On July 25, 2024, the Office of Advocacy (Advocacy) and the Small Business Administration’s San Antonio Small Business Development Center visited the Texas Research Institute Austin, Inc. (TRI Austin). TRI Austin is a research and product development institute in Austin, Texas that manufactures products made of versatile materials such as plastic. There, Advocacy met Vice President and Technical Director Michael Dingus, Ph.D., who provided a tour of the facility.
Dingus began the tour by showing and explaining their products, which were on display at the entry to the facility. Dingus explained how building cutting-edge technology that is non-toxic, saves money, and makes the consumer’s job more efficient led to contracting with large government agencies such as the Navy and NASA.
After the tour, Dingus shared a presentation to introduce and inform Advocacy on the business’s operations. He explained how TRI Austin are problem solvers. It is their job, for example, to look at an aging plane and figure out where the stress starts and cracks form. Then, they develop methods to ensure safety when a person gets in the plane and that solution goes to the warfighters handling the plane.
Like many businesses today, they often use artificial intelligence (AI) to offer a quicker and more thorough assessment to fix complex structures like planes. In addition, AI was used to condense data. AI was important to Advocacy staff as agencies seek to comply with President Biden’s Executive Order that requires agencies to expand their use of AI. In addition, several bills come before Congress that seek to educate and regulate AI.
Dingus shared with Advocacy that TRI Austin has had many successes and expansions, which makes the firm size classification a bit difficult for him to grasp. With subsidiaries like their sister company, TRI Austin Technology, which handles the products and product testing at that location, the company has expanded over the last 40 years. However, despite the expansion, TRI Austin still only employs 150 engineers, scientists, and professionals. The term small business refers to a business with less than 500 employees.
TRI Austin is no stranger to challenges. Dingus went over a few of those challenges and how they are handled. One challenge mentioned was the changes made to Section 174 of the Internal Revenue Code by the 2017 Tax Cuts and Jobs Act that went into effect in 2022 and how it will affect research and development expenses. The changes require businesses to amortize research and development expenses over a five-year period, rather than allowing them to be deducted in the year they were incurred.
Another challenge discussed was meeting the costly Cyber Maturity Model Certification (CMMC) process which requires added security to continue participating in contracts with the Department of Defense. Dingus brought up the complex steps small contractors must take to comply but also the costly nature of compliance with the proposed CMMC framework. While TRI Austin retains a lawyer and an HR person to monitor regulations closely, as the VP and Technical Director, he looks through every regulation himself with a fine-toothed comb. He stated that diligence and preparedness are the key elements to make it through most challenges.
Advocacy always benefits from hearing from small businesses and learning about the challenges they face. Please reach out to Advocacy and share your concerns about any rules or regulations that may impact your small business.