SB IRS TT R data rights and
contracting . The reason why we chose
these two topics for the first webinar
was pretty simple . Um I host a
quarterly round table with the
honorable MS Xu , the undersecretary
for R and E with SBIR firms .
Um And to date , we've had
88 of these webinars .
Um The common theme
that I've noticed were from the
questions from the SP CS that attended
the , the eight the eight webinars
were um how do I protect my I my IP ,
how do I protect my software ? And what
do I do when contracting with the
government or a prime contractor ? In
addition , the um
OS D technology Spir transition program
which I also run . Um I
get asked these two questions almost
weekly um companies asking about their
IP rights um getting stolen
or they wanna make sure that they have
them , they're having difficulties um
um contracted with the government or
with the prime . Um So with that
said , our purpose here today is pretty
straight straightforward is that this
webinar is here to educate you on the S
TT RS pr data rights and what you
should know when contracting with the
federal government or a prime
contractor . Again , we only have 90
minutes . So , so we're gonna break
this into two parts . The first session
will be small business , uh small
business data rights , and the second
session will be on spir phase rec
contracting . We've put together what I
call is the dream team for this
conversation uh collectively over 80
years , um what they bring to the table .
Um The first session will be
presented by Mr David Mesker , a
retired lawyer with over 40 years work
with the SB A in drafting the um first
Sbir Policy directive , Chief counsel
of the Small Business Committee
assistant in drafting earlier versions
of the SBIR Act . They specialized in
uh federal contacting and assisting S
PR firms . Davis taught 15
horses in federal contact , federal
contracts . Excuse me , is a former
president of the Board of Contracts Bar
Association . Dave is the
recipient of the Ronald JK Award ,
the Association's most prestigious
award . He's a Roland Tibbetts award .
Uh re recipient Dave has given over
275 lectures on SB IRS across the
country . And these accolades go on ,
on and on . I just don't have time . Um
But Dave has literally written the book
on , having published , having
published several books , but he's um
um on federal GS a leasing
and concerning spir and how to improve
the S PR program . The second session
will be presented by Mr Thomas Hill A
retired chief contracting officer for
Nava Lakers again with over 40 years
experience . He has a con
he has been a contract negotiator
administrator of contracting officer
with both the public and private
sectors . Um I admitted to the
Pennsylvania bar in 1977 . Tom
has taught business law courses and and
is an adjunct professor at FIT .
He also was awarded the uh Tibbets
Award in 2020 received the Navy
meritorious uh civil service award and
the Navy Superior Performance Award .
Again , I wanna thank you all for
joining and participating with this
webinar and I will , I'll start off
with passing it off to Mr Metzger .
Thank you for the kind words , Matt .
And uh let's get started . We're gonna
talk about small business data rights
and uh this is a fairly complex subject .
So let's get started on the next slide
and next one after that ,
let's go to the next slide . We're
gonna cover a variety of uh questions .
Uh what are small business innovation
research , Sbir and small business
technology transfer S TT R data rights .
If I use the word Sbir , it will reply ,
it will apply to both . So I won't keep
saying SB IRS TT R unless it's
absolutely necessary , we're gonna go
into what is a government phase three
award because you do get data rights
under it . And so you have to know when
you're entering it and what it means .
Uh We're gonna talk about why
protecting your SB IRS TT R data is
important . We're gonna talk about to
what agencies in the federal government
do . All of these rules apply and we're
also going to go into how and when to
mark your SB IRS TT R data . Next
slide ,
the SB IRS TT R data rights
grant , the government , a
non-exclusive royalty free paid up
worldwide license to limited use
of the SB IRS TT R data . So
all of those um kind of are
portions of what the government gets or
or and limits from the data . But the
most important aspect of SB IRS TT R
data is that the government cannot
disclose publicly that data as
long as the protection period remains
in effect . That is unlike any other
data rights uh that apply to other uh
programs . It's unique to SBIR and it
allows the Sbir firm to develop a
market without competing with others
that have gotten a hold of its data .
The data rights protection period is
now 20 years from the date of
award and then it goes 20 years out to
the 20th anniversary . The Small
Business administration eliminated the
rollover provision sometimes called the
extension provision in its uh
2019 final rule
which put in place the 20 year date
instead of others . And that
2019 extension period
is now done as of May 2nd
2019 , we no longer have that extension
period or rollover uh provision uh that
existed under prior uh arrangements .
Therefore , any contract that was
entered into before May 2nd 2019
will live out its five year for
military contracts , its five year data
protection period and then they end ,
there's no grandfathering and uh then
new contracts on or after May 2nd
2019 will receive the 20
year protection period . And that's
been true . Uh since May 2nd 2019 ,
uh government disclosure of the data
could provide competitors a free entry
into the SB IRS TT R firms market
without any investment uh or effort .
And that's why those that protection ,
that non-disclosure protection is so
important . Next slide ,
let's talk about the essential
attributes of Sbir and S TT R data .
First of all , they're recorded
information that is they are reduced to
writing . So that can be any source
code , sketches , drawings , formula uh
equations , reports that you submit to
the government technical descriptions
of SB IRS TT R effort and so forth .
The second attribute is that that SB
IRS TT R data must be technical in
nature . So your name of your firm and
your address in the proposal are not SB
IRS TT R data because they're not
technical um general statements about
your innovation , um its applications
and uses are not technical data and
they don't qualify for SB IRS TT R data
uh status because they don't need to
next slide .
The third aspect of SB IRS TT R
data is extremely important . It refers
to data , technical data that are
generated under an Sbir or S TT R
funding agreement and are appropriately
marked . Obviously , the first two
things we talked about , they have to
be reduced to writing . It's uh some
written technical information that are
generated under an Sbir uh S
TT R funding agreement . Uh proprietary
data that the firm developed with its
own private funds is not SB IRS TT R
data , they are separately marked as
such . And that means that staff of the
Sbir firm needs to kind of keep track
of what it developed outside of Sbir
contracts and what is Sbir data so that
they can always tell the government the
difference an important point and some
point of confusion is that hardware is
not SB IRS TT R data for two
reasons . First , let's take a black
box , it's not recorded or written
information . You can look at it , it's
hard but it's not written information .
And secondly , that black box , if
we're looking at it is visible to the
naked eye and therefore it can't be the
subject of a non-disclosure obligation
because we can look at it on the table .
That's why hardware is not subject
to SB IRS TT R data and markings . Uh
The way other written information is
so do not mark hardware as SB IRS
TT R data . That does not mean that
there might be source code , object
code , some kind of code inside that
you want to protect uh in that black
box , then of course , you can do that ,
but I'm referring to the hardware box
outside . You don't mark that box or
any hardware uh materials that you
submit software in a black box . Of
course , uh could be subject to the
data rules . Um And if it's uh
you don't need to market if it's
inaccessible and the black box is
integrated , manipulated or otherwise
used . But if you're gonna submit that
code by itself independent of the black
box to the government , then you need
to market it with SB IRS TT R markings .
An important fact is that an agency
receive one seat only for
SB IRS TT R computer program data and
that seat is necessary for it to be
able to evaluate the data . And that's
why it receives that one seat . When a
government agency asks for 10 , 15 , 20
seats of uh data of computer source
code say , um you really shouldn't give
it , you shouldn't uh agree to that and
do all you can to educate them that the ,
the law SB IRS TT R law
um prohibits them from asking that next
uh slide .
Now under sbassb IRS TT R
policy directive , currently , any
SB IRS TT R data that you deliver to
the government must be marked with the
appropriate SB IRS TT R data rights
legend . We're gonna talk about that
legend in a little while and describe
it what it is . But it's included in
that policy directive at Appendix one
in the Sbasbir clause that's included
at Appendix one . You can find it there .
Now , since the 19 nineties , the
policy directive has had the force of
law . I've already mentioned that and
as a regulation binds agencies by law ,
the non lawyers in the crowd might ask ,
how does a policy directive get the
force of law ? I don't get it . Well ,
the explanation for that is that in
1982 when I helped the SB A draft , the
original policy directive , it was
exactly that policy . It was not
binding on the agencies . But in
1992 SB A issued the
policy directive personally into what
we call a process of notice and comment
rulemaking . That's the way agencies
make rules and regulations and laws .
It was put in the federal register .
That was the notice . Uh the public
commented on that uh proposal and then
the SB A reviewed the comments , made
some adjustments and issued the final
rule in 1992 as a binding
regulation . That was the uh
rulemaking part of it . So it was
personal to notice and comment ,
rulemaking . The way agencies make law
that the a the policy directive became
law in 1992 . And it has been so ever
since agencies cannot change
and they can't circumvent the SB
IRS TT R laws by requesting SBIR
firms to waive SBIR data requirements .
They can't do that . They shouldn't do
that . And if they do do that , um you
need to resist those requests . Uh You
know , if the agency comes to you and
says , could you take away the markings
or not just put them on SB I or data
you submit to us , that's an illegal
request and you need to seek help from
other agency officials higher up who
will get that person in line uh and uh
possibly uh enlist other people , maybe
champion who wants to get your
innovation inserted into the dod uh
mission and uh remind them , teach them
that uh the law does not allow that you
therefore , as Sbir firm uh employees
and owners are actually that's
necessary for you to become teachers .
OK . That's why you're taking this
course . Uh Let's go on next slide
in order to secure SBIR
data rights under a phase three , we
need to know how a phase three is
defined . So let's talk about what is a
phase three award ? A phase three is
defined as an award that derives from
extends or completes prior SB IRS tt R
effort with non SB IRS tt R ,
non set aside funds . And
that sometimes creates confusion
because government people believe that
uh an R and D contract is funded with R
and D funds . An O and M contract is
funded with O and M funds . And then
they ask , well , how can an Sbir phase
three be funded with non Sbir funds ?
The non SBIR refers to those set aside
funds that fund phases one and two and
those are set asides about 3% right now
from 11 agencies R and D budgets and
they're set aside for the SBIR program .
They fund only phase one and two for
phase three . The agency has to find
its own funds , procurement funds , onm
funds , construction funds . It doesn't
matter what kind of funds , but it's
got to find its other funds and fund
the phase three with it , that point uh
needs to be understood . Let's talk
about the three parts of this derives
from means that phase three work under
consideration traces back somehow to
prior SB IRS TT R effort and is funded
with non sbir funds , non set aside
funds uh derives them is a very
broad concept . It's probably the
broadest of these three and it is so
broad that in fact , omb originally
when we uh proposed it opposed that
because it said it was way too broad ,
too many contracts would be defined as
SBIR under it . So derives from this
one , you wanna look at first extends
means that the proposed phase three
work can be used for an entirely
different application of the technology
than was developed under a prior phase
one , a prior phase two or even a prior
phase three . So you can jump shift to
new applications as long as the
underlying innovation , the underlying
technology developed in prior SB I
efforts is used complete refers
to the process of completing the
innovation process , the innovation
continuum and developing your uh
research effort , your uh research and
development effort into a product uh or
a design notice the or
any one of those three can apply or
means that if any one of those terms
applies , the new requirement can be a
phase three and that's important . So
sometimes all of them apply , sometimes
only one applies . But if anyone
applies , then it can be a phase three .
Next slide ,
phase three brings it with it a whole
lot of benefits . If you earn the right
to awards without competition , you
earn Sbir data rights protection , you
get exemption from the SB a size
standards in the phase three . So a
large firm can acquire your firm and
get uh um those uh phase three benefits .
There's no limit on the number funding
duration or time between phase three
awards . Uh the right to a phase three
mandate uh exists . So the Sbir firm
has a right to be awarded a future
phase three award to the greatest
extent practicable . Um That means uh
really only the agency has
the right to ask is that Sbir firms
still in business , still available ,
still capable of doing this and willing
to do it . That's what greatest extent
practical means . If the Sbir
firm went out of business um is no
longer as bankrupt , uh then it
wouldn't be practicable to uh award uh
phase three to that firm and it might
have to move on . The phase three
applies to subcontracts . And that is
now set expressly in section four C of
the uh Sbasbir policy directive .
And uh those can be entered into
without competition , the ability to
pursue research , research and
development , services , products ,
production or any combination of these
exists for a phase three . For that
last bullet , I would defy anyone to
try and come up with some activity that
the government could describe that
doesn't fit into that . In other words ,
a phase three can be used for anything .
OK . Next slide .
Uh if phase three can be made by any
federal agency , even if that agency is
not one of the 11 SBIR participating
program participants . Um So
if uh if a federal agency that is not
one of those 11 wants to issue a phase
three , it can and uh federal
agencies can enter into a phase three
agreement at any time with a phase one
or phase two awardee regardless of the
stage of completion . So even if you
haven't completed your phase one or
your phase two , they can enter into a
phase three with you to uh advance the
research . Uh I will say that
the agencies that are not familiar with
Sbir need to be reminded that it is a
sole source contract and the
justification for that sole source
which always confuses uh government
officials and they always kind of look
at it and it's complicated and they
have to go worldwide and see if anybody
else can use it . No , for Sbir , the
justification for the sole source is
easy . The language for it is included
in section four C again , that's why
you need to keep that policy directive
handy . And it says that whole
justification is if this award uh
derives from uh extends or completes
prior SBIR work and is funded with non
sbir funds , obviously , that's a
definition of a phase three . That's
the justification for it . So um
for non participating agencies , you
might have to remind them of that easy
justification for the sole source .
Next slide ,
phase three commercialization uh can be
done for the military for the civilian
or uh agencies or even private sector .
Um SB IRS TT R derived products or
services . Um That's what
commercialization means . And it also
can mean simply continuation of the R
and D process . Increasingly , agency
level rules are requiring
commercialization to a marketable
product as a condition of receiving
more phase ones or phase twos . And
there are dollar limits , uh dollar
requirements um of sales that are
sometimes required uh to get additional
phase one or phase two if you have a
lot of them . Um Additional
considerations regarding the phase
three successor in interest ,
firms can qualify for phase three .
What are those a successor in interest
can occur through an acquisition of
your whole firm ? And therefore it gets
to own all of the sbir prior uh
research and therefore , it can get a ,
a phase three based on that prior work .
Innovation can lead to uh uh a
qualification for phase three .
Innovation is simply a purchase of a
pending contract . And because there is
a law against uh selling federal
contracts while they're in existence ,
the innovation process is set out in
far part 51 and allows you to transfer
a pending contract . And that way a
success or an interest can be uh
created , you can also assign that is
sell um part of your sbir uh data
rights and technology and keep the
other parts . Uh other applications
that you're working on that can lead to
a phase three eligibility for the
purchaser . And I do want to
repeat that the SB IRS TT R Act now has
restrictions and requirements on
commercialization . So you really need
to work hard to get to
commercialization . Next slide .
Now , if pursuing phase three work is
found to be practicable ,
we need to go back to the next slide .
Then uh the agencies must uh provide a
non-competitive funding agreement to
that firm . The practicality
really relates to , as I said before is
the firm available , capable and
willing to perform the work ? That's
all it is . It's nothing more than that .
They can't go worldwide and look for
anybody else to do it . And if that
phase three is determined not to be
practical and agency practicable . That
agency has to provide a copy of its
written decision to that effect to the
SB A which can appeal that decision .
OK . Next slide , so you do get a kind
of a right to a phase three award .
Next , next slide , there's
three elements in the SB IRS TT R
data rights legend and these are
important and it's important to
understand the data rights legend . So
you affix it to your data rights
submissions um in
appropriately , that's the term that
the policy directive uh uses but
accurately is the , is the way I would
define it . The three elements are
first the title SB IRS TT R Data
Rights . You need to put that on the
top of your legend . Second part of it
is a five row chart and it has the
funding agreement number that is your
contract number for dod to the award
date . They'll find , you'll find that
on the title page , the date , 20 years
out from the award date . So that's the
20th anniversary and then the awardees
name and the awardees address . Those
are easy . You don't need to include
the outlines of the box , but you do
need to include those words and all the
answers to them . And the third part of
it is a paragraph of text describing
the government's rights and obligations .
Um That text is long and may seem
complicated , but you need to um
duplicate it and replicate it
accurately . Uh don't , don't have
spelling errors or words left out or
commas in the wrong place . Um Pay
attention to it , edit it carefully and
make sure you've replicated it
completely inaccurately . You don't
want the government to take a comma and
say this is an inappropriate legend
because you missed a comma and because
they want to get their hands on your
data , you don't know if they will or
not . OK . Next slide
marking Sbir data refers to the process
of a fixing that three part legend we
just talked about to accurately
completely and in Oh
yeah . Oh oh
for Sbir and the Department of Defense
abandoned its original uh Dr
clause 70 18 . And it agreed
initially to use the Sbas new clause
instead , which includes the legend .
Recently on March 17th 2020
dod reissued its 17
70 18 clause and labeled it
deviation
2020-0007 .
Um And that data rights clause is now
in use and carefully sets out the Sbas
legend . I will say that that uh
deviation also replicates ,
recites the Sbassbir
clause , almost word for word . There
are some dod adaptations in it , but
it's largely um a recitation
of the Sbassbir clause . Next slide ,
failure to mark inappropriately or mark
inappropriately uh failure to mark or ,
or marking something inappropriately
gives the government unlimited rights
in the Sbir data . That means they can
do anything they want with it ,
disclose it to a large firm um make the
product themselves and use it . Um
There , there's no limit on what they
can do with your data if it's
inappropriately marked or you fail to
mark it . Um That , that
is important because that's a way you
can give up your data rights even
though you thought you had marked it or
you submit it and failed to mark it .
Now , awards have six months to correct
inappropriate or failed markings . But
please note the government retains
unlimited rights to that data until it
is corrected . So , don't uh
hesitate if you think someone , you or
someone submitted uh Sbir data without
marking it . Don't hesitate to resubmit
it with the marking . Don't wait ,
don't ask , get it submitted and then
discuss it with the government but get
it submitted fast uh
appropriately marking the , the uh
document with Sbir data and that turns
the tables completely appropriately
marked sbar data constitute
trade secrets . And that's important
because trade secrets are covered by
the Federal Trade Secrets Act 18 US C
section 19 05 . And I don't wanna start
getting to be the lawyer here , but
that is important because it makes
it a felony for a federal official to
disclose such data punishable by not
more than one year in prison and not to
exceed $100,000 per disclosure , which
comes out of the uh federal official's
own bank account . So you can see that
there is uh a real set of
gnawing teeth behind this uh
non-disclosure obligation on the part
of the government . And that's what uh
is written into uh that data rights ,
non-disclosure obligation . Ok . Next
slide .
Now the entire legend should be on the
title page of any submission uh You
give and it's a long uh sort of
legend and takes up a lot of room . So
sbas policy directive requires a legend
to be included on every succeeding page .
But agencies in the SB A have accepted
a shortcut for succeeding pages and
I've written it out there exactly . Um
this page governed by the Sbars TT R
data rights legend set forth on the
title page which is incorporated here
in as if written out in full . So you
can put that at the bottom of every
succeeding page to your title page and
that is good enough . OK ? Next slide ,
you need to apply the required legend
to all documents containing SB IRS TT R
data . And I'm gonna qualify that in
just uh just one later bullet ,
irrespective of the type of funding
agreement . It doesn't matter whether
it's a grant , a contract , a
cooperative agreement and other
transaction agreement , ot a task order
or any other type , they can all
constitute SBIR funding agreements is
the term we use . It means that that
contract is gonna be stole funds on you
to do SBIR work and that
needs to be on all documents that
contain SBIR data that are uh generated
under that uh uh funding agreement .
The second bullet however , is really
important . Uh do not affix the SB IRS
TT R data rights legend to a proposal .
The proposal uh contents are governed
by uh fire rules and
they provide for nondisclosure of
critical parts of that with some
exceptions . But uh you don't
protect your data in a proposal .
Why ? Because SBIR data is data
generated under an SBIR funding
agreement . And so you haven't yet
gotten to a ward and started work under
the uh contract . Prior Sbir
data that you do include is uh
protected . Yes , by that fire clause
by that fire uh rule that protects uh
proposal uh contents . So you don't
have to worry about putting Sbir data
into a proposal , but don't mark it
with the legend . Ok . Next slide .
Now support services contractors are
those contractors that are under a
contract to sit right next to the
government person and , and get all the
data and , and learn everything that ,
that uh uh government person knows .
They sign a nondisclosure document with
the government and they're bound also
by the Federal Trade Secrets Act . Like
federal employees are uh in reports and
submissions . I like to say , submit as
little Sbir data as possible , as
little as you can get away with under
the contract . And an agency simply
can't disclose eventually when the 20
year period runs out what it never knew
in the first place . Here's a caution
do not voluntarily disclose sbir
data outside of the government without
a nondisclosure agreement . So if
you're gonna do a deal with a large
firm , uh enter into a nondisclosure
and like I like to use the title
nondisclosure and non use agreement so
that you limit their ability to
disclose the data you give them and you
limit their ability to use it . So you
probably want to get a lawyer to help
you with that agreement . I would
caution you to watch powerpoint
presentations to the government . They
a lot of times like you to come in and
then they'll have their contractors
sitting in there in the room . You need
to , first of all ask who here is not a
federal employee or a support services
contractor . Raise your hand and if
five hands go up , don't deliver your
powerpoint presentation . If it has
SBIR data in it , ask those people to
be excused . So be aware that
sometimes the government might bring in
uh non-government people . And then
when you display all your SBIR data to
them , they'll say you voluntarily
disclosed it . We no longer have a
non-disclosure obligation for
everything . All the SBIR data you had
in that powerpoint presentation . Even
if you mark that powerpoint
presentation as SBIR data . The problem
is you voluntarily disclose it to the
public . Ok , next slide
that completes my presentation and I'm
going to turn it over to the honorable
Tom Hill . Thank you . Thanks Dave .
Um everyone . Dave's just done a good
job of working through what are S pr S
TT R data rights . He's giving you an
overview of what's in the policy
directive . He's giving you uh a sense
of what you really need to do when
you're gonna market your data and
protect your data . I was thinking
about that today . I mean , you , you
start to wonder uh is there an acronym
that would help you recognize , you
know , what you should be doing ? And I
kept thinking , identify your data mark ,
your data , protect your data , which
is basically what they just ran through
with you at the list today's chart
there . But you know , we are who we
were . Then I , as , as Matt mentioned
to you , I was ac co at Lakehurst . Uh
it's an a uh lab , one of
several and uh basically , we were
involved , had been engaged for 20
years in the S pr TT R contracting
business in essence , during that
period of time . Uh up up to my
retirement , we obligated the $5.2
billion or excess of 5.2 billion ,
about 20,000 transactions . What was
interesting about those numbers is the
fact that 50% of those dollars were
associated with basic applied research
phase ones and twos and 50% of it was
involved in production buying . And I I
happen to be noticing some chat uh
messages going around to give you a
sense of uh that volume of dollars in
business uh that represented about
20,000 transactions throughout a whole
period of time , 90% of that would be
associated with the basic applied
research , 10% of the transactions .
And again , that's $2.6 billion in
obligations uh represented production
efforts that resulted from continuation
from phase one and two . So with that ,
I'd like to , I'm going to be giving
you some , some observations about the
contracting process itself and
some , I would think some guides and
some tips as to how to be successful .
Can I , uh interrupt you for a second ?
There are some people that say that
they can't hear you . Yeah , I don't
know if it's the , the , how close you
are to the mic , but there's some , I
can hear you fine , but some people in
the audience are claiming that they
can't hear you very well . Really ? I'm
sorry about that . Uh Has this improved
folks if you can get the mic , I guess
closer to you , which would be a little
better . OK . We'll try that .
I apologize . We've had some audio
issues uh with uh this presentation
before even in the dry run and I'm
hoping that that's better . That sounds
better . Thank you . OK . And you know ,
uh just to quickly re restate some
things that they , they may have missed
as ac co I ran an operation that for 20
years did about $5.2 billion and a and
more of uh Sbirctr contracting
um that represented obligation wise ,
50% going to basically apply research ,
50% going to production and to give you
a sense of the volume of activity that
was 20,000 transactions and of those
20,000 transactions , 10% of them
were uh towards production . So it
gives you an idea ratio of nine , you
know , one out of 10 type of
transactions ended up in production .
Not that that is an equation to uh the
number of contractors that were
successful getting phase three
contracts . Just that that was what the
data would tell us . I uh I'm going to
give you some observations generally
about the contracting process . Uh how
I think it has been successful . What I
see is trends that have been developing .
And basically my , my view of this
whole process is just that one , it's a
process two to be successful , we have
to manage each other's expectations .
And I think that's at the heart of uh
contracting in itself , but it's
particularly SBRS DJ R contracting next .
Uh Please ,
this is stating the obvious , why are
you involved in the SBR program ? Well ,
to address national research and needs
that are profited by Dod and oh , by
the way , because of being a former do
DPC O , my view of the world is
influenced by 20 plus years in S pr
contracting as well as 40 plus years in
dod contracting . Um you know , the the
objective is to further develop
technologies that have dual
applications for both military and
commercial markets and to mature that
technology to to provide solutions to
the government's stated needs and also
solutions to the commercial marketplace .
Next slide , please .
Ok , took a look at the last you know ,
I mean , you know , we are who we are
then uh I took a look at the last four
years of obligations uh out of fesng
and to give you a sense of , you know ,
how much money is truly being spent by
dod in these respective areas .
You can see that over the past four
years , $7.5 billion has been pumped
into doing basic and applied research .
And to give you a sense from Fy 19 to
Fy 22 where I had to compare the total
numbers in relation uh base year 19 to
22 . There has been an annual increase
of about 30.3% for
Sbir and 78.7%
from comparison of 19 to 22 in S TT R
business . And what that tells me is
basic applied research figures show an
intent to be interested in investing in
the SB I SBS B CS technologies .
So with that next chart , please ,
you jump one . Uh No , we're good ,
right . There are there , there are
actually three keys that I have in SVRS
TT R contracting . The first key is
time is of the essence . Thank you .
The second key is standardization and
clarity and communication is not a word .
And the third is the objective of the
program is the phase three . Next chart ,
please . Why time is of the
essence dod puts its equipment , it
designs and deploys its equipment with
the prospect of it being out there in
service exceeding 25 years . And I
picked the B 52 as an example of that .
Just that circumstance , the airframe
that we're talking about has flown
missions and will float , fly missions
for more than 100 years by the time
it's ready to be retired . And
basically in looking at that , just
that particular example , you know ,
you know , you're gonna run into
considerations of obsolescence , safety
concerns , maintainability , challenges
and capability enhancements to meet
emerging needs . Why that that exist ?
Why does that exist ? Because 20 years
ago , the way the design was created
for a platform and the equipment may
not necessarily deal with the threats
today , cybersecurity threats is just
particularly one of them for connected
um systems . Now , I also want to
mention why do I think time is of the
essence and there was an experience
that we had in 2010 . Um in 2010 , we
noticed an uptick in awards to
Sbir uh companies doing production .
And the reason for that was at that
junction , we were in Iran and um not
Iran , excuse me , Iraq and Afghanistan .
And in those two theater
uh areas um we
were implementing some ISR Intelligence
surveillance reconnaissance
capabilities that were to address 22
specific uh problems . One of them was
IED detection , it provides explosive
devices . The other was to give the
concept of uh the surrounding uh the
surrounding environment for our uh our
uh marines uh servicemen , you know ,
in uh in theater and to make sure that
they were protected , it gives them
situational awareness of the , of the
theater and what we found . I mean ,
first of all that , that whole
initiative uh and it went over several
years , we ended up putting a billion
dollars worth of work into uh those ,
those uh areas , you know , to , to do
just what I said , the ISR capabilities
as well as the IED detection . And we
were finding that we could accomplish
that test through the SB CS in days and
weeks of getting product in country as
opposed to months and years where we
just pursue other standard procurement
procedures so that galvanized both for
myself and my staff , the need to move
quickly in getting things awarded and
products to the war fighter . Next
chart , please .
OK . S pr contracting , you know , over
the last five years , uh There have
been four GAO uh studies done on SBRS
TT R contracting and the intent of
those studies was to determine
adherence to the SB a policy
requirements and recommendations that
are in the uh policy directive . And to
just so you're aware the requirement in
the po policy directive is that within
90 days of the activities are receiving
proposals from the SP CS are to notify
the uh the proposal of their selection
status . The recommendation is that
awards be made within 100 and 80 days
from the date of receivable proposals .
And what we have seen over over this
period of time , the last five years
plus is the fact that the activities
have stepped back and to a to a person ,
almost all of the fans have taken the
initiative to start looking at their
operation and doing several of the next ,
the next issues which is basically uh
reorganizing their operation to service
the customer and this is where there
was a creation of contracting centers
of excellence . Uh Navia pursued it .
Navy pursued it as well as the Air
Force where that works . They developed
the use of templates for solicitations ,
negotiations and awards of projects
consistently . If you like the first
solicitation or , and or award , you're
gonna like the 1/100 because what that
does is that gives you certainty when
you're reviewing the documents as to
how you're gonna respond . And with
certainty also , when you're gonna get
an award , they develop a contract of
core personnel to process the work to
be completed . And they developed a
communication model with the respective
contractor base to manage the
expectations for proposals , submits
and awards . And I can't help but
restate that as each component command
invariably have , they have specific
vendors that are interested in their
business and they talk to them uh
regularly and consistently bringing up
the same issues from one project to the
next next chart , please .
And the phase three award . Ok .
Oh , I'm sorry about that .
Programs are identifying solutions to
existing problems and they can regret
achieve the S PR program out of the
NAVI R community . We basically draft
our topics to address specific problems
that uh each of the programs are , are
are running into , which means you
basically have a sponsor behind the the
topic . And so if someone could come up
with a solution , you have already made
market . Uh the Air Force uh is using
commercial solution opportunities .
That was an approach where they opened
up have having open topics , giving the
community of small businesses the
opportunity to respond to with what
they have and what they perceive as
solutions to potential problems for the
Air Force . And then in turn to pursue
uh the structure of the Air Force's
program office to pursue the potential
of selling those solutions to the
program office . The perception is and
I will share this with you . And this
has been my experience . I know others
may have a , a different experience ,
but the perception is that small
business community represents an agile ,
technically sound cost effective and
responsible partner when proceeding to
implement a solution , you know , um as
I said , you know , historically , you
know , we've had a great deal of
business at Lakehurst where we've done
uh production efforts . And I think
that um our , our efforts there as
well as others . I mean , I've , I've
seen it with the uh data from various
other component commands that the
initiative to get to the third phase to
get the product to the war fighter is
exactly following the intent of what
the statute and the uh the uh uh policy
directive is providing . Next chart ,
please . Now this is
how again we're , you know , this is a
two sided the issue . You know , the
government has taken in issues , try to
speed things up . There are things that
can be done in the commercial world
that will facilitate the moving forward
with getting things accomplished
quicker . And what I'm gonna point to
is these , these are types of actions
that you might take , which would
facilitate getting uh the contract to
you quicker . First is to recognize the
sense of urgency and to take a look at
your back office processes . How do you
buy your materials ? How do you do your
subcontracting ? If you have processes
documented and prepared for how you're
gonna do business , it will accelerate
getting the award . And let me share
with you when I tracked our processing
times and I will share in the last year
we were processing phase one of the
award less than 30 days . We got it
down to 23 but that was kind of hard .
Phase twos were accomplished in 75 days
and phase three is on the average and
these were all averages were
accomplished in 100 and two days . Well ,
you know , you have to attack the
problem at both with the idea that
there is a concept of touch time which
really , you know , to do the work with
work . And it's just gonna take that
amount of time where we found uh
tremendous benefits associated with
moving the process along was reducing
the wait time . And in essence , that's
the time for when government asks a
question and you respond , if you're
already prepared to respond , if you're
already aware what the questions are ,
they're gonna be asked , you will be
prepared to turn that question around
and get it back to the party that his
game . Now , uh understanding the
structure of the communication models ,
that's , that's necessary to provide
responses to the anticipated questions .
That's just what I was talking about .
How do you acquire your materials ? Has
your accounting system been audited ? I
will share with you if they are
pursuing that strategy regularly ,
you're going to be asked the same
questions , doesn't matter what the
topic was . But when you're talking
about evaluating your proposal and
taking a look at what direction
contracting is going to take , that's
what's going to happen , you're gonna ,
you're gonna be quizzed on your prime
cost , you're gonna be booked to about
your indirect , you know , if you don't
have an audit , you know , people
should be asking you give me a copy of
your uh your , your , your ledger , you
know , and uh that gives me an idea of
your indirect . And so for all intents
and purposes , putting that picture
together quickly results in a more
effective uh processing forward of an
award . And you know what they
mentioned this in his presentation ,
you have to understand the organization ,
you know who you're negotiating with
and who the who the stakeholders are ,
whether it's program manager or Tko .
Um First of all , to whom do you choose
to address your challenges that you're
having in the acquisition process ? But
more importantly , you know , you're
gonna be looking for your champion .
There's going to be someone on the
other side of the table that
understands your technology that
understands the , the opportunities
that it represents to the government
and they will be your , your , your ,
your champion within the organization
to get a phase three . And really ,
this is all about getting to a phase
three . As long as we're doing that ,
we're getting products of the war
fighter , we're getting uh solutions to
our problems and we're more effectively
using our resources . Next chart ,
please .
Ok , same period that I talked to you
about the $7.5 billion of investment
during that period . Eight point
obviously , 8.67 billion was put into
production . Now that's a myriad of
technologies and thousands of
transactions don't get me wrong in that ,
but it emphasizes D SDS interest in
acquiring your goods and services . And
I've watched this number increase . I
mean , I , I mentioned to you in 2010
being concerned about what we were
deploying in , in country , you know ,
to Afghanistan and Iraq and I have
watched Phase three Obligations , you
know , not contract value . Let's make
sure we understand that these are
dollars going out , the vendors , it's
not estimated values of ID IQs or , or
anything else like that . We have
watched the obligations going out to
vendors increase consistently over the
last , um , because we , we picked four
years , I could do it over a half dozen ,
almost to 10 years . We have seen that
trend . It's ramping up and that , uh
it , you know , dod is investing in our
small businesses and getting the
product . Like I said , they , they
consider you a , uh , you know , a
trusted partner and I think that that's
a , is an important takeaway . Um Yeah ,
we can differ , we can differ in our
points of view , government to , to ,
to commercial enterprise . But uh at
the end of the day , you know , the way
the government is getting things
accomplished is by your support via
your contract . Mr , please .
Oh , here we go . The good news . If we
work together , we all win our best
approach . Stay flexible in how you're ,
you're approaching your contract . It's
an art , not a science . You know ,
there's not one solution fits all
problems . We tailor the selection of
the funding agreement to the
circumstances that we're presented with .
If we have a defined requirement , you
could very well place a contract that's
fine if it's readily , if , if we have
a new vendor that's in the , in the mix .
Uh much more familiar with commercial
business , maybe , maybe another
transaction is appropriate uh tool
again , if it's a defined requirement
and you can fix prices . Well , great .
You pursue a fixed price if there's
gonna be variables in performance ,
where there's a question about , you
know , are our best estimates uh going
to hold up and uh would it be better
for a vendor to have a cost effort ?
Yeah . Well , then you tailor the
contract to that particular purpose . I
mean , it's OK to see the world
differently than UK O , but you must
make sure and this is the point about
communicating clearly . You must make
sure that you're defining your position
and maintaining your position . You
know , you heard Dave say don't back
off , you know , when you're talking
about working your data and protecting
your data and I agree with it , you
have to do that . Um And that , you
know , and truly , you know , I'm not
saying that uh there's difficult people
within the process , but we have to
understand what's motivating each of us
to drive , drive our positions forward .
And if we understand that if we drive
out , you know , the misunderstandings
or the lack . And I , I would have to
admit that in certain circumstances ,
I've seen a lack of communication or
the part of the small business concern
because there's a concern about raising
their , their voice and saying that
they have a different opinion and
that's ok . I admittedly it's all right
to have a different opinion . It's all
right to say no , I don't want to do
this be and have an explanation as to
what say what the is going on . If the
P CEO is taking a position and can't
defend that position or explain that
position to you , then I would , I
would always say to you maintain your
course of action until you're satisfied .
And of course , the last point being be
prepared to respond , you know , um I
really do believe we , we , we squeezed
as much time out of the process as we
could when we were looking at that .
And I've seen others , you know , with
their , with their small business
challenges , with their uh you know ,
sprints and , and I think there's a
tremendous initiatives throughout all
of dod that where they're attempting to
make sure that they can get this
accomplished quickly . What does that
do ? If the contract award is placed
quickly , performers can commence ,
buildings can occur . And so from the
government's perspective , we've moved
from committing funds to obligating
funds to expending funds and that
should tie itself to delivery of
product . And I think that that's
really at the end of the day , what
we're trying to accomplish is get the
product delivered next chart , please .
So , here's some less than good news .
And Dave was starting to allude to in
his presentation over the past few
years . There's been an , uh , some
unfortunate interpretations of what
people think is permissible under the
program . And we've got just a couple
of scenarios . I know we're gonna have
some questions we're going to be
dealing with . But um they're examples
of certain occurrences that seem to be
popping up a little more regularly
regularly than they should . Uh And uh
and we're gonna offer you , at least
we'll offer you an idea of how to , to
deal with those uh issues . Next chart ,
please .
Ok . The scenario is just give me the
data . All right . And then many of you
have run into this , that company has
been working with the dod component and
to solve a problem . In this particular
case , we had foreign substance
penetration of smooth mechanical
services in the performance of a phase
two . The company is approached by name ,
the government stakeholder doesn't
matter , requesting the firm provide
all your detailed research documents
without your markings on your data . Is
this an acceptable request ? Next chart
please . The answer
is no , it's not . You know , it's been
and Dave mentioned this earlier in his
presentation , it's been maintained
that the S BC has rights that it
asserts and protects under the SM RT
program . It's inappropriate for the
government to require an S BC , whether
under a prime or subcontract
under prime contract or a subcontract
to deliver data without allowing it to
mark the data with its uh data
restrictions . And that includes a
phase three and uh you know , just
taking a second and looking at that ,
remember if I can't do it directly
prime contract , I cannot do it
indirectly through a subcontract . Just
have to remember , maintain the fact
that you have a right to protect your
data , mark your data back to the ,
identify your data , mark your data and
protect your data . If you're doing
that , you're , you're , you're
fostering the future for your company
and the government may approach this .
Now , here's something here and , and
you know , we , we point this out .
It's a , it's within the policy
directive . Uh I will share with you .
It's not usually pursued . Uh At least
I have not seen examples of it over
those 20,000 transactions . I think
maybe I might have seen one instance
where you know , the government and the
small business entered into
negotiations over uh how to define and
redefine their , the SB I is teaching
their data rights . Um Obviously , if
you're going to do that , it has to be
a separate agreement and it can't be uh
contingent upon you receiving S pr S TT
R funding agreement . Do I think
there's benefits that could be brought
about with uh an agreement that could
be negotiated between the two parties .
Uh And I think they may , I mean , uh
you know , in today's environment , if
there's uh some thought associated with
how you're doing business to sit down
and again , talk to each other and
resolve it and have a reasonable
discussion . I know by the way ,
potential in there , if you're looking
at the policy directive says that you
can extend the term of the production
period . So I mean , you know , there ,
there's some , some puts and takes and
you know , possibly this would be a
another way of addressing potential
issues that exist for you today . Um If
you can't resolve them uh through
reasonable discussion of uh what the
clauses allow you to do and you know ,
and , and in talking to a PC O having
them to decide , you know , how to move
forward with the project . Next chart ,
please .
OK , here we go . Let's just have a lot
of prototypes . S BC is requested to
provide 20 copies of software product
under a phase two contract and
prototypes . The government has no
intention of quiring any additional
copies of the software under a phase
three . Is this acceptable next year ,
please ?
And the answer is no , it's not the
concept of producing a prototype under
phase two is intended to allow for
testing and determining whether the
item required requires of the concepts
developed under the topic for guidance ,
we look at the prototype , other
transactions and the idea that the
development contract may be used to
require a reasonable number of
prototypes to test in the field before
making a decision to purchasing
quantity . And always remember
purchasing in quantity is associated
with the production effort . The
attempt to use a development contract
as noted is inappropriate for the use
of that particular contractual vehicle
river . The phase two is being funded
by sbir funding , future funding .
Um A phase three is O PM , other
people's money , it's going to be
whatever is the appropriate funds for
the statement of work that's being uh
solicited and awarded . And I would
argue that uh in this scenario , the
appropriation that's being obligated is
probably inappropriate for what's
resulting here . Next chart , please .
Ok . Oh , there we go . So there are 3
May I have your access code , please ?
And um I know a number of SP CS get
request to provide their access code to
software during the performance of the
S pr S teacher agreements . Um Make
sure please
so many this with ownership . And the
answer is , could this be , could this
be a legitimate request ? And the
answer is yes , you know , the Defense
Innovation Board under SFC that the
government should and will require
access codes to required software uh to
seek to obtain that source code for non
custom software for the purposes of
vulnerability , scanning and related
analysis . And let's be honest , you
know , cybersecurity issues today are
so so active and so prevalent that ,
you know , that's one of the one of the
reasons why they need to be testing the
software and it goes on from there .
However , granted , it might be a
legitimate request but this does not .
Um this request does in no way
abrogates the ownership rights of the S
PR S TT R data resident in the S BC in
those stated in incidents . It's
incumbent upon the S BC to properly
assert and mark , deliver data to the
government to ensure adequate
protection of its S PR TT R data . And
what I'm gonna say is again back to the
acronym , I identify mark and protect
and that's really what drives , I mean
guides go to the D 42 52 2 27 70
18 and that will hopefully help you
understand that . Yes , you have , you
know , you , you have a couple of
pillars upon which to protect your data .
You know , background data is , is
dressed addressed in 70 18 which
basically says , you know , you have to
again identify assert and have the
appropriate markings on your data for
that , which is uh proprietary . And it
gives you an idea of what you have to
do for SBIR data and identifying and
protecting that data . But it also
alludes to the fact that I allude to
earlier is you could have actually an
agreement that would affect the
protection of your data um that was
negotiated in accordance with the uh
the terms of the policy directive . And
again , would be a grounds upon which
to protect your interests . And this is
all about protecting your interests .
Um Basically contacting , you know ,
again , that's uh that's an , an easy
way of uh getting a product or service
accomplished that will support the war
fighter . And as I said to you earlier ,
I mean , with the processing times that
we were experiencing and I assume
others are experiencing comparable uh
processing times that uh in and of
itself is a benefit to a program office
because at the end of the day , a
program office is required to get a
capability out to their eventual
customer next
and end of my prepared uh comments . Uh
Thank you very much for that most uh
knowledgeable uh session , Dave again .
Thank you . Um We're gonna run into the
question and answer period . Um We
received well over 200 questions on the
uh uh registration prior to this
happening . Um I filtered through um uh
many of them and we're getting many
questions in the chat . When we post
this on our site , we will um try to
address all of the questions that have
been posted . Um But I'm gonna start
off and I will , I will read questions
um and Mr Metzger is gonna field them .
So the first question we have if
um an S pr company
has a technology where the protection
period has run out . What if any
additional action should they take
prior to entering into a phase
three contract ? So , I mean that ,
that their , their , their , their
effort that they are gonna have the
phase three on the protection period
has expired . Now they're going into a
uh phase three . What should they do
prior to entering into , into that
phase three ? There's really no special
action to be required . Uh They should
make sure that they get the 20 year
protection for new data that's
developed under phase three . But
there's really nothing they can do uh
to uh extend the ,
the expiring data rights protection
period that they're experiencing under
prior uh contracts . So there may be
some overlap . It could be that it took
a long time for the agency to get to
phase three , but there's really
nothing special that I can recommend
other than making sure that you get uh
your sbir data rights in the new phase
three . And that will protect new data
that you develop . Keep in mind ,
expiring contracts are largely phase
one and phase two and that data is only
semi useful to anyone who receives it
five years after development . So you
have your technology lead and that's
what's valuable , takes no further
action to keep that lead . All right .
Thank you . Um Next question is that we
have before we leave that , before we
leave as a PC O and I , and I
understand everything that David just
said , I , I got that . But as a PC O I
would ask the company , yeah , we
really , the company , um you know ,
when we talk about the data that was
covered by the uh SVRR protection
period , uh Was there other background
data that was proprietary to the
company that could influence how the
government might look at the
overarching data package that you're
you're discussing . I mean , in essence ,
um the Sbir
initiative and the S pr productive data
is really a a falling out of or part
of uh the proprietary information that
you had beforehand . Well , if you can
link and just if you can link ,
that you require the proprietary data
to be able to uh have a contract ,
then the thing I would argue is that
you're looking at potential for 10 US E
23 04 C one to come into play as the
justification to place the contract ,
not that it's going to affect , you
know , your , your , your protection
period under the SBR uh uh data
protections , but effectively looking
at the totality of your data package
that could very well be the direction
that you have to go . Um Mr thought
over . Thank you , Tom . Um The next
question is um um a small
business um who's received multiple
phase two and phase three awards has
been acquired by a large business . All
the contracts have been nov um
during the performance of the phase
three work after novation , a logical
extension of the work is discovered and
developed . What are the intellectual
property protections and implications ?
Well , for those
new uh developments that
extend the prior sbir research ,
those are owned by now the
acquiring firm and the private
firms own them . They don't have to
divulge them to the government . They
don't have to give them to the
government unless the government
insists on it in a later contract . But
the government is going to be
interested at some point if it issues
AAA follow on phase three to that
progress . And you will want to brag
about that progress in the proposal .
But really , it doesn't put any burden
on the firm uh to disclose that
innovation or uh bring the government
up to speed on it because it's
proprietary information and it doesn't
need to deliver it to the government .
Ok . The only , the only observation I
would add to , to Dave's uh point and ,
and Paul valid is the uh is the fact
that the government is probably going
to look at what was the transfer of the
data just to make sure that it was all
accomplished properly . If you're gonna
be doing it under the under the act ,
you know , as an SB I or uh procurement ,
they want to make sure that , you know ,
it was a clean transfer uh during the
also during the innovation , you know ,
you can nov a contract and potentially
the creator of the intellectual
property could have retained ownership ,
you know , of the uh S pr technology .
So they'll probably want to take a look
at what uh the documentation that made
the transfer over . Thank you . And the
next two questions , I get a lot . Um
First one is , are the data rights in
place the same for ot A contracts
answer is yes . Data rights don't
depend on the type or nature of the
contract . The same data rights clause
applies . The same legend is used .
I agree wholeheartedly with Dave . The
only thing is with an ot A . You're not
gonna have the D for reference , you're
gonna have something comparable to it
as he alludes to it . It's gonna be ,
you know , the sbasb A uh probably
version of uh the uh the instructions
and the , and the clause . But uh yes ,
absolutely . That would be the case
over . OK ? And the next question is
what rights apply to mixed development
where Sbir paid only part of the effort
and the rest was privately funded . Ira
D example , 60% was paid with super
funds and 40% was paid by
Ira funds and the work cannot be
separated in that
case , any deliverable to the
government containing Sbir . Plus other
information would be marked with Sbir
data rights legends . However , where
you have your own proprietary
information included , even if it's non
sever , you might want to stack legends
that has put the Sbir legend up there
and then put your own company ,
proprietary legend below it ,
indicating to the government that there
is a mix of data that you are supplying .
But the Sbir data uh absolutely can't
be disclosed . And even though it's
mixed up with other data , um you can't
disclose the other data without
disclosing the attached Sbir data . So
the Sbir Clause has to be put into any
new contract , any new amendment
that's from a practical issue . And I
absolutely agree with that . But , you
know , when we talk about in
independent research and development ,
the first thing that popped out of uh
pops into my head is do you really have
a IR and D account ? You know , have
you been really tracking your data and
your , and the cost that you're
associating with the development of
that data ? And if you're not , I
recommend you do it . I had a company ,
a small business coming in um worst
story years ago um said , oh , we own
this data we developed and everything
else . Then we went to look , you know ,
to price it out actually to negotiate
it and they didn't have an Ir and D
account in their accounting system . OK .
How do , how does one make an assertion
that you're owning something when you
don't have the data to back up that uh
that assertion ? Um that's a thought
over . So , Tom , how does that get
policed ? Then if you , if you're
questioning their assertion . Well ,
there are , there are , there are
clauses in there that you , you can
challenge , uh you know , a legend . Um ,
2 27 was it 70 19 , I think ,
uh on certain data and the rest , um
not that you're going to do a lot of it .
Uh Let me , let me just take a quick
look . Uh Yeah , 70
19 on computer software . And there's
another clause to , to , to validation ,
restrictive markings on technical data
and that would be 70 37 . And that's
probably in the contract that uh has
been written . And , uh , you know , uh ,
and if you're getting into this whole
debate about , you know , do you have
it , don't , you have it , um , you
know , you come across a lot of
different data when you're negotiating
with people , even though it's not sort
of a cost price data . But , you know ,
sometimes you get into the negotiation
with them , you get into their , their
accounting system , uh whether using
gap or , or , or of course , accounting
standards . And , you know , if you're
talking about ownership of data , it's
going the logical question for the PC O
to ask is OK . Where's the IRD ? You
know , I mean , just , just show me now
the commercial sales , it's something
else that can take , be taken into
consideration to discuss ownership of
data . But , you know , if you're going
to make the assertion that you're doing
that internal research document it .
That's all I'm saying over . Thank you .
Uh Next question is um a small
business um whether it's an S TT R
or Sbir has teamed with the university
or federal lab as , as one of their
subs , how does that affect their data
rights ? The
use of a subcontractor is m makes
an important uh imposition on data
rights for the SB IRS TT R firm , a
subcontractor of any kind , whether
it's a FFR DC or a university or even
another small business owns the
data that it developed under that
contract . So as a subcontractor , it
is developing ownership in data , it
develops . That's why I caution all
people that are going to uh that asked
me about , you know , bringing in a , a
subcontractor , be very careful about
not subcontracting
core uh tasks under
your contract because you are giving
up ownership of certain data and will
eventually have a hole in your
ownership of the whole product you
develop because that subcontractor is
gonna be able to say and universities
do uh we've got a piece of that and you
are not allowed to use it . So be very
careful about subcontracting testing is
a great uh uh example of something you
can subcontract out doesn't uh involve
technical data . And if it involves
technical data and you pass a test ,
you wanna brag about it anyway . So be
very careful about subcontracting
subcontractors own the data they
develop . OK .
Um The next question is um
regards to um asserting
data rights . Um how do I properly
assert data rights from a previous Sbir
development on a current Sbir where the
technology is different ? Can I assert
those those data rights in this new S
pr proposal , data
rights are protected by each contract ?
That is your prior contract has an
expiration period and it protects that
data and your current
contract will protect all data
generated under it . Now , if you use
SBIR data in your proposal to the
government do not market as SBIR data
as I said in my presentation . So you
really don't have to worry about
protecting prior contract uh
data sbir data because that contract
protects it and your new contract
protects what you're going to develop .
So each contract is now independent in
uh uh protecting Sbir data and you
don't grandfather it , you don't
transfer it to the new contract . It's
all protected under the contract under
which it was developed . See , I get
that a lot , Dave um When I review
phase two proposals from certain
for , from a lot of uh small businesses
to where when they assert there's they
insert a chart that's within the phase
two that what they're making their
assertions on and they will list every
single phase two proposal that they've
done and that's what they're asserting .
So my guess is that they're trying to
extend those data rights on those older
topics by making assertions
assertion tables uh are only
appropriately asking what else other
than Sbir , are you asking us as the
government to protect ? That's usually
a statement of proprietary information
that was developed outside of an Sbir .
And they're saying be cautious about
this , we've got that data and here's
our assertion to it . You do not really
include SBIR data in an assertion table
because it's asking for other uh
data to be protected . So it's uh
not really , how shall I say not Kosher
to uh put Sbir data in those uh
assertion tabless , even though I know
a lot of firms do , right ?
Um Let's see , this one , I get uh this
one I get asked a lot . Um and they're
looking for a simplified explanation or
resources . Would you recommend for a
contracting officer explaining Sbir
data rights to a program office wanting
to award under a phase three ? How
would you explain it to them to help
the program office understand that they
are not going to have the same data
rights . They would under a competitive
contract using different clauses . They
have repeatedly run into an issue where
the program office states that they
understand and sign off on the eval
and then basically still want them to
give up their data . Yes . Um
That really brings up a a fact
and that is that not all contracting
people that is PC OS uh
their , their assistants , program
managers understand Sbir that puts
the Sbir firm in the position of being
a teacher . The first point of
reference is section four C of the SB A
directive and you should direct them to
it . If they read down four C , they
will see a lot of the rights that we
talked about here all in uh
Sbir language and stated
simply , you can probably send them a
copy of this presentation which puts a
lot of that language into uh words
and answers a lot of their questions .
And third , you can resort to the SB A
to uh uh have them confer with
SB A about questions they have about SB
IRS B A is always willing to talk to
agencies and educate them to Sbir . So
the good news is you have a person that
wants to be educated and those are
sources for educating them . The bad
news is the ones that don't want to be
educated at all and want unrestricted
rights even though they issued an Sbir
contract . And uh all you can do is
try and work with them and get them to
understand , right ? You know ,
you know , Matt , I've had those
conversations with P MS and
Dave is right . You know , if , if
they're willing to listen , if they're
willing to learn , there's a tremendous
amount of resources available to them
uh to be able to , to understand what
the program is about and what they'll
receive out of the program . Sometimes
I wonder , you know , people that talk
to me about like , hey , I want
unlimited rights and you're sitting
there going , wait a minute , you're
gonna get government purpose license
rights . You're gonna be able to do the
same thing that you needed to do . So
why are you , why are you so camped out
on wanting unlimited ? Right ? Um And
as , as Dave pointed out and I agree ,
sbaofbp offices , more business
programs , you know , they have the uh
apex Accelerators who used to be the
form formerly used to be the P they've
been developing training materials in
this particular area , you know , for
all of uh for all of the , the , the
contractors and it , it's the same
message that's going to get back to uh
the PC O and Dave is right . Not all PC
OS understand uh the program , the way
they do though , I would offer that
many of the component command program
offices have been working diligently
with their PC OS to get them educated
so that they understand the
implications of what they do when they
are uh in the throes of executing the
program and hopefully getting
contractors and the government to phase
three over , I think . And we have time
for one last question . Um In the past ,
Dave , you have stated the SBR policy
directive has the full force and effect
of the law . Could you please provide
the legal basis behind that statement ?
Since numerous federal contracting
officers believe they do not have to
follow what is written in the SB a
policy directive . Yes . The uh
the answer for that is what I stated in
the presentation that is the current
policy directive was reissued pursuant
to notice and comment rulemaking in uh
2019 and became effective on May 2nd of
that date and notice and comment
rulemaking is the way that an agency
like SB A can issue a binding
regulation and that was done . So it's
important for the contracting officer
or a person that's inquiring to
understand what notice and comment
rulemaking is about . And they're
taught that in their training . So
there's no excuse for them not
understanding that . Now , if they have
any doubt about what you said to that
effect , they can call SB A and they
can ask the question is the policy
directive binding , a binding
regulation . And SB A will shout yes
and hang up . So it's uh it's a
fact of understanding that this uh
guidance that SB A has is a
binding regulation even though it has
the word policy in its title . And that
dates back to 1982 . And that
misleads , I think a lot of contracting
officers uh and their supporting
personnel into thinking that this is
only policy and not a regulation , a
binding regulation .
OK . Well , just to be respectful of
everyone's time , we are 90 minutes
into the uh webinar . I'm sorry , I
didn't get through all the questions
again . We will post them on our site
under the fact section . We'll try to
go to them all . I know that we've had
a lot of questions posted since . Um
Again , I want to thank Dave and Tom
for um an excellent job and most
informative Brief . Um II , I can't
thank you enough for your expertise and ,
and , and answering questions and
giving all the expert advice . Um
And I wanna thank the team , um Ian
Ashley Carri Maria for actually pull
pulling this off . Um This was great .
I look forward to our next session . Um
and we'll , we'll post that out
probably in a couple of months , what
the next two segments will uh be . But
again , um special thanks to Dave and
Tom for your expert advice and thank
you everyone for taking time out to uh
join the webinar .
Oh , and also , um if you would please ,
if you didn't already log off , um Can
you please do the survey ? That's how
we learn and we can make it better . So ,
thank you ,
Dave . Take care . Good to be with you .
Bye everyone .