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Wednesday, June 9, 2010
Mass. excels in landing stimulus funds for tech; More grants available
By Galen Moore
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In Massachusetts, where businesses and government agencies are already adept at applying for federal money, the land rush for stimulus funds is over. Now some businesses say the competition for research grants has gotten stiffer.
Opportunities associated with the American Recovery and Reinvestment Act (ARRA) catalyzed many more grant writers than normal. Not all of them got the funds they sought, and now they are looking for other opportunities.
“It led to some tens of thousands of grants swimming around in the system,” said Robert McBurney, founder and chairman of Differential Proteomics Inc., a Beverly startup, and the former chief scientific officer at BG Medicine Inc. “There’s a lot of potential noise in the system created by these grants.”
The U.S. government has spent less than half of the $275 billion in contracts, grants and loans it has budgeted in its $787 billion stimulus package — but the government already knows where most of the dollars are going, officials say. Approximately $5.6 billion in grants, loans and contracts is expected to flow to Bay State companies, nonprofits and government agencies through ARRA, state officials estimate. That figure is part of $13.8 billion expected in total, including tax benefits and entitlement programs.
State records through the end of the first quarter show that just over $5 billion is already under contract to government agencies, research institutions and companies for programs to be performed in Massachusetts. A handful of opportunities remain, as do opportunities for vendors and subvendors to grant-funded entities, but by and large the checks are in the mail.
The estimate won’t be the whole story, predicted Jeffrey Simon, director of the Massachusetts Recovery and Reinvestment Office. “I think we’ll probably be over (the $5.6 billion estimate) because we’re doing so well in some of these areas.”
Simon cited National Institutes of Health grants as a particularly active area for the state. The NIH is expected to fund approximately $522.8 million in grants, loans and contracts to be performed in Massachusetts, and is expected to administer $40.3 million more funded by the U.S. Department of Health and Human Services, according to data obtained from Simon’s office.
The NIH’s largest grant is worth $15 million and will go to MIT to renovate the university’s facility for lab animals. But most of the NIH programs — over 1,000 of the 1,240 or so grants, loans and contracts funded or administered by NIH to be performed in-state — are worth $500,000 or less.
Aphios Corp. was among the many small-grant recipients. The Woburn company is receiving $500,000 from Health and Human Services through a grant administered by the NIH to bring to market a novel approach to attacking viruses. “It’s basically giving a viral particle the bends,” said president and CEO Trevor Castor. “We inflate a viral particle with gas and we release the pressure and they pop at the weakest point.”
The company will use the funds to build a large demonstration unit to show the technology to potential pilot customers. Castor said he has applied for grants before, but the ARRA process was more competitive. In the end, he speculated, Aphios won out because of how long the company has been working on its technology — since 1993. “I think it was good science and the relatively mature tech that needed a final push to get it to commercialization,” he said.
Other small companies found success with mature technology. Fall River sensor maker Micro Magnetics Inc. received $500,000 from the National Science Foundation and $300,000 from the National Institute of Standards and Technology to scale up production of its spintronic hard-drive reader, which the company has been working on since 2000. The product is now being delivered to about 50 customers, but the company needs funding to figure out how to increase production, said chairman and CTO Gang Xiao. “Because we make devices, equipment is expensive. But more expensive is people,” he said of the 10-person company. “We have two Ph.D’s. Almost every employee has a bachelor of science.”
Much of the $5 billion already allocated for Massachusetts-based programs through ARRA is not related to technology. The top 10 grants, contracts and loans, ranging from $59.6 million to $813 million, went mostly to state education, housing, transportation and environmental protection.
The U.S. Department of Energy was not the state’s biggest federal stimulus benefactor, but the agency is writing the largest technology-related checks in Massachusetts. The DOE is planning to fund $376.1 million in total for programs in the Bay State, including $54.9 million to the state government itself for energy-related programs and $50 million to BioEnergy International LLC, a Quincy-based renewable chemicals company, to produce succinic acid, a biological alternative to industrial petrochemicals.
Close to $48 million of the $54.9 million state grant, administered by the Massachusetts Division of Energy Resources and the Massachusetts Clean Energy Center, is already under contract, said Energy Resources Commissioner Philip Giudice. Boston-based EnerNOC Inc. (Nasdaq: ENOC) was among the largest beneficiaries, with a $10 million contract to deliver monitoring systems for government buildings, announced in April. Remaining funds are set aside for oversight of projects that have already been granted. The Division of Energy Resources is also setting aside some money in hopes of combining it with another pending grant. The state is seeking to participate in a $25 million DOE program to develop new ways of financing energy efficiency programs included in Massachusetts’ Green Communities Act.
Even with the stimulus money largely wrapped up, funds for energy programs will continue flowing in the Bay State, Giudice predicted. ARRA will bring about $85 million to government entities in Massachusetts, compared with about $1 million in a typical year — but the state itself has spent $200 million to $250 million a year on energy programs, he said.
Another stimulus grant application that remains outstanding is the state’s quest for $45 million to support a middle-mile broadband expansion through central Massachusetts. Similar to Opencape Corp., a project on Cape Cod funded by a $32.1 million stimulus grant announced in March, the Central Massachusetts project would create opportunities for a list of contractors who prequalified last fall.
“We do not plan to run the network ourselves,” said Judy Dumont, director of the Massachusetts Broadband Institute, which is administering the grant application. “We will be looking for a network operator. That’s actually the first RFP we’ll be issuing.”
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