Last month the Department of Energy issued a flash policy memo limiting indirect rates on grants to for-profit entities to 15%. (https://www.energy.gov/articles/energy-department-aligns-award-criteria-profit-non-profit-organizations-and-state-and). The Small Business Technology Council is concerned that this cap will have unintended consequences that may make it difficult if not impossible for many small businesses work with the DOE. For businesses without significant cash reserves or financial backing, an indirect rate limit of 15% is simply not economically viable, and would result in losses of 30%-35% of the value of the grant. Few small businesses can afford to absorb such large losses.
SBTC has sent a letter to the Secretary of Energy Chris Wright asking that he review this policy and consider reversing it, or at least exempting small business programs like SBIR and STTR from it. For DOE to benefit from the innovations that high-tech small businesses generate, small businesses have to be able to make money from grants. This new policy will severely disincentivize participation by small businesses in the SBIR, STTR, and other research programs, and will make it that much more difficult for DOE to help the US maintain its energy technology leadership in the world.
To read the letter, follow the link below: