Caren B. Les, News Editor, firstname.lastname@example.org
Photonics companies large and small and
their technologies have benefited from government contracts, and there is little
doubt that we all benefit in the end from the resulting technology development.
Photonics cluster executives provide insight into the world of government contracts
– including advice on how to obtain them, areas of current technological interest,
and the issues, concerns and challenges involved. A government contracts lawyer
also shares her views.
Companies and academic research centers within the Florida Photonics
Cluster (FPC) based in Orlando, are pursuing government contracts in Department
of Homeland Security-related applications, such as the detection of explosives and
hazardous materials, as well as in military applications, such as improvised explosive
device detection, target designation and unmanned aerial vehicles.
They are also involved in seeking contracts for life sciences
and medical applications, such as high-speed diagnostics and high-resolution imaging,
minimally invasive surgery and nanoscale sensors, said Alex Fong, president of the
FPC, and James Pearson, executive director. High-efficiency solar cells and other
forms of alternative energy, optical communications and all-optical computing are
also hot topics, they added.
“Detection on images of very small scale represents a ripe
industry for government contracting. Detection of relatively small disturbances
in huge relative backgrounds, be they at the biomedical tissue level or improvised
explosive devices at the scale of hundreds of square miles, is a technology coming
into its own,” said Robert Breault, chairman of the Arizona Optics Industry
Association and president and founder of the Breault Research Organization Inc.
in Tucson, an optical engineering firm with global reach.
Robert Breault, chairman of the Arizona
Optics Industry Association, meets with a business delegation visiting from Korea.
Courtesy of Breault Research.
He added that devices for detecting terrorists, new materials
development, and the areas of biosciences, health and nano-technology are other
fields in which government contract work may be available. Breault said that his
impression is that various forms of military hardware have been a haven for some
small photonics companies that are vendors to prime contractors. The hardware contracts
tend to weather typical recessions, so they can be considered as an offset –
if a vendor qualifies to meet the high standards of the contractor, which can be
a challenge for a small company, he added.
The US Small Business Administration’s Small Business Innovation
Research (SBIR) contracts have also been a source of revenue for small- to medium-size
enterprises for developing products in the aerospace and commercial markets in spite
of the recession; however, in Congress there have been many assaults on the SBIR
and Small Business Technology Transfer (STTR) programs, Breault said.
The National Institutes of Health, the US Department of Homeland
Security, the National Science Foundation and the US Department of Defense seem
to be the main drivers for R&D funding and even product development, according
to FPC executives. The National Institute of Standards and Technology also has some
good opportunities in R&D and in manufacturing assistance, but the executives
believe that the funding available is less than from the other agencies.
In terms of the importance of government contracts to FPC members,
Fong and Pearson said that the contracts tend to be more critical for the larger
firms such as FPC members Northrop Grumman Corp. Laser Systems of Apopka, Harris
Corp. of Melbourne and Lockheed Martin Missiles & Fire Control of Orlando, all
in Florida, than for the smaller firms, which tend to be aimed more at industrial
They noted that during the past 18 months, a fair amount of growth
in the industry throughout has benefited directly or at least indirectly from the
Offering a somewhat different view, Breault commented, “An
enormous amount of stimulus money has gone to banks, financial institutions, national
labs and various government departments and to state governors. Very little of that
has trickled down to the small- to medium-sized enterprises that are the backbone
of the US economy and are the dominant size of many of our companies in the optics
He agreed that government contracts have always been very important
to photonics cluster members. “In the 1980s, the optics industry lived off
the aerospace industry, and in the 1990s there was a proliferation of commercial
optical products, many of which were developed with major government funding. The
biomedical industry and the consumer electronics industry, particularly the display
market, have greatly benefited from the needs of the various government departments,”
Breault added that current government-regulated bank lending requirements,
funding for the wars in the Middle East, and the recession have all negatively affected
small- to medium-size optical enterprises.
“In the past 10 years, the US government export regulations
imposed severe restrictions on industries of all sizes, research labs and universities.
Added to the commodity and other control lists have been stricter interpretations
in the field of the terms called ‘dual use’ items, and on a newer term
called ‘deemed exports.’ These new rules have had a catastrophic effect
on US competitiveness. Fortunately, this seems to be recognized by all parties concerned,
and just about all various US agencies, up to the president, are making some positive
moves to take the handicaps off the innovativeness of US organizations at all levels,”
“Speaking from the small business standpoint, government
contracts, especially SBIRs, are very critical for photonics cluster members,”
said Giovanni Tomasi, CEO and chief technology officer of RSL Fiber Systems LLC
of East Hartford, Conn. “SBIRs allow a small business to develop a product
using government funding while retaining the intellectual property on the item.
“Cluster members also benefit from government contracts
awarded to larger contractors because these will flow down to the member companies
through subcontracts for parts and services. It is often easier to work on a government
contract as a subcontractor to a larger company than directly with the government,”
he added. RSL provides remote source lighting technology for use on US Navy ships
and for various commercial applications. Tomasi is also president of the Connecticut
Optics and Photonics Association, of which RSL is a member.
Challenges to obtaining contracts
Considering challenges and difficulties in the pursuit of government
contracts, Fong said that nationality of the parent company can be a stumbling block.
For example, Gooch & Housego LLC, which is a US subsidiary of Gooch & Housego
plc (UK), does not qualify for many otherwise applicable opportunities, such as
the US SBIR contracts, despite being a US facility, employing US citizens and paying
US taxes. International Traffic in Arms Regulations also make defense work very
difficult, which is ironic because the UK is an ally, said Fong, who, besides being
FPC president, is also vice president of life sciences and instrumentation at Gooch
& Housego, which manufactures precision optical components and subsystems, and
light measurement instrumentation.
“For some R&D contracts, teaming with a university
group like CREOL [Center for Research and Education in Optics and Lasers], the College
of Optics and Photonics, University of Central Florida, in Orlando, is a great asset,
sometimes an essential element for a successful proposal,” Fong said.
Top, student John Broky participates
in research at CREOL. Bottom, Max Bonner, a student at the College of Optics and
Photonics at the University of Central Florida, conducts research. Photos courtesy
of CREOL and FPC.
“Making the right contact is a challenge – and then
keeping the government-funded equipment together to carry on the research to fully
commercialize the new products,” said Breault, who added that the government
requires highly detailed “Technology Control Plans,” which can add up
to a significantly time-consuming amount of paperwork for a company.
“Small-to-medium enterprises need Washington ombudsmen
to champion their cause,” he said. “The big companies have lobbyists
who get the job done for them. In general, the small-to-medium enterprises have
solutions that need a home, but they are rejected at the door of the government
departments that could use them. Their ideas do not get heard. I believe in the
peer review process in general, even though it too comes with flaws. We need optics-related
proposals to be peer-reviewed by optics people,” he added.
“Based on the experience of RSL Fiber Systems, before a
government agency will consider a company for a contract award, including the award
of an SBIR, the company needs to make a significant investment in time and engineering
effort in order to become known by that government agency or department,”
Students learn to use optical software in the tutorial room at Breault
Research Organization, a member of the Arizona Optics Industry Association. Courtesy
of Breault Research.
“Companies operating in the commercial sector often have
difficulty understanding the process required to identify and bid government contracts,”
he added. “Government contracts typically require an extensive and detailed
cost tracking, accounting and product documentation system that many businesses
operating in the commercial segment do not have or are not familiar with. These
requirements add to the overall operating costs of the organization and of the end
product. Small businesses often underestimate the costs associated with fulfilling
a government contract. The terms and conditions of the contracts are often several
hundred pages long and reference additional external documents.”
The process of gaining access to government contract funding can
be daunting and has been likened to game hunting by Breault: “As is often
the case in hunting, winning government contracts is a knowledge- and experienced-based
sport. The more places you know, the more places you have hunted, or the more people
you know who can put you in contact with federal organizations that would benefit
from your technology, the more contracts you will win. Optics is still a young industry,
and there are not many small-to-medium enterprise CEOs that can rattle off a dozen
potential sites to go looking for a contract.
“The steps involve knowing the right season for the right
region and organization. SBIR contracts are let out annually at different times
by different departments. Knowledge and experience will help, and clusters and other
types of organizations can provide assistance. So often for small companies, the
hunt is a failure, and they stop looking. Prime contractors and the larger enterprises
can often help make the right contact.
A gas-sensing radiometer designed and fabricated at Breault Research
undergoes preflight testing. Courtesy of Breault Research.
“On the commercial side, schmoozing is a necessity. The
small companies need to first find a niche and then invest their profits into bigger
markets that they can grow into or, in optics especially, grow up with,” Breault
said, adding that, in every company, it is the role of the CEO to assure that the
revenue is generated but that it is best when both CEOs and engineers have had a
successful track record of working together.
“I believe that the routine in universities is more or less
the same. New professors and researchers team up with experienced ‘finders’
from whom they gain knowledge, experience and contacts. Contacts are a main resource,”
Services like FedBizOpps.gov, the Federal Business Opportunities
online database, are really only an after-the-fact mechanism for applying to bid,
according to Fong and Pearson. “You really need contacts within the government
who have an interest in your solution to tip you off about what might be coming
up. Once that’s done, the rest is pretty straight-forward contract proposal
work,” they advised.
The Florida universities have excellent resources for keeping
their research faculty informed of opportunities, so having good, active contacts
at the universities (particularly CREOL at the University of Central Florida) is
very useful. A contract bid can be initiated by a company or a university, depending
on the size of the company and who sees the opportunity first, Fong and Pearson
Shown is the optical setup for demonstrating a rewritable 3-D holographic
display based on photorefractive polymers. The 532-nm green laser beam is split
into reference and object beams, which then interfere to write the hologram in the
polymer. The equipment is housed at the University of Arizona’s College of
Optical Sciences in Tucson, a photonics cluster member. Photo courtesy of the College
of Optical Sciences, University of Arizona.
In Florida, there are several resources that can help companies
and individuals better understand what is needed for successful government proposals.
Examples include the University of Central Florida Business Incubation Program (www.incubator.ucf.edu),
the Florida Economic Gardening Institute (www.growfl.com), the Florida High Tech
Corridor Council (www.floridahightech.com) and the Manufacturers Association of
Central Florida (www.macf.biz), all of which are members of the FPC.
RSL’s Tomasi said that the SBIR and STTR programs are two
of the best ways for a small business or academic organization to become involved
in government programs. “However, the organization should identify the government
agency or entity that may be interested in their products or technology; work with
this agency to define an SBIR or STTR topic; then, once the topic is released, submit
a proposal. This will greatly increase the chances of being awarded the SBIR or
STTR,” he explained.
“There is no dishonor in the hunting down and winning of
government contracts. The awarded contracts lead to a more competitive nation and
almost always can have a substantial benefit to mankind,” Breault said.
“It is not the big companies versus the smaller ones, even
though the manpower often makes it seem like that. The small- to medium-size companies
have traditionally been more agile and faster to go into high-risk technologies.
If they do not succeed, their failure usually carries a lesser stigma than a failure
in a big company. Often enough, not to the exclusion of the big organizations, the
real innovation starts within some small company that finds a market niche and then
As a photonics cluster chairperson, Breault has often seen the
great benefit of the large companies sitting down with the smaller enterprises and
talking. “These are my problems; what are your ideas on how to solve it? Let’s
both work to find money to fund the project.”
A legal perspective
Photonics companies can turn to the legal profession for guidance
in procuring government contracts.
Susan Ebner, an attorney who regularly oversees government contracting
matters, said she has handled projects relating to optical scanning and retrieval
systems, radar, robotics, lighting products and organic solar lighting. “In
these kinds of projects, I have been involved with smaller and larger businesses,
startups and established companies, nonprofits and academic institutions,”
said Ebner, who works with Pittsburgh-based Buchanan Ingersoll & Rooney PC.
She helps clients at all stages in the process of obtaining government contracts.
In describing her services, Ebner says she helps companies figure
out how to provide their ideas and information to the government while protecting
proprietary technology and information. She drafts and negotiates nondisclosure
agreements, teaming agreements, contracts and subcontracts for companies as they
set up strategic alliances between themselves and/or the government.
“When problems arise during performance, or where a government
audit or investigation is conducted, I work with clients and the government personnel
to resolve problems identified as efficiently as possible and at the lowest level,”
she said, adding, “I have represented clients in bid protests when they have
concerns about procurement terms or restrictions, or not being awarded the contract,
and have handled the litigation or alternate dispute resolution of claims that arose
from contract changes, as well as audits or investigations.
“There are costs of doing business with the government.
Knowing what your requirements are and factoring them and the costs of compliance
into your proposal and later contract performance will help ensure that you can
successfully perform and actually make money working on a government contract. The
challenge for many companies is thinking strategically as early as possible and
getting advice where you need it. If you do this, you can succeed in government
contracts,” Ebner said.