In February of 2016, Zipr Shift applied for SBIR A16-062.
We didn’t get the grant as we were told that…
- Our company is too small and we don’t have our own R&D facilities
- Our technology is at too great a development level to qualify for a Phase I (idea stage) grant
Yeah, these reasons have nothing to do with science.
SBIR stands for SMALL Business Innovation Research. But, maybe that should be changed to Just-Small-Enough Business Idea Reward.
R&D has continued for us; we have a fully functional prototype and we have conducted more testing to verify our product fits the needs of the Army. We have tons of interest from potential customers. We’re doing OK.
But, after some searching into the companies who were awarded the grant, we have come to find that there is a double standard as well as likely abuse of government funding. Just checking out the competition…
The abuse is our honest opinion until the OIG investigation concludes. But, here’s our case:
The Double Standard
The double standard is due to the fact that the alleged abuser of government funding, a Carnegie Mellon University spin-off called nanoGriptech Inc. has a product trademarked Setex (TM)-cF which they claim is “on the market” via various news sources and press releases:
- New Atlas- “Gecko-inspired adhesive tape finally scales to market“
- Forbes- “Dry Adhesive Inspired By Geckos Now On The Market”
- BusinessWire- “Carnegie Mellon Spinoff nanoGriptech Is First Mass Manufacturer of a Strong and Sensitive Gecko-Inspired Adhesive“
So, they’re already selling product to DoD yet their technology still qualifies for a Phase I grant. Their level of technological readiness is more advanced than ours!
Abuse of Government Funding (Currently Undergoing Investigation by the SBA Office of Inspector General)
It’s abuse if a company receives multiple awards for the same or similar work in the case of government research grant funding.
LAW
First, a defintion of the term “essentially equivalent” [1]
“Essentially Equivalent Work” defined:
• Work that is substantially the same research, which is proposed for funding in more than one contract proposal or grant application submitted to the same federal agency or submitted to two or more different federal agencies for review and funding consideration; or
• Work where a specific research objective and the research design for accomplishing the objective are the same or closely related to another proposal or award, regardless of the funding source
Essentially Equivalent Work Regulation [2]
4.18 Prior, Current, or Pending Support of Similar Proposals or Awards
IMPORTANT — While it is permissible, with proposal notification, to submit identical proposals or proposals containing a significant amount of essentially equivalent work (see Section 3.3) for consideration under numerous federal program BAAs or solicitations, it is unlawful to enter into contracts or grants requiring essentially equivalent effort. If there is any question concerning prior, current, or pending support of similar proposals or awards, it must be disclosed to the soliciting agency or agencies as early as possible. See Section 5.4.c(11).
A powerpoint detailing DoD SBIR/STTR Fraud Training: [3]
Duplication of Funds
Duplicate awards from the same or diferent agencies for the same work.
- Submitting duplicate proposals to different agencies and received multiple awards for essentially the same or overlapping work.
- Offer proposals that are supposed to do separate work, then provide identical deliverables.
- Receiving multiple payments for the same work product from diferent agencies.
- Steering new SBIR research topics towards topics previously funded by other SBIR agencies to facilitate research recycling.
The Most Common Procurement Fraud Schemes and their Primary Red Flags [4]
CO-MINGLING OF CONTRACTS
Dishonest contractors can submit multiple bills on different contracts or work orders for work performed or expense incurred only once. A contracting official can facilitate the scheme and share in the profits by writing similar work orders under different contracts and accepting the multiple billings.
The major red flags of co-mingling of contracts:
- The contractor submits several billings for the same or similar expenses or work under different jobs or contracts
- The contractor submits the same or similar documentation to support billings on different contracts
- Multiple awards for similar work are given to the same contractor
- Similar work orders are issued to the same contractor under more than one contract
EVIDENCE
A certain Carnegie Mellon University spinoff called nanoGriptech Inc. has received multiple grant awards [5] for their research for chem/bio protective gear so now they are being investigated along with the Department of Defense overall.
U.S. taxpayers have been subsidizing this company’s R&D efforts since 2009.
(Engineering intern Glassdoor review cons: “The company is mainly running on government funding. The product is still on research stage and not mature enough to compete other counterparts on market.”)
Since 2009, they have received multiple awards totaling about $2 Million covering the hermetic sealing of chem/bio protective garments or respiratory face masks with their technology. They also received the Phase I grant for A16-062 solicitation about chem/bio closures.
This means there are three SBIR awarded to them covering chem/bio suits and gear in some way: CBD09-102 (Phase I & II), CBD13-109 (Phase I & II), and now A16-062 (Phase I with Phase II TBD.) They all have to do with sealing chem/bio gear with gecko grip adhesive whether to skin, itself, or otherwise.
Between CBD09–102 and CBD13–109, the application changed from gecko adhesive-to-skin to gecko adhesive-to-itself. However, CBD13–109 and A16–062 are both about applying the Setex TM gecko adhesive to itself on protective garments. The CBD13–109 and A16–062 solicitations definitely asked for equivalent work as the objectives are the same.
Meanwhile, they’ve already listed the Setex TM closure they’d sell for chem/bio suits on their website. If they already have a product that they can sell then why are they still seeking grant funding for development?
And, per the Engineering intern’s review, the technology is not ready for commercialization even having received two Phase II SBIR grant awards already.
After a Phase II award, the next step is to just sell the product. Since Setex TM is the product and it was not sold after the first Phase II then they should not have been awarded another SBIR for developing the Setex TM closure further.
Obviously the researchers have great Department of Defense connections. But, that’s what you need to have in order to facilitate fraud unless they outright lied/omitted information to the DoD about having been awarded other SBIR in the past.
Though, there is always the slight chance this isn’t fraud: innocent until proven guilty.
PRECEDENT
Receiving multiple awards for the same research is a common source of fraud with government grant funding:
- NASA research program fraudulent, wasteful: Inspector general – Watchdog.org
- Fraud, abuse found in NASA research funding to small companies
- Thermacore, Inc., Agrees To Pay $965,000 To Resolve False Claims Act Allegations
- Embezzlement, False Claims, Theft and Bribery, Oh No! – The real impact to your institution.
Footnotes
[1] https://www.nsf.gov/oig/o
[2] http://www.acq.osd.mil/os
[3] https://sbir.defensebusin
[4] The Most Common Procurement Fraud Schemes and their Primary Red Flags
This posting is a critique on the U.S. government’s SBIR program, our honest allegation of fraud that SBA’s OIG felt was worth investigating, and a questioning of why research is more political than scientific.
We know the Zipr Shift product is the superior fastener product. This isn’t a jealous competitive attack. This is Zipr Shift acting as a whistle-blower.
The gecko adhesive technology is a workaround to non-hermetic closures yet it is not strong enough to compete with the current zipper product. Our technology is a proposed solution that is hermetic and veritably stronger than the current zipper product. It should eliminate the need for a workaround.
If, when we looked up who was awarded the grant, we didn’t find what could be attributed to evidence of fraud then we would have never made the claim that initiated the investigation.
Furthermore, if we are wrong then we will apologize.
