The Small Business Watchdog

On February 12, President Obama issued the Executive Order for Improving Critical Infrastructure Cybersecurity (E.O. 13636). In accordance with Section 8(e) of E.O. 13636, within 120 days, the General Services Administration and the Department of Defense, in consultation with the Department of Homeland Security and the Federal Acquisition Regulation Council, are required to make recommendations on the feasibility, security benefits, and relative merits of incorporating security standards into acquisition planning and contract administration and address what steps can be taken to harmonize, and make consistent, existing procurement requirements related to cybersecurity.

Public outreach is a critically important activity for implementation of the Executive Order. In an effort to obtain broad stakeholder involvement, the General Services Administration and the Department of Defense are publishing this request for information (RFI) seeking information that can be used in the Section 8(e) report.

Below are a few of the 37 questions this information notice is seeking public input. Please see the entire notice on the Federal Register.

For example:

1. What is the most feasible method to incorporate cybersecurity-relevant standards in acquisition planning and contract administration? What are the cost and other resource implications for the federal acquisition system stakeholders?

2. How can the federal acquisition system, given its inherent constraints and the current fiscal realities, best use incentives to increase cybersecurity amongst federal contractors and suppliers at all tiers? How can this be accomplished while minimizing barriers to entry to the federal market?

3. What are the implications of imposing a set of cybersecurity baseline standards and implementing an associated accreditation program?

4. How can cybersecurity be improved using standards in acquisition planning and contract administration?

Dates: Effective date: Submit comments on or before June 12, 2013.

Comments: Submit comments in response to Notice-OERR-2013-01 by any of the following methods:

•Regulations.gov: Submit comments via the Federal eRulemaking portal by searching for “Notice-OERR-2013-01”. Select the link “Submit a Comment” that corresponds with “Notice-OERR-2013-01”. Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “Notice-OERR-2013-01” on your attached document.

•Mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street NE., 7th Floor, Washington, DC 20417.

Instructions: Please submit comments only and cite “Notice-OERR-2013-01”, in all correspondence related to this case. All comments received will be posted without change to Regulations.gov, including any personal and/or business confidential information provided.

Advocacy contact:
    Assistant Chief Counsel Major Clark, III
    Telephone 202-205-7150

On April 24, the Department of Homeland Security (DHS) and the Department of Labor (DOL) released an interim final rule (IFR) amending the methodology for calculating the prevailing wages to be paid to H-2B workers and U.S. workers recruited under this visa program.  The H-2B visa program allows U.S. seasonal employers to hire temporary foreign non-agricultural workers.  The Wage Methodology IFR eliminates the use of four-tier wage rates based on the Bureau of Labor Statistics’ Occupational Employment Statistics (OES) survey and replaces them with the OES arithmetic mean. The Wage Methodology IFR continues to set the prevailing wage based on the applicable collective bargaining agreement wage rates, or, at the employer’s request, the Service Contract Act or Davis-Bacon Act wage determinations, or appropriate private wage surveys.  DOL and DHS are jointly issuing this rule in response to the court’s order in Comite´ de Apoyo a los Trabajadores Agricolas v. Solis, which vacated portions of DOL’s previous H-2B wage rule. This interim final rule is effective April 24, 2013. Interested persons are invited to submit written comments on this interim final rule on or before June 10, 2013.

•   Link to the Interim Final Rule

•   Submit Comments on the Final Rule

•   Frequently Asked Questions from DOL

•   Latest Information from DHS/USCIS

•   Advocacy contact Janis Reyes or call 202-619-0312

•   Visit Regulations.gov, the federal government’s one stop site to comment on federal regulations

While it’s not common knowledge, Gainesville, Florida, has exported some pretty valuable commodities to the rest of the world. While Tom Petty, of Heartbreakers fame, may be flashier, no less valuable is Gatorade. The granddaddy of sports drinks is also a poster child for successful university research commercialization.

Dr. Robert Cade and several researchers on staff at the University of Florida in Gainesville developed the sucrose-dextrose drink, Gatorade, in the 1960s; their novel formula replenished the combination of water, carbohydrates, and electrolytes that athletes lose in sweat during rigorous athletic competitions. Ray Graves, then coach of the football team, requested that Dr. Cade provide the drink mix to his players. The drink was tested in football practice and later used extensively by the Gators during the 1966 season, one in which the team enjoyed one of its best records in history, 9-2, capped by a victory in the Orange Bowl over Georgia Tech. Coach Graves credited Gatorade for enabling his players to finish much stronger in the fourth quarter of that game. Gatorade was the beginning of a slew of innovative products spun out of university research that has enabled UF to collect hundreds of millions of dollars in royalties through its Office of Technology Licensing, led by David Day, Assistant Vice President & Director, and Jane Muir, Associate Director.

On March 14, I attended “A Celebration of Innovation” in Gainesville. This event is an annual conference and over 300 startup entrepreneurs, venture capitalists, academicians, and media were treated to presentations by approximately 15 emerging companies birthed at the university’s Innovation Hub and the Sid Martin Biotech Incubator. Dr. Bernie Machen, president of the University of Florida, welcomed the attendees and offered  introductory remarks. He highlighted the growth of several early-stage spinoffs including Axogen, a medical device company that has developed new ways to regenerate tissue growth by using tissues from cadavers, and Applied Genetic Technologies Corporation, Inc., a company that is developing its proprietary adenovirus manufacturing platform for the treatment of two eye conditions: achromatopsia and X-linked retinoschisis.

Dr. Win Phillips, Senior Vice President and Chief Operating Officer of the University’s Office of Research, followed Dr. Machen’s remarks by relating some facts about the University’s Office of Technology Licensing and the city of Gainesville:

• Four Gainesville entrepreneurs were honored by the White House last year as “Top 100 Entrepreneurs under 30.”
• MindTree, a software development company that recently relocated to Gainesville announced a new center in Innovation Square and currently employs 80 of an expected 400 employees.
• Creative Class author Richard Florida has singled out Gainesville as a leading community for the growth of high-tech jobs.
• UF receives more than 300 invention disclosures annually.
• In 2012, UF executed 79 licenses and options and helped start 15 new companies.
• More than $335 million in tech transfer revenue has been generated in the past decade.

The conference concluded with the 15 entrepreneurs giving presentations of their companies to prospective funders and other interested individuals. It was my observation that innovation is alive and well in Gainesville and the University of Florida, and I anxiously await the next exciting startup to emerge from the Office of Technology Transfer. Speaking as a Gator alum, I selfishly hope that this one will benefit the Florida basketball team in the hope that they can make it to the Final Four again.

—Mark Berson, Region IV Advocate

Mark Berson is the Office of Advocacy’s regional advocate for Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee.  He can be reached at mark.berson@sba.gov.

On April 3-4, 2013, the attorneys from the Office of Advocacy attended the American Bar Association’s 9^th Annual Administrative Law and Regulatory Practice Institute: Critical Issues in Regulation. The institute deals primarily with administrative law, which covers the things that agencies do to implement laws or make regulations. The institute provides attorneys with an opportunity to learn about the relevant issues of the day and network with their peers. Advocacy’s participation in this conference keeps staff attorneys aware of the latest regulatory law developments that may have ramifications for small businesses.

The first day consisted of an update on the rulemaking process and judicial review of rules. The second day covered some of the hot topics in administrative law, such as extending the authority of the White House Office of Information and Regulatory Affairs to review independent agencies, recess appointments, public-private governance, and technology in rulemaking. It was an extremely informative two days for anyone interested in learning about administrative law from the leading experts in the field.

—Jennifer Smith, Assistant Chief Counsel

On March 12 and 13, the Office of Advocacy rolled out the next installment in its national conversation on innovation and entrepreneurship. This extended dialog took place at the University of Pittsburgh’s Katz Business School in the heart of downtown Pittsburgh. The event continued Advocacy’s listening initiative, “Small Business and Government: Maximizing Entrepreneurship, Driving Innovation,” launched in Seattle in September 2012.

Pittsburgh is located at the confluence of three great rivers, and was known historically as an industrial center and transportation hub. Steel and railroads defined its economic role in the 20th century. Today, the city is positioned at the “confluence” of important education, research and health care networks, and has emerged as the hub of the regional innovation economy. Despite the economic challenges of the 2000s, Pittsburgh is the focus of new ventures and investor optimism.

Participants came from every angle, including the city’s premier institutions of learning: Carnegie Mellon University, a world leader in robotics and computer science research, and the University of Pittsburgh, which excels in life sciences, biotech, and several other technology disciplines. Also represented were 21 organizations and companies that support innovation in diverse and novel ways: incubating, accelerating, and commercializing ideas by identifying and channeling economic development dollars, creating collaborative work environments, and other key functions. These support platforms include StartUptown, Innovation Works/AlphaLab, Pittsburgh Technology Council, Pittsburgh Life Science Greenhouse, Idea Foundry, Pennsylvania Nanomaterials Commercialization Center, Urban Innovation21, CEED, and Institute for Entrepreneurial Excellence.  

In 10 sessions over two days, entrepreneurship and innovation leaders from key industry sectors came together to identify key barriers, big ideas, and best practices that can have positive and significant industry-impacting results through public/private partnerships.

Each session featured an ecosystem of the interdependent aspects of each sector. These discussions were robust and lively, engaging the expert panelists and the 350 attendees. I’ve mentioned one or two of each sessions’ key points to merely hint at the direction of these amazing exchanges.

The Life Sciences session identified important sector-enabling ideas including the need for government to robustly fund organizations that help entrepreneurs take costly scientific discovery to the commercialization stage.

The Life Sciences Session.

The Healthcare session cited the need for more large-scale government-run investigative projects, exemplified by the collaboration between the National Human Genome Research Institute (NHGRI) and Department of Energy (DOE) to build on the results of the landmark Human Genome Project. Healthcare breakthroughs are highly investment-intensive, requiring commitments and funding on a scale that only government can provide.

The Energy session provided several inputs, especially the need for a stable and comprehensive 10-year federal policy to eliminate uncertainty in the industry.

The Young Entrepreneurs session featured a diverse ecosystem that included high school age entrepreneurs and innovators. Two of this group’s key messages were the need for student loan deferment for entrepreneurs who meet a predetermined set of criteria and faster implementation of the equity-based crowdfunding authorized in the JOBS Act. Crowdfunding offers a potential solution to the challenges young entrepreneurs face in accessing capital in the early stages of their enterprises.

The ecosystem of Advanced Materials, a sector focused on cutting-edge innovation in nanomaterials, chemistry, and material science, spans research and ideation to commercialization. The group discussed and identified roadblocks including the intermediate fundraising phase of a company’s lifecycle. Many later-stage companies are challenged to secure funding for assets and resort to sourcing funding in regions outside the United States.

A key issue identified in the High Technology and Innovation session was the need to extend technology translational capital (which typically goes from government to universities) to non-university-based technology incubators and accelerators that are key to commercialization efforts.

The Manufacturing session identified the sector’s talent gap as the most critical issue. They would like to see the government put more emphasis on talent recruitment for manufacturing jobs as part of its emphasis on STEM. They suggested a variation on that acronym—STEAM—where the A stands for “advanced manufacturing.”

The Women and Minority Entrepreneurship session highlighted the need for targeted mentoring and coaching on the government contract bidding process, with the aim of increasing the success rate from the current 3 percent level to the 5 percent goal.

The two final panels, Information Technology/Urban Entrepreneurship and Social Entrepreneurship, are two emerging sectors that Pittsburghers say involve a very diverse ecosystem and have the unique potential to provide a far-reaching boost to specific components of the innovation economy in Pittsburgh and the wider region. The Urban Entrepreneurship session suggested that one of the region’s tax incentive best practices be extended to the national level. Pittsburgh’s targeted eight-year state tax incentive program has proven effective at encouraging high-growth companies to locate in low-income communities. The presence of these new businesses has stimulated the growth of support enterprises around them, and the communities have provided a percentage of the local workforce.

In the Social Entrepreneurship session, participants agreed that they would like social enterprises that combine profitability with their social goal to receive the same corporate classifications as for-profit corporations and hence access existing benefits for small businesses. They also suggested that the SBA’s Impact Investment fund that already has a CleanTech focus set aside a percent of funds for social enterprises that meet set criteria.

Lots of positive feedback has followed the event. Pittsburghers in the innovation circle appreciated the ecosystem approach and the holistic and robust discussion it facilitated in each sector. By introducing players in diverse sectors to each other and promoting a lively interaction, the event is another element feeding and expanding the collaborative process that characterizes innovation in Pittsburgh today.

—Ngozi Bell, Region III Advocate

Ngozi Bell is the Office of Advocacy’s regional advocate for Delaware, Pennsylvania, Maryland, Virginia, West Virginia, and Washington, D.C. She can be reached at ngozi.bell@sba.gov.

 StartUptown (above) and Techshop (below) are two Pittsburgh business incubators.

Dreams came true this entrepreneurial season as New Orleans Entrepreneur Week (NOEW) drew to a close last Friday.  To the winners went the spoils—over $200,000 in cash prizes to local start-ups with the best ideas and business pitch. This year’s NOEW was abuzz with activity, engaging more than 3,000 individuals in small business dialogue, including numerous entrepreneurs who competed on eight stages for cash prizes and technical assistance—all focused on helping to strengthen locally based businesses.

NOEW, an annual spring event, is the culmination of the Idea Village’s annual entrepreneur season which starts the previous July; the event allocates over $2.5 million in capital and strategic consulting resources to hundreds of local entrepreneurs through numerous events and outreach sessions. At the heart of NOEW is the IDEAcorps which is a team of seven MBA programs (Tulane, Loyola, Harvard, Yale, Columbia, Stanford, Cornell, and Dartmouth) that descend upon NOLA every spring break to provide free technical assistance to the entrepreneurs in the Idea Village network. Local entrepreneurs receive a solid week of one-on-one assistance from MBA students who also help prepare the entrepreneurs to compete at NOEW for additional capital and technical assistance resources. 

The final NOEW pitch on Fulton Street.

  The apex of the entrepreneurial celebration and the end of the NOEW season takes place on Friday night on Fulton Street. Thousands of locals gather together to root for 15 entrepreneurs who compete to become one of three finalists who pitch for a chance to win $50,000 in cash prizes awarded by a celebrity panel. This year’s panel included political strategist Mary Matalin, actor Wendell Pierce, billionaire investor Jim Coulter and Archie Manning, the former New Orleans Saints quarterback.

The roar of the crowd produced a tie for first place: Lorenzo Castillo, owner of Education Everytime, a music curriculum business that enhances student engagement and school efficiencies; and Erik Frank, owner of Your Nutrition Delivered, a delivery service for organic pre-cooked meals. The third entrepreneur pitching on the Fulton Street stage was Webster Pierce, owner of WaveRobber, a porous plastic structure that gathers and distributes sediment (from wave action)  to rebuild wetlands. Pierce finished as a runner-up, but he did not leave NOEW empty-handed, having won the $50,000 Water Challenge earlier in the week. He now joins other visionary Water Challenge winners, NanoFex (an environmental technology firm) and Tierra Resources (a carbon offsetting company).

The Office of Advocacy was also featured prominently in NOEW. Chief Counsel for Advocacy Winslow Sargeant participated as a panelist as part of the Water Challenge—a day that focused on fostering public-private dialogue on integrated water management issues and innovation around water-related technologies.  Dr. Sargeant joined four other notable panelists from Coca Cola, Tulane University, Nunez Community College, and NanoFex to dialogue about ways to grow and strengthen New Orleans’ water-based economy. Panelists discussed issues stretching from streamlining federal assistance programs for funding efficiency to helping small entrepreneurs connect with larger corporations to solve complex water-related challenges.

Dr. Winslow Sargeant participates on a panel dialogue discussing entrepreneurship, innovation and integrated water management as part of this year’s NOEW.

Webster Pierce (right) wins this year’s Water Challenge business competition and is joined by past winners, Sara Mack of Tierra Resources (middle) and David Culpepper of NanoFex.

In addition to the Water Challenge, NOEW also featured some outstanding panel dialogues and pre-eminent speakers including Walter Isaacson, President and CEO of the Aspen Institute, and Tina Wells, CEO and Founder of Buzz Marketing Group. Many of the NOEW speakers shared a similar mindset and opined about the importance of sustaining momentum through constant re-invention and living (not just thinking) outside the box. Both speakers stressed that creativity and an independent mind set are key to entrepreneurial success and that no other city reflects this so naturally as New Orleans.  

Another less cerebral but equally important dialogue enjoyed by many was one entitled “Failure Fest,” where a panel of young and old entrepreneurs gathered together to discuss their best and worst failures. One (older) panelist, a prominent architecture and engineering businessman, noted that his greatest failure is ongoing—a struggle of not having and/or planning for diverse executive leadership. This entrepreneur emphasized the need to embrace all manners of diversity at an earlier business stage, citing that his inability to do so may ultimately undermine the firm’s long-term viability.

Interestingly, the same theme of diversity and social inclusion echoed throughout various sessions, including a mayoral dialogue on sustaining the larger regional entrepreneurial ecosystem. Some participants noted that more active engagement is needed to ensure that the entrepreneurial movement is as inclusive and diverse as possible. The local chapter of the Association for Corporate Growth (ACG) also recognized this challenge and as part of this year’s NOEW, they along with co-host sponsors, decided to tackle the diversity debate by launching a panel discussion entitled “Louisiana’s Got Talent: A Bridge to Business Growth” which focused on fostering a cultural mindset of doing more business with small diverse, local businesses. Perhaps next year’s NOEW will actively accelerate this nascent movement by doing what it does best—connecting a diverse array of entrepreneurs, and the network that supports them, to dialogue and problem solve about the opportunities and challenges of sustaining an entrepreneurial ecosystem.

Tim Williamson, co-founder of the Idea Village, will tell you that the Idea Village and, by extension NOEW, were formed on the back of a napkin (in a bar) in response to a parochial leadership mindset that feared failure. To this day, that same napkin is now framed, hanging on a wall that boasts news articles about the robustness of the New Orleans entrepreneurial economy (which is 40 percent above the national average).

Rather than fear failure, local entrepreneurs, and a diverse array of organizations supporting them, opted for re-invention. These collective efforts helped redefine New Orleans as the “Coolest Startup City in America” (so named by Inc.com), where with each entrepreneurial season crazy ideas are championed, solutions to real problems are discovered and businesses are launched.  I’m already looking forward to next season.”

—Caitlin Cain, Region VI Advocate

Caitlin Cain is the Office of Advocacy’s regional advocate  for Arkansas, Louisiana, New Mexico, Texas, and Oklahoma. She can be reached at caitlin.cain@sba.gov.

The U.S. Fish and Wildlife Service today announced the opening of an information gathering period regarding the status of the fisher (Martes pennanti) throughout the range of its West Coast distinct population segment (DPS) in the United States. The status review will be used in determining whether the West Coast DPS of the fisher warrants listing it as endangered or threatened under the Endangered Species Act.

Comments are due by May 3, 2013.

•           Proposed Rule from the Federal Register.
•           Submit Comments  on this request on Regulations.gov.
•           Advocacy contact: Assistant Chief Counsel Kia Dennis, (202) 205-6936.

 Visit Advocacy’s website for more information on Regulatory Alerts.

The fisher (Martes pennant) is a small mammal that lives in forested habitats where prey is abundant. Its name is misleading since fishers do not actually catch fish. © Getty Images.

Earlier this month, the U.S. Citizenship and Immigration Services (USCIS) published a new employment eligibility verification form (Form I-9), now available for immediate use by employers. Employers who need to make necessary updates to prepare for the new Form I-9 may continue to use other previously accepted revisions (Rev.02/02/09)N and (Rev. 08/07/09)Y until May 7, 2013. After this date, all employers must use the revised Form I-9 for each new employee hired in the United States.

The revised Form I-9 has several new features, including new fields and a new format to reduce errors. The instructions also more clearly describe the information employees and employers must provide in each section. 

English and Spanish versions of the new form are available online at http://www.uscis.gov/portal/site/uscis.

For more information, please call (888) 464-4218 or visit I-9 Central online. 

To order forms, call USCIS toll-free at (800) 870-3673. For downloadable forms and information on immigration laws as well as USCIS programs, regulations and procedures, please visit www.uscis.gov.

Recently, I had the privilege of participating in the annual State of Missoula Commerce Report hosted by the Missoula Chamber of Commerce. The event, called “The Impacts of Small Business: A National, Regional and Local Perspective,” focused on small business health in Missoula, Montana’s second largest city, as well as the rest of the state. One highlight was a resource fair showcasing federal, state, and private services, as well as tools available to small businesses throughout the city and state. 

The list of participants included the Small Business Administration district office; the Missoula Economic Partnership, promoting business opportunities in Missoula; and the Montana Business Expansion and Retention Office, a joint partnership of the Governor’s Office of Economic Development, Montana Departments of Commerce and Labor, and the Montana Economic Developers Association.

As the Regional Advocate for the area, I shared the panel with Barbara Wagner, senior economist at the Montana Department of Labor and Industry’s Research and Analysis Bureau; Michael Braun, associate professor at the University of Montana School of Business Administration and an expert on family-run enterprises; and David Glaser, a small business development expert.

Several hundred small business owners attended, representing a broad mix of existing small businesses and those looking to launch entrepreneurial endeavors.  Montana industry is based around agriculture, mining and lumber development. These traditional businesses—mining and drilling operations, sawmills and timber-centric enterprises, and natural gas wells—are the foundation of a new wave of businesses in the finished wood product industry and the burgeoning energy exploration field.  High-tech and service industries are also well represented in the computer support areas, human resource operations, and telecommunications and software engineering.

The event offered an incredible array of resources available to support existing small business owners and potential startups.  The SBA’s standard offerings—credit, counseling and contracting—are supplemented by municipal, state, and private resource partners offering complementary services. 

Many participants were cautious about small business growth, after surviving the trials of economic recession; but they were optimistic about opportunities despite the slow pace of economic recovery.   Small business owners have been reluctant to take on new loans for leases or equipment or even to hire new employees as demand for products and services has yet to return to pre-recession levels.  Many attendees were eager to aggressively market their products and services, demonstrating that the “wait and see” attitude may have run its course.

Much of the business growth in Montana is attributed to small business startups.  In fact, the Montana Department of Labor estimates startup companies and entrepreneurs have created more than 60,000 new jobs in Montana during the past five years despite the economic recession.  Montana has a rich history of family-run businesses and entrepreneurial self-reliance, attributed to its tight-knit communities and the downsizing of large industry to smaller economic entities.

As the event wound down and the multitude of small business owners and would-be entrepreneurs had their last words with resource partners and local officials, I was struck at the continued level of optimism and growing curiosity of small business owners who are intent on making use of the new opportunities available to them.

—by John Hart, Region VIII Advocate

John Hart  is the Office of Advocacy’s Regional Advocate for Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming. He can be reached at john.hart@sba.gov.