Flexibility was the driver behind the decision against pursuing a joint venture. If a partner proved incapable of fulfilling its role, Mr. Gibson's company believed that it would be better able to jettison the partner and find a new one if X-Ray Optical Systems were the sole recipient of the ATP grant. It is possible to restructure participants in an ATP grant with a joint venture, but there are some costs. In summary, Mr. Gibson said that his company was willing to accept a lower probability of winning the award as a single-company applicant, because the company believed that it had a higher chance of technical and commercial success applying as a single company. The bias in the legislation toward encouraging collaboration among companies in the application process is well-intended, in that it is essential to have multiple skills from multiple organizations to be successful. However, the organizational bias toward the joint venture, reflected in the administration of ATP is a "very poor" way to accomplish this goal.

Jon Baron, manager of the SBIR program in the Department of Defense, asked for an elaboration on how the ATP evaluates the commercial or spillover potential of applicants. Dr. Powell responded by saying that the ATP has a peer review process on the technical and business side for applications. The ATP gathers experts from the world of business and economics, as well as technologists, to scrutinize proposals. It is not difficult to find qualified technologists, but the ATP does face a scarcity of expertise among economists and business people. Often, therefore, the ATP draws on retired business people and the best available academicians to review business plans. The ATP also makes sure that its outside experts have no conflicts of interest because the review process involves the disclosure of proprietary information.

Mr. Baron followed up by asking the two panelists from industry what they thought of the process. Mr. Gibson said that, when his company was turned down the first time, the ATP was "right on the money" because X-Ray Optical System's business plan was not well developed at that point. Mr. Gibson said that the oral presentation to the ATP panel and subsequent questions from panelists were of excellent quality and certainly found holes in X-Ray Optical's proposals where holes existed. The review panel was extremely well prepared and knew what it was doing.



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