to take dollars out of other programs to pay the people who manage the SBIR program, which is “painful.”

Col. Stephen said that Air Force program officers had also felt that SBIR money was money “taken out of their hides.” The normal routine is for the program office to submit a budget that is based on an independent cost estimate of program needs. They must then take 2.5 percent out of this budget with the mandate of doing something else with it. He said that a better approach would be to make the program officers feel that the set-aside is their money, and is part of their R&D program. They can use the money to write topics they are interested in. Rather than increasing the whole pot of funding, he suggested raising the grant limits. This might reduce the number of SBIR awards, but it would make each project more viable and give more value to the program officers, who could then expect a higher level of technology readiness for their program. They could even use some of those dollars—their dollars—to hire people to help manage the SBIR projects and to advocate for the SBIR program within the program office. Those steps could be taken, he said, without changing the current set-aside rate of 2.5 percent.

Mr. Carroll returned to the issue of the “hay wagon,” the complex acquisitions process. Fitting SBIR into that acquisition framework, he said, is very complicated, but he said he thought it could be done in a way that might even streamline the process itself. He referred to a proposal to Congress by Dr. Gansler six or seven years previously, which recommended that at least half of SBIR projects should be tied directly to acquisition programs. He said that this goal made sense, along with educating the program management personnel on how to use and benefit from SBIR. This had been part of the training curriculum for a year, but had been deleted. He suggested re-examining the objectives recommended in that earlier proposal which “still make a lot of sense.” He said that the Navy had followed a number of those recommendations with good results.

Mr. Caccuitto responded that he had just reviewed the SBIR numbers for 2002 through the end of 2004 and found that over 65 percent of the topics had endorsement or sponsorship from acquisition activities. He said that this was a result of Dr. Gansler’s directives in the late 1990s. Even with that result, he said, it was still difficult to integrate SBIR into acquisitions activities, which underlined the importance of taking steps to enhance the process.