The Golden Age of American Innovation: Reforming SBIR-STTR for the 21st Century — Caleb Carr, Vita Inclinata Technologies, Inc.

Summary

Written testimony of Caleb Carr, President and Chief Executive Officer of Vita Inclinata Technologies, Inc., before the U.S. Senate Committee on Small Business and Entrepreneurship on March 05, 2025, for a hearing on reforming the SBIR and STTR programs. The testimony describes how the company's first SBIR award, a Phase 1 award of $75,000, led to further Phase 2 contracts and the Vita Rescue System for stabilizing loads suspended under helicopters. It argues that SBIR is an investment program rather than a research grant and criticizes entities it calls SBIR Mills. It closes with four recommendations: simpler applications, measures prioritizing commercialization, a default to Firm Fixed Price contract vehicles, and caps on awards to curb SBIR Mills.

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                Written Testimony:
                       Caleb Carr, Esq.
              President & Chief Executive Officer
                Vita Inclinata Technologies, Inc.



The Golden Age of American Innovation: Reforming SBIR-STTR
                    for the 21st Century


                           Before the

U.S. Senate Committee on Small Business and Entrepreneurship
                       March 05, 2025
Chair Ernst, Ranking Member Markey, and distinguished members of the committee, thank you
for the opportunity to appear before you to discuss the Small Business Innovation Research
(“SBIR”) and Small Business Technology Transfer (“STTR”) programs.

My name is Caleb Carr, and I am the CEO of Vita Inclinata Technologies (“Vita”), headquartered
in Broomfield, Colorado. I also serve as a board member of the Software in Defense Coalition
and am a professor of entrepreneurship at the University of Colorado. I am honored to testify
before you on the essential nature of the SBIR program, a cornerstone of small business
innovation in the United States.

For over forty years, the SBIR and STTR programs have been the federal government’s flagship
vehicles to harness promising companies’ unique agility for product, value, and job creation.
From industry giants like Qualcomm, to small but mighty startups like Vita Inclinata, growing
businesses have leveraged “America’s Seed Fund” to develop groundbreaking technologies,
bridging the gap between early-stage research and commercialization, and ultimately creating
jobs and economic value in the process.


A Valley of Death Story



Vita Inclinata was not founded with a traditional business model in mind; it was born out of a
personal tragedy and a desperate need for innovation. Over a decade ago, I witnessed a close
friend suffer cardiac arrest during a search and rescue mission. A rescue helicopter arrived, but
due to uncontrollable swinging of the rescue basket caused by rotor wash and winds that night,
the crew was unable to complete the hoist mission. After repeated failed attempts, the helicopter
crew called off the mission. We had no choice but to declare his time of death.
That moment solidified my commitment to finding a better solution for suspended load
stabilization that wasn’t the current practice – a rope. However, as with any hardware innovation,
developing a viable product required significant capital. Time and again, Vita was rejected by
investors who saw the barriers to entry in government procurement as insurmountable. The irony
is that while the U.S. government is often seen as a highly desirable customer due to its
purchasing power and contract stability, early-stage investors recognize the difficulty of breaking
into federal markets, leading to significant hesitation in funding companies like ours.1
Eventually someone, or in this case, something took a risk on us – the SBIR program. In late
2018, Vita won one of the first open topic SBIR contract from AFWERX. The initial Phase 1

1
 This is not inclusive of investment funds which are supported by the DoD trusted capital environment as these
funds are more prone to understanding the US government processes. More informa on can be found here:
h ps://www.defense.gov/News/Releases/Release/Ar cle/2470485/department‐of‐defense‐announces‐
establishment‐of‐the‐trusted‐capital‐digital‐ma/
award of $75,000 gave us the jolt that we needed to take the risk of leaving our day jobs, hiring a
team, and building a solution that wasn’t just a research project but that was something tangible.
This initial success paved the way for the company to go on and win an MD5 SBIR (now NSIN)
and two Phase 2 SBIR contracts to complete the capability.

Eventually, that capability turned into a product known as the Vita Rescue System (“VRS”). A
system that uses thrust to control a suspended load under a helicopter, simply put – a solution
which would have saved my friend over a decade ago. The product went through rigorous Army
testing equivalent to that of aircraft components and is now ready to execute its mission for the
US Government, only slowed down by the length of time that it has taken to get an SBIR Phase 3
transition contract in place. By the end of the year, Vita is on track to receive a Phase 3 $50M
IDIQ to execute on this mission and take this capability to the fleet of US Army aircraft.

The contracting process has taken almost as long, if not longer, than the airworthiness process,
and forced the company to get creative with military customers. We leveraged the Defense
Logistics Agency (“DLA”) to get the VRS into the hands of the warfighter faster than the
contracting processes would normally allow. As a result of the company’s and the government’s
willingness to be flexible, the capability is now in the hands of the entire Air National Guard, Air
Force Reserves, and numerous Army units. Outside of the Department of Defense, the VRS is
now deployed to the battlefield of Ukraine, CALFIRE’s firefighting helicopters that recently
were recently used in the Palisade and Eaton fires, and the UAE Coast Guard, among others.
Through the SBIR program and the initial investment that it made, Vita successfully navigated
the Valley of Death, deployed solutions to our nation’s war fighters, facilitated deep military and
humanitarian international relationships, and moved closer to ensuring that we bring everyone
home, every time.


The SBIR Program is an Investment Program



The SBIR program is not a research grant, it is an investment program. As "America’s Seed
Fund," 2 its purpose is to jumpstart innovation, validate market potential, and accelerate
commercialization. Unfortunately, some entities known as "SBIR Mills" exploit the system by
securing a significant number of SBIR awards without ever transitioning technologies to market.
This practice diverts funding away from companies that could benefit from the program’s
intended purpose.
To establish a real technology and a real solution, you must conduct Research and Development
(“R&D”). That research should focus on the market, the use case, the technology solution itself,

2
  U.S. Small Business AdministraƟon. (n.d.). Small Business InnovaƟon Research (SBIR) program. SBIR.gov.,
from h ps://www.sbir.gov
the unique value proposition it provides. However, the technology is but one part of the equation.
It is critical that companies leverage their tools to complete R&D of all the other pillars of the
technology simultaneously. If you do not, how can one successfully transition the technology
into something meaningful and useful for the end user – in this case, the US Government?

At the end of the day, the SBIR program is meant to be a seed stage investor to encourage parties
to innovate and create. It is not meant to be an R&D slush fund that allows for companies to
survive off the income from the SBIR program due to their ability to win small proposals. Is that
really what we want American businesses to become? People who just complete R&D contracts
which don’t turn into a tangible solution?

I ask these questions because the outcome matters. If Vita would have solely lived off our SBIRs,
we would not be what we are today. Vita would be less than 20 people instead of the nearly 100
people we are now, taking a drip of SBIR funding in exchange for ideas sitting on dusty shelves;
ideas that do not benefit the market or the government. Because Vita took the SBIR capability
commercial, we were able to raise over $70,000,000 in capital, hire nearly 100 staff, and pursue
the global market in addition to the US government. Isn’t this what the SBIR program is meant
to create? Isn’t that what a seed fund is meant to do?


The SBIR Program is a Tool - not a Means to an End


Like many government programs, SBIR is one of many tools in the vast tool chest for executing
development and, eventually, sales within the US Government. It goes without saying that the
US government can be a challenging customer. However, SBIR is uniquely positioned to enable
companies to excel when partnering with the US government.
When Vita first submitted for our Phase 1, the requirement was a 3-page white paper on the idea.
Without this ease of submission, Vita would have never been able to submit for the Phase 1
which made Vita what it is today. This ease was due to the following:

   ‐   Resource Constraints - Everyone had day jobs, including myself. We simply couldn’t
       dedicate 40+ hours a week to a proposal for the US Government.

   ‐   Proposal Simplicity - As an idea, it is just that – an idea. There is nothing tangible yet. A
       simple proposal focused on the future vs. on the past, enabling the company to dream and
       dream big, forcing the company to sell that idea to the SBIR team evaluating the
       possibility of the solution.

   ‐   Unknown Unknowns - The SBIR program, while structured and effective, often focuses
       on predefined problems and solutions. This approach can overlook groundbreaking ideas
           that address unrecognized issues or offer novel solutions to existing challenges.3 How
           does that bring new solutions to the forefront that no one thought about before? For
           instance, Vita's innovation in stabilizing suspended helicopter loads was initially met with
           skepticism, as the industry standard was a simple rope. No one had considered a
           technological solution because it wasn't perceived as a solvable problem.


Collectively, these tools were only possible because of the SBIR program. I am aware of no other
program in the US Government that allows for simplicity but also allows for people to propose
some of the most radical solutions to solve problems that no one knew that they had.



The Opportunity to Ideate and Innovate the SBIR Program


The upcoming SBIR reauthorization offers the opportunity to harness what small businesses do
every day - ideate and innovate for the future. Through this reauthorization, we can create real
improvements that can break down barriers and serve as even stronger catalysts to nurture ideas
and grow them into viable products delivered by vibrant and disruptive companies. Ultimately,

3
    An ac ve SBIR solicita on, SOCOM254‐D002, requires the following:

The capability to provide oxygen therapy and genera on far‐forward will incorporate a design that is both durable
and small‐scale so that it is both portable and able to withstand travel and ground movement while simultaneously
providing the necessary oxygen concentra on to an adult pa ent and is able to generate oxygen by separa ng it
from other gases in the atmosphere. As a part of this feasibility study, the proposers shall address the design
op ons with specifica ons on the key equipment a ributes:
          Able to generate and provide oxygen purity of 93% +/‐ 3%.
          Able to provide 15 liters per minute and capable of suppor ng mul ple pa ents.
          Device must meet MIL‐STD‐810H and Environmental – Joint Enroute Care Equipment Test Standards.
          Device must be dual voltage with ba ery pack capability; capable of running off “shore” power.
          Ba ery has a run‐ me of 6 hours.
          Ba ery charging is compa ble with universal USB‐C; compa ble with external AC/DC (110/240 VAC/12‐
         24 VDC).
          Ba eries are swappable without device losing memory or se ngs; must not require use of hold up
         ba ery.
          Ba ery recharge me is <35 minutes.
          Device has a replace sieve bend and replaceable / cleanable filter(s).
          Device must be able to fit within a standard “D” size oxygen cylinder mount (4.5” diameter x 20”
         length).
          Device is compa ble with standard connectors.
          Device must have a tac cal se ng that allows audible alarms to be completely disabled or reduced to a
         level acceptable by the FDA.
          Device must have a tac cal se ng that changes all light sources or visual screens to the lowest level
         acceptable by the FDA.
          Device must weight < 5 lbs.
          Device is easily transportable by a single person.
the best SBIR model will incentivize small business participation, boost competition for awards,
reduce undue bureaucratic process and contracting burdens, and employ mechanisms to help
worthwhile awardees transition from start-up to viable and self-sufficient companies.

The intent and practice should be for every awardee to transition. The SBIR program is not and
cannot be viewed as “corporate welfare,” where applicants compete for dollars that go into an
R&D “black hole.” The newly reauthorized SBIR program should include a system that
identifies the most promising technologies and has the necessary controls to ensure any
government dollar invested is working toward this end – a real transition based on successful
products brought to market, jobs created, procurement contracts secured, and captured revenues
reinvested in a business’ long-term growth. As such, I recommend the following:

   1. Simplify and streamline the application and administrative processes by providing tools
      to submit simple applications that have quick response turn arounds and facilitate more
      entrants into the market.

   2. Install measures that prioritize successful product commercialization over research alone.
      Whether it’s including a mandate for program executives to account for Phase III funding
      in the PPBE (Planning, Programming, Budgeting, and Execution) process or simply
      conducting more oversight to ensure decision-makers and Commercial Technology
      Pipeline (CTP) partners are communicating and equipped to match available funding
      with the best technologies, methods to helping the right companies bridge the Valley of
      Death and achieve commercialization are necessary.

   3. Default to Firm Fixed Price contract vehicles, with other options for contract vehicles
      remaining available to meet specific needs of different products enabling small
      businesses to be nimble and flexible as they work to get off the ground in the early days
      of the company.

   4. Eliminate “SBIR Mills” by capping award and funding opportunities bringing back the
      SBIR program to what it is meant to be – a seed investment fund to create value not items
      that sit on a shelf.

Building on the myriad successes of the SIBR program, while incorporating lessons learned over
time, we have an opportunity to refine and modernize the system—reducing administrative
burdens, enhancing commercialization pathways, and expanding access to diverse and emerging
innovators. By addressing these challenges now, we can ensure the SBIR program continues to
drive technological leadership and economic prosperity for generations to come.

Thank you for the opportunity to testify before you today and for all you do to enable small
business success. I look forward to answering your questions and working with this committee
and our stakeholders to strengthen the SBIR program for the future.


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