Arizona state firms seek fed research funds

2 companies thriving on military

The U.S. military may someday be carrying palm-size devices that can detect anthrax on the spot, thanks to research from a small Phoenix company.

Jane Larson
The Arizona Republic

http://www.azcentral.com/arizonarepublic/business/articles/0307Innovators07.html

Or commanders may send intelligent, unmanned vehicles crawling through enemy territory, developed with ideas from a Tucson company that built battling robots.

The military might not have the image of a font of innovation, but it actually spends billions of dollars a year on defense research. And Arizona companies that dare to think big regularly tap those funds.

Both Ribomed Inc. of Phoenix and Rob Meyer Productions in Tucson are coming up with new ideas inspired by a little-known outfit called the Defense Advanced Research Projects Agency, or DARPA. It’s essentially the research-and-development arm of the U.S. Defense Department, charged with funding cutting-edge technology that could prove useful to the military.

Ribomed won a $2.85 million, one-year contract in January to develop a DNA, RNA and protein-detection system for the agency and prime contractor Northrop Grumman Corp. It followed two smaller contracts the company won to prove its concept worked, said Maria Laughner, director of business development for Ribomed.

Detecting deadly agents like anthrax now requires a system that uses electricity to bring the substance to high temperatures, she said. But DARPA is trying to make everything smaller and portable, and it sought out Ribomed because it had heard about founder Michelle Hanna’s work creating diagnostics for cancer, Laughner said.

The company, which had just 10 employees before the contract swelled its workforce to 21, wasn’t intimidated by the idea of working with defense giants.

"We had a real can-do attitude," Laughner said. "We know the technology is solid, and the proof is they found us."

Also catching the military’s eye is Rob Meyer Productions, the only Arizona company among 25 competing for a $1 million prize DARPA is offering in its 2004 Grand Challenge. The agency will award the prize to the first team that can send an unmanned, autonomous vehicle across the desert between Barstow, Calif., and Las Vegas later this month. It’s part of the military’s search for a vehicle that could sense its environment, control its own speed and travel a route without human control.

Company founder Rob Meyer did not respond to calls about his vehicle’s progress, but the finalists are expected to show up at the California Speedway on Monday to qualify their vehicles.

Even outside DARPA, the Defense Department is a big source of funding known as Small Business Innovation Research grants.

The grants, made by Defense and other federal agencies, are designed to encourage technological innovation in small firms and solve national problems at the same time.

Small Arizona firms captured 986 such grants worth $159 million between 1983 and 2000, according to U.S. Small Business Administration figures.

The grants are for companies like Ribomed, whose technology is ahead of any demand in the market, said Sharon Ballard, an instructor and coach with Arizona State University’s Technopolis program. That kind of technology is new and risky, but even a failure will move research forward, she said.

Ballard, who grew her San Diego-based software firm partly with innovation-research grants, thinks Defense Department dollars are a great way for small companies to get their innovations going.

For one thing, the department is looking for real answers to real problems, such as getting information to soldiers in the battlefield or to satellites in space.

Unlike private industry, the department readily shares information with small companies on what it needs, how much it will spend and whom to contact, Ballard said.

The chances of winning a research grant to fund a business also are higher than the chances of getting investments from venture capitalists or friends and family, she said.

And when a company has an answer to a defense problem, the department is eager to buy products in big volumes, she said. That’s in contrast to agencies such as NASA, which also fund small-business research but buy only one or two Mars rovers at a time, or the National Science Foundation, which doesn’t buy the products and services that come out of its research, Ballard added.

Ribomed’s Laughner said the Northrop Grumman team must go through three more phases and beat out a competing team before its detection devices would become reality. But if it succeeds, it could mean a lucrative licensing deal and research that will help the company’s medical applications, too.

"We’re looking beyond this for further opportunities," she said.

Reach the reporter at [email protected] or (602) 444-8280.