example, the number of quality projects were such that the number of projects to be funded was increased from 200 to 281), and the smaller agencies generally funded at the lower limits in their range of estimates.

here

1. The number of awards to be made by Defense is still not finally settled but is provisionally
estimated to be about 200.

2. NASA's SBIR has been established at $5 million permitting increase of the number of pro-
jects to be supported from the originally announced 60 to about 100.

These changes in fact serve to underscore directly the point to be made

that the Proposal to Funded Project Rates in the six smaller agencies are a cause for concern in many quality small firms, not willing to participate in a perceived lottery situation.

Though the Department of Energy runs a little high, and Health and Human Services proportionately lower, a submitting firm can factor to an average award rate in the larger agencies of ten (10) received proposals for every one funded, 2 and in the smaller agencies a rate of 28 : 1.

2. Allowing for a percentage of entirely inappropriate submissions and some duplicate proposals, for a quality project from a competent small firm, the odds are probably more favorable.

The Achievement of Multiple Awards

As noted earlier, 102 firms were multiple award winners in the FY 83 SBIR program, with the range of their awards from two (2) to a maximum of six (6) funded projects. Involving firms in twenty eight (28) states, the geographic breakdown of their state locations is indicated in Table 111 Distribution in Multiple Award States.

In terms of single firm achievement, no company perhaps comes close to that of Spectron Development Laboratories, Inc., a small firm with facilities in Costa Mesa, CA., and in Seattle, WA. Employing 22 Ph.D's in a firm of 60 people, Spectron not only took the largest single number of awards to a firm in any one state six (6) to their California location but also competed successfully for an additional four (4) awards to their laboratories in Washington state for a total of ten (10) funded projects. These include four from NASA, two from DOE, and one each from DOI, NIH, NRC and DOD.

Eleven other firms took five (5) awards, three in the state of Massachusetts and one each in eight other states. As indicated in the chart, sixty-five (65) firms took two (2) awards, twelve (12) took three (3) and thirteen (13) took four (4).

California

With the exception of the two large award total states and Massachusetts it is noticeable that firms taking 4, 5 and 6 awards, generally represent the major percentage of the awards for that state. In Maine, for example, the five (5) awards of Fiber Materials, Inc, located in Biddeford, ME are the only five awards taken by that state; while in Oregon, Bend Research, a firm long involved in the SBIR program, is responsible for five (5) of that state's six (6) awards in the program.

multiple applications stra

In my work around the country with small firms interested in SBIR participation, a strong argument is made for effective use of a multiple submission strategy. The research interests of the eleven federal agencies involved in the program overlap in some areas, and with well-crafted proposal(s), focused specifically to the needs of the receiving agency a firm can significantly enhance the prospects for funding and for the development of their technology to a range of possible applications.

To the extent that they can successfully apply this strategy in the highly competitive SBIR environment, the achievement of these 102 firms is considerable. However, I begin to have concerns about what their achievement potentially might do to program usage, particularly in states with a limited SBIR presence.

As the more experienced firms progress through the program into the greater resources of Phase 11, and eventually Phase 111, there is some evidence to suggest that they reduce significantly their involvement in the highly competitive conditions of the Phase 1 entry stakes. In effect, they are doing what the program was designed to facilitate, i.e. developing their projects and technologies beyond the feasibility stage, into the resources of the private sector, and thus to the market.

There is evidence to suggest that multiple award firms, particularly where those awards were in closely related areas, as a group will advance to this condition more quickly. In the continuing program administration and development effort, therefore, it is important to remember that the task of drawing in competent small firms and supporting their involvement must be an ongoing commitment.

Having said that, as I so frequently stress, in the effective use of the SBIR program those involved should always remember that:

Innovation is a process which involves taking an idea through all the stages of research, development and demonstration into commercial or other application

and until that process is completed, none of the benefits of innovation new jobs, improved productivity, increased profits, enhanced competetive posture etc, etc none of those benefits accrue. Though the conduct of quality research, therefore, is the price of entry into the SBIR program, ultimately the objective is effective use of the developed technologies and in this second year of the expanded SBIR program the focus must shift to include Phase 11.

Phase 11 Implementation

Inevitably, and appropriately, the focus in the agencies and in the states during FY 83 and early 84 has been to effective Phase 1 implementation, and to getting out the word. As noted, though less emphasized, those tasks will continue. However, as those projects funded in the first year of the expanded program now reach their conclusion, the primary focus must shift to Phase 11.

I am impressed with the obvious care taken in the Energy Department particularly to ease the Phase 1 Phase 11 transition through the mechanism of on-site visits and the provision for bridge funding of promising projects. It is the clear recommendation of many of the SBIR firms with whom I have contact, that the other agencies, where feasible, adopt a similar approach.

I am interested to hear from program administrators here today, the current state of their thinking on this matter, with indication of what the criteria of project selection will be, and how the very difficult task of allocation between on-going Phase 11's and selection of new Phase 1's