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Why partnerships are critical to federal R&D projects

By Posted on February 12, 2016
Blog

Danny Allen
Manager, Venture Services
NextEnergy

In energy and transportation, federal research and development grant programs represent attractive opportunities to fund the advancement of a company’s technology readiness level and development of its IP portfolio. The Department of Energy plays a critical role in the development of next-generation energy technologies and is a significant economic development driver. Therefore in my opinion, every technology-intensive company in the energy or transportation space ought to continually assess different DOE, DOD, NSF, etc. federal R&D grant opportunities as ways to build its business and gain competitive advantage.

But developing a strong proposal takes work. Proposals that are ill-conceived, deficient, or incomplete are resource drains and counterproductive to a company’s mission. The worst of proposals still require a great deal of preparation time, and can create a poor publicly-facing impression. There are numerous elements of a proposal that determine its quality — clarity, proper use of grammar, realism of milestones, accurate budget, value of the technology improvement, etc. — but an especially critical element is the proposal’s team of partners. The best federal R&D proposals have a well-rounded, comprehensive set of partners that not only support the project, but also the company’s path to success.

Robust partnerships can make your proposal more competitive. Federal granting agencies do not seek to fund research that is incomplete or occurs in a vacuum, and when a proposal doesn’t include strategic project partners, the R&D can appear isolated and inert. The DOE, for example, wants to see its funded research and resulting technologies be shared with the scientific community and ultimately adopted in the market. Proper development, dissemination, and adoption of the technology likely will not happen without adequate project partnerships. Thus, adding partners will make your proposal more attractive and legitimate to the granting agency.

Beyond the merits of the technology R&D, integrating partners into a proposal can make a project far more valuable to your company by leveraging the federal grant as an excuse to develop relationships critical to your company. The prospect of a high-impact, DOE-funded subcontract makes many potential partners’ ears perk up, more so than if a company was reaching out otherwise. The federal grant provides a financial incentive for partners to seriously consider working with a startup or small company, and often the upside benefit outweighs the downside risk for partners. If your company’s project has sufficient technical value, the proposal can serve as a credible foot in the door of potential key partners.

What do I mean by project partners? These are companies (large corporations or small startups) or research institutions (universities, national labs, independent labs) that perform notable portions of a research project’s scope of work, to varying degrees. For example, a project partner could be a subcontractor that performs almost half of a project’s technical work, or a technology validation partner not included in the project budget that provides feedback.

There are three primary partner archetypes that plug three primary capability gaps:

  1. R&D gaps: The first is a partner that provides complementary R&D capabilities or technologies to the project. The motivation behind including this type of partner is simple: your company alone is unable to fulfill all of the R&D activities or milestones of the project, so you must incorporate partners with the missing expertise, equipment, or technology to complete those milestones.
  2. Credibility gaps: The second is a partner that, using its credibility and technical capabilities, can validate and legitimize a technology developed through a proposal. This partner’s work may come in the form of performance testing, certification according to certain standards, or pilot demonstrations. A company can borrow some of this partner’s credibility and apply it to its own technology to secure additional funding, customers, partners, etc.
  3. Commercialization gaps: The third partner archetype is a commercialization partner. The term “commercialization partner” is intentionally broad, and often overlaps with the previous two partner archetypes. These partners are, for the most part, larger companies that represent a company’s potential future customer, supplier, or channel partner that could accelerate the company’s growth. For example, if my company is proposing the development of a new sensor for industrial equipment, I might want to include Rockwell Automation as an R&D and commercialization partner, because Rockwell could be a valuable future customer or marketing channel partner. Working with Rockwell on a federally-funded R&D program would further the relationship and secure its initial buy-in to the technology.

As we all know, fruitful relationships do not develop overnight. It is important to allow enough lead time before a federal grant program’s deadline to reach out to potential partners and begin the relationship-building process. Check out a past Funding Findings blog about courting the right funders for some tips. Additionally, ensure that your company has a solid understanding of what the motivation or incentive is for you and your potential partners alike. You may not know upfront what each partner wants to get out of an R&D project with you, but make hypotheses to inform and sharpen your outreach.

This month’s featured funding opportunity is the DOE EERE’s Vehicle Technologies Office FY16 Wide FOA. It is the VTO’s annual solicitation that seeks proposals for technology innovations in a number of different areas related to vehicles, including lightweighting, advanced batteries, vehicle electrification, engine technologies, and more. A mandatory concept paper is due on February 18th at 8pm ET. The VTO Wide FOA program is an attractive funding opportunity for companies in the vehicle space for a couple of reasons. First, its technology focus areas are broad enough to make the FOA applicable to many companies. Second, due to the nature of the automotive/vehicle industry, this FOA is ripe for partnership opportunities. This opportunity can be the excuse for small companies with innovative technologies to reach out to OEMs, Tier 1s, and other large industry players to build an R&D relationship, and hopefully in the future, a commercial relationship.

Even if your company is not in a position to pursue the VTO’s FY16 Wide FOA at this point, use it as a thought experiment to identify how your company could leverage federal funding programs to develop strategic partnerships. With that forethought, it will be easier to use federal R&D funding to not only build your technology, but also build your business.

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