L. A. SECTION ENTERPRISE CHAPTER

Numerous AIAA entrepreneurs are participating in the Small Business Innovation Research (SBIR) program operated by the federal government.

The October 21, 2003 program of the Los Angeles Section Enterprise Chapter addressed featured Joseph Hepp, who has succeeded in capturing four SBIR jobs. His company is Joe Hepp Engineering. He pursues contracts in the technical disciplines with which he has some familiarity, and calls upon retired persons in those disciplines to perform the work. His ability to respond to customer needs is directly related to his Rolodex file on retirees he had met in his workplace or networked with over the years.

He has succeeded in winning one contract involving finite element programs and parallel processors, and three contracts in various aspects of heat transfer and engine design. His company has developed a tool which, by combining features such as data structures, access notation, and looping constructs in a unique fashion, permits finite element analyses to be conducted on several parallel processing platforms to arrive at solutions more rapidly.

In the his powerplant contracts, he has developed a passively metered scheme for automatically adding coolant for localized film cooling when critical wall temperatures are reached that could threaten the structural integrity of a regenerative cooling system. Another contract supports the design of a tube-type heat exchanger in conjunction with an innovative tube-manifold joint to replace heavy plate-fin heavy exchangers currently in use in space propulsion. Finally, he has conceived a powerplant initially designed for ground support equipment. This "vapor engine" relies on external combustion, produces ultra-low emissions, operates on several fuels, does not require a gear box, and uses frictionless bearings.

These contracts are Phase II SBIR’s. While they provide considerably more funds than Phase I SBIR’s, they have funding caps even though they are cost-plus contracts. There are other cautionary items which Joe pointed out. Cost-plus contracts require the approval of the company accounting system before a go-ahead is given, and increase record keeping costs. Accounting policies and procedures, property records and control of government property, work breakdown structures, job costing, and specific forms vouchers for payment, and a demonstrable understanding of allowable and unallowable costs are examples of kinds of information expected of the entrepreneur. The degree of detail required is sometimes at the whim of the specific individual that the government auditing agency assigns to your company. Rigid auditors don’t seem to worry about piling more work onto your small staff. They tend to be less demanding if you prepare some written description - of your chart of accounts, whether you utilize software programs like QuickBooks, who controls expenditures, signs checks, and conducts audits, etc. – in advance of their pre-contract inspection. This preparation is important. In some cases, contract start date has been delayed for months until an approved accounting system was in place.

Unfortunately, many products developed in Phase II SBIR’s remain stillborn. When SBIR’s were introduced, it was hoped that after Phase II, private capital would launch products with commercial promise into the next phase of development. It frequently turns out, however, that a demonstrator must be built before customers can be attracted, and the payback is so slow that private capital is not obtainable. In such cases, further government sponsorship is necessary but hard to come by. Joe was fortunate enough to be able to use profits from previous SBIR’s to fund a large percentage of the demonstrator cost of his vapor engine. We wish him luck in completing this phase of his product development, and in winning production contracts in the future.

You are invited to click on the Archives of Speaker Presentations etc. button on our web site www.aiaaenterprise.org and then click on archive of speaker presentations to view Hepp’s presentation and previous presentations by:

A calendar of Larta Technology Business Events is also featured, along with "links" in the lower left-hand corner of our web site that allow access to business organizations, venture capital firms, government agencies professional societies, publications, etc.

If you wish to let potential customers know about your services, take the opportunity to register on our web site by clicking on the Input Directory button. It's easy to do and it's free!