Government Funding of Small Companies: The Good, The Bad, and the Ugly
- PDF / 2,372,207 Bytes
- 3 Pages / 576 x 777.6 pts Page_size
- 96 Downloads / 202 Views
Government Funding of Small Companies: The Good, The Bad, and the Ugly The Money. This is a delayed good. The company has to perform and document a service, either labor and material or some measurable deliverable or milestone. Expenses come before repayments and may result in a cash crunch. The Contacts. The government funding agency often has internal conferences of companies working on similar technologies. There is strong technical networking within the government. This is a very valuable source of information.
tinued your own research and will be smarter when you get the contract than you were when you wrote it. The contract monitor, however, will expect you to do what you said that you were going to do at the earlier time. If your best people now want to work in a different direction, you will have a slight management problem. If this is not handled well, morale and motivation may suffer. The Exposure. The contract probably requires reports that tell your competitors (with some delay) what you are doing. This will upset your investors. They expect you to invent all the good stuff on the corporate money and do the routine stuff on the government money. A small company can and should get a waiver to permit it to own all of the intellectual property and patents (and even schedule a delayed final report) when the initial contract is issued. The Final Report. No one in a small company wants to write an archival report. Structure your proposal so that you get a final payment when the report is delivered and remind your people that this relates to their budget for equipment (or even their salary). This is not a refereed journal article, just a solid review of your work.
The Bad
The Ugly
The Bureaucracy. The government agency that pays may not be the same one that awards the contract and the different government agency that audits the contract has a totally rigorous mind set. Its primary purpose is to audit military contract companies to make sure they do not make too much profit. Arguments and lawsuits abound in which the government and the company disagree about payment of part of the CEO's perks. This means that the company has to set up explicit and constrained internal accounting systems to prove that only the correct things (people included) are charged to the government. Most people in a start-up value their freedom, and time cards and charge numbers are viewed as a nuisance. You need an extra person (or persons) to set up this accounting program correctly or you will have a serious cash flow problem because you may not get paid for years. The Delays. The award will probably arrive nine months after you have written the proposal. You will have probably con-
The Lack of a Clean Ending. The funding for subsequent years of a contract depends on the availability of funds from the funding agency, which depends upon funds from the agency budget, which depends upon the approval of Congress. During any delay, you are expected to maintain the facilities and staff to deliver on the contract when it is continued. A
Data Loading...
