? Odds seem good since it has already had $1.8M Phase 2 SBIR from MDA in the last five years for such modeling studies. Hey, it's intellectually interesting work, clean hands, and decent salary for life-style companies. 

MDA has lots of money. Therefore, it legally must have lots of SBIR, if (a real if) it follows the law's mandate. If you're intending to mine that lode, you might read MDA's record of its recent Industry Day http://www.winbmdo.com/conferences/File1.pdf   Once you read through process gibberish and realize that these folks are pure bureaucrats' using word slides they can read to a presumed illiterate audience, you get to the SBIR mission slide. It says nothing about future investment,  or other criteria that proposers can use as a guide. The one clue word is relevance, which unfortunately means something only to the MDA guys, and their ideas keep changing anyway as system development takes its twists and turns and blind alleys. The bottom line: it's like shooting blind. Try the best thing you know how to do, especially if you know that no one else can do anywhere near as well. 

Advanced Technology and the Importance of SBIR 9::10AM Mr. Gary Payton/Deputy, MD/Advanced Systems (Invited) will lead off MDA's Small Business Innovation Research Industry Day.  MDA says it wants to explain the esoteric military terms of missile defense with which it announces its SBIR topics to innovative companies. In practice the really innovative companies want foremost to advance their technologies with DOD's money as a merely useful agent. The likely conference beneficiaries will be the R&D service companies who can talk directly to MDA technologists and managers (if any important ones actually show up) about what MDA wants to fund. But rather than Washington conferences to which companies have to travel and pay for an unknowable benefit, MDA could clarify its attitude by expressing its needs and criteria on its website in terms that companies with no prior knowledge of missile defense could understand. Surely a bleeding edge technology program could harness some leading edge info technology to deliver its message.  Sign up with the National Defense Industrial AssociationSign up with the National Defense Industrial Association by Aug 1  The real reason for such a conference remains obscure (at least to me) since MDA assails SBIR as a annoying inconvenience and an oppressive tax on the "real" programs.  Former astronaut, gentleman, and general Payton should know something about the subject since he had some responsibility for SBIR in both SDIO and NASA. In SDIO he had the good sense to let the guys who knew the SBIR law's intentions run the program with the intent of extracting the maximum available benefit for all concerned given the infancy of really innovative technologies. 

Open Innovation Competition. MDA has appointed an Advanced Systems Innovation Cell (ASIC) to pursue and assess innovative concepts and develop algorithms to improve BMDS capability. All and sundry are invited to send in a five-pager until Jan 06. MDA's spring Tech Applications quarterly also announces a similar program for universities at the $150-200K level for three years. 

The test was not a failure, it just was not completed. "We weren't able to complete the test that we had planned. I definitely wouldn't categorize it as a setback of any kind. The test had been planned for a while so it's a disappointment for those of us who were working on it. We will isolate the anomaly and fix it." [Washington Post, Dec 17] Thus MDA "explained" that they started the test sequence which failed before reaching launch. Maybe MDA will take the same attitude when an SBIR contractor has a problem with a test in an SBIR contract. Maybe. 

The Center for Defense Information has a report on an October Missile Defence Conference in London  where CDI Vice President Theresa Hitchens gave a missile defense update and speculated on the USAF’s plans for space. She noted that The long-troubled Airborne Laser (ABL) is teetering on the brink of cancellation.  Will ABL actually die? Nah, there's an unwritten rule that each service gets a "fair" share of the MDA pie. CDI also notes that MDA got $10B for next year; it takes a lot of work to spend $10B. 

Dig a Eurohole and Fill It With ... viewgraphs. Star Wars says it plans to deploy to Europe in five years which means the digging has to start soon, sooner than the tests that prove such a system would even work. UK, Poland, Czech Republic, and Hungary are all mentioned as candidates for the holes that would defend Europe against ... But they have spend their politically driven $10B a year on something visible. [story from The Independent, Nov 21]

In Love With Foam.  MDA must have loved the foams as it awarded three Phase 2 SBIRs totaling $4.8M last year to Touchstone Research Labs (Tridelphia, WV) in a field crowded with many many materials competitors. The three published abstracts have not a single number by which an outsider could begin to judge how innovative or economic the allegedly new technologies really are. What little the abstracts reveal suggests a rather mature technology being bought in a pseudo-procurement instead of a nursery stage innovation needing a start. 

Meanwhile, MDA should have tons of money for SBIR as it seems to lose battle after battle to avoid spending its required minimum. Its Phase 1 closes October 15.

MDA Claims Defense.  MDA's latest press release announces yet another interceptor installed in what is implied as a national defense. The Ground-based Midcourse Defense (GMD) element of the U.S. Missile Defense Agency emplaced the fourth interceptor missile designed to intercept and destroy a long-range ballistic missile into its underground silo at Ft. Greely, Alaska ... The interceptors are part of an integrated system of sensors, ground and sea-based radars and an advanced command and control, battle management and communication system designed to detect, track and launch an interceptor to destroy a target warhead before it can reach its intended target in any of our 50 states. Although the system will initially have a limited capability when it becomes operational later this year, it will mark the first time the United States has a capability to defend the entire country against a limited attack by a long-range ballistic missile. Such pabulum designed for political campaigns avoids hard questions about whether it will work at all against a real opponent (only the tooth fairy knows), if so with what reliability (nowhere enough testing to assign any credible estimate, when it will be wholly national (no time soon), etc. An SBIR evaluator might ask which of all the technology funded by SDIO's SBIR since 1985 made it into the system that surely has used some high tech advances 19 years later. 

MDA Changes. In its seemingly endless quest for perfection, MDA has made two changes to its SBIR solicitation terms for October 15. two revisions to the MDA 04.4 SBIR Solicitation Instructions: you can propose a $50K six-month add-on option, with a max of $150K, and its Fast Track "will continue" (whatever that means).  MDA recently threw itself back 15 years in its SBIR approach and is now learning what we earlier managers had already learned. The $150K Phase 1 hints at wanting minor projects that can be finished quickly so they can be incorporated in some MDA program. Service, rather than innovation, would be favored. After all, innovation is a lot more trouble to adopt than a new coat of paint. Why they re-state their Fast Track is hard to fathom. The least likely reason is that they discovered that projects with third-party cash are a lot better than stuff that only a government could love. The most likely is that they got political or legal flak from deviating from published DOD policy. 

Gotta Re-Organize; We're in Deep Doo-Doo.  The Missile Defense Agency Director wants to capitalize on the extraordinarily hard work undertaken throughout the agency to develop and deliver Ballistic Missile Defense System (BMDS) capabilities. Our purpose is to realize the solidarity of your hard work, reduce the distractions and facilitate the commonality in our focus, and maximize the efficient utilization of MDA resources.  The goal is to eliminate wasted energy and encourage harmonizing individual energies towards the common vision to develop and field an integrated BMDS capable of providing a layered defense for the homeland, deployed forces, friends, and allies against ballistic missiles of all ranges in all phases of flight. I am forming the BMDS Integration Working Group (IWG) to harmonize the separate element contracts into a coherent whole. The IWG will need to have insightful discussions, innovative coordinate actions, and a collegial environment to form and evaluate alternatives that reward integrated BMDS demonstrated capabilities. [Al Kamen, Washington Post, Sep 13, quoting a BMDO functionary] That's bureau-speak for "it doesn't work and it's time for a plan B that we don't have"

MDA Phase 2 Bafflegab.  MDA published a section "explaining" its process for Phase 2 SBIR invitation and review. An SBIR Topic Sponsor (either an MDA Element MDA Project Office or MDA Functional Area Office) begins the process for a Phase II Invitation by reviewing the Phase I work of each contractor (along with the Contract Technical Monitor) and making a recommendation on what Phase I efforts should continue into Phase II. The MDA Sponsor recommendation is based on several criteria. The Phase II Prototype/Demonstration (What is being offered at the end of Phase II?), Phase II Benefits/Capabilities (Why it is important), Phase II Program Benefit (Why it is important to an MDA Program), Phase II Partnership (Who are the partners and what are their commitment? Funding? Facilities? Etc? This also can include Phase III partners), and the Potential Phase II Cost. This is the basic business case for a Phase II invitation and requires communication between the MDA Program, the Phase I SBIR Offeror, and the Phase I Technical Monitor. An MDA SBIR Working Group then reviews the entire Phase II Invitation list and forwards their recommendations to the MDA Source Selection Authority for final approval.  The kind of stuff written by and for the crats with little info from which a competitor can judge the odds. Not surprising since the entire cost of proposing rests on the small company. All signs, though, point to overriding weight given to "what's in it for us?" - Why it is important to an MDA Program. To score well on that criterion, the proposer has to get inside the skin of the MDA tech guys - an MDA Element MDA Project Office or MDA Functional Area Office - who shy from talking to the public. To reach them the company has to pound on the doors insisting on its right to access public officials. The chief architect and operator of MDA's SBIR is Dr Charlie Infosino and the small business advocate is Mr Stephen Moss. What you want from them is the names and contact means for getting to the individuals who will opine on whether your proposal is slick or schlock on the criterion of value to MDA. Some of the topics give you a start with the name and address of someone with a mda.mil e-mail address. 

Baby Steps, Baby Impact.  MDA's list of Phase 1 awards area phantasmagoria of baby steps for purely military technologies by companies that have been doing military funded SBIRs for a long time.  Economic spillover will be zip, thereby putting a great burden on MDA's Tech Applications people to advertise lemonade.  If you are even thinking remotely about proposing to MDA's next solicitation in October, read the abstracts in your field, go visit the companies, think about partnering with one of them, learn the MDA lingo of sub-programs that would use your stuff, use or invent figures-of-merit that MDA would respond to, call around to the MDA points of contact to find the technical people who review proposals. In short, get as far into bed with MDA's ideology as you can, because the winners are going to be the companies who cater to MDA's fantasy of eliminating SBIR altogether in favor of regular incremental improvements in established technologies and programs. Ugh! 

Thinking MDA SBIR? Think mature. Clark-MXR (Ann Arbor, MI) got a Phase 2 to build  a manufacturing workstation (the “ABL” Workstation) capable of drilling precisely contoured holes in various materials specifically for the Airborne Laser. MDA's Tech Applications quarterly - Update - describes the non-proprietary (we hope) aspects of the technology. The Airborne Laser is a flying dream to shoot down missiles in their launch phase from a not-too-distant airplane with a high power laser. Tactically, such a plane would have to be in the air on alert within range and not get shot down itself by any power that was strong and daring enough to launch a missile against the USA. Unfortunately for SBIR, such a project borders on using SBIR for procurement rather than for nurturing infant technology. Which is wholly in line with MDA's  recent decision that nurturing was a waste of their money and that direct service was more efficient.  The next chance to propose a new idea that has been thoroughly tested to MDA is unknown since MDA has chosen NOT to play in DOD's summer solicitation, ends Aug 12 in DOD Solicitation 2004.3. The good news for the Tech App folks is that mature technologies make great copy that doesn't require long  imagination to get to the commercial return on tech investment. It makes Update look good even though it is already the best of the government tech app programs.  

Miracle scheduled for September. If all goes according to the political re-election plan, MDA will declare operational readiness of whatever they have on the ground in September. But not without a lot of naysayers claiming it has never been tried in even simulated anger and will still be in a state of design flux. But then, we did that with ICBMs in the 50s and 60s and who knows whether they would have worked as planned. The MDA boss, Gen Kadish, must be under intense political pressure to make it sound like the dream works even though his military experience says don't risk battles with untried stuff. Fortunately, the ICBMs were never put to the test, and it is likely that MDA's first few generations won't ever be tested either. For now, their only mission is to shoot down Democrats.  Aficionados of ICBM can see a fully preserved silo with a demonstration what can be done when money is no object. It's a Titan site just south of Tucson. 

Prognostics, modeling, and analysis. Got a little company that likes clean hands and mathematics?  Go find a non-profit that likes the same things - they're all over the map, and they're usually called universities. Write an STTR proposal to MDA which last year funded 70% of proposals presented, and heavily on analysis. They even saw high innovation in yet another math model of the thermal decomposition of H2O2. Due April 15. Although MDA has a huge innovation challenge to shoot down missiles, that challenge does not seem to extend to SBIR/STTR where MDA seeks incremental advances in knowledge. 

Anti-Democrat Missiles.  So, says the White House, we don't know if they will work with acceptable reliability against ICBMs; we are sure they will work against Democrats though in an election year. The Bushies want to install, at considerable taxpayer expense, a BMDO system that experts say is at best a poor chance.  In December 2002, President Bush called for a system by the end of this year. Republican presidents love to call for wonderful defenses which if they worked would be indeed wonderful. But Weapons experts outside the Pentagon have argued that there is no imminent threat that would justify the program's huge expenditures, up $1.2 billion from the previous year, and the deployment of a system whose capabilities are unknown. [New York Times, Mar 12]  Is the technology ready? Some of it. Is the system ready? Who knows. Unfortunately for Bush's imitation of Reagan, there is no longer a strategic opponent we can spend to death regardless of whether the deployed systems actually work. 

MDA's technology commercialization arm won a Distinguished Technical Communication award from the Society for Technical Communication. The award actually goes to MDA's contractor - the  National Technology Transfer Center-Washington Operations (WO)- which evolved from an excellent in-house office to a well-run contractor operation as a subsidiary of the NTTC. The NTTC itself is a Senator Byrd pork project for West Virginia. In those days SDIO (the first Republican name for MDA) cared about tech transfer and spin-off of its leading edge tech research. WO has kept the operation alive and sparkling despite MDA's slide into conventional military development of a weapons system. See WO in action

Grinding away until it's economic. BMDO's Tech Applications report touts the spin-offs for many companies funded by MDA over the years. Most are SBIR companies that spend only 2.5% of MDA's R&D money. The first story is Pyrograf-III from Applied Sciences (Cedarville, OH) which had been grinding away on carbon fibers for nearly two decades. It has had at least 30 Phase 1 SBIRs and 7 Phase 2s from DOD since 1987.plus twelve Phase 1s and five Phase 2s from other agencies plus some piece of an ATP award to Goodrich et al.  It has grown from four employees then to 21 employees now and MDA's report claims the production capacity if fully subscribed for 70,000 pounds a year (with "plans to double capacity") at $100 a pound. Not too many industrial products can be sold with $100/pound major ingredients. Applied Sciences' history raises the obvious policy question; what does the government think it is doing in long term bare survival funding for a product that may never be economic? Is there any government-wide strategy as there might be in a large industrial firm investing in a potential new supplier or product source?  The likely answer is that the government has no strategy (other than the political move of apportioning a part of R&D funding to small companies); each agency does whatever it likes with little regard to any grand investment strategy. No agency is responsible for the intelligent investment of any other agency's funds, nor of intelligent investment of government funds as a whole. There is NO management review of investments, no investment board of directors, no one held accountable for return on investment. 

MDA Lets Loose. MDA posted a horde of SBIR and STTR awards on its website. 424 Phase 1 SBIRs (from 1860 proposals), 44 Phase 1 STTRs, and 109 SBIR Phase 2s. That's enough to consume a big share, say $80M of even the huge MDA budget. .Lots of awards to companies who have been speaking SBIR to DOD agencies for two decades; the same companies whose names parade through the award lists from the military services. And for safe projects unlikely to have much impact once the SBIR money is spent. One Phase 2 will do some mods to a math model of a burn-'em-up laser - the kind of science that any university can do with zero market potential. Ah well, it's MDA's money to waste if they want; they'll never be held to any account except having handed out the money to the target class.  The SBIR advocates get their wish - their members get a share of the pie. Among the many awards for math models are a few things that sound like innovative technology with a future in the hands of companies that have an real market mindset:  Crystal IS, Belford Research, Crystal Research, IPITEK, Peregrine Semiconductor, Sensors Unlimited. The acid test, of course, comes later in the Phase 2 competition, but judging by the first dozen awards (announcement delayed for the others), the prospects are bleak. If you won a Phase 1, get to know as many MDA people as you can since that is the only way you can know the magic words they are looking for and even those words are subject to arbitrary change.  

The Public - Who Cares? MDA has notified at least some winners from the Phase 1 winter competition that extended into spring with the receipt fiasco, and some Phase 2 winners although the web site denies that 2003 yet exists.  Ah well, the first law of SBIR is to pass out the money, not to tell the public what's happening.  Congress can forgive a lot of sins except dodging payouts to constituent groups. But it does feel like MDA has dumped its nearly two-decade enthusiasm for engaging the public - another sign of bureaucratic takeover. 

Innovate! That's MDA's prime directive to small technology companies undertaking early-stage research in its SBIR program, says the opening line in MDA's Tech Transfer newsletter MDA Update. Could the right hand not know what the left hand is doing? Certainly the right hand - MDA's SBIR program operators - have made it clear to SBIR hopefuls that nothing will be funded without letters of credit from MDA staffers.

What's With MDA's Fast Track?  Even though MDA was the example that inspired DOD's Fast Track, all signals now are that MDA has abandoned FT despite formal participation under the DOD solicitation. Stories emanating from MDA FT applicants are that it is neither fast nor a track. MDA has apparently taken the attitude that Fast Track is no different than regular Phase 2 applications: batch processing, disdain for private support, and a requirement that applicants obtain a support letter from a high MDA official. The support letter requirement shifts the advantage to companies who work the Pentagon on the inside and to the disadvantage of companies with innovative ideas that were not invented at MDA (the NIH syndrome).  Working against MDA's apparent attitude problem is the fact that MDA is not spending the required SBIR funding. Its website shows far to few Phase 2s selected for the  money that it must spend. Sounds like a replay of the FY2002 attempt to scuttle SBIR by financial shenanigans. It will either have to defy Congress or abandon its requirements for hand-holding of MDA officials by every Phase 2 hopeful. The officials have neither the time nor the interest to entertain all those companies for the effort it takes to work up a deal. 

Even though MDA's SBIR has turned non-commercial the MDA Tech Transfer group National Technology Transfer Center's Washington Operations (NTTC-WO) won a prize - the Society for Technical Communication (STC) Award of Excellence for its 2002 special report "MDA Technologies: Tools to Counter Terrorism."

Market 2002 Performance of BMDO SBIR Companies

CompanyMarket Cap
Dec31 ($M)
Gain 2002Profit ($M)Symbol
Advanced Photonix

11

+17% -.4API
ATMI567-22%-33.ATMI
American Superconductor64-60%-60AMSC
American Xtal 40-77%-77AXTI
APA Optics18-50%-5APAT
AstroPower174-52%+5.1APWR
Conductus15-70%-17CDTS
Cree Research1190-44%-203CREE
Emcore80-83%-122EMKR
HNC Softwaremerged   
Illinois Superconductorgone   
Implant Science25-70%-2IMX
Irvine Sensors10+150%-4IRSN
Kopin272-72%-21KOPN
Nanophase Technologies43-47%-5NANX
Nonvolatile Electronics36+20%-2NVCR.OB
Spire16+100%-1ORYX
SatCon Technology23-73%-25SATC
Spire22-20%-1SPIR
Superconductor Technologies36-73%-21SCON
Vixel50+10%-11VIXL
TOTAL$2890M-53%$-600M
What do the numbers mean? The market cap measures investors' view of future profits, the business risk of new technology. The profits measure whether the new technology can make money now. The profits numbers here are skewed by special situations at two companies who reported huge nominal losses but are actually making money. Profit numbers are those reported by Yahoo Finance as available to the common stock. Why market cap as the acid test of a company's efficient use of SBIR? What better cold-fact measure? Still, many companies whose technology won't stand market scrutiny will rationalize more government succor for the eternally potential commercial appeal that would never pass an economics exam. And most government agencies have become witting co-conspirators.
Why only BMDO's SBIR winners? BMDO was once the only agency that cared whether the companies live or die as economic entities. No one else had data on which to rate proposers. No one else recognized that if the economics don't work out then the government investment becomes mere welfare. Now no agency cares as each serves its own interests. In another tech-wreck year, this BMDO SBIR portfolio did even worse than the NASDAQ which was -31%.

Some Other SBIR Public Companies Not Supported by BMDO
CompanyMarket Cap
Dec31 ($M)
Gain 2002Profit ($M)
Albany Molecular480-40%+39AMRI
Embrex90-36%+8.EMBX
Energy Conversion215-50%-24ENER
Ibis44-65% -13IBIS
Surmodics490-19%+6SRDX
ViaSat300-15%-7VSAT

MDA Dances the Shuffle. Last year MDA tried to slough off half its SBIR funding, but no other DOD agency would take up the slack. Now MDA says that because of that shuffle, it could not obligate its legal share and therefore it should not have to ever obligate it. $30M fell into the hole. Murder your parents and throw yourself on the mercy of the court as an orphan. But the political arm of SBIR - SBTC - has raised the alarm in Congress that MDA should not be allowed such fruits of its crimes. SBTC has also notified DOD that it will file a brief with GAO to get DOD to re-open the fouled SBIR solicitation 2003.1. 

MDA Goes Eclectic for STTR. Even though the proposal aren't yet in for SBIR, MDA has already published its 2003 STTR topics, an eclectic bunch of requirements:  predicitng the future, modeling the decomposition of H2O2, IR materials modeling, COIL lasers, GPS/INS coupling. Innovative vision was shelved again in favor of predictable results from incremental projects. Unfortunately for the reputation of DOD's SBIR, such topics suggest coziness between several MDA staffers and specific contractors for narrow specialized subjects. Modeling the decomposition of hydrogen peroxide sounds particularly odd: the chemistry is well known, tons of academics have already worked on the problem, the odds of any follow-on or spin-off are minuscule, and a small company has no inherent advantage over large enterprises in such a task. It is merely a way to hijack SBIR to do ordinary R&D tasks that would otherwise be done by large entities.  DARPA, by contrast starts its Topic 001 with Commercial Development. of ...... , followed by Topic 2's COTS-Based ....   Proposals Due April 16

MDA revealed eight more Phase 2 SBIR winners. Three went to veterans and three sound like only modest innovation. The rest sound reasonably innovative in technologies with a future. No word on whether any were Fast Track. 

Fast Track? Bah,  humbug, hints MDA, a Fast Track is just another Phase 2 proposal with a somewhat better commercialization story. Noises emanating from MDA's SBIR office, which is the official mouthpiece but no longer the decision maker, say that the DOD Fast Track standards do not apply to MDA (even if they still might apply to DOD). Specifically, the DOD rules promise Fast Track when the company has timely submission, matching cash, and technical sufficiency. It's the technical sufficiency part that MDA seems to have abandoned in favor of the usual relevancy to existing programs.  Thus Fast Track proposals have to run the same gamut of successive committee approvals in which any committee has an effective veto. That's the usual government way where every office holds a veto over any new action. Third party cash as a validator of the technology's value no longer impresses the technocrats who focus most of their daily energy on getting a bigger piece of next year's budget. 

Fuzzy Standards at MDA. A Phase 1 MDA SBIR winner briefed his technical manager towards the end of the contract with a view to learning what matters for Phase 2. The manager reported that MDA, for which he only acts as a contracting agent says, "program needs", which is bureau-speak for we'll do whatever we want. Further advice was that "matching funds and Fast Track do not have much weight in the selection of phase IIs". What that means for Phase 1 winners is that you must find, by whatever means, a friendly face in MDA which usually presents a "don't bother us" face to the public, especially to small inexperienced companies. Well, you might ask, "if they don't known what they want for Phase 2, why did they give us a Phase 1?" Good question. They do have tons of money that they would like to spend outside SBIR but may not have the nerve to shortchange SBIR below the legally mandated minimum. The days of a consistent innovation and future potential standard for SDIO/BMDO/MDA Phase 2s are over, done, finis. There's no single mind deciding and no standard available to an outsider.

 
MDA rounded up the usual suspects for mostly conventional R&D with its summer batch of Phase 1 SBIRs. The Oct 30 announcement claims it decided the 262 winners on Sept 24 which is only five weeks from the solicitation close. Fast service for a bureau!. Familiar SBIR names abound: ALPHATECH (at least 113 previous awards), American GNC (87), Coherent Technologies (125), Creare (352), Fiber Materials (40), Foster-Miller (713), HYPRES (106), MetroLaser (81), Mission Research (270), Irvine Sensors (69), ORINCON (138), Physical Sciences (242), Scientific Systems (116), SVT Associates (65), Systran Federal (65), TDA Research (211), Technology Service (99), Ultramet (166). So, these few companies have already had 2500 SBIR awards which is in the neighborhood of $500M. What do you suppose the economic return has been to the government or to the national economy from profits and jobs that followed the $500M? Don't bother asking the new MDA (the old BMDO actually cared). Oh sure, perfectly competent R&D companies who will perform knowledge gaining projects like Agile Engagement Planning: Integrating Decision Graphs with Stochastic Dynamic Programming Solvers; Adaptive Waveform Coherent Ladar Fusion for Long Range Tracking, Discrimination, and Kill Assessment; Reliability of Space-Borne Turbo-Brayton Cryocoolers; Divert and Attitude Control Systems (DACs) Thruster Non-Destructive Examination, Development of an Air-Transportable, Rapid Production, Mixed Base Hydrogen Peroxide System, Improve/Develop Metrology for VLA (Very Low Absorption) Coatings, Ultra-Wideband RF Discrimination Techniques
Ah well, who has the gold makes the rules, and where there are no metrics to define success, no one can refute any claim. If you are one of the lucky winners, keep in touch with your technical overseer and emphasize the practical effect of the results of your Phase 1 work. Then pay attention to the deadlines because the bureau honors neatness and timeliness. It would also help if the overseer could point you to the technically responsible technocrat at MDA who has influence with the shadowy committee(s) actually deciding the winners. That technocrat is also an opening to possible follow-on contracts although MDA's track record on bringing SBIR companies into mainstream funding is bleak.

MDA's 2003.1 SBIR topics have become the standard laundry list of military agencies. The first 17 topics all have the same technical point of contact. Lots more opportunities for well-comtrolled engineers to get a government contract for a well-controlled study project.

 

MDA gave two Phase 1 SBIR awards to StratCom International (Keedysville, MD) whose CEO is Mr. James Abrahamson [rtd]. One was for Stratospheric Missile-Intercept Launch System . As if a start-up company could develop and build an anti-missile launch system. What's unusual is not that the DOD uses SBIR for study contracts, but that the company is the child of the first director of SDI, LTG Jim Abrahamson, a fine general to work for. After all, who would know more about missile defense? The topic under which the project was proposed, Techniques for Missile Defense was a catch-all which invited projects with a degree of technical risk where the technical feasibility of the proposed work has not been fully established.. The other Phase 1 was for Metal Storm, an outer extension to the kill vehicle which the abstract claims is a well developed, flexible and fully patented and fully demonstrated technology which promises improved kill vehicle reliability against unanticipated phenomenon and countermeasures. This proposal is to accomplish exploratory development on this concept for enhanced kill vehicle performance and kill potential. Which makes it sound like the only risk is in systematizing the concept into an actual kill vehicle that flies (at a cost of zillions per test).
One wonders why, with a $7B kitty, MDA uses the highly restrictive SBIR as the vehicle to fund a three-star general to start development of a major subsystem of a missile defense. It is, of course, one way to use SBIR funds for the mainline program. MDA last year worked a deal with one part of Congress to cancel half its SBIR, only to have to restore it later when the rest of the Congress demanded that DOD cover the loss, but no other DOD agency loved either MDA or SBIR enough to overfund their SBIR program by $70M. The basic rule still applies who has the gold makes the rules.We wonder what size the Phase 2 will be. At least tens of millions, although the one-man company would be hard pressed to absorb that much money and the SBIR rules mandate that the small business must do half the work. So, unless MDA ditches the SBIR rules, it can only give a real system development company, like Lockheed-Martin or Boeing, half a Phase 2, which is pocket change for an aerospace prime. We'll watch and see whether MDA even tells the public how and why Phase 2 is funded. Classification often comes in handy for opacity (wouldn't want Saddam or the terrorists or the New York Times to know).

 

 
VC Help for BMDO Infants. Although the ATP still funds some of the world's richest companies, it has also given a VC hand to three MD-VA infant companies. Genex's 3D display ideas got a start from BMDO (now MDA) with $1.9M in 1997 and then another $1M+ each from BMDO and AF. Neocera''s HTSC got its first Phase 2 SBIR from BMDO in 1992, and Luna's nano-stuff had its first Phase 2 from BMDO in 1998. Note that the first funder of all three was the agency that measured economics as well as technological sweetness. Alas, MDA has since dragged itself down into the bureau-swamp of mostly conventional R&D and even though it is swimming in money will try to either wriggle out from under SBIR altogether or fund predictably incremental projects. Actually, the government has another chance to start out right as it forms a Homeland Security SBIR program. Since the tech side of anti-terror needs the same kind of big tech advances as Star Wars needed, here's a chance to put a seed-technology leader in charge.

SBIR proposers and wannabes want to know: what is MDA looking for? Defense agencies typically state their criteria in ways that outsiders cannot use (whatever is good for the Navy), since a federal agency isn't concerned with the economics of proposing. It doesn't even seem concerned with its own costs of reviewing. Outsiders have to look to the agency's actual awards to read its mind. An example of what MDA has become: It funded two Mission Research projects in Phase 1. Mission Research has been an R&D company since 1970 and has won 242 SBIR awards from DOD since 1984. Its website mentions commercial products but talks only about sales of R&D to happy customers who pony up $90M a year to feed 450 employees. One project will develop a tool to simulate common schemes and allow for direct evaluation of their efficacy under typical environments which tool would then be used to choose and optimize mitigation schemes for given mission scenarios of photo-detectors. The second project will design, simulate, and perform layout on a series of small scale integrated circuits to be used as replacements for 5400 series devices used in many military and space systems. Both projects sound like the ordinary R&D for which small companies have no particular advantage. MDA here is merely filling minor gaps in its R&D by substituting a small company for open competition. If Congress ever wanted economic impact from SBIR (other than motherhood words) these kinds of projects will NOT deliver it. MDA says not only does it not care about economic impact or commercial investment as a route to better products, it doesn't even want much innovation.

MDA Phase 1 winners (hooray!) should read their notification letters carefully for rules on submitting Phase 2. MDA abandoned the BMDO concept that Phase 2 should be proposed when the company feels the technology is ready to compete. Instead, MDA has adopted the bureaucratically convenient rule of considering only Phase 2s that they have formally invited to propose and only in a narrow window in October. It's their money and they can do almost any foolishness they want with it. If your supplier of a key material can't deliver on time, you may have to wait a year for the next window. That way MDA can give many more Phase 2s to companies doing paper studies and software, which seemed to be their aim in shifting their SBIR organization anyway.

MDA Emerges from Cocoon(Apr 23)Missile Defense finally revealed its SBIR approach in announcing 381 Phase 1 winners from 274 companies. Plus it named 34 Phase 2 winners since the regime change last October. It looks like a mix of predictable contract research and technical innovation. It will take some analyses to tease out the real strategy in the absence of any publicly useful statements by MDA. Wouldn't want those terrorists to know what they're up to. It is clear that a lot of companies whom BMDO had treated as living dead that subsisted wholly on government contracts are back in the mix with much of the same limited promise and limited scope. To MDA's credit, it also published the abstracts with the names. Some contracts are already underway and the Phase 2 submission window will only open for October (as the rules are presently stated). Two companies got five wins: Fiber Materials and Materials Modification. Five got four wins: Advanced Ceramics, ALPHATECH, Applied Physical Electronics, MicroCoating Technologies, and Structured Materials Industries. Note the dominance of materials companies in the multiple winners. But the problem with most of the new materials is that they are too good (= too expensive) for commercial use and thus they will go no farther than the government is willing to take them. A few innovative sounding things like a laser refrigerator, more GaN crystal growth methods, Ferroelectric Random Access Memory, and a spin transistor, buried in a mountain of the usual safe R&D stuff like sensor network management software, an altitude sensor, YABMI (yet another battle management internet), scramjet enhancement (why bother with "enhancement"), a rain erosion test thing, a gizmo for COIL, and spectral parameter modeling. Ah well, Phase 1 is not a serious commitment; look to Phase 2 selections to see the real SBIR philosophy. 381 is a big number that will not be big enough if MDA doesn't again convince Congress next year to halve its SBIR tax rate from the law's 2.5%.

MDA's Phase 2s for the last quarter of 2001 actually have only a little junk in that most of the projects that might find use in any number of applications. Such a list is probably due to the nature of the Phase 1 selection in 2000 and 2001 when Jeff Bond selected projects on criteria that valued a future for the technology.

BMDO Mixed STTR Message. After ditching the idea that SBIR should be innovative and a broad call for new technology, BMDO's STTR solicitation says it hasn't yet found its footing. After a long-winded recitative on BMDO's mission, the single topic of Electronics and Superconductivity invites almost anything and says that proposers need know no specifics of BMDO's program. What will BMDO actually do? Who knows? Until they go through the travail of a real Phase 1 selection, not even they know what they will do. The web site shows no Phase 2s as having been selected since Aug 1, two months before the policy bloodbath.

BMDO Cuts Its SBIR
(Jan 3) BMDO appealed and got legislation that cuts its SBIR from a 2.5% tax to half that number by limiting the tax to $75M. Other agencies who hate SBIR will be examining the move to see if they can copy it. Any net loss will be in the minds of the SBIR advocates who will scream "we wuz robbed". The move is only for FY2002 and does relieve BMDO of huge problem of intelligently spending that much money since the Phase 1-Phase 2 structure of SBIR cannot handle large abrupt changes in funding. Oh, sure, an agency can throw the money away, any fool can do that.

Market 2001 Performance of BMDO SBIR Companies

CompanyMarket Cap
Dec31 ($M)
Gain 2001Profit($M)Symbol
Advanced Photonix*900.2API
Advanced Technology Materials72423%5.3.ATMI
American Superconductor577-39%-30.2AMSC
American Xtal Technology323-56%23.2AXTI
APA Optics37-52%-3.4APAT
AstroPower36758%2.5APWR
Conductus51-39%-18.2CDTS
Cree Research2130-16%21.6CREE
Emcore464-63%-12.2EMKR
HNC Software728-24%-34HNCS
Illinois Superconductor8654%-28.2ISCO
Implant Science8389%-3.2IMX
Irvine Sensors*4-92%-21.8IRSN
Kopin95836%-19.8KOPN
Nanophase Technologies81-46%-5NANX
 8-20%-2ORYX
SDLmerged  SDLI
SatCon Technology86-37%-22.2SATC
Spire*22-20%-2.3
Superconductor Technologies<116<78%-15.3SCON
Vixel450%-22.6
TOTAL$7120M-15%$-227M
What do the numbers mean? The market cap measures investors' view of future profits, the business risk of new technology. The profits measure whether the new technology can make money now. The profits numbers here are skewed by special situations at two companies who reported huge nominal losses but are actually making money. Profit numbers are those reported by Yahoo as available to the common stock. Why market cap as the acid test of a company's efficient use of SBIR? What better cold-fact measure? Still, many companies whose technology won't stand market scrutiny will rationalize more government succor for the eternally potential commercial appeal that would never pass an economics exam. And most government agencies have become witting co-conspirators.
Why only BMDO's SBIR winners? BMDO was once the only agancy that cared whether the companies live or die as economic entities. No one else had data to rate proposers. No one else recognized that if the economics don't work out then the government investment becomes mere welfare. Now no one cares as each agency serves its own interests. This BMDO SBIR portfolio beat the NASDAQ which was -21%.

Some Other SBIR Public Companies Not Supported by BMDO
CompanyMarket Cap
Dec31 ($M)
Gain 2001Profit($M)
Embrex14218%7.EMBX
Surmodics6126%2.2SRDX
ViaSat353+23%9VSAT

dateline 2001

 

Dress Right, Dress.. Having gutted the innovation of its SBIR, BMDO wants to grab all the missile defense programs. The Wall Street Journal reports that Gen Kadish wants to control the funding and management (bureaucratic terms for ownership) of the Army, Navy, and Air Force anti-missile programs. Centralization is a bureaucrat's first instinct and is usually a wet blanket on innovation which requires some independent actors.

the cancellation seems to have been largely driven by the recommendations of Lt. Gen. Ronald Kadish, who heads the BMDO. Gen. Kadish has gone out of his way under both the Clinton and Bush administrations to delay, dumb down and otherwise impede the most promising options for near-term missile defense: short- and long-range anti-missile systems based on the Navy's existing $60B Aegis fleet air defense infrastructure. [Frank Gaffney, Washington Times, Dec 18] Gaffney is the ultra-hawk and the Washington Times is the ultra right-wing allegedly normal newspaper. The lead headline every day calls some strike of Republicans against Democrats.

Missile Defense Not So Easy
(Dec 17) As soon as the Congress caved in to Bush's passion for missile defense and doubled BMDO's budget to $8B, the Navy is pulling the plug on the presumed easiest of the defense schemes by cancelling its program. Which points up the political dream nature of a national missile defense. Even though they can throw money at it, they cannot make it work "By Direction of the President". Which points up Ron Kadish's dilemma of whether to deploy present technology or keep trying to find technology that can do the job. His present attitude of procuring what exists needs re-thinking in light of the Navy's admission that the easy scheme is not working.

A Pile of Free Money. Even though BMDO has not yet issued any sign of how it will run its SBIR, a quick calculation says that its biggest problem will be too much money. If the planned Republican wish of $8.3B comes true, and most of it is still RDT&E, and the lion's share (70%) still is spent with contractors, BMDO's SBIR should be something like $145M. Awkwardly, SBIR's structure of a little Phase 1 money makes any huge increase almost unspendable. BMDO thus faces the choice of awarding a gazillion Phase 1s or funding just about every Phase 2 proposal. It must either lower its standards or default its legal obligation to spend 2.5% on SBIR. If you have a decent idea or a decent Phase 2 concept (don't they all?) this is the year to float it.

 
Death to SBIR Co-Investment
(Nov 5) BMDO quit the game after 15 years of being the only federal agency to believe that co-investment and market potential were the best clue that an SBIR company would do anything except spend government money. BMDO has internally re-organized to hand military managers the choice of where to spend SBIR money. They will ignore commercialization and consistent evaluation and thus companies will have to take up schmoozing BMDO managers to discover the real rules. Without a single decider, there will be no consistent approach to innovation or its exploitation. Government connection will beat innovation. It remains to be seen whether BMDO will continue a transparent management or descend into the normal bureaucratic opaqueness that leaves everyone outside the Pentagon guessing. The shift means the end of any economic return analysis.
What Should BMDO Proposers Do? Welcome to arbitrary and opaque government. At the moment, even BMDO does not know how it will handle SBIR. Now that the people who lusted for the money got their wish, they are not prepared for the management. Each office has a few contracts it wants to award but no plan for coping with a flood of proposals and the required administration. Those offices probably expect the same kind of administration from the SBIR office that they had before. But that office and its central management has evaporated. Expect pandemonium. Expect calls not to be returned even if you find someone to talk to. You will have to do what companies do with the military services: make a thousand phone calls to find the guys who want what you are selling. The coming solicitation in January will look like a lottery; no one can predict what kind of proposals will win Phase 1. Cast your proposals in terms of a great advantage you have in militarily useful figures of merit. Study as much as you can the specific devices BMDO is working on and expect those devices to change. Make friends with the large contractors who spend BMDO's money and design and build the systems. Any large aerospace company either is doing it or wants to do it. Make friends and partners with the companies who have won a lot of military SBIRs; they know the system. Go to the DOD lists of Phase 2 winners to find out who they are. Remember that BMDO has over $100M they MUST pass out in small SBIR awards next year. A lot of companies will get a piece of that pie.

Success Breeds Failure. BMDO's latest issue of its Update quarterly newsletter on commercialization highlights co-investing as a prelude to BMDO's Oct 1 announcement that it was no longer interested. After all, what better indicator is there than real money form an outside investor to demonstrate industry's interest to move the innovation beyond prototype?, says one BMDO office; we will pursue just our mission, says the same office within weeks. Interestingly, the piece shows 22 SBIR companies as co-investors in other SBIR companies. In the three years 1997-2000, BMDO's SBIR (Phase 2) awards attracted $180M to match BMDO's $200M. Now, if the new approach survives a Congressional attack on Dark Age management, all that will be history. Congress might well ask why success has been abandoned after years of showing just the kind of fruit that could sell SBIR. But then, the Dark Force management would like SBIR to go away and if they cannot kill it in law, they would least abduct it in practice.

 
BMDO Changes Some SBIR Rules
(Oct 1)Military First, Ditch Commerce.To start the new federal fiscal year off with a thud, BMDO's SBIR solicitation for the January Phase 1 proposals has a few noticeable changes that stem from the internal battle to shorten its vision. Phase 2 proposals from this next round of Phase 1 awards will be accepted only in a narrow window starting next October, which makes life easier for bureaucrats reviewing them. Eventually, they will come to regret that move when their pet projects will have to wait a year if they miss the window. The mission of BMDO SBIR has shifted to improve the performance or reduce the cost of ongoing development programs in BMD which is code for serving the immediate program needs. BMDO's special FasTrack is dead and the DOD procedure will be followed which tries to downplay commercial impact while pretending to honor it. Missing are the ringing phrases about private sector investment which is consistent with generals and SES views that the economy is not their job regardless of what the SBIR law says. Defense-crats have always found justification for ignoring civilian objectives in the name of their higher mission of military operations. The idea of relevance marches through the solicitation even though the crats didn't have time to revise the topics to fit their new schemes. The true test of their intentions will appear in the list of selections in the spring (if the new masters of the universe can get themselves newly organized in time).
Why, you might ask, are they ditching a model program for which the manager just received the program advocates' highest honor, a Tibbetts Award and has published remarkable economic analysis to show that there is a definitely competitive ROI for many of the companies and technologies? The military cares nothing for Tibbetts, what he stands for, or for what SBIR stands for. The technocrats within BMDO lusted for the $100+M that BMDO's SBIR will get next year which is huge in the scope of the peanuts devoted to other new technology. "We need that money" they said, "and besides, what has SBIR ever done for us?" Well, it won't do much if you won't let it. The technocrats had a shorter focus of the next test or demo for which a whole new technology would not be available in time. In a bureau, budget is power and every manager can find all kinds of rationalizations for more money/power for their particular "rice bowl". SBIR had too much money to be ignored as just another social program handout.

Bureau Couldn't Stand Prosperity. Rumor has it that BMDO has decided to ditch its 15-year SBIR success story and adopt the military model. That means that commercial potential will get lip service. If they like your engineering, any commercial fantasy will suffice. If they don't like your engineering, no great commercial story will save you. Look for opaque management, vague debriefings, and schedules that serve the bureau. The premium for proposers will be on schmoozing the internal BMDO people who are seizing the reins. Look for repeated and even sequential contracts to favored contractors who have learned to play ball with the internal people. Don't look for any announcements.

 
Co-Investment. Need a partner who understands both investment and SBIR? SBIR makes little sense without co-investment and a marked trail to a future self-sufficiency for the technology. Otherwise it is just the usual government R&D for either benefit to the government agency and/or hoped-for large societal gain. But the only SBIR agency taking co-investment seriously is BMDO, which has even published a list of SBIR winners who have themselves become co-investors in other firms' SBIRs. The editor and commercialization whirlwind Leslie Aitcheson has written a piece for BMDO's commercilization rag Update that names the names: II-VI, American Superconductor, American XTAL, ATMI, Cree, Crystal Systems, EMCORE, ENTECH, FED, FiberTek, Ibis, Kigre, Neocera, Nichols Research, Nova Scientific, Ortel, PRA, Schwartz Electro-Optics, Silicon Mountain Design, Thermacore, and Triton Systems.Some company news from the BMDO website: Advanced Fuel Research said that its commercial spin-off company, On-Line Technologies is being acquired by MKS Instruments for $22M; Thermacore (Lancaster, PA) has agreed to be acquired by Modine Manufacturing for $110M. Both Thermacore and AFR were big consumers of SBIR

 
We Don't Yet Know That We Need It. Jeff Bond, program manager with the BMDO's SBIR group, cautions that combining thin-film batteries with existing photovoltaics is no easy task. "What Lithium Power is proposing in this phase is extremely high risk," he says. "We're looking to fund the wild ideas, if you will. We don't have any specific requirement right now to use the technology." High risk, wild ideas, no specific requriement? Real innovation? David Essex's MIT Technology Review piece was only about a Phase 1 SBIR by Lithium Power (Manvel, TX) to combine thin-film lithium polymer with existing photovoltaics to form the main structural panels of spacecraft, saving space and allowing lighter weight or more power, claims Lithium Power president Zafar Munshi.Nice start after which must come a serious proposal for a Phase 2 (real money) that brings in the co-investment that shows the idea has something somebody cares about. Not necessarily BMDO at this point becuae bureaus take a long time to change their minds about what they want as progress makes their current wants obsolete. Bond's SBIR idea is to get little innovative firms started toward self-sufficiency if and when they can show something beyond wishful thinking.

One Rose Does Not Make a Summer says the general. BMDO Director Kadish says that one test success doesn't say much about reliability. Nevertheless, the advocates are screaming for deployment, apparently in the hope that such a system would never be seriously tested. People who think hitting a bullet with a bullet is so revolutionary should remember that DARPA did it once in the mid-80s. Now BMDO faces the age-old question: do we freeze the technology that gave us our one success and develop a system around it, or do we keep advancing technology until we have a much better system. One tiny part of BMDO used to have a role to advance the technology option with technologies that might be available in the marketplace. SBIR. Lately, the "let's deploy" faction has found a way to divert the technology adventure into routine support kind of stuff. But there's still a lot of money floating through BMDO under a Bush anti-missile religion, and BMDO still has enough SBIR left over to do the really exciting new technology things on top of the mundane.

Even though BMDO said that its interceptor smashed the oncoming missile (and its political opponents) into smithereens just by hitting it at the Mach many relative speed, BMDO will seek a hotter impact to blow even the smithereens into smithereens. General Sciences (Souderton, PA) gets a Phase 2 SBIR to develop hot materials (Hi-Therm Reactive Materials) that blast the target at impact more than mere inert material would do. Will their marginal weight be worth the marginal kill potential? Every pound of zero value-added weight reduces acceleration, fuel economy, and maneuver. Commercial potential? Oh sure. No, this is war stuff and the military will have to continue the development after Phase 2. Chances of that happening? General Sciences has had 37 SBIRs from DOD since the mid-80s, including several on such exothermic materials, which explains what about half the employees have been doing for 15 years. The other half must be attracting military money somehow for stuff that only a general could love if he doesn't have to pay for it.

 
Whatever you are working on now, I don’t care about. I want to know what you have in the back room, that if you had a little capital for it, you would try it out. That is the wild idea that I want to find, because it is the wild ideas that are the technologies for tomorrow. The words of a real SBIR manager who wants real innovation....... Unlike the military services who don't mind safe incremental improvements, BMDO cannot get where it wants to go with incremental advance. On the other hand, BMDO can't afford to chase every interesting advance to its logical conclusion; BMDO has neither the time, the money, nor the interest in such pursuit. So, Bond looks for the big potential innovations that can ALSO attract private investment to carry the development through its big money days.
Bond's quote appeared in a National Defense piece by Roxana Tiron. The rest of the piece is the usual story of how to win a government contract to do defensive R&D - scmhmoozing, partnering with a DOD firm, hiring a consultant, It's pretty much nice sounding theory that leads mostly to R&D service contracts. If you want Bond's money, though, all those things are irrelevant to his two main criteria: degree of innovation and potential for commercial investment. Great ideas will get funding; mediocrity will go to the tail of the line where it MAY get funded if some government drone takes enough interest.

 
BMDO Joins the Mob
unified comprehensive radiation simulation tool for complex flow phenomena at arbitrary altitude. The innovations enable unprecedented accuracy, efficiency, and generality for optical signature simulation to support multiple scientific and systems applications ... The software product contains extensive capabilities for broad commerical applications in research and development which include engine performance diagnostics, pollution/contraband monitoring, molecualr spectroscopy, remote sensing, hyperspectral imagery, enviromental monitoring, global warming, and computational fluid imaging. A comprehensive rigorous unified physical formulation and accurate efficient robust computation technique are described for simulating complex compressible viscous reacting multiphases flow phenomena ... : Benefits to BMDO include enhanced capability, fidelity, and speed for flow computation to support target optical signature analysis and simulation with application to detecting, tracking, typing, targeting, and intelligence. Potential commercial applications include advanced computational fluid dynamics and imaging methodlogies with broad utility for investigating flow-dependent physical phenomena and related optical effects.
Same company, two different math models, two different Phase 2 SBIRs. Chances for ROI? Would you invest in yet another modeler with nice science? Who do you think will pour money into the enterprise when the Phase 2s end? BMDO mainline programs that insisted they be funded? Not bloody likely. Not in 15 years have they done so. The mainline programs will find a thousand excuses NOT to fund any continuation of the work as they whine that SBIR should fund more such work. Other DOD programs? More interesting question since the company claims a ton of clients who service DOD. It has had several BMDO mainline contracts. And now, let's guess, the BMDO staffers want SBIR to pay for what they used to buy without SBIR. And with such proven client base, why does it need SBIR to attract buyers? Surprised that bureaucrats act like bureaucrats? Not when Congress sent such a muddled masage on what SBIR is for and turned over control to the federal agencies who can do almost anything they want. Congress got what it wanted - an apparent handout to small business (motherhood, apple pie, and the flag). Unfortunately for everyone concerned, the handout is a mirage since the money comes from the pot that was going to small business anyway.

20 BMDO STTRs
(May 31) BMDO funded 20 Phase 1 STTRs in 18 companies for an average $69K. In general, they are material innovations, eight using some combination of nitride or SiC semiconductors. The deliberately vague abstracts tell only the general approach with few specifics by which an outsider could just any degree of innovation. But, if BMDO has continued its course of dual-use development, the Phase 2 competition will be stiff among market-smart innovators. Nine companies won for the first time.

Seed Those Newbies. BMDO so far this year has approved six SBIR Phase 2s for five companies. For five of the companies it is their first BMDO Phase 2 award and for the other company it is its second award. BMDO (the first last year) believes in innovations with a market appeal and thus weeds out repeat proposers who don't have much original or have already proved to be poor at commercializing. If you are new and you look marketable, your best chance for SBIR money is BMDO. And if the Congress ever wants to use real metrics for evaluation SBIR, it will look to BMDO as the model of what to do and how to do it. For the long run, BMDO is seeding the technologies of the future that will find their ways into BMDO systems (if they ever get fielded) and eventually the other military services will get a free ride as the private markets do the heavy investment lifting and take the big risks. One exception, though, Kazak Composites, has had a slew of Phase 1s and three Phase 2s elsewhere for what sound like applications of variants of its core technology. Although abstracts are deliberately vague, it sounds like BMDO has joined the application parade under probable pressure from the same kind of safety-first internal people that drive service SBIR awards. The other are first-time DOD.

BMDO Funds 36%
(Mar 4) BMDO funded 166 Phase 1s, 36% of 463 proposed in its annual round at 126 companies. of which 57 won for the first time. Average award was $65K. Why so high a percentage winning? BMDO clarifies its criteria instead of just hiding behind a blind statement that it will fund what it likes. Oh, the others dress up their rhetoric in blather like "mission requirements" of which no outsider can ever fathom the meaning. BMDO, at least until the latest grab by the missioneers for the pot of money, well publicizes its Phase 1 criteria - innovation! That looks like it will end as BMDO sinks into the morass of the othe rmission agencies that reward schmoozers and synchophants. The winners from such a shift will be the contract R&D companies with negligible prospects for commercializtion preoposing to a group of techies with equally negligible interest. One firm - ALTAIR Center, LLC. won eight proposals. That bunch of Russian surnames won five BMDO Phase 1s last year and two Phase 2 proposals from the two Phase 1 projects in 99. In electronic materials, 52% of the proposals won.

Market 2000 Performance of BMDO SBIR Companies

CompanyMarket Cap
Dec31 ($M)
Gain 1999Profit($M)Symbol
Advanced Photonix*9-71%0.2API
Advanced Technology Materials590-32%38.ATMI
American Superconductor5772%-17.3AMSC
American Xtal Technology726123%3.9AXTI
APA Optics77-43%-3.5