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So I would object strongly to reducing it. I think the Grovernment 

 needs to get the most efficient, most productive sector of the econ- 

 omy in. We have got to remember small business still only gets 3 

 percent of total R&D expenditures and considering that, every 

 study says small business has less overhead, has less cost per sci- 

 entist, and more innovations per employee, and more innovations 

 per R&D dollar. It seems that to cut that back would fly in the face 

 of good solid business. 



In the discussion of private enterprise, we have to remember 

 Government contracting is not private enterprise. We have a sys- 

 tem that we have artificially set up and competition is way down 

 on the list The thing that has always upset me is how many Gov- 

 ernment contracts and especially at the different agencies that we 

 talk about are awarded with no competition. Small business gets 

 about 40 percent of the competitive solicitations across the board. 

 The reason they only get 20 percent overall is because they get 

 such a low percentage of the sole-source contracts. Probably the 

 most important thing we can do for small business overall is make 

 it competitive. 



The beauty of this program, it is the most competitive program. 

 We have got 10 people fighting for every award that is granted. To 

 cut back on this program would be a horrible mistake and I would 

 oppose it vehemently. 



Mr. Rezendes. I would add a comment to that. I think from our 

 perspective we only looked at from the recipients, the SBIR side. 

 We found that there it is a very competitive prospect and there are 

 a lot of potential awardees. We found out, as I mentioned earlier, 

 no diminishing in terms of the ratio between proposals and award- 

 ees. So, obviously, there is a need and in our previous work showed 

 us some success in the program as these projects mature and be- 

 come commercial. There are some paybacks here. 



I guess we really should get into Dr. Norwood's point. The point 

 I want to make is that he is inferring that the agencies are giving 

 up some critical research that they cannot get done through this 

 program. That is not the side that we have looked at or I believe 

 any of the other panel have looked at is the NASA research that 

 is going by the waste. 



I think what really needs to be done is each of the agencies in- 

 volved need to come forward with what exactly, what tradeoffs that 

 they are making and what they are giving up for doing this pro- 

 gram. That is the piece that is missing here. 



Chairman Torkildsen. The program was certainly designed to 

 extend R&D work to small business. It was not designed to set 

 aside funds for small business that went into work other than 

 R&D. Mr. Little. 



Mr. Little. I think that the small business percentages, in ef- 

 fect, are shrinking anyhow. It shrinks for two factors. One is with 

 the advent of the SBIR Program and its growth, small businesses 

 almost get no mainline R&D funding from agencies. They are di- 

 rected to go to the SBIR Program. So, that has come down on 

 mainline funding. 



The second thing is the percentage is based on the extramural 

 R&D budgets. As the budgets for R&D are cut back throughout the 



