To Extend the SBIR and STTR Programs, and for Other Purposes — House Report 119–265, Part 1
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Summary
House Report 119–265, Part 1, submitted September 10, 2025 by Mr. Williams of Texas from the Committee on Small Business to accompany H.R. 5100, a bill to extend the SBIR and STTR programs, together with minority views. The Committee reports the bill favorably without amendment; it held a hearing on February 26, 2025 and ordered the bill reported on September 9, 2025 by a roll call vote of 27 ayes to 0 nos. The section-by-section analysis states that the bill extends SBIR and STTR authority and several related pilot programs and initiatives from September 30, 2025 to September 30, 2026. The report includes the required House statements and a comparative print of changes to section 9 of the Small Business Act. The minority views, signed by Ranking Member Nydia M. Velázquez, support a one-year extension while a comprehensive package is negotiated.
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“To Extend the SBIR and STTR Programs, and for Other Purposes — House Report 119–265, Part 1.”
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119TH CONGRESS REPT. 119–265
" HOUSE OF REPRESENTATIVES !
1st Session Part 1
TO EXTEND THE SBIR AND STTR PROGRAMS, AND FOR
OTHER PURPOSES
SEPTEMBER 10, 2025.—Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. WILLIAMS of Texas, from the Committee on Small Business,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 5100]
The Committee on Small Business, to whom was referred the bill
(H.R. 5100) to extend the SBIR and STTR programs, and for other
purposes, having considered the same, reports favorably thereon
without amendment and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary ........................................................................ 2
II. Need for Legislation .................................................................................... 2
III. Hearings ....................................................................................................... 2
IV. Committee Consideration ........................................................................... 2
V. Committee Votes ......................................................................................... 2
VI. Section-by-Section of H.R. 5100 ................................................................. 4
VII. Congressional Budget Office Cost Estimate ............................................. 4
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 4
IX. Oversight Findings & Recommendations .................................................. 4
X. Performance Goals and Objectives ............................................................ 4
XI. Statement of Duplication of Federal Programs ........................................ 5
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits ..................................................................................................... 5
XIII. Federal Mandates Statement ..................................................................... 5
XIV. Federal Advisory Committee Statement ................................................... 5
XV. Applicability to Legislative Branch ........................................................... 5
XVI. Statement of Constitutional Authority ...................................................... 5
XVII. Changes in Existing Law Made by the Bill, as Reported ........................ 5
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XVIII. Committee Correspondence ........................................................................ 62
XIX. Minority Views ............................................................................................ 64
59–006
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I. PURPOSE AND BILL SUMMARY
On September 2, 2025, Chairman Roger Williams, introduced
H.R. 5100, to extend the SBIR and STTR programs, and for other
purposes. Chairman Williams introduced H.R. 5100 with Ranking
Member Nydia Velázquez, and House Science, Space, and Tech-
nology Committee Chairman Brian Babin and Ranking Member
Zoe Lofgren. H.R. 5100 extends the authorization of the Small
Business Innovation Research (SBIR) and Small Business Tech-
nology Transfer (STTR) programs, along with related pilot pro-
grams and initiatives, to September 30, 2026.
II. NEED FOR LEGISLATION
For over four decades, the SBIR and STTR programs have fueled
American innovation by providing early-stage funding to small
businesses developing cutting-edge technologies tailored to federal
agency needs, including those critical for national defense. These
programs are set to expire on September 30, 2025.
The SBIR and STTR programs provide small businesses with ac-
cess to compete for existing federal research and development
(R&D) funding by setting aside a small percentage of existing fed-
eral R&D budgets specifically for small innovators. Agencies with
large extramural R&D budgets over $100 million must participate
in SBIR and over $1 billion must participate in STTR. Should these
programs expire, small businesses could be cut out of federal inno-
vation with 11 participating agencies, as those dollars would likely
be redirected to large firms.
This legislation is necessary to prevent the authorization of the
programs from lapsing as Congress continues to work towards a
long-term reauthorization that would strengthen both programs for
small businesses across the country. Without a one-year extension
small businesses risk losing access to the funding they rely on to
innovate and bring technologies to the market.
III. HEARINGS
On February 26, 2025, the Committee on Small Business held a
hearing examining matters related to H.R. 5100 entitled ‘‘Fostering
American Innovation: Insights into SBIR and STTR Programs.’’
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on September 9, 2025, and ordered H.R.
5100 to be reported favorably to the House of Representatives by
a roll call vote of 27 ayes to 0 nos.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representa-
tives requires the Committee to list the recorded votes on the mo-
tion to report legislation and amendments thereto. The Committee
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voted to favorably report H.R. 5100 to the House of Representatives
at 10:48 AM.
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VI. SECTION-BY-SECTION OF H.R. 5100
Section 1—Extension of SBIR and STTR authority
This section extends the authorization of the SBIR and STTR
programs by one year, from September 30, 2025 to September 30,
2026.
Section 2—Extension of SBIR and STTR programs and activities
This section extends the authorization of several SBIR and STTR
related pilot programs and initiatives to September 30, 2026. The
programs and initiatives include: Phase Flexibility, Commercializa-
tion Readiness Program for Civilian Agencies Pilot Program, Accel-
erated Awards, Phase 0 Pilot Program, Administrative Assistance,
Increased Minimum Performance Standards, Commercialization
Assistance Pilot Programs, Due Diligence Program, STTR Partici-
pation of Military Research Participation, and Budget Calculation
Pilot Program.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to 3(c)(3) of rule XIII of the Rules of the House of Rep-
resentatives, the Committee adopts as its own the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to section 402 of the Congressional Budget Act of 1974. At the
time this report was filed, the Committee has requested but not re-
ceived a cost estimate from the Director of the Congressional Budg-
et Office.
VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX
EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
of Representatives and section 308(a)(I) of the Congressional Budg-
et Act of 1974, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement author-
ity, and tax expenditures. While the Committee has not received an
estimate of new budget authority contained in the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to section 402 of the Congressional Budget Act of 1974, the
Committee does not believe that there will be any new or increased
costs attributable to this legislation.
IX. OVERSIGHT FINDINGS & RECOMMENDATIONS
In accordance with clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the over-
sight findings and recommendations of the Committee on Small
Business with respect to the subject matter contained in H.R. 5100
are incorporated into the descriptive portions of this report.
X. PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(4) of rule XIII of
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the Rules of the House of Representatives, the goal of H.R. 5100
is to extend SBIR and STTR programs and related pilot programs
and initiatives by one year.
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XI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House
of Representatives, no provision of H.R. 5100 is known to be dupli-
cative of another Federal program, including any program that was
included in a report to Congress pursuant to section 21 of Public
Law 111–139 or the most recent Catalog of Federal Domestic As-
sistance.
XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND
LIMITED TARIFF BENEFITS
With respect to clause 9 of rule XXI of the Rules of the House
of Representatives, the Committee finds that the bill does not con-
tain any congressional earmarks, limited tax benefits, or limited
tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
the Rules of the House of Representatives.
XIII. FEDERAL MANDATES STATEMENT
The Committee will adopt as its own the estimate of the Federal
mandates prepared by the Director of the Congressional Budget Of-
fice pursuant to section 423 of the Unfunded Mandates Reform Act.
XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b) of the
Federal Advisory Committee Act were created by this legislation.
XV. APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to the
terms and conditions of employment or access to public services or
accommodations within the meaning of section 102(b)(3) of the Con-
gressional Accountability Act.
XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
Pursuant to clause 7 of rule XII of the Rules of the House, the
Committee finds that the authority for this legislation in Art. I, § 8,
cl. 1 of the Constitution of the United States.
XVII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be omit-
ted is enclosed in black brackets, new matter is printed in italics,
and existing law in which no change is proposed is shown in
roman):
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be omit-
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ted is enclosed in black brackets, new matter is printed in italics,
and existing law in which no change is proposed is shown in
roman):
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SMALL BUSINESS ACT
* * * * * * *
SEC. 9. (a) Research and development are major factors in the
growth and progress of industry and the national economy. The ex-
pense of carrying on research and development programs is beyond
the means of many small-business concerns, and such concerns are
handicapped in obtaining the benefits of research and development
programs conducted at Government expense. These small-business
concerns are thereby placed at a competitive disadvantage. This
weakens the competitive free enterprise system and prevents the
orderly development of the national economy. It is the policy of the
Congress that assistance be given to small-business concerns to en-
able them to undertake and to obtain the benefits of research and
development in order to maintain and strengthen the competitive
free enterprise system and the national economy.
(b) It shall be the duty of the Administration, and it is hereby
empowered—
(1) to assist small-business concerns to obtain Government
contracts for research and development;
(2) to assist small-business concerns to obtain the benefits of
research and development performed under Government con-
tracts or at Government expense;
(3) to provide technical assistance to small-business concerns
to accomplish the purposes of this section;
(4) to develop and maintain a source file and an information
program to assure each qualified and interested small business
concern the opportunity to participate in Federal agency small
business innovation research programs and small business
technology transfer programs;
(5) to coordinate with participating agencies a schedule for
release of SBIR and STTR solicitations, and to prepare a mas-
ter release schedule so as to maximize small business’ opportu-
nities to respond to solicitations;
(6) to independently survey and monitor the operation of
SBIR and STTR programs within participating Federal agen-
cies;
(7) to report not less than annually to the Committee on
Small Business of the Senate, and to the Committee on Science
and the Committee on Small Business of the House of Rep-
resentatives, on the SBIR and STTR programs of the Federal
agencies and the Administration’s information and monitoring
efforts related to the SBIR and STTR programs, including—
(A) the data on output and outcomes collected pursuant
to subsections (g)(8) and (o)(9);
(B) the number of proposals received from, and the num-
ber and total amount of awards to, HUBZone small busi-
ness concerns and firms with venture capital, hedge fund,
or private equity firm investment (including those major-
ity-owned by multiple venture capital operating compa-
nies, hedge funds, or private equity firms) under each of
the SBIR and STTR programs;
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(C) a description of the extent to which each Federal
agency is increasing outreach and awards to firms owned
and controlled by women or by socially or economically dis-
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advantaged individuals under each of the SBIR and STTR
programs;
(D) general information about the implementation of,
and compliance with the allocation of funds required
under, subsection (dd) for firms owned in majority part by
venture capital operating companies, hedge funds, or pri-
vate equity firms and participating in the SBIR program;
(E) a detailed description of appeals of Phase III awards
and notices of noncompliance with the SBIR Policy Direc-
tive and the STTR Policy Directive filed by the Adminis-
trator with Federal agencies;
(F) an accounting of funds, initiatives, and outcomes
under the Commercialization Readiness Program;
(G) a descriptionof the extent to which Federal agencies
are providing in a timely manner information needed to
maintain the database described in subsection (k);
(H) with respect to a Federal agency to which subsection
(f)(1) or (n)(1) applies, whether the Federal agency has
complied with the applicable subsection for the year cov-
ered by the report;
(I) the number of applications submitted to each Federal
agency participating in the SBIR or STTR program in in-
novation open topics as compared to conventional topics,
and how many small business concerns receive funding
from open topics compared to conventional topics;
(J) the total number and dollar amount, and average
size, of awards made by each Federal agency participating
in the SBIR or STTR program, by phase, from—
(i) open topics; and
(ii) conventional topics;
(K) the minimum performance standards established
under subsection (qq), including any applicable modifica-
tions under paragraph (3) of such subsection, and the
number of small business concerns that did not meet those
minimum performance standards, provided that the Ad-
ministrator does not publish any personally identifiable in-
formation, the identity of each such small business con-
cern, or any otherwise sensitive information; and
(L) the aggregate number and dollar amount of SBIR
and STTR awards made pursuant to waivers under sub-
section (qq)(3)(E), provided that the Administrator does
not publish any personally identifiable information, the
identity of each such small business concern, or any other-
wise sensitive information;
(8) to provide for and fully implement the tenets of Executive
Order No. 13329 (Encouraging Innovation in Manufacturing);
(9) to coordinate the implementation of electronic databases
at each of the Federal agencies participating in the SBIR pro-
gram or the STTR program, including the technical ability of
the participating agencies to electronically share data; and
(10) to consult, where appropriate, with personnel from the
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relevant Federal agency to assist small business concerns par-
ticipating in a SBIR or STTR program with commercializing
research developed under such a program before such small
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business concern is awarded a contract from such Federal
agency.
(c) The Administration is authorized to consult and cooperate
with all Government agencies and to make studies and rec-
ommendations to such agencies, and such agencies are authorized
and directed to cooperate with the Administration in order to carry
out and to accomplish the purposes of this section.
(d)(1) The Administrator is authorized to consult with represent-
atives of small-business concerns with a view to assisting and en-
couraging such firms to undertake joint programs for research and
development carried out through such corporate or other mecha-
nism as may be most appropriate for the purpose. Such joint pro-
grams may, among other things, include the following purposes:
(A) to construct, acquire, or establish laboratories and other
facilities for the conduct of research;
(B) to undertake and utilize applied research;
(C) to collect research information related to a particular in-
dustry and disseminate it to participating members;
(D) to conduct applied research on a protected, proprietary,
and contractual basis with member or nonmember firms, Gov-
ernment agencies, and others;
(E) to prosecute applications for patents and render patent
services for participating members; and
(F) to negotiate and grant licenses under patents held under
the point program, and to establish corporations designed to
exploit particular patents obtained by it.
(2) The Administrator may, after consultation with the Attorney
General and the Chairman of the Federal Trade Commission, and
with the prior written approval of the Attorney General, approve
any agreement between small-business firms providing for a joint
program of research and development, if the Administrator finds
that the joint program proposed will maintain and strengthen the
free enterprise system and the economy of the Nation. The Admin-
istrator or the Attorney General may at any time withdraw his ap-
proval of the agreement and the joint program of research and de-
velopment covered thereby, if he finds that the agreement or the
joint program carried on under it is no longer in the best interests
of the competitive free enterprise system and the economy of the
Nation. A copy of the statement of any such finding and approval
intended to be within the coverage of this subsection, and a copy
of any modification or withdrawal of approval, shall be published
in the Federal Register. The authority conferred by this subsection
on the Administrator shall not be delegated by him.
(3) No act or omission to act pursuant to and within the scope
of any joint program for research and development, under an
agreement approved by the Administrator under this subsection,
shall be construed to be within the prohibitions of the antitrust
laws or the Federal Trade Commission Act. Upon publication in the
Federal Register of the notice of withdrawal of his approval of the
agreement granted under this subsection, either by the Adminis-
trator or by the Attorney General, the provisions of this subsection
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shall not apply to any subsequent act or omission to act by reason
of such agreement or approval.
(e) For the purpose of this section—
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(1) the term ‘‘extramural budget’’ means the sum of the total
obligations minus amounts obligated for such activities by em-
ployees of the agency in or through Government-owned, Gov-
ernment-operated facilities, except that for the Agency for
International Development it shall not include amounts obli-
gated solely for general institutional support of international
research centers or for grants to foreign countries, and except
that for the Department of Energy it shall not include amounts
obligated for atomic energy defense programs for weapons and
weapons-related activities or for naval reactor programs;
(2) the term ‘‘Federal agency’’ means an executive agency as
defined in section 105 of title 5, United States Code, or a mili-
tary department as defined in section 102 of such title, except
that it does not include any agency within the Intelligence
Community (as the term is defined in section 3.4(f) of Execu-
tive Order 12333 or its successor orders);
(3) the term ‘‘funding agreement’’ means any contract, grant,
or cooperative agreement entered into between any Federal
agency and any small business for the performance of experi-
mental, developmental, or research work funded in whole or in
part by the Federal Government;
(4) the term ‘‘Small Business Innovation Research Program’’
or ‘‘SBIR’’ means a program under which a portion of a Federal
agency’s research or research and development effort is re-
served for award to small business concerns through a uniform
process having—
(A) a first phase for determining, insofar as possible, the
scientific and technical merit and feasibility of ideas that
appear to have commercial potential, as described in sub-
paragraph (B), submitted pursuant to SBIR program solici-
tations;
(B) a second phase, which shall not include any invita-
tion, pre-screening, or pre-selection process for eligibility
for Phase II, that will further develop proposals which
meet particular program needs, in which awards shall be
made based on the scientific and technical merit and feasi-
bility of the proposals, as evidenced by the first phase, con-
sidering, among other things, the proposal’s commercial
potential, as evidenced by—
(i) the small business concern’s record of successfully
commercializing SBIR or other research;
(ii) the existence of second phase funding commit-
ments from private sector or non-SBIR funding
sources;
(iii) the existence of third phase, follow-on commit-
ments for the subject of the research; and
(iv) the presence of other indicators of the commer-
cial potential of the idea; and
(C) where appropriate, a third phase for work that de-
rives from, extends, or completes efforts made under prior
funding agreements under the SBIR program—
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(i) in which commercial applications of SBIR-funded
research or research and development are funded by
non-Federal sources of capital or, for products or serv-
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ices intended for use by the Federal Government, by
follow-on non-SBIR Federal funding awards; or
(ii) for which awards from non-SBIR Federal fund-
ing sources are used for the continuation of research
or research and development that has been competi-
tively selected using peer review or merit-based selec-
tion procedures;
(5) the term ‘‘research’’ or ‘‘research and development’’ means
any activity which is (A) a systematic, intensive study directed
toward greater knowledge or understanding of the subject
studied; (B) a systematic study directed specifically toward ap-
plying new knowledge to meet a recognized need; or (C) a sys-
tematic application of knowledge toward the production of use-
ful materials, devices, and systems or methods, including de-
sign, development, and improvement of prototypes and new
processes to meet specific requirements;
(6) the term ‘‘Small Business Technology Transfer Program’’
or ‘‘STTR’’ means a program under which a portion of a Fed-
eral agency’s extramural research or research and development
effort is reserved for award to small business concerns for coop-
erative research and development through a uniform process
having—
(A) a first phase, to determine, to the extent possible,
the scientific, technical, and commercial merit and feasi-
bility of ideas submitted pursuant to STTR program solici-
tations;
(B) a second phase, which shall not include any invita-
tion, pre-screening, or pre-selection process for eligibility
for Phase II, that will further develop proposals that meet
particular program needs, in which awards shall be made
based on the scientific, technical, and commercial merit
and feasibility of the idea, as evidenced by the first phase
and by other relevant information; and
(C) where appropriate, a third phase for work that de-
rives from, extends, or completes efforts made under prior
funding agreements under the STTR program—
(i) in which commercial applications of STTR-funded
research or research and development are funded by
non-Federal sources of capital or, for products or serv-
ices intended for use by the Federal Government, by
follow-on non-STTR Federal funding awards; and
(ii) for which awards from non-STTR Federal fund-
ing sources are used for the continuation of research
or research and development that has been competi-
tively selected using peer review or scientific review
criteria;
(7) the term ‘‘cooperative research and development’’ means
research or research and development conducted jointly by a
small business concern and a research institution in which not
less than 40 percent of the work is performed by the small
business concern, and not less than 30 percent of the work is
performed by the research institution;
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(8) the term ‘‘research institution’’ means a nonprofit institu-
tion, as defined in section 4(5) of the Stevenson-Wydler Tech-
nology Innovation Act of 1980, and includes federally funded
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11
research and development centers, as identified by the Na-
tional Scientific Foundation in accordance with the govern-
mentwide Federal Acquisition Regulation issued in accordance
with section 35(c)(1) of the Office of Federal Procurement Pol-
icy Act (or any successor regulation thereto);
(9) the term ‘‘commercial applications’’ shall not be construed
to exclude testing and evaluation of products, services, or tech-
nologies for use in technical or weapons systems, and further,
awards for testing and evaluation of products, services, or tech-
nologies for use in technical or weapons systems may be made
in either Phase II or Phase III of the Small Business Innova-
tion Research Program and of the Small Business Technology
Transfer Program, as defined in this subsection;
(10) the term ‘‘commercialization’’ means—
(A) the process of developing products, processes, tech-
nologies, or services; and
(B) the production and delivery (whether by the origi-
nating party or by others) of products, processes, tech-
nologies, or services for sale to or use by the Federal Gov-
ernment or commercial markets;
(11) the term ‘‘Phase I’’ means—
(A) with respect to the SBIR program, the first phase de-
scribed in paragraph (4)(A); and
(B) with respect to the STTR program, the first phase
described in paragraph (6)(A);
(12) the term ‘‘Phase II’’ means—
(A) with respect to the SBIR program, the second phase
described in paragraph (4)(B); and
(B) with respect to the STTR program, the second phase
described in paragraph (6)(B);
(13) the term ‘‘Phase III’’ means—
(A) with respect to the SBIR program, the third phase
described in paragraph (4)(C); and
(B) with respect to the STTR program, the third phase
described in paragraph (6)(C);
(14) the term ‘‘senior procurement executive’’ means an offi-
cial designated under section 1702(c) of title 41, United States
Code, as the senior procurement executive of a Federal agency
participating in a SBIR or STTR program;
(15) the term ‘‘covered individual’’ means an individual
who—
(A) contributes in a substantive, meaningful way to the
scientific development or execution of a research and de-
velopment project proposed to be carried out with a re-
search and development award from a Federal research
agency; and
(B) is designated as a covered individual by the Federal
research agency concerned;
(16) the term ‘‘foreign affiliation’’ means a funded or un-
funded academic, professional, or institutional appointment or
position with a foreign government or government-owned enti-
ty, whether full-time, part-time, or voluntary (including ad-
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junct, visiting, or honorary);
(17) the term ‘‘foreign country of concern’’ means the People’s
Republic of China, the Democratic People’s Republic of Korea,
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12
the Russian Federation, the Islamic Republic of Iran, or any
other country determined to be a country of concern by the
Secretary of State;
(18) the term ‘‘malign foreign talent recruitment program’’
has the meaning given such term in section 10638 of the Re-
search and Development, Competition, and Innovation Act (di-
vision B of Public Law 117–167); and
(19) the term ‘‘federally funded award’’ means a Phase I,
Phase II (including a Phase II award under subsection (cc)), or
Phase III SBIR or STTR award made using a funding agree-
ment.
(f) FEDERAL AGENCY EXPENDITURES FOR THE SBIR PROGRAM.—
(1) REQUIRED EXPENDITURE AMOUNTS.—Except as provided in
paragraph (2)(B), each Federal agency which has an extra-
mural budget for research or research and development in ex-
cess of $100,000,000 for fiscal year 1992, or any fiscal year
thereafter, shall expend with small business concerns—
(A) not less than 1.5 percent of such budget in each of
fiscal years 1993 and 1994;
(B) not less than 2.0 percent of such budget in each of
fiscal years 1995 and 1996;
(C) not less than 2.5 percent of such budget in each of
fiscal years 1997 through 2011;
(D) not less than 2.6 percent of such budget in fiscal
year 2012;
(E) not less than 2.7 percent of such budget in fiscal year
2013;
(F) not less than 2.8 percent of such budget in fiscal year
2014;
(G) not less than 2.9 percent of such budget in fiscal
year 2015;
(H) not less than 3.0 percent of such budget in fiscal
year 2016; and
(I) not less than 3.2 percent of such budget in fiscal year
2017 and each fiscal year thereafter,
specifically in connection with SBIR programs which meet the
requirements of this section, policy directives, and regulations
issued under this section.
(2) LIMITATIONS.—A Federal agency shall not—
(A) use any of its SBIR budget established pursuant to
paragraph (1) for the purpose of funding administrative
costs of the program, including costs associated with sala-
ries and expenses; or
(B) make available for the purpose of meeting the re-
quirements of paragraph (1) an amount of its extramural
budget for basic research which exceeds the percentages
specified in paragraph (1).
(3) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—Funding
agreements with small business concerns for research or re-
search and development which result from competitive or sin-
gle source selections other than an SBIR program shall not be
considered to meet any portion of the percentage requirements
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of paragraph (1).
(4) RULE OF CONSTRUCTION.—Nothing in this subsection may
be construed to prohibit a Federal agency from expending with
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13
small business concerns an amount of the extramural budget
for research or research and development of the agency that
exceeds the amount required under paragraph (1).
(g) Each Federal agency required by subsection (f) to establish a
small business innovation research program shall, in accordance
with this Act and regulations issued hereunder—
(1) unilaterally determine categories of projects to be in its
SBIR program;
(2) issue small business innovation research solicitations in
accordance with a schedule determined cooperatively with the
Small Business Administration;
(3) unilaterally determine research topics within the agency’s
SBIR solicitations, giving special consideration to broad re-
search topics and to topics that further 1 or more critical tech-
nologies, as identified by—
(A) the National Critical Technologies Panel (or its suc-
cessor) in the 1991 report required under section 603 of
the National Science and Technology Policy, Organization,
and Priorities Act of 1976, and in subsequent reports
issued under that authority; or
(B) the Secretary of Defense, in the 1992 report issued
in accordance with section 2522 of title 10, United States
Code, and in subsequent reports issued under that author-
ity;
(4)(A) unilaterally receive and evaluate proposals resulting
from SBIR proposals; and
(B) make a final decision on each proposal submitted under
the SBIR program—
(i) not later than 1 year after the date on which the ap-
plicable solicitation closes, if with respect to the National
Institutes of Health or the National Science Foundation, or
90 days after the date on which the applicable solicitation
closes, if with respect to any other participating agency; or
(ii) if the Administrator authorizes an extension with re-
spect to a solicitation, not later than 90 days after the date
that would otherwise be applicable to the agency under
clause (i);
(5) subject to subsection (l), unilaterally select awardees for
the SBIR funding agreements and inform each awardee under
such an agreement, to the extent possible, of the expenses of
the awardee that will be allowable under the funding agree-
ment;
(6) administer its own SBIR funding agreements (or delegate
such administration to another agency);
(7) make payments to recipients of SBIR funding agreements
on the basis of progress toward or completion of the funding
agreement requirements and, in all cases, make payment to re-
cipients under such agreements in full, subject to audit, on or
before the last day of the 12-month period beginning on the
date of completion of such requirements;
(8) collect annually, and maintain in a common format in ac-
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cordance with the simplified reporting requirements under
subsection (v), such information from awardees as is necessary
to assess the SBIR program, including information necessary
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14
to maintain the database described in subsection (k), includ-
ing—
(A) whether an awardee—
(i) has venture capital, hedge fund, or private equity
firm investment or is majority-owned by multiple ven-
ture capital operating companies, hedge funds, or pri-
vate equity firms and, if so—
(I) the amount of venture capital, hedge fund, or
private equity firm investment that the awardee
has received as of the date of the award; and
(II) the amount of additional capital that the
awardee has invested in the SBIR technology;
(ii) has an investor that—
(I) is an individual who is not a citizen of the
United States or a lawful permanent resident of
the United States and, if so, the name of any such
individual; or
(II) is a person that is not an individual and is
not organized under the laws of a State or the
United States and, if so, the name of any such
person;
(iii) is owned by a woman or has a woman as a prin-
cipal investigator;
(iv) is owned by a socially or economically disadvan-
taged individual or has a socially or economically dis-
advantaged individual as a principal investigator;
(v) is a faculty member or a student of an institution
of higher education, as that term is defined in section
101 of the Higher Education Act of 1965 (20 U.S.C.
1001); or
(vi) is located in a State described in subsection
(u)(3);
(B) a justification statement from the agency, if an
awardee receives an award in an amount that is more
than the award guidelines under this section; and
(C) data with respect to the Federal and State Tech-
nology Partnership Program (FAST Program);
(9) make an annual report on the SBIR program to the Small
Business Administration and the Office of Science and Tech-
nology Policy;
(10) include, as part of its annual performance plan as re-
quired by subsections (a) and (b) of section 1115 of title 31,
United States Code, a section on its SBIR program, which sec-
tion shall describe whether or not the Federal agency complied
with the requirements of subsection (f) for the year covered by
that plan and include a justification for failure to comply (if ap-
plicable),, and shall submit such section to the Committee on
Small Business of the Senate, and the Committee on Science
and the Committee on Small Business of the House of Rep-
resentatives;
(11) provide for and fully implement the tenets of Executive
Order No. 13329 (Encouraging Innovation in Manufacturing);
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(12) provide timely notice to the Administrator of any case
or controversy before any Federal judicial or administrative tri-
bunal concerning the SBIR program of the Federal agency;
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(13) require each small business concern submitting a pro-
posal or application for a federally funded award to disclose in
the proposal or application—
(A) the identity of all owners and covered individuals of
the small business concern who are a party to any foreign
talent recruitment program of any foreign country of con-
cern, including the People’s Republic of China;
(B) the existence of any joint venture or subsidiary of the
small business concern that is based in, funded by, or has
a foreign affiliation with any foreign country of concern, in-
cluding the People’s Republic of China;
(C) any current or pending contractual or financial obli-
gation or other agreement specific to a business arrange-
ment, or joint venture-like arrangement with an enterprise
owned by a foreign state or any foreign entity;
(D) whether the small business concern is wholly owned
in the People’s Republic of China or another foreign coun-
try;
(E) the percentage, if any, of venture capital or institu-
tional investment by an entity that has a general partner
or individual holding a leadership role in such entity who
has a foreign affiliation with any foreign country of con-
cern, including the People’s Republic of China;
(F) any technology licensing or intellectual property
sales to a foreign country of concern, including the People’s
Republic of China, during the 5-year period preceding sub-
mission of the proposal; and
(G) any foreign business entity, offshore entity, or entity
outside the United States related to the small business
concern;
(14) after reviewing the disclosures of a small business con-
cern under paragraph (13), and if determined appropriate by
the head of such Federal agency, request such small business
concern to provide true copies of any contractual or financial
obligation or other agreement specific to a business arrange-
ment, or joint-venture like arrangement with an enterprise
owned by a foreign state or any foreign entity in effect during
the 5-year period preceding submission of the proposal with re-
spect to which such small business concern made such disclo-
sures;
(15) not make an award under the SBIR program of the Fed-
eral agency to a small business concern if the head of the Fed-
eral agency determines that—
(A) the small business concern submitting the proposal
or application—
(i) has an owner or covered individual that is party
to a malign foreign talent recruitment program;
(ii) has a business entity, parent company, or sub-
sidiary located in the People’s Republic of China or an-
other foreign country of concern; or
(iii) has an owner or covered individual that has a
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foreign affiliation with a research institution located
in the People’s Republic of China or another foreign
country of concern; and
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16
(B) the relationships and commitments described in
clauses (i) through (iii) of subparagraph (A)—
(i) interfere with the capacity for activities sup-
ported by the Federal agency to be carried out;
(ii) create duplication with activities supported by
the Federal agency;
(iii) present concerns about conflicts of interest;
(iv) were not appropriately disclosed to the Federal
agency;
(v) violate Federal law or terms and conditions of
the Federal agency; or
(vi) pose a risk to national security;
(16) require a small business concern receiving an award
under its SBIR program to repay all amounts received from
the Federal agency under the award if—
(A) the small business concern makes a material
misstatement that the Federal agency determines poses a
risk to national security; or
(B) there is a change in ownership, change to entity
structure, or other substantial change in circumstances of
the small business concern that the Federal agency deter-
mines poses a risk to national security; and
(17) require a small business concern receiving an award
under its SBIR program to regularly report to the Federal
agency and the Administration throughout the duration of the
award on—
(A) any change to a disclosure required under subpara-
graphs (A) through (G) of paragraph (13);
(B) any material misstatement made under paragraph
(16)(A); and
(C) any change described in paragraph (16)(B).
(h) In addition to the requirements of subsection (f), each Federal
agency which has a budget for research or research and develop-
ment in excess of $20,000,000 for any fiscal year beginning with
fiscal year 1983 or subsequent fiscal year shall establish goals spe-
cifically for funding agreements for research or research and devel-
opment to small business concerns, and no goal established under
this subsection shall be less than the percentage of the agency’s re-
search or research and development budget expended under fund-
ing agreements with small business concerns in the immediately
preceding fiscal year.
(i) ANNUAL REPORTING.—
(1) IN GENERAL.—Each Federal agency required by this sec-
tion to have an SBIR program or to establish goals shall report
annually to the Small Business Administration the number of
awards (including awards under subsection (y)) pursuant to
grants, contracts, or cooperative agreements over $10,000 in
amount and the dollar value of all such awards, identifying
SBIR awards and comparing the number and amount of such
awards with awards to other than small business concerns.
(2) CALCULATION OF EXTRAMURAL BUDGET.—
(A) METHODOLOGY.—Not later than 4 months after the
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date of the enactment of each appropriations Act for a Fed-
eral agency required by this section to have an SBIR pro-
gram, the Federal agency shall submit to the Adminis-
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17
trator a report, which shall include a description of the
methodology used for calculating the amount of the extra-
mural budget of that Federal agency.
(B) ADMINISTRATOR’S ANALYSIS.—The Administrator
shall include an analysis of the methodology received from
each Federal agency referred to in subparagraph (A) in the
report required by subsection (b)(7).
(j)(1) POLICY DIRECTIVES.—The Small Business Administration,
after consultation with the Administrator of the Office of Federal
Procurement Policy, the Director of the Office of Science and Tech-
nology Policy, and the Intergovernmental Affairs Division of the Of-
fice of Management and Budget, shall, within one hundred and
twenty days of the enactment of the Small Business Innovation De-
velopment Act of 1982, issue policy directives for the general con-
duct of the SBIR programs within the Federal Government, includ-
ing providing for—
(A) simplified, standardized, and timely SBIR solicitations;
(B) a simplified, standardized funding process which pro-
vides for (i) the timely receipt and review of proposals; (ii) out-
side peer review for at least Phase II proposals, if appropriate;
(iii) protection of proprietary information provided in proposals;
(iv) selection of awardees; (v) retention of rights in data gen-
erated in the performance of the contract by the small business
concern; (vi) transfer of title to property provided by the agency
to the small business concern if such a transfer would be more
cost effective than recovery of the property by the agency; (vii)
cost sharing; and (viii) cost principles and payment schedules;
(C) exemptions from the regulations under paragraph (2) if
national security or intelligence functions clearly would be
jeopardized;
(D) minimizing regulatory burden associated with participa-
tion in the SBIR program for the small business concern which
will stimulate the cost-effective conduct of Federal research
and development and the likelihood of commercialization of the
results of research and development conducted under the SBIR
program;
(E) simplified, standardized, and timely annual report on the
SBIR program to the Small Business Administration and the
Office of Science and Technology Policy;
(F) standardized and orderly withdrawal from program par-
ticipation by an agency having a SBIR program; at the discre-
tion of the Administration, such directives may require a
phased withdrawal over a period of time sufficient in duration
to minimize any adverse impact on small business concerns;
and
(G) the voluntary participation in a SBIR program by a Fed-
eral agency not required to establish such a program pursuant
to subsection (f).
(2) MODIFICATIONS.—Not later than 90 days after the date of
enactment of the Small Business Research and Development
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Enhancement Act of 1992, the Administrator shall modify the
policy directives issued pursuant to this subsection to provide
for—
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18
(A) retention by a small business concern of the rights
to data generated by the concern in the performance of an
SBIR award for a period of not less than 4 years;
(B) continued use by a small business concern partici-
pating in Phase III of the SBIR program, as a directed
bailment, of any property transferred by a Federal agency
to the small business concern in Phase II of an SBIR pro-
gram for a period of not less than 2 years, beginning on
the initial date of the concern’s participation in Phase III
of such program;
(C) procedures to ensure, to the extent practicable, that
an agency which intends to pursue research, development,
or production of a technology developed by a small busi-
ness concern under an SBIR program enters into follow-on,
non-SBIR funding agreements with the small business
concern for such research, development, or production;
(D) an increase to $150,000 in the amount of funds
which an agency may award in Phase I of an SBIR pro-
gram, and to $1,000,000 in Phase II of an SBIR program,
and an adjustment of such amounts every year for infla-
tion;
(E) a process for notifying the participating SBIR agen-
cies and potential SBIR participants of the 1991, 1992, and
the current critical technologies, as identified—
(i) by the National Critical Technologies Panel (or
its successor), in accordance with section 603 of the
National Science and Technology Policy, Organization,
and Priorities Act of 1976; or
(ii) by the Secretary of Defense, in accordance with
section 2522 of title 10, United States Code;
(F) enhanced outreach efforts to increase the participa-
tion of socially and economically disadvantaged small busi-
ness concerns, as defined in section 8(a)(4), and the partici-
pation of small businesses that are 51 percent owned and
controlled by women in technological innovation and in
SBIR programs, including Phase III of such programs, and
the collection of data to document such participation;
(G) technical and programmatic guidance to encourage
agencies to develop gap-funding programs to address the
delay between an award for Phase I of an SBIR program
and the application for and extension of an award for
Phase II of such program;
(H) procedures to ensure that a small business concern
that submits a proposal for a funding agreement for Phase
I of an SBIR program and that has received more than 15
Phase II SBIR awards during the preceding 5 fiscal years
is able to demonstrate the extent to which it was able to
secure Phase III funding to develop concepts resulting
from previous Phase II SBIR awards; and
(I) procedures to ensure that agencies participating in
the SBIR program retain the information submitted under
subparagraph (H) at least until the General Accounting
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Office submits the report required under section 105 of the
Small Business Research and Development Enhancement
Act of 1992.
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19
(3) ADDITIONAL MODIFICATIONS.—Not later than 120 days
after the date of the enactment of the Small Business Innova-
tion Research Program Reauthorization Act of 2000, the Ad-
ministrator shall modify the policy directives issued pursuant
to this subsection—
(A) to clarify that the rights provided for under para-
graph (2)(A) apply to all Federal funding awards under
this section, including Phase I, Phase II, and Phase III;
(B) to provide for the requirement of a succinct commer-
cialization plan with each application for a Phase II award
that is moving toward commercialization;
(C) to require agencies to report to the Administration,
not less frequently than annually, all instances in which
an agency pursued research, development, or production of
a technology developed by a small business concern using
an award made under the SBIR program of that agency,
and determined that it was not practicable to enter into a
follow-on non-SBIR program funding agreement with the
small business concern, which report shall include, at a
minimum—
(i) the reasons why the follow-on funding agreement
with the small business concern was not practicable;
(ii) the identity of the entity with which the agency
contracted to perform the research, development, or
production; and
(iii) a description of the type of funding agreement
under which the research, development, or production
was obtained; and
(D) to implement subsection (v), including establishing
standardized procedures for the provision of information
pursuant to subsection (k)(3).
(4) MODIFICATIONS RELATING TO PROCUREMENT CENTER REP-
RESENTATIVES.—Upon the enactment of this paragraph, the
Administrator shall modify the policy directives issued pursu-
ant to this subsection to require procurement center represent-
atives (as described in section 15(l)) to consult with the appro-
priate personnel from the relevant Federal agency, to assist
small business concerns participating in the SBIR program,
particularly in Phase III.
(k) DATABASE.—
(1) PUBLIC DATABASE.—Not later than 180 days after the
date of the enactment of the Small Business Innovation Re-
search Program Reauthorization Act of 2000, the Adminis-
trator shall develop, maintain, and make available to the pub-
lic a searchable, up-to-date, electronic database that includes—
(A) the name, size, location, and an identifying number
assigned by the Administrator, of each small business con-
cern that has received a Phase I or Phase II SBIR or STTR
award from a Federal agency;
(B) a description of each Phase I or Phase II SBIR or
STTR award received by that small business concern, in-
cluding—
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(i) an abstract of the project funded by the award,
excluding any proprietary information so identified by
the small business concern;
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20
(ii) the Federal agency making the award; and
(iii) the date and amount of the award;
(C) an identification of any business concern or sub-
sidiary established for the commercial application of a
product or service for which an SBIR or STTR award is
made;
(D) information regarding mentors and Mentoring Net-
works, as required by section 35(d);
(E) with respect to assistance under the STTR program
only—
(i) whether the small business concern or the re-
search institution initiated their collaboration on each
assisted STTR project;
(ii) whether the small business concern or the re-
search institution originated any technology relating
to the assisted STTR project;
(iii) the length of time it took to negotiate any li-
censing agreement between the small business concern
and the research institution under each assisted STTR
project; and
(iv) how the proceeds from commercialization, mar-
keting, or sale of technology resulting from each as-
sisted STTR project were allocated (by percentage) be-
tween the small business concern and the research in-
stitution; and
(F) for each small business concern that has received a
Phase I or Phase II SBIR or STTR award from a Federal
agency, whether the small business concern—
(i) has venture capital, hedge fund, or private equity
firm investment and, if so, whether the small business
concern is registered as majority-owned by multiple
venture capital operating companies, hedge funds, or
private equity firms as required under subsection
(dd)(3);
(ii) is owned by a woman or has a woman as a prin-
cipal investigator;
(iii) is owned by a socially or economically disadvan-
taged individual or has a socially or economically dis-
advantaged individual as a principal investigator;
(iv) is owned by a faculty member or a student of an
institution of higher education, as that term is defined
in section 101 of the Higher Education Act of 1965 (20
U.S.C. 1001); or
(v) received assistance under the Federal and State
Technology Partnership Program (FAST Program).
(2) GOVERNMENT DATABASE.—Not later than 90 days after
the date of enactment of the SBIR/STTR Reauthorization Act
of 2011, the Administrator, in consultation with Federal agen-
cies required to have an SBIR program pursuant to subsection
(f)(1) or an STTR program pursuant to subsection (n)(1), shall
develop and maintain a database to be used exclusively for
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SBIR and STTR program evaluation that—
(A) contains for each small business concern that applies
for, submits a proposal for, or receives an award under
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21
Phase I or Phase II of the SBIR program or the STTR pro-
gram—
(i) the name, size, and location of, and the identi-
fying number assigned by the Administration to, the
small business concern;
(ii) an abstract of the applicable project;
(iii) the specific aims of the project;
(iv) the number of employees of the small business
concern;
(v) the names and titles of the key individuals that
will carry out the project, the position each key indi-
vidual holds in the small business concern, and con-
tact information for each key individual;
(vi) the percentage of effort each individual de-
scribed in clause (v) will contribute to the project;
(vii) whether the small business concern is majority-
owned by multiple venture capital operating compa-
nies, hedge funds, or private equity firms; and
(viii) the Federal agency to which the application is
made and contact information for the person or office
within the Federal agency that is responsible for re-
viewing applications and making awards under the
SBIR program or the STTR program;
(B) contains for each Phase II award made by a Federal
agency—
(i) information collected in accordance with para-
graph (3) on revenue from the sale of new products or
services resulting from the research conducted under
the award;
(ii) information collected in accordance with para-
graph (3) on additional investment from any source,
other than Phase I or Phase II SBIR or STTR awards,
to further the research and development conducted
under the award; and
(iii) any other information received in connection
with the award that the Administrator, in conjunction
with the SBIR and STTR program managers of Fed-
eral agencies, considers relevant and appropriate;
(C) includes any narrative information that a small busi-
ness concern receiving a Phase II award voluntarily sub-
mits to further describe the outputs and outcomes of its
awards;
(D) includes, for each awardee—
(i) the name, size, and location of, and any identi-
fying number assigned by the Administrator to, the
awardee;
(ii) whether the awardee has venture capital, hedge
fund, or private equity firm investment and, if so—
(I) the amount of venture capital, hedge fund, or
private equity firm investment as of the date of
the award;
(II) the percentage of ownership of the awardee
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held by a venture capital operating company,
hedge fund, or private equity firm, including
whether the awardee is majority-owned by mul-
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22
tiple venture capital operating companies, hedge
funds, or private equity firms; and
(III) the amount of additional capital that the
awardee has invested in the SBIR or STTR tech-
nology, which information shall be collected on an
annual basis;
(iii) the names and locations of any affiliates of the
awardee;
(iv) the number of employees of the awardee;
(v) the number of employees of the affiliates of the
awardee; and
(vi) the names of, and the percentage of ownership
of the awardee held by—
(I) any individual who is not a citizen of the
United States or a lawful permanent resident of
the United States; or
(II) any person that is not an individual and is
not organized under the laws of a State or the
United States;
(E) includes any other data collected by or available to
any Federal agency that such agency considers may be
useful for SBIR or STTR program evaluation;
(F) is available for use solely for program evaluation
purposes by the Federal Government or, in accordance
with policy directives issued by the Administration, by
other authorized persons who are subject to a use and non-
disclosure agreement with the Federal Government cov-
ering the use of the database; and
(G) includes a timely and accurate list of any individual
or small business concern that has participated in the
SBIR program or STTR program that has been—
(i) convicted of a fraud-related crime involving fund-
ing received under the SBIR program or STTR pro-
gram; or
(ii) found civilly liable for a fraud-related violation
involving funding received under the SBIR program or
STTR program.
(3) UPDATING INFORMATION FOR DATABASE.—
(A) IN GENERAL.—A small business concern applying for
a Phase II award under this section shall be required to
update information in the database established under this
subsection for any prior Phase II award received by that
small business concern. In complying with this paragraph,
a small business concern may apportion sales or additional
investment information relating to more than one Phase II
award among those awards, if it notes the apportionment
for each award.
(B) ANNUAL UPDATES UPON TERMINATION.—A small busi-
ness concern receiving a Phase II award under this section
shall—
(i) update information in the database concerning
that award at the termination of the award period;
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and
(ii) be requested to voluntarily update such informa-
tion annually thereafter for a period of 5 years.
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(C) GOVERNMENT DATABASE.—Not later than 60 days
after the date established by a Federal agency for submit-
ting applications or proposals for a Phase I or Phase II
award under the SBIR program or STTR program, the
head of the Federal agency shall submit to the Adminis-
trator the data required under paragraph (2) with respect
to each small business concern that applies or submits a
proposal for the Phase I or Phase II award.
(4) PROTECTION OF INFORMATION.—Information provided
under paragraph (2) shall be considered privileged and con-
fidential and not subject to disclosure pursuant to section 552
of title 5, United States Code.
(5) RULE OF CONSTRUCTION.—Inclusion of information in the
database under this subsection shall not be considered to be
publication for purposes of subsection (a) or (b) of section 102
of title 35, United States Code.
(l) REPORTING OF AWARDS MADE FROM SINGLE PROPOSAL, TO
MULTIPLE AWARD WINNERS, OR TO CRITICAL TECHNOLOGY TOP-
ICS.—
(1) SINGLE PROPOSAL.—If a Federal agency required to estab-
lish an SBIR program under subsection (f) makes an award
with respect to an SBIR solicitation topic or subtopic for which
the agency received only 1 proposal, the agency shall provide
written justification for making the award in its next quarterly
report to the Administration and in the agency’s next annual
report required under subsection (g)(8).
(2) MULTIPLE AWARDS.—An agency referred to in paragraph
(1) shall include in its next annual report required under sub-
section (g)(8) an accounting of the awards the agency has made
for Phase I of an SBIR program during the reporting period to
entities that have received more than 15 awards for the Phase
II of an SBIR program during the preceding 5 fiscal years.
(3) CRITICAL TECHNOLOGY AWARDS.—An agency referred to in
paragraph (1) shall include in its next annual report required
under subsection (g)(8), an accounting of the number of awards
it has made to critical technology topics, as defined in sub-
section (g)(3), including an identification of the specific critical
technologies topics, and the percentage by number and dollar
amount of the agency’s total SBIR awards to such critical tech-
nology topics.
(m) TERMINATION.—The authorization to carry out the Small
Business Innovation Research Program established under this sec-
tion shall terminate on øSeptember 30, 2025¿ September 30, 2026.
(n) REQUIRED EXPENDITURES FOR STTR BY FEDERAL AGENCIES.—
(1) REQUIRED EXPENDITURE AMOUNTS.—
(A) IN GENERAL.—With respect to each fiscal year
øthrough fiscal year 2025¿ though fiscal year 2026, each
Federal agency that has an extramural budget for re-
search, or research and development, in excess of
$1,000,000,000 for that fiscal year, shall expend with small
business concerns not less than the percentage of that ex-
tramural budget specified in subparagraph (B), specifically
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in connection with STTR programs that meet the require-
ments of this section and any policy directives and regula-
tions issued under this section.
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24
(B) EXPENDITURE AMOUNTS.—The percentage of the ex-
tramural budget required to be expended by an agency in
accordance with subparagraph (A) shall be—
(i) 0.15 percent for each fiscal year through fiscal
year 2003;
(ii) 0.3 percent for each of fiscal years 2004 through
2011;
(iii) 0.35 percent for each of fiscal years 2012 and
2013;
(iv) 0.40 percent for each of fiscal years 2014 and
2015; and
(v) 0.45 percent for fiscal year 2016 and each fiscal
year thereafter.
(2) LIMITATIONS.—A Federal agency shall not—
(A) use any of its STTR budget established pursuant to
paragraph (1) for the purpose of funding administrative
costs of the program, including costs associated with sala-
ries and expenses, or, in the case of a small business con-
cern or a research institution, costs associated with sala-
ries, expenses, and administrative overhead (other than
those direct or indirect costs allowable under guidelines of
the Office of Management and Budget and the govern-
mentwide Federal Acquisition Regulation issued in accord-
ance with section 25(c)(1) of the Office of Federal Procure-
ment Policy Act); or
(B) make available for the purpose of meeting the re-
quirements of paragraph (1) an amount of its extramural
budget for basic research which exceeds the percentage
specified in paragraph (1).
(3) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—Funding
agreements with small business concerns for research or re-
search and development which result from competitive or sin-
gle source selections other than an STTR program shall not be
considered to meet any portion of the percentage requirements
of paragraph (1).
(o) FEDERAL AGENCY STTR AUTHORITY.—Each Federal agency
required to establish an STTR program in accordance with sub-
section (n) and regulations issued under this Act, shall—
(1) unilaterally determine categories of projects to be in-
cluded in its STTR program;
(2) issue STTR solicitations in accordance with a schedule
determined cooperatively with the Administration;
(3) unilaterally determine research topics within the agency’s
STTR solicitations, giving special consideration to broad re-
search topics and to topics that further 1 or more critical tech-
nologies, as identified—
(A) by the National Critical Technologies Panel (or its
successor) in reports required under section 603 of the Na-
tional Science and Technology Policy, Organization, and
Priorities Act of 1976; or
(B) by the Secretary of Defense, in accordance with sec-
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tion 2522 of title 10, United States Code;
(4)(A) unilaterally receive and evaluate proposals resulting
from STTR solicitations; and
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25
(B) make a final decision on each proposal submitted under
the STTR program—
(i) not later than 1 year after the date on which the ap-
plicable solicitation closes, if with respect to the National
Institutes of Health or the National Science Foundation, or
90 days after the date on which the applicable solicitation
closes, if with respect to any other participating agency; or
(ii) if the Administrator authorizes an extension for a so-
licitation, not later than 90 days after the date that would
be applicable to the agency under clause (i);
(5) unilaterally select awardees for its STTR funding agree-
ments and inform each awardee under such an agreement, to
the extent possible, of the expenses of the awardee that will be
allowable under the funding agreement;
(6) administer its own STTR funding agreements (or delegate
such administration to another agency);
(7) make payments to recipients of STTR funding agree-
ments on the basis of progress toward or completion of the
funding agreement requirements and, in all cases, make pay-
ment to recipients under such agreements in full, subject to
audit, on or before the last day of the 12-month period begin-
ning on the date of the completion of such requirements;
(8) include, as part of its annual performance plan as re-
quired by subsections (a) and (b) of section 1115 of title 31,
United States Code, a section on its STTR program, which sec-
tion shall describe whether or not the Federal agency complied
with the requirements of subsection (n) for the year covered by
that plan and include a justification for failure to comply (if ap-
plicable),, and shall submit such section to the Committee on
Small Business of the Senate, and the Committee on Science
and the Committee on Small Business of the House of Rep-
resentatives;
(9) collect annually, and maintain in a common format in ac-
cordance with the simplified reporting requirements under
subsection (v), such information from applicants and awardees
as is necessary to assess the STTR program outputs and out-
comes, including information necessary to maintain the data-
base described in subsection (k), including—
(A) whether an applicant or awardee—
(i) has venture capital, hedge fund, or private equity
firm investment or is majority-owned by multiple ven-
ture capital operating companies, hedge funds, or pri-
vate equity firms and, if so—
(I) the amount of venture capital, hedge fund, or
private equity firm investment that the applicant
or awardee has received as of the date of the ap-
plication or award, as applicable; and
(II) the amount of additional capital that the ap-
plicant or awardee has invested in the STTR tech-
nology;
(ii) has an investor that—
(I) is an individual who is not a citizen of the
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United States or a lawful permanent resident of
the United States and, if so, the name of any such
individual; or
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26
(II) is a person that is not an individual and is
not organized under the laws of a State or the
United States and, if so, the name of any such
person;
(iii) is owned by a woman or has a woman as a prin-
cipal investigator;
(iv) is owned by a socially or economically disadvan-
taged individual or has a socially or economically dis-
advantaged individual as a principal investigator;
(v) is a faculty member or a student of an institution
of higher education, as that term is defined in section
101 of the Higher Education Act of 1965 (20 U.S.C.
1001); or
(vi) is located in a State in which the total value of
contracts awarded to small business concerns under
all STTR programs is less than the total value of con-
tracts awarded to small business concerns in a major-
ity of other States, as determined by the Adminis-
trator in biennial fiscal years, beginning with fiscal
year 2008, based on the most recent statistics com-
piled by the Administrator;
(B) if an awardee receives an award in an amount that
is more than the award guidelines under this section, a
statement from the agency that justifies the award
amount; and
(C) data with respect to the Federal and State Tech-
nology Partnership Program (FAST Program);
(10) submit an annual report on the STTR program to the
Administration and the Office of Science and Technology Pol-
icy;
(11) adopt the agreement developed by the Administrator
under subsection (w) as the agency’s model agreement for allo-
cating between small business concerns and research institu-
tions intellectual property rights and rights, if any, to carry out
follow-on research, development, or commercialization;
(12) develop, in consultation with the Office of Federal Pro-
curement Policy and the Office of Government Ethics, proce-
dures to ensure that federally funded research and develop-
ment centers (as defined in subsection (e)(8)) that participate
in STTR agreements—
(A) are free from organizational conflicts of interests rel-
ative to the STTR program;
(B) do not use privileged information gained through
work performed for an STTR agency or private access to
STTR agency personnel in the development of an STTR
proposal; and
(C) use outside peer review, as appropriate;
(13) not later than July 31, 1993, develop procedures for as-
sessing the commercial merit and feasibility of STTR pro-
posals, as evidenced by—
(A) the small business concern’s record of successfully
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commercializing STTR or other research;
(B) the existence of Phase II funding commitments from
private sector or non-STTR funding sources;
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27
(C) the existence of Phase III follow-on commitments for
the subject of the research; and
(D) the presence of other indicators of the commercial
potential of the idea;
(14) implement an outreach program to research institutions
and small business concerns for the purpose of enhancing its
STTR program, in conjunction with any such outreach done for
purposes of the SBIR program;
(15) provide for and fully implement the tenets of Executive
Order No. 13329 (Encouraging Innovation in Manufacturing);
(16) provide timely notice to the Administrator of any case
or controversy before any Federal judicial or administrative tri-
bunal concerning the STTR program of the Federal agency;
(17) require each small business concern submitting a pro-
posal or application for a federally funded award to disclose in
the proposal or application—
(A) the identity of all owners and covered individuals of
the small business concern who are a party to any foreign
talent recruitment program of any foreign country of con-
cern, including the People’s Republic of China;
(B) the existence of any joint venture or subsidiary of the
small business concern that is based in, funded by, or has
a foreign affiliation with any foreign country of concern, in-
cluding the People’s Republic of China;
(C) any current or pending contractual or financial obli-
gation or other agreement specific to a business arrange-
ment, or joint venture-like arrangement with an enterprise
owned by a foreign state or any foreign entity;
(D) whether the small business concern is wholly owned
in the People’s Republic of China or another foreign coun-
try;
(E) the percentage, if any, of venture capital or institu-
tional investment by an entity that has a general partner
or individual holding a leadership role in such entity who
has a foreign affiliation with any foreign country of con-
cern, including the People’s Republic of China;
(F) any technology licensing or intellectual property
sales to a foreign country of concern, including the People’s
Republic of China, during the 5-year period preceding sub-
mission of the proposal; and
(G) any foreign business entity, offshore entity, or entity
outside the United States related to the small business
concern;
(18) after reviewing the disclosures of a small business con-
cern under paragraph (17), and if determined appropriate by
the head of such Federal agency, request such small business
concern to provide true copies of any contractual or financial
obligation or other agreement specific to a business arrange-
ment, or joint-venture like arrangement with an enterprise
owned by a foreign state or any foreign entity in effect during
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the 5-year period preceding submission of the proposal with re-
spect to which such small business concern made such disclo-
sures;
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28
(19) not make an award under the STTR program of the Fed-
eral agency to a small business concern if the head of the Fed-
eral agency determines that—
(A) the small business concern submitting the proposal
or application—
(i) has an owner or covered individual that is party
to a malign foreign talent recruitment program;
(ii) has a business entity, parent company, or sub-
sidiary located in the People’s Republic of China or an-
other foreign country of concern; or
(iii) has an owner or covered individual that has a
foreign affiliation with a research institution located
in the People’s Republic of China or another foreign
country of concern; and
(B) the relationships and commitments described in
clauses (i) through (iii) of subparagraph (A)—
(i) interfere with the capacity for activities sup-
ported by the Federal agency to be carried out;
(ii) create duplication with activities supported by
the Federal agency;
(iii) present concerns about conflicts of interest;
(iv) were not appropriately disclosed to the Federal
agency;
(v) violate Federal law or terms and conditions of
the Federal agency; or
(vi) pose a risk to national security;
(20) require a small business concern receiving an award
under its STTR program to repay all amounts received from
the Federal agency under the award if—
(A) the small business concern makes a material
misstatement that the Federal agency determines poses a
risk to national security; or
(B) there is a change in ownership, change to entity
structure, or other substantial change in circumstances of
the small business concern that the Federal agency deter-
mines poses a risk to national security; and
(21) require a small business concern receiving an award
under its STTR program to regularly report to the Federal
agency and the Administration throughout the duration of the
award on—
(A) any change to a disclosure required under subpara-
graphs (A) through (G) of paragraph (17);
(B) any material misstatement made under paragraph
(20)(A); and
(C) any change described in paragraph (20)(B).
(p) STTR POLICY DIRECTIVE.—
(1) ISSUANCE.—The Administrator shall issue a policy direc-
tive for the general conduct of the STTR programs within the
Federal Government. Such policy directive shall be issued after
consultation with—
(A) the heads of each of the Federal agencies required by
subsection (n) to establish an STTR program;
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(B) the Under Secretary of Commerce for Intellectual
Property and Director of the United States Patent and
Trademark Office; and
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29
(C) the Director of the Office of Federal Procurement
Policy.
(2) CONTENTS.—The policy directive required by paragraph
(1) shall provide for—
(A) simplified, standardized, and timely STTR solicita-
tions;
(B) a simplified, standardized funding process that pro-
vides for—
(i) the timely receipt and review of proposals;
(ii) outside peer review, if appropriate;
(iii) protection of proprietary information provided in
proposals;
(iv) selection of awardees;
(v) retention by a small business concern of the
rights to data generated by the concern in the per-
formance of an STTR award for a period of not less
than 4 years;
(vi) continued use by a small business concern, as a
directed bailment, of any property transferred by a
Federal agency to the small business concern in Phase
II of the STTR program for a period of not less than
2 years, beginning on the initial date of the concern’s
participation in Phase III of such program;
(vii) cost sharing;
(viii) cost principles and payment schedules; and
(ix) 1-year awards for Phase I of an STTR program,
generally not to exceed $150,000, and 2-year awards
for Phase II of an STTR program, generally not to ex-
ceed $1,000,000, (each of which the Administrator
shall adjust for inflation annually) greater or lesser
amounts to be awarded at the discretion of the award-
ing agency, and shorter or longer periods of time to be
approved at the discretion of the awarding agency
where appropriate for a particular project;
(C) minimizing regulatory burdens associated with par-
ticipation in STTR programs;
(D) guidelines for a model agreement, to be used by all
agencies, for allocating between small business concerns
and research institutions intellectual property rights and
rights, if any, to carry out follow-on research, development,
or commercialization;
(E) procedures to ensure that—
(i) a recipient of an STTR award is a small business
concern, as defined in section 3 and the regulations
promulgated thereunder; and
(ii) such small business concern exercises manage-
ment and control of the performance of the STTR
funding agreement pursuant to a business plan pro-
viding for the commercialization of the technology that
is the subject matter of the award;
(F) procedures to ensure, to the extent practicable, that
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an agency which intends to pursue research, development,
or production of a technology developed by a small busi-
ness concern under an STTR program enters into follow-
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30
on, non-STTR funding agreements with the small business
concern for such research, development, or production; and
(G) procedures to ensure that procurement center rep-
resentatives (as described in section 15(l))—
(i) consult with the appropriate personnel from the
relevant Federal agency, to assist small business con-
cerns participating in the STTR program, particularly
in Phase III;
(ii) provide technical assistance to such concerns to
submit a bid for an award of a Federal contract; and
(iii) consult with the appropriate personnel from the
relevant Federal agency in providing the assistance
described in clause (i).
(3) MODIFICATIONS.—Not later than 120 days after the date
of enactment of this paragraph, the Administrator shall modify
the policy directive issued pursuant to this subsection to clarify
that the rights provided for under paragraph (2)(B)(v) apply to
all Federal funding awards under this section, including Phase
I, Phase II, and Phase III.
(q) DISCRETIONARY TECHNICAL AND BUSINESS ASSISTANCE.—
(1) IN GENERAL.—Each Federal agency required by this sec-
tion to conduct an SBIR program or STTR program may enter
into an agreement with 1 or more vendors selected under para-
graph (2)(A) to provide small business concerns engaged in
SBIR or STTR projects with technical and business assistance
services, such as access to a network of scientists and engi-
neers engaged in a wide range of technologies, assistance with
product sales, intellectual property protections, market re-
search, market validation, and development of regulatory plans
and manufacturing plans, or access to technical and business
literature available through on-line data bases, for the purpose
of assisting such concerns in—
(A) making better technical decisions concerning such
projects;
(B) solving technical problems which arise during the
conduct of such projects;
(C) minimizing technical risks associated with such
projects; and
(D) developing and commercializing new commercial
products and processes resulting from such projects, in-
cluding intellectual property protections.
(2) VENDOR SELECTION.—
(A) IN GENERAL.—Each agency may select 1 or more ven-
dors from which small business concerns may obtain as-
sistance in meeting the goals listed in paragraph (1) for a
term not to exceed 5 years. Such selection shall be com-
petitive and shall utilize merit-based criteria.
(B) SELECTION BY SMALL BUSINESS CONCERN.—A small
business concern may, by contract or otherwise, select 1 or
more vendors to assist the small business concern in meet-
ing the goals listed in paragraph (1).
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(3) ADDITIONAL TECHNICAL ASSISTANCE.—
(A) PHASE I.—A Federal agency described in paragraph
(1) may—
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31
(i) provide to the recipient of a Phase I SBIR or
STTR award, through a vendor selected under para-
graph (2)(A), the services described in paragraph (1),
in an amount equal to not more than $6,500 per year;
or
(ii) authorize the recipient of a Phase I SBIR or
STTR award to purchase the services described in
paragraph (1), in an amount equal to not more than
$6,500 per year, which shall be in addition to the
amount of the recipient’s award.
(B) PHASE II.—A Federal agency described in paragraph
(1) may—
(i) provide to the recipient of a Phase II SBIR or
STTR award, through a vendor selected under para-
graph (2)(A), the services described in paragraph (1),
in an amount equal to not more than $50,000 per
project; or
(ii) authorize the recipient of a Phase II SBIR or
STTR award to purchase the services described in
paragraph (1), in an amount equal to not more than
$50,000 per project, which may, as determined appro-
priate by the head of the Federal agency, be included
as part of the recipient’s award or be in addition to the
amount of the recipient’s award.
(C) FLEXIBILITY.—In carrying out subparagraphs (A) and
(B), each Federal agency shall provide the allowable
amounts to a recipient that meets the eligibility require-
ments under the applicable subparagraph, if the recipient
requests to seek technical or business assistance from an
individual or entity other than a vendor selected under
paragraph (2)(A) by the Federal agency. Business-related
services aimed at improving the commercialization success
of a small business concern may be obtained from an enti-
ty, such as a public or private organization or an agency
of or other entity established or funded by a State that fa-
cilitates or accelerates the commercialization of tech-
nologies or assists in the creation and growth of private
enterprises that are commercializing technology.
(D) LIMITATION.—A Federal agency may not—
(i) use the amounts authorized under subparagraph
(A) or (B) unless 1 or more vendors selected under
paragraph (2)(A) provides the technical or business as-
sistance to the recipient; or
(ii) enter a contract with a vendor under paragraph
(2)(A) under which the amount provided for technical
or business assistance is based on total number of
Phase I or Phase II awards.
(E) MULTIPLE AWARD RECIPIENTS.—The Administrator
shall establish a limit on the amount of technical and busi-
ness assistance services that may be received or purchased
under subparagraph (B) by a small business concern that
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has received multiple Phase II SBIR or STTR awards for
a fiscal year.
(4) ANNUAL REPORTING.—
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32
(A) IN GENERAL.—A small business concern that receives
technical or business assistance from a vendor under this
subsection during a fiscal year shall submit to the Federal
agency contracting with the vendor a description of the
technical or business assistance provided and the benefits
and results of the technical or business assistance pro-
vided.
(B) USE OF EXISTING REPORTING MECHANISM.—The infor-
mation required under subparagraph (A) shall be collected
by a Federal agency as part of a report required to be sub-
mitted by small business concerns engaged in SBIR or
STTR projects of the Federal agency for which the require-
ment was in effect on the date of enactment of this para-
graph.
(r) PHASE III AGREEMENTS, COMPETITIVE PROCEDURES, AND JUS-
TIFICATION FOR AWARDS.—
(1) IN GENERAL.—In the case of a small business concern
that is awarded a funding agreement for Phase II of an SBIR
or STTR program, a Federal agency may enter into a Phase III
agreement with that business concern for additional work to be
performed during or after the Phase II period. The Phase II
funding agreement with the small business concern may, at
the discretion of the agency awarding the agreement, set out
the procedures applicable to Phase III agreements with that
agency or any other agency.
(2) DEFINITION.—In this subsection, the term ‘‘Phase III
agreement’’ means a follow-on, non-SBIR or non-STTR funded
contract as described in paragraph (4)(C) or paragraph (6)(C)
of subsection (e).
(3) INTELLECTUAL PROPERTY RIGHTS.—Each funding agree-
ment under an SBIR or STTR program shall include provisions
setting forth the respective rights of the United States and the
small business concern with respect to intellectual property
rights and with respect to any right to carry out follow-on re-
search.
(4) COMPETITIVE PROCEDURES AND JUSTIFICATION FOR
AWARDS.—To the greatest extent practicable, Federal agencies
and Federal prime contractors shall—
(A) consider an award under the SBIR program or the
STTR program to satisfy the requirements under sections
3201 through 3205 of title 10, United States Code, and any
other applicable competition requirements; and
(B) issue, without further justification, Phase III awards
relating to technology, including sole source awards, to the
SBIR and STTR award recipients that developed the tech-
nology.
(s) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR
PROGRAMS.—All funds awarded, appropriated, or otherwise made
available in accordance with subsection (f) or (n) must be awarded
pursuant to competitive and merit-based selection procedures.
(t) INCLUSION IN STRATEGIC PLANS.—Program information relat-
ing to the SBIR and STTR programs shall be included by each Fed-
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eral agency in any update or revision required of the Federal agen-
cy under section 306(b) of title 5, United States Code.
(u) COORDINATION OF TECHNOLOGY DEVELOPMENT PROGRAMS.—
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33
(1) DEFINITION OF TECHNOLOGY DEVELOPMENT PROGRAM.—In
this subsection, the term ‘‘technology development program’’
means—
(A) the Experimental Program to Stimulate Competitive
Research of the National Science Foundation, as estab-
lished under section 113 of the National Science Founda-
tion Authorization Act of 1988 (42 U.S.C. 1862g);
(B) the Defense Experimental Program to Stimulate
Competitive Research of the Department of Defense;
(C) the Experimental Program to Stimulate Competitive
Research of the Department of Energy;
(D) the Experimental Program to Stimulate Competitive
Research of the Environmental Protection Agency;
(E) the Experimental Program to Stimulate Competitive
Research of the National Aeronautics and Space Adminis-
tration;
(F) the Institutional Development Award Program of the
National Institutes of Health; and
(G) the National Research Initiative Competitive Grants
Program of the Department of Agriculture.
(2) COORDINATION REQUIREMENTS.—Each Federal agency
that is subject to subsection (f) and that has established a tech-
nology development program may, in each fiscal year, review
for funding under that technology development program—
(A) any proposal to provide outreach and assistance to
one or more small business concerns interested in partici-
pating in the SBIR program, including any proposal to
make a grant or loan to a company to pay a portion or all
of the cost of developing an SBIR proposal, from an entity,
organization, or individual located in—
(i) a State that is eligible to participate in that pro-
gram; or
(ii) a State described in paragraph (3); or
(B) any proposal for Phase I of the SBIR program, if the
proposal, though meritorious, is not funded through the
SBIR program for that fiscal year due to funding re-
straints, from a small business concern located in—
(i) a State that is eligible to participate in a tech-
nology development program; or
(ii) a State described in paragraph (3).
(3) ADDITIONALLY ELIGIBLE STATE.—A State referred to in
subparagraph (A)(ii) or (B)(ii) of paragraph (2) is a State in
which the total value of contracts awarded to small business
concerns under all SBIR programs is less than the total value
of contracts awarded to small business concerns in a majority
of other States, as determined by the Administrator in biennial
fiscal years, beginning with fiscal year 2000, based on the most
recent statistics compiled by the Administrator.
(v) REDUCING PAPERWORK AND COMPLIANCE BURDEN.—
(1) STANDARDIZATION OF REPORTING REQUIREMENTS.—The
Administrator shall work with the Federal agencies required
by this section to have an SBIR or STTR program to stand-
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ardize reporting requirements for the collection of data from
SBIR or STTR applicants and awardees, including data for in-
clusion in the database under subsection (k), taking into con-
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34
sideration the unique needs of each agency, and to the extent
possible, permitting the updating of previously reported infor-
mation by electronic means. Such requirements shall be de-
signed to minimize the burden on small businesses.
(2) SIMPLIFICATION OF APPLICATION AND AWARD PROCESS.—
Not later than 1 year after the date of enactment of this para-
graph, and after a period of public comment, the Administrator
shall issue regulations or guidelines, taking into consideration
the unique needs of each Federal agency, to ensure that each
Federal agency required to carry out an SBIR program or
STTR program simplifies and standardizes the program pro-
posal, selection, contracting, compliance, and audit procedures
for the SBIR program or STTR program of the Federal agency
(including procedures relating to overhead rates for applicants
and documentation requirements) to reduce the paperwork and
regulatory compliance burden on small business concerns ap-
plying to and participating in the SBIR program or STTR pro-
gram.
(w) STTR MODEL AGREEMENT FOR INTELLECTUAL PROPERTY
RIGHTS.—
(1) IN GENERAL.—The Administrator shall promulgate regu-
lations establishing a single model agreement for use in the
STTR program that allocates between small business concerns
and research institutions intellectual property rights and
rights, if any, to carry out follow-on research, development, or
commercialization.
(2) OPPORTUNITY FOR COMMENT.—In promulgating regula-
tions under paragraph (1), the Administrator shall provide to
affected agencies, small business concerns, research institu-
tions, and other interested parties the opportunity to submit
written comments.
(x) RESEARCH AND DEVELOPMENT FOCUS.—
(1) REVISION AND UPDATE OF CRITERIA AND PROCEDURES OF
IDENTIFICATION.—In carrying out subsection (g), the Secretary
of Defense shall, not less often than once every 4 years, revise
and update the criteria and procedures utilized to identify
areas of the research and development efforts of the Depart-
ment of Defense which are suitable for the provision of funds
under the Small Business Innovation Research Program and
the Small Business Technology Transfer Program.
(2) UTILIZATION OF PLANS.—The criteria and procedures de-
scribed in paragraph (1) shall be developed through the use of
the most current versions of the following plans:
(A) The Joint Warfighting Science and Technology Plan
required under section 270 of the National Defense Au-
thorization Act for Fiscal Year 1997 (Public Law 104–201;
10 U.S.C. 2501 note).
(B) The Defense Technology Area Plan of the Depart-
ment of Defense.
(C) The Basic Research Plan of the Department of De-
fense.
(3) INPUT IN IDENTIFICATION OF AREAS OF EFFORT.—The cri-
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teria and procedures described in paragraph (1) shall include
input in the identification of areas of research and develop-
ment efforts described in that paragraph from Department of
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35
Defense program managers (PMs) and program executive offi-
cers (PEOs).
(y) COMMERCIALIZATION READINESS PROGRAM.—
(1) IN GENERAL.—The Secretary of Defense and the Secretary
of each military department is authorized to create and admin-
ister a ‘‘Commercialization Readiness Program’’ to accelerate
the transition of technologies, products, and services developed
under the Small Business Innovation Research Program or
Small Business Technology Transfer Program to Phase III, in-
cluding the acquisition process. The authority to create and ad-
minister a Commercialization Readiness Program under this
subsection may not be construed to eliminate or replace any
other SBIR program or STTR program that enhances the in-
sertion or transition of SBIR or STTR technologies, including
any such program in effect on the date of enactment of the Na-
tional Defense Authorization Act for Fiscal Year 2006 (Public
Law 109–163; 119 Stat. 3136).
(2) IDENTIFICATION OF RESEARCH PROGRAMS FOR ACCELER-
ATED TRANSITION TO ACQUISITION PROCESS.—In carrying out
the Commercialization Readiness Program, the Secretary of
Defense and the Secretary of each military department shall
identify research programs of the Small Business Innovation
Research Program or Small Business Technology Transfer Pro-
gram that have the potential for rapid transitioning to Phase
III and into the acquisition process.
(3) LIMITATION.—No research program may be identified
under paragraph (2) unless the Secretary of the military de-
partment concerned certifies in writing that the successful
transition of the program to Phase III and into the acquisition
process is expected to meet high priority military requirements
of such military department.
(4) FUNDING.—
(A) IN GENERAL.—The Secretary of Defense and each
Secretary of a military department may use not more than
an amount equal to 1 percent of the funds available to the
Department of Defense or the military department pursu-
ant to the Small Business Innovation Research Program
for payment of expenses incurred to administer the Com-
mercialization Readiness Program under this subsection.
(B) LIMITATIONS.—The funds described in subparagraph
(A)—
(i) shall not be subject to the limitations on the use
of funds in subsection (f)(2); and
(ii) shall not be used to make Phase III awards.
(5) INSERTION INCENTIVES.—For any contract with a value of
not less than $100,000,000, the Secretary of Defense is author-
ized to—
(A) establish goals for the transition of Phase III tech-
nologies in subcontracting plans; and
(B) require a prime contractor on such a contract to re-
port the number and dollar amount of contracts entered
into by that prime contractor for Phase III SBIR or STTR
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projects.
(6) GOAL FOR SBIR AND STTR TECHNOLOGY INSERTION.—The
Secretary of Defense shall—
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36
(A) set a goal to increase the number of Phase II SBIR
contracts and the number of Phase II STTR contracts
awarded by the Secretary that lead to technology transi-
tion into programs of record or fielded systems;
(B) use incentives in effect on the date of enactment of
the SBIR/STTR Reauthorization Act of 2011, or create new
incentives, to encourage agency program managers and
prime contractors to meet the goal under subparagraph
(A); and
(C) submit to the Administrator for inclusion in the an-
nual report under subsection (b)(7)—
(i) the number and percentage of Phase II SBIR and
STTR contracts awarded by the Secretary that led to
technology transition into programs of record or field-
ed systems;
(ii) information on the status of each project that re-
ceived funding through the Commercialization Readi-
ness Program and efforts to transition those projects
into programs of record or fielded systems; and
(iii) a description of each incentive that has been
used by the Secretary under subparagraph (B) and the
effectiveness of that incentive with respect to meeting
the goal under subparagraph (A).
(z) ENCOURAGING INNOVATION IN ENERGY EFFICIENCY.—
(1) FEDERAL AGENCY ENERGY-RELATED PRIORITY.—In carrying
out its duties under this section relating to SBIR and STTR so-
licitations by Federal departments and agencies, the Adminis-
trator shall—
(A) ensure that such departments and agencies give high
priority to small business concerns that participate in or
conduct energy efficiency or renewable energy system re-
search and development projects; and
(B) include in the annual report to Congress under sub-
section (b)(7) a determination of whether the priority de-
scribed in subparagraph (A) is being carried out.
(2) CONSULTATION REQUIRED.—The Administrator shall con-
sult with the heads of other Federal departments and agencies
in determining whether priority has been given to small busi-
ness concerns that participate in or conduct energy efficiency
or renewable energy system research and development
projects, as required by this subsection.
(3) GUIDELINES.—The Administrator shall, as soon as is
practicable after the date of enactment of this subsection, issue
guidelines and directives to assist Federal agencies in meeting
the requirements of this subsection.
(4) DEFINITIONS.—In this subsection—
(A) the term ‘‘biomass’’—
(i) means any organic material that is available on
a renewable or recurring basis, including—
(I) agricultural crops;
(II) trees grown for energy production;
(III) wood waste and wood residues;
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(IV) plants (including aquatic plants and
grasses);
(V) residues;
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37
(VI) fibers;
(VII) animal wastes and other waste materials;
and
(VIII) fats, oils, and greases (including recycled
fats, oils, and greases); and
(ii) does not include—
(I) paper that is commonly recycled; or
(II) unsegregated solid waste;
(B) the term ‘‘energy efficiency project’’ means the instal-
lation or upgrading of equipment that results in a signifi-
cant reduction in energy usage; and
(C) the term ‘‘renewable energy system’’ means a system
of energy derived from—
(i) a wind, solar, biomass (including biodiesel), or
geothermal source; or
(ii) hydrogen derived from biomass or water using
an energy source described in clause (i).
(aa) LIMITATION ON SIZE OF AWARDS.—
(1) LIMITATION.—No Federal agency may issue an award
under the SBIR program or the STTR program if the size of
the award exceeds the award guidelines established under this
section by more than 50 percent.
(2) MAINTENANCE OF INFORMATION.—Participating agencies
shall maintain information on awards exceeding the guidelines
established under this section, including—
(A) the amount of each award;
(B) a justification for exceeding the guidelines for each
award;
(C) the identity and location of each award recipient;
and
(D) whether an award recipient has received any ven-
ture capital, hedge fund, or private equity firm investment
and, if so, whether the recipient is majority-owned by mul-
tiple venture capital operating companies, hedge funds, or
private equity firms.
(3) REPORTS.—The Administrator shall include the informa-
tion described in paragraph (2) in the annual report of the Ad-
ministrator to Congress.
(4) WAIVER FOR SPECIFIC TOPIC.—Upon the receipt of an ap-
plication from a Federal agency, the Administrator may grant
a waiver from the requirement under paragraph (1) with re-
spect to a specific topic (but not for the agency as a whole) for
a fiscal year if the Administrator determines, based on the in-
formation contained in the application from the agency, that—
(A) the requirement under paragraph (1) will interfere
with the ability of the agency to fulfill its research mission
through the SBIR program or the STTR program; and
(B) the agency will minimize, to the maximum extent
possible, the number of awards that do not satisfy the re-
quirement under paragraph (1) to preserve the nature and
intent of the SBIR program and the STTR program.
(5) RULE OF CONSTRUCTION.—Nothing in this subsection
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shall be construed to prevent a Federal agency from
supplementing an award under the SBIR program or the STTR
program using funds of the Federal agency that are not part
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38
of the SBIR program or the STTR program of the Federal
agency.
(bb) SUBSEQUENT PHASE II AWARDS.—
(1) AGENCY FLEXIBILITY.—A small business concern that re-
ceived a Phase I award from a Federal agency under this sec-
tion shall be eligible to receive a subsequent Phase II award
from another Federal agency, if the head of each relevant Fed-
eral agency or the relevant component of the Federal agency
makes a written determination that the topics of the relevant
awards are the same and both agencies report the awards to
the Administrator for inclusion in the public database under
subsection (k).
(2) SBIR AND STTR PROGRAM FLEXIBILITY.—A small business
concern that received a Phase I award under this section under
the SBIR program or the STTR program may receive a subse-
quent Phase II award in either the SBIR program or the STTR
program and the participating agency or agencies shall report
the awards to the Administrator for inclusion in the public
database under subsection (k).
(3) PREVENTING DUPLICATIVE AWARDS.—The head of a Fed-
eral agency shall verify that any activity to be performed with
respect to a project with a Phase I or Phase II SBIR or STTR
award has not been funded under the SBIR program or STTR
program of another Federal agency.
(cc) PHASE FLEXIBILITY.—During fiscal years 2012 øthrough
2025¿ through 2026, the National Institutes of Health, the Depart-
ment of Defense, and the Department of Education may each pro-
vide to a small business concern an award under Phase II of the
SBIR program with respect to a project, without regard to whether
the small business concern was provided an award under Phase I
of an SBIR program with respect to such project, if the head of the
applicable agency determines that the small business concern has
completed the determinations described in subsection (e)(4)(A) with
respect to such project despite not having been provided a Phase
I award.
(dd) PARTICIPATION OF SMALL BUSINESS CONCERNS MAJORITY-
OWNED BY VENTURE CAPITAL OPERATING COMPANIES, HEDGE
FUNDS, OR PRIVATE EQUITY FIRMS IN THE SBIR PROGRAM.—
(1) AUTHORITY.—Upon providing a written determination de-
scribed in paragraph (2) to the Administrator, the Committee
on Small Business and Entrepreneurship of the Senate, and
the Committee on Small Business and the Committee on
Science, Space, and Technology of the House of Representa-
tives, not later than 30 days before the date on which any such
award is made—
(A) the Director of the National Institutes of Health, the
Secretary of Energy, and the Director of the National
Science Foundation may award not more than 25 percent
of the funds allocated for the SBIR program of the applica-
ble Federal agency to small business concerns that are
owned in majority part by multiple venture capital oper-
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ating companies, hedge funds, or private equity firms
through competitive, merit-based procedures that are open
to all eligible small business concerns; and
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39
(B) the head of a Federal agency other than a Federal
agency described in subparagraph (A) that participates in
the SBIR program may award not more than 15 percent
of the funds allocated for the SBIR program of the Federal
agency to small business concerns that are owned in ma-
jority part by multiple venture capital operating compa-
nies, hedge funds, or private equity firms through competi-
tive, merit-based procedures that are open to all eligible
small business concerns.
(2) DETERMINATION.—A written determination described in
this paragraph is a written determination by the head of a
Federal agency that explains how the use of the authority
under paragraph (1) will—
(A) induce additional venture capital, hedge fund, or pri-
vate equity firm funding of small business innovations;
(B) substantially contribute to the mission of the Federal
agency;
(C) demonstrate a need for public research; and
(D) otherwise fulfill the capital needs of small business
concerns for additional financing for SBIR projects.
(3) REGISTRATION.—A small business concern that is major-
ity-owned by multiple venture capital operating companies,
hedge funds, or private equity firms and qualified for participa-
tion in the program authorized under paragraph (1) shall—
(A) register with the Administrator on the date that the
small business concern submits an application for an
award under the SBIR program; and
(B) indicate in any SBIR proposal that the small busi-
ness concern is registered under subparagraph (A) as ma-
jority-owned by multiple venture capital operating compa-
nies, hedge funds, or private equity firms.
(4) COMPLIANCE.—
(A) IN GENERAL.—The head of a Federal agency that
makes an award under this subsection during a fiscal year
shall collect and submit to the Administrator data relating
to the number and dollar amount of Phase I awards, Phase
II awards, and any other category of awards by the Fed-
eral agency under the SBIR program during that fiscal
year.
(B) ANNUAL REPORTING.—The Administrator shall in-
clude as part of each annual report by the Administration
under subsection (b)(7) any data submitted under subpara-
graph (A) and a discussion of the compliance of each Fed-
eral agency that makes an award under this subsection
during the fiscal year with the maximum percentages
under paragraph (1).
(5) ENFORCEMENT.—If a Federal agency awards more than
the percent of the funds allocated for the SBIR program of the
Federal agency authorized under paragraph (1) for a purpose
described in paragraph (1), the head of the Federal agency
shall transfer an amount equal to the amount awarded in ex-
cess of the amount authorized under paragraph (1) to the
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funds for general SBIR programs from the non-SBIR and non-
STTR research and development funds of the Federal agency
not later than 180 days after the date on which the Federal
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40
agency made the award that caused the total awarded under
paragraph (1) to be more than the amount authorized under
paragraph (1) for a purpose described in paragraph (1).
(6) FINAL DECISIONS ON APPLICATIONS UNDER THE SBIR PRO-
GRAM.—
(A) DEFINITION.—In this paragraph, the term ‘‘covered
small business concern’’ means a small business concern
that—
(i) was not majority-owned by multiple venture cap-
ital operating companies, hedge funds, or private eq-
uity firms on the date on which the small business
concern submitted an application in response to a so-
licitation under the SBIR programs; and
(ii) on the date of the award under the SBIR pro-
gram is majority-owned by multiple venture capital
operating companies, hedge funds, or private equity
firms.
(B) IN GENERAL.—If a Federal agency does not make an
award under a solicitation under the SBIR program before
the date that is 9 months after the date on which the pe-
riod for submitting applications under the solicitation
ends—
(i) a covered small business concern is eligible to re-
ceive the award, without regard to whether the cov-
ered small business concern meets the requirements
for receiving an award under the SBIR program for a
small business concern that is majority-owned by mul-
tiple venture capital operating companies, hedge
funds, or private equity firms, if the covered small
business concern meets all other requirements for
such an award; and
(ii) the head of the Federal agency shall transfer an
amount equal to any amount awarded to a covered
small business concern under the solicitation to the
funds for general SBIR programs from the non-SBIR
and non-STTR research and development funds of the
Federal agency, not later than 90 days after the date
on which the Federal agency makes the award.
(7) EVALUATION CRITERIA.—A Federal agency may not use in-
vestment of venture capital or investment from hedge funds or
private equity firms as a criterion for the award of contracts
under the SBIR program or STTR program.
(ee) COLLABORATING WITH FEDERAL LABORATORIES AND RE-
SEARCH AND DEVELOPMENT CENTERS.—
(1) AUTHORIZATION.—Subject to the limitations under this
section, the head of each participating Federal agency may
make SBIR and STTR awards to any eligible small business
concern that—
(A) intends to enter into an agreement with a Federal
laboratory or federally funded research and development
center for portions of the activities to be performed under
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that award; or
(B) has entered into a cooperative research and develop-
ment agreement (as defined in section 12(d) of the Steven-
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41
son-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710a(d))) with a Federal laboratory.
(2) PROHIBITION.—No Federal agency shall—
(A) condition an SBIR or STTR award upon entering
into agreement with any Federal laboratory or any feder-
ally funded laboratory or research and development center
for any portion of the activities to be performed under that
award;
(B) approve an agreement between a small business con-
cern receiving an SBIR or STTR award and a Federal lab-
oratory or federally funded laboratory or research and de-
velopment center, if the small business concern performs
a lesser portion of the activities to be performed under
that award than required by this section and by the SBIR
Policy Directive and the STTR Policy Directive of the Ad-
ministrator; or
(C) approve an agreement that violates any provision,
including any data rights protections provision, of this sec-
tion or the SBIR and the STTR Policy Directives.
(3) IMPLEMENTATION.—Not later than 180 days after the date
of enactment of this subsection, the Administrator shall modify
the SBIR Policy Directive and the STTR Policy Directive
issued under this section to ensure that small business con-
cerns—
(A) have the flexibility to use the resources of the Fed-
eral laboratories or federally funded research and develop-
ment centers; and
(B) are not mandated to enter into agreement with any
Federal laboratory or any federally funded laboratory or
research and development center as a condition of an
award.
(4) ADVANCE PAYMENT.—If a small business concern receiv-
ing an award under this section enters into an agreement with
a Federal laboratory or federally funded research and develop-
ment center for portions of the activities to be performed under
that award, the Federal laboratory or federally funded re-
search and development center may not require advance pay-
ment from the small business concern in an amount greater
than the amount necessary to pay for 30 days of such activi-
ties.
(ff) ADDITIONAL SBIR AND STTR AWARDS.—
(1) EXPRESS AUTHORITY FOR AWARDING A SEQUENTIAL PHASE
II AWARD.—A small business concern that receives a Phase II
SBIR award or a Phase II STTR award for a project remains
eligible to receive 1 additional Phase II SBIR award or Phase
II STTR award for continued work on that project.
(2) PREVENTING DUPLICATIVE AWARDS.—The head of a Fed-
eral agency shall verify that any activity to be performed with
respect to a project with a Phase I or Phase II SBIR or STTR
award has not been funded under the SBIR program or STTR
program of another Federal agency.
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(gg) PILOT PROGRAM.—
(1) AUTHORIZATION.—The head of each covered Federal agen-
cy may allocate not more than 10 percent of the funds allo-
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42
cated to the SBIR program and the STTR program of the cov-
ered Federal agency—
(A) for awards for technology development, testing, eval-
uation, and commercialization assistance for SBIR and
STTR Phase II technologies; or
(B) to support the progress of research, research and de-
velopment, and commercialization conducted under the
SBIR or STTR programs to Phase III.
(2) APPLICATION BY FEDERAL AGENCY.—
(A) IN GENERAL.—A covered Federal agency may not es-
tablish a pilot program unless the covered Federal agency
makes a written application to the Administrator, not later
than 90 days before the first day of the fiscal year in which
the pilot program is to be established, that describes a
compelling reason that additional investment in SBIR or
STTR technologies is necessary, including unusually high
regulatory, systems integration, or other costs relating to
development or manufacturing of identifiable, highly prom-
ising small business technologies or a class of such tech-
nologies expected to substantially advance the mission of
the agency.
(B) DETERMINATION.—The Administrator shall—
(i) make a determination regarding an application
submitted under subparagraph (A) not later than 30
days before the first day of the fiscal year for which
the application is submitted;
(ii) publish the determination in the Federal Reg-
ister; and
(iii) make a copy of the determination and any re-
lated materials available to the Committee on Small
Business and Entrepreneurship of the Senate and the
Committee on Small Business and the Committee on
Science, Space, and Technology of the House of Rep-
resentatives.
(3) MAXIMUM AMOUNT OF AWARD.—The head of a covered
Federal agency may not make an award under a pilot program
in excess of 3 times the dollar amounts generally established
for Phase II awards under subsection (j)(2)(D) or (p)(2)(B)(ix).
(4) REGISTRATION.—Any applicant that receives an award
under a pilot program shall register with the Administrator in
a registry that is available to the public.
(5) AWARD CRITERIA OR CONSIDERATION.—When making an
award under this section, the head of a covered Federal agency
shall give consideration to whether the technology to be sup-
ported by the award is likely to be manufactured in the United
States.
(6) REPORT.—The head of each covered Federal agency shall
include in the annual report of the covered Federal agency to
the Administrator an analysis of the various activities consid-
ered for inclusion in the pilot program of the covered Federal
agency and a statement of the reasons why each activity con-
sidered was included or not included, as the case may be.
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(7) TERMINATION.—The authority to establish a pilot pro-
gram under this section expires at the end of øfiscal year
2025¿ fiscal year 2026.
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43
(8) DEFINITIONS.—In this subsection—
(A) the term ‘‘covered Federal agency’’—
(i) means a Federal agency participating in the
SBIR program or the STTR program; and
(ii) does not include the Department of Defense; and
(B) the term ‘‘pilot program’’ means each program estab-
lished under paragraph (1).
(hh) TIMING OF RELEASE OF FUNDING.—
(1) IN GENERAL.—Federal agencies participating in the SBIR
program or STTR program shall, to the extent possible, short-
en the amount of time between the provision of notice of an
award under the SBIR program or STTR program and the sub-
sequent release of funding with respect to the award.
(2) PILOT PROGRAM TO ACCELERATE DEPARTMENT OF DEFENSE
SBIR AND STTR AWARDS.—
(A) IN GENERAL.—Not later than 1 year after the date of
enactment of this paragraph, the Under Secretary of De-
fense for Research and Engineering, acting through the Di-
rector of Defense Procurement and Acquisition Policy of
the Department of Defense, shall establish a pilot program
to reduce the time for awards under the SBIR and STTR
programs of the Department of Defense, under which the
Department of Defense shall—
(i) develop simplified and standardized procedures
and model contracts throughout the Department of
Defense for Phase I, Phase II, and Phase III SBIR
awards;
(ii) for Phase I SBIR and STTR awards, reduce the
amount of time between solicitation closure and
award;
(iii) for Phase II SBIR and STTR awards, reduce the
amount of time between the end of a Phase I award
and the start of the Phase II award;
(iv) for Phase II SBIR and STTR awards that skip
Phase I, reduce the amount of time between solicita-
tion closure and award;
(v) for sequential Phase II SBIR and STTR awards,
reduce the amount of time between Phase II awards;
and
(vi) reduce the award times described in clauses (ii),
(iii), (iv), and (v) to be as close to 90 days as possible.
(B) CONSULTATION.—In carrying out the pilot program
under subparagraph (A), the Director of Defense Procure-
ment and Acquisition Policy of the Department of Defense
shall consult with the Director of the Office of Small Busi-
ness Programs of the Department of Defense.
(C) TERMINATION.—The pilot program under subpara-
graph (A) shall terminate on øSeptember 30, 2025¿ Sep-
tember 30, 2026.
(ii) REPORTING ON TIMING.—
(1) IN GENERAL.—Federal agencies participating in the SBIR
program or STTR program shall provide to the Administrator,
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for the annual report on the SBIR and STTR program under
subsection (b)(7), the average amount of time the agency takes
to make a final decision on proposals submitted under such
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44
programs, the average amount of time the agency takes to re-
lease funding with respect to an award under such programs,
and the goals established to reduce such amounts.
(2) COMPTROLLER GENERAL REPORTS.—The Comptroller Gen-
eral of the United States shall submit to the Committee on
Small Business and Entrepreneurship of the Senate, the Com-
mittee on Armed Services of the Senate, the Committee on
Small Business of the House of Representatives, and the Com-
mittee on Armed Services of the House of Representatives—
(A) not later than 1 year after the date of enactment of
this paragraph, and every year thereafter for 3 years, a re-
port that—
(i) provides the average and median amount of time
that each component of the Department of Defense
with an SBIR or STTR program takes to review and
make a final decision on proposals submitted under
the program; and
(ii) compares that average and median amount of
time with that of other Federal agencies participating
in the SBIR or STTR program; and
(B) not later than December 5, 2021, a report that—
(i) includes the information described in subpara-
graph (A);
(ii) assesses where each Federal agency partici-
pating in the SBIR or STTR program needs improve-
ment with respect to the proposal review and award
times under the program;
(iii) identifies best practices for shortening the pro-
posal review and award times under the SBIR and
STTR programs, including the pros and cons of using
contracts compared to grants; and
(iv) analyzes the efficacy of the pilot program estab-
lished under subsection (hh)(2).
(jj) PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PROGRAM.—
(1) IN GENERAL.—The Director of the National Institutes of
Health may use $5,000,000 of the funds allocated under sub-
section (n)(1) for a Proof of Concept Partnership pilot program
to accelerate the creation of small businesses and the commer-
cialization of research innovations from qualifying institutions.
To implement this program, the Director shall award, through
a competitive, merit-based process, grants to qualifying institu-
tions. These grants shall only be used to administer Proof of
Concept Partnership awards in conformity with this sub-
section.
(2) DEFINITIONS.—In this subsection—
(A) the term ‘‘Director’’ means the Director of the Na-
tional Institutes of Health;
(B) the term ‘‘pilot program’’ refers to the Proof of Con-
cept Partnership pilot program; and
(C) the terms ‘‘qualifying institution’’ and ‘‘institution’’
mean a university or other research institution that par-
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ticipates in the National Institutes of Health’s STTR pro-
gram.
(3) PROOF OF CONCEPT PARTNERSHIPS.—
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45
(A) IN GENERAL.—A Proof of Concept Partnership shall
be set up by a qualifying institution to award grants to in-
dividual researchers. These grants should provide re-
searchers with the initial investment and the resources to
support the proof of concept work and commercialization
mentoring needed to translate promising research projects
and technologies into a viable company. This work may in-
clude technical validations, market research, clarifying in-
tellectual property rights position and strategy, and inves-
tigating commercial or business opportunities.
(B) AWARD GUIDELINES.—The administrator of a Proof of
Concept Partnership program shall award grants in ac-
cordance with the following guidelines:
(i) The Proof of Concept Partnership shall use a
market-focused project management oversight process,
including—
(I) a rigorous, diverse review board comprised of
local experts in translational and proof of concept
research, including industry, start-up, venture
capital, technical, financial, and business experts
and university technology transfer officials;
(II) technology validation milestones focused on
market feasibility;
(III) simple reporting effective at redirecting
projects; and
(IV) the willingness to reallocate funding from
failing projects to those with more potential.
(ii) Not more than $100,000 shall be awarded to-
wards an individual proposal.
(C) EDUCATIONAL RESOURCES AND GUIDANCE.—The ad-
ministrator of a Proof of Concept Partnership program
shall make educational resources and guidance available
to researchers attempting to commercialize their innova-
tions.
(4) AWARDS.—
(A) SIZE OF AWARD.—The Director may make awards to
a qualifying institution for up to $1,000,000 per year for
up to 4 years.
(B) AWARD CRITERIA.—In determining which qualifying
institutions receive pilot program grants, the Director
shall consider, in addition to any other criteria the Direc-
tor determines necessary, the extent to which qualifying
institutions—
(i) have an established and proven technology trans-
fer or commercialization office and have a plan for en-
gaging that office in the program’s implementation;
(ii) have demonstrated a commitment to local and
regional economic development;
(iii) are located in diverse geographies and are of di-
verse sizes;
(iv) can assemble project management boards com-
prised of industry, start-up, venture capital, technical,
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financial, and business experts;
(v) have an intellectual property rights strategy or
office; and
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46
(vi) demonstrate a plan for sustainability beyond the
duration of the funding award.
(5) LIMITATIONS.—The funds for the pilot program shall not
be used—
(A) for basic research, but to evaluate the commercial
potential of existing discoveries, including—
(i) proof of concept research or prototype develop-
ment; and
(ii) activities that contribute to determining a
project’s commercialization path, to include technical
validations, market research, clarifying intellectual
property rights, and investigating commercial and
business opportunities; or
(B) to fund the acquisition of research equipment or sup-
plies unrelated to commercialization activities.
(6) EVALUATIVE REPORT.—The Director shall submit to the
Committee on Science, Space, and Technology and the Com-
mittee on Small Business of the House of Representatives and
the Committee on Small Business and Entrepreneurship of the
Senate an evaluative report regarding the activities of the pilot
program. The report shall include—
(A) a detailed description of the institutional and pro-
posal selection process;
(B) an accounting of the funds used in the pilot program;
(C) a detailed description of the pilot program, including
incentives and activities undertaken by review board ex-
perts;
(D) a detailed compilation of results achieved by the
pilot program, including the number of small business con-
cerns included and the number of business packages devel-
oped, and the number of projects that progressed into sub-
sequent STTR phases; and
(E) an analysis of the program’s effectiveness with sup-
porting data.
(7) SUNSET.—The pilot program under this subsection shall
terminate at the end of øfiscal year 2025¿ fiscal year 2026.
(kk) PHASE III REPORTING.—The annual SBIR or STTR report to
Congress by the Administration under subsection (b)(7) shall in-
clude, for each Phase III award—
(1) the name of the agency or component of the agency or the
non-Federal source of capital making the Phase III award;
(2) the name of the small business concern or individual re-
ceiving the Phase III award; and
(3) the dollar amount of the Phase III award.
(ll) CONSENT TO RELEASE CONTACT INFORMATION TO ORGANIZA-
TIONS.—
(1) ENABLING CONCERN TO GIVE CONSENT.—Each Federal
agency required by this section to conduct an SBIR program or
an STTR program shall enable a small business concern that
is an SBIR applicant or an STTR applicant to indicate to the
Federal agency whether the Federal agency has the consent of
the concern to—
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(A) identify the concern to appropriate local and State-
level economic development organizations as an SBIR ap-
plicant or an STTR applicant; and
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47
(B) release the contact information of the concern to
such organizations.
(2) RULES.—The Administrator shall establish rules to imple-
ment this subsection. The rules shall include a requirement
that a Federal agency include in the SBIR and STTR applica-
tion a provision through which the applicant can indicate con-
sent for purposes of paragraph (1).
(mm) ASSISTANCE FOR ADMINISTRATIVE, OVERSIGHT, AND CON-
TRACT PROCESSING COSTS.—
(1) IN GENERAL.—Subject to paragraph (3) and until øSep-
tember 30, 2025¿ September 30, 2026, the Administrator shall
allow each Federal agency required to conduct an SBIR pro-
gram to use not more than 3 percent of the funds allocated to
the SBIR program of the Federal agency for—
(A) the administration of the SBIR program or the STTR
program of the Federal agency;
(B) the provision of outreach and technical assistance re-
lating to the SBIR program or STTR program of the Fed-
eral agency, including technical assistance site visits, per-
sonnel interviews, and national conferences;
(C) the implementation of commercialization and out-
reach initiatives that were not in effect on the date of en-
actment of this subsection;
(D) carrying out the program under subsection (y);
(E) activities relating to oversight and congressional re-
porting, including waste, fraud, and abuse prevention ac-
tivities;
(F) targeted reviews of recipients of awards under the
SBIR program or STTR program of the Federal agency
that the head of the Federal agency determines are at high
risk for fraud, waste, or abuse to ensure compliance with
requirements of the SBIR program or STTR program, re-
spectively;
(G) the implementation of oversight and quality control
measures, including verification of reports and invoices
and cost reviews;
(H) carrying out subsection (dd);
(I) contract processing costs relating to the SBIR pro-
gram or STTR program of the Federal agency;
(J) funding for additional personnel and assistance with
application reviews; and
(K) funding for improvements that increase commonality
across data systems, reduce redundancy, and improve data
oversight and accuracy.
(2) OUTREACH AND TECHNICAL ASSISTANCE.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), a Federal agency participating in the program under
this subsection shall use a portion of the funds authorized
for uses under paragraph (1) to carry out the policy direc-
tive required under subsection (j)(2)(F) and to increase the
participation of States with respect to which a low level of
SBIR awards have historically been awarded.
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(B) WAIVER.—A Federal agency may request the Admin-
istrator to waive the requirement contained in subpara-
graph (A). Such request shall include an explanation of
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48
why the waiver is necessary. The Administrator may grant
the waiver based on a determination that the agency has
demonstrated a sufficient need for the waiver, that the
outreach objectives of the agency are being met, and that
there is increased participation by States with respect to
which a low level of SBIR awards have historically been
awarded.
(3) PERFORMANCE CRITERIA.—A Federal agency may not use
funds as authorized under paragraph (1) until after the effec-
tive date of performance criteria, which the Administrator
shall establish, to measure any benefits of using funds as au-
thorized under paragraph (1) and to assess continuation of the
authority under paragraph (1).
(4) RULES.—Not later than 180 days after the date of enact-
ment of this subsection, the Administrator shall issue rules to
carry out this subsection.
(5) COORDINATION WITH IG.—Each Federal agency shall co-
ordinate the activities funded under subparagraph (E), (F), or
(G) of paragraph (1) with their respective Inspectors General,
when appropriate, and each Federal agency that allocates more
than $50,000,000 to the SBIR program of the Federal agency
for a fiscal year may share such funding with its Inspector
General when the Inspector General performs such activities.
(6) REPORTING.—The Administrator shall collect data and
provide to the Committee on Small Business and Entrepre-
neurship of the Senate and the Committee on Small Business,
the Committee on Science, Space, and Technology, and the
Committee on Appropriations of the House of Representatives
a report on the use of funds under this subsection, including
funds used to achieve the objectives of paragraph (2)(A) and
any use of the waiver authority under paragraph (2)(B).
(nn) ANNUAL REPORT ON SBIR AND STTR PROGRAM GOALS.—
(1) DEVELOPMENT OF METRICS.—The head of each Federal
agency required to participate in the SBIR program or the
STTR program shall develop metrics to evaluate the effective-
ness and the benefit to the people of the United States of the
SBIR program and the STTR program of the Federal agency
that—
(A) are science-based and statistically driven;
(B) reflect the mission of the Federal agency; and
(C) include factors relating to the economic impact of the
programs.
(2) EVALUATION.—The head of each Federal agency described
in paragraph (1) shall conduct an annual evaluation using the
metrics developed under paragraph (1) of—
(A) the SBIR program and the STTR program of the
Federal agency; and
(B) the benefits to the people of the United States of the
SBIR program and the STTR program of the Federal agen-
cy.
(3) REPORT.—
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(A) IN GENERAL.—The head of each Federal agency de-
scribed in paragraph (1) shall submit to the appropriate
committees of Congress and the Administrator an annual
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49
report describing in detail the results of an evaluation con-
ducted under paragraph (2).
(B) PUBLIC AVAILABILITY OF REPORT.—The head of each
Federal agency described in paragraph (1) shall make each
report submitted under subparagraph (A) available to the
public online.
(C) DEFINITION.—In this paragraph, the term ‘‘appro-
priate committees of Congress’’ means—
(i) the Committee on Small Business and Entrepre-
neurship of the Senate; and
(ii) the Committee on Small Business and the Com-
mittee on Science, Space, and Technology of the House
of Representatives.
(oo) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR
PROGRAMS.—All funds awarded, appropriated, or otherwise made
available in accordance with subsection (f) or (n) must be awarded
pursuant to competitive and merit-based selection procedures.
(pp) LIMITATION ON PILOT PROGRAMS.—
(1) EXISTING PILOT PROGRAMS.—The Administrator may only
carry out a covered pilot program that is in operation on the
date of enactment of this subsection during the 3-year period
beginning on such date of enactment.
(2) NEW PILOT PROGRAMS.—The Administrator may only
carry out a covered pilot program established after the date of
enactment of this subsection—
(A) during the 3-year period beginning on the date on
which such program is established; and
(B) if such program does not continue and is not based
on, in any manner, a previously established covered pilot
program.
(3) COVERED PILOT PROGRAM DEFINED.—In this subsection,
the term ‘‘covered pilot program’’ means any initiative, project,
innovation, or other activity—
(A) established by the Administrator;
(B) relating to an SBIR or STTR program; and
(C) not specifically authorized by law.
(qq) MINIMUM STANDARDS FOR PARTICIPATION.—
(1) PROGRESS TO PHASE II SUCCESS.—
(A) ESTABLISHMENT OF SYSTEM AND MINIMUM COMMER-
CIALIZATION RATE.—Not later than 1 year after the date of
enactment of this subsection, the head of each Federal
agency participating in the SBIR or STTR program shall—
(i) establish a system to measure, where appro-
priate, the success of small business concerns with re-
spect to the receipt of Phase II SBIR or STTR awards
for projects that have received Phase I SBIR or STTR
awards;
(ii) establish a minimum performance standard for
small business concerns with respect to the receipt of
Phase II SBIR or STTR awards for projects that have
received Phase I SBIR or STTR awards; and
(iii) begin evaluating, each fiscal year, whether each
DMWilson on DSK7X7S144PROD with REPORTS
small business concern that received a Phase I SBIR
or STTR award from the agency meets the minimum
performance standard established under clause (ii).
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50
(B) CONSEQUENCE OF FAILURE TO MEET MINIMUM COM-
MERCIALIZATION RATE.—If the head of a Federal agency de-
termines that a small business concern that received a
Phase I SBIR or STTR award from the agency is not meet-
ing the minimum performance standard established under
subparagraph (A)(ii), such concern may not participate in
Phase I (or Phase II if under the authority of subsection
(cc)) of the SBIR or STTR program of that agency during
the 1-year period beginning on the date on which such de-
termination is made.
(2) PROGRESS TO PHASE III SUCCESS.—
(A) ESTABLISHMENT OF SYSTEM AND MINIMUM COMMER-
CIALIZATION RATE.—Not later than 2 years after the date
of enactment of this subsection, the head of each Federal
agency participating in the SBIR or STTR program shall—
(i) establish a system to measure, where appro-
priate, the success of small business concerns with re-
spect to the receipt of Phase III SBIR or STTR awards
for projects that have received Phase I SBIR or STTR
awards;
(ii) establish a minimum performance standard for
small business concerns with respect to the receipt of
Phase III SBIR or STTR awards for projects that have
received Phase I SBIR or STTR awards; and
(iii) begin evaluating, each fiscal year, whether each
small business concern that received a Phase I SBIR
or STTR award from the agency meets the minimum
performance standard established under clause (ii).
(B) CONSEQUENCE OF FAILURE TO MEET MINIMUM COM-
MERCIALIZATION RATE.—If the head of a Federal agency de-
termines that a small business concern that received a
Phase I SBIR or STTR award from the agency is not meet-
ing the minimum performance standard established under
subparagraph (A)(ii), such concern may not participate in
Phase I (or Phase II if under the authority of subsection
(cc)) of the SBIR or STTR program of that agency during
the 1-year period beginning on the date on which such de-
termination is made.
(3) INCREASED MINIMUM PERFORMANCE STANDARDS FOR EXPE-
RIENCED FIRMS.—
(A) PROGRESS TO PHASE II SUCCESS.—
(i) IN GENERAL.—With respect to a small business
concern that received or receives more than 50 Phase
I awards during a covered period, each minimum per-
formance standard established under paragraph
(1)(A)(ii) shall be doubled for such covered period.
(ii) CONSEQUENCE OF FAILURE TO MEET STANDARD.—
If the head of a Federal agency determines that a
small business concern that received a Phase I award
from the Federal agency is not meeting an applicable
increased minimum performance standard modified
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under clause (i), the small business concern may not
receive more than 20 total Phase I awards and Phase
II awards under subsection (cc) from each Federal
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51
agency during the 1-year period beginning on the date
on which such determination is made.
(iii) COVERED PERIOD DEFINED.—In this subpara-
graph, the term ‘‘covered period’’ means a consecutive
period of 5 fiscal years preceding the most recent fiscal
year.
(B) PROGRESS TO PHASE III SUCCESS.—
(i) IN GENERAL.—Each minimum performance stand-
ard established under paragraph (2)(A)(ii) shall—
(I) with respect to a small business concern that
received or receives more than 50 Phase II awards
during a covered period, require an average of
$250,000 of aggregate sales and investments per
Phase II award received during such covered pe-
riod; and
(II) with respect to a small business concern
that received or receives more than 100 Phase II
awards during a covered period, require an aver-
age of $450,000 of aggregate sales and invest-
ments per Phase II award received during such
covered period.
(ii) CONSEQUENCE OF FAILURE TO MEET STANDARD.—
If the head of a Federal agency determines that a
small business concern that received a Phase I award
from the agency is not meeting an applicable increased
minimum performance standard modified under clause
(i), the small business concern may not receive more
than 20 total Phase I awards and Phase II awards
under subsection (cc) from each agency during the 1-
year period beginning on the date on which such de-
termination is made.
(iii) DOCUMENTATION.—
(I) IN GENERAL.—A small business concern that
is subject to an increased minimum performance
standard described in clause (i) shall submit to
the Administrator supporting documentation evi-
dencing that all covered sales of the small busi-
ness concern were properly used to meet the in-
creased minimum performance standard.
(II) COVERED SALE DEFINED.—In this clause, the
term ‘‘covered sale’’ means a sale by a small busi-
ness concern—
(aa) that the small business concern claims
to be attributable to an SBIR or STTR award;
(bb) for which no amount of the payment
was or is made using Federal funds;
(cc) which the small business concern uses
to meet an applicable increased minimum per-
formance standard under clause (i); and
(dd) that was or is received during the 5 fis-
cal years immediately preceding the fiscal
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year in which the small business concern uses
the sale to meet the increased minimum per-
formance standard.
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52
(iv) COVERED PERIOD DEFINED.—In this subpara-
graph, the term ‘‘covered period’’ means a consecutive
period of 10 fiscal years preceding the most recent 2
fiscal years.
(C) PATENTS FOR INCREASED MINIMUM PERFORMANCE
STANDARDS.—A small business concern with respect to
which an increased minimum performance standard under
subparagraph (B) applies may not meet the increased min-
imum performance standard by obtaining patents.
(D) EFFECTIVE DATE.—Subparagraphs (A) through (C)
shall take effect on April 1, 2023.
(E) WAIVER.—
(i) IN GENERAL.—The Administrator may, upon the
request of a senior official of a Federal agency, grant
a waiver with respect to a topic for the SBIR or STTR
program of the Federal agency if—
(I) the topic is critical to the mission of the Fed-
eral agency or relates to national security; and
(II) the official submits to the Administrator a
request for the waiver in accordance with clause
(iii).
(ii) WAIVER EFFECTS.—If the Administration grants
a waiver with respect to a topic for the SBIR or STTR
program of a Federal agency, subparagraphs (A)(ii)
and (B)(ii) shall not prohibit any covered small busi-
ness concern from receiving an SBIR or STTR award
under such topic.
(iii) AGENCY REQUEST AND CONGRESSIONAL NOTIFICA-
TION.—Not later than 15 days before the release of a
solicitation including a topic for which a senior official
of a Federal agency is requesting a waiver under
clause (i), the senior official shall submit to the Ad-
ministrator, the Committee on Small Business and the
Committee on Science, Space, and Technology of the
House of Representatives, and the Committee on
Small Business and Entrepreneurship of the Senate a
request for the waiver.
(iv) ADMINISTRATOR DETERMINATION AND CONGRES-
SIONAL NOTIFICATION.—Not later than 15 days after
receiving a request for a waiver under clause (i), the
Administrator shall make a determination with re-
spect to the request and notify the senior official at
the Federal agency that made the request, the Com-
mittee on Small Business and the Committee on
Science, Space, and Technology of the House of Rep-
resentatives, and the Committee on Small Business
and Entrepreneurship of the Senate of the determina-
tion.
(v) DEFINITIONS.—In this subparagraph:
(I) COVERED SMALL BUSINESS CONCERN.—The
term ‘‘covered small business concern’’ means a
small business concern that is subject to the con-
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sequences under subparagraph (A)(ii) or (B)(ii)
pursuant to a determination by the head of a Fed-
eral agency that such small business concern did
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53
not meet an increased minimum performance
standard that was applicable to such small busi-
ness concern.
(II) SENIOR OFFICIAL.—The term ‘‘senior official’’
means an individual appointed to a position in a
Federal agency that is classified above GS–15 pur-
suant section 5108 of title 5, United States Code,
or any equivalent position, as determined by the
Administrator.
(F) REPORTING.—
(i) IN GENERAL.—Not later than July 1, 2023, and
annually thereafter, the Administrator shall submit to
Congress a list of the small business concerns that did
not meet—
(I) an applicable minimum performance stand-
ard established under paragraph (1)(A)(ii) or
(2)(A)(ii); or
(II) an applicable increased minimum perform-
ance standard.
(ii) WAIVERS.—Each list submitted under clause (i)
shall identify each small business concern that re-
ceived an SBIR or STTR award pursuant to a waiver
granted under subparagraph (E) by the Administrator
during the period covered by the list.
(iii) CONFIDENTIALITY.—Each list submitted under
clause (i) shall be confidential and exempt from disclo-
sure under section 552(b)(3) of title 5, United States
Code (commonly known as the ‘‘Freedom of Informa-
tion Act’’).
(G) IMPLEMENTATION.—Not later than April 1, 2023, the
Administration shall implement the increased minimum
performance standards under this paragraph.
(H) RULES OF CONSTRUCTION.—Nothing in this para-
graph shall be construed—
(i) to prohibit a small business concern from partici-
pating in a Phase I (or Phase II if under the authority
of subsection (cc)) of an SBIR or STTR program under
paragraph (1)(B) or (2)(B) solely on the basis of a de-
termination by the head of a Federal agency that the
small business concern is not meeting an increased
minimum performance standard; or
(ii) to prevent the head of a Federal agency from im-
plementing more restrictive limitations on the number
of federally funded Phase I awards and direct to Phase
II awards under subsection (cc) that may be awarded
to a small business concern than the limitations de-
scribed in subparagraphs (A)(ii) and (B)(ii).
(I) TERMINATION.—This paragraph shall terminate on
øSeptember 30, 2025¿ September 30, 2026.
(4) ADMINISTRATION OVERSIGHT.—
(A) APPROVAL AND PUBLICATION OF SYSTEMS AND MIN-
IMUM PERFORMANCE STANDARDS.—Each system and min-
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imum performance standard established under paragraph
(1) or paragraph (2) shall be submitted by the head of the
applicable Federal agency to the Administrator and shall
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54
be subject to the approval of the Administrator. In making
a determination with respect to approval, the Adminis-
trator shall ensure that the minimum performance stand-
ard exceeds a de minimis level. The Administrator shall
publish on the Internet Web site of the Administration the
systems and minimum performance standards approved.
(B) SUBMISSION OF EVALUATION RESULTS BY AGENCY.—
The head of each covered Federal agency shall submit to
the Administrator the results of each evaluation conducted
under paragraph (1) or paragraph (2).
(5) REQUIREMENT OF NOTICE AND COMMENT.—Each system
and minimum performance standard established under para-
graph (1) or paragraph (2) and each approval provided by the
Administrator under paragraph (4)(A), at least 60 days before
becoming effective, shall be preceded by the provision of notice
of and an opportunity for public comment on such system,
standard, or approval.
(6) INSPECTOR GENERAL AUDIT.—Not later than 1 year after
the date on which the Administrator implements the increased
minimum performance standards under paragraph (3), and pe-
riodically thereafter, the Inspector General of the Administra-
tion shall—
(A) conduct an audit on whether the small business con-
cerns subject to increased minimum performance stand-
ards under paragraph (3)(B) verified—
(i) the sales by and investments in the small busi-
ness concerns—
(I) during the 5 fiscal years immediately pre-
ceding the fiscal year in which the small business
concern used such sales and investments to meet
an applicable increased performance standard;
and
(II) as a direct result of a Phase I award or
Phase II award made under subsection (cc) during
the covered period (as defined in paragraph
(3)(B)(iv)), consistent with the definition of Phase
III, as applicable;
(ii) any third-party revenue the small business con-
cerns list as investments or incomes to meet the in-
creased minimum performance standard—
(I) is a direct result of a Phase I award or Phase
II award made under subsection (cc) during the
covered period (as defined in paragraph (3)(B)(iv));
and
(II) consistent with the requirements of the Ad-
ministrator as in effect on September 30, 2022, or
any successor requirements; and
(iii) any dollar amounts such small business con-
cerns list as investments or income to meet such in-
creased minimum performance standard the provi-
dence of which is unclear and that is not directly at-
tributable to a Phase I award or Phase II award made
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under subsection (cc) during the covered period (as de-
fined in paragraph (3)(B)(iv)), consistent with the defi-
nition of Phase III, as applicable;
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55
(B) assess the self-certification requirements for the min-
imum performance standards established under paragraph
(2)(A)(ii) and the increased minimum performance stand-
ards under paragraph (3)(B); and
(C) submit to the Committee on Small Business and En-
trepreneurship of the Senate and the Committee on Small
Business and the Committee on Science, Space, and Tech-
nology of the House of Representatives a report on the
audit conducted under subparagraph (A) and the assess-
ment conducted under subparagraph (B).
(7) INCREASED MINIMUM PERFORMANCE STANDARD DEFINED.—
In this subsection, the term ‘‘increased minimum performance
standard’’ means a minimum performance standard estab-
lished under paragraph (1)(A)(ii) or (2)(A)(ii) as modified under
subparagraph (A) or (B), respectively, of paragraph (3) with re-
spect to a small business concern.
(rr) PUBLICATION OF CERTAIN INFORMATION.—In order to increase
the number of small businesses receiving awards under the SBIR
or STTR programs of participating agencies, and to simplify the ap-
plication process for such awards, the Administrator shall establish
and maintain a public Internet Web site on which the Adminis-
trator shall publish such information relating to notice of and ap-
plication for awards under the SBIR program and STTR program
of each participating Federal agency as the Administrator deter-
mines appropriate.
(ss) REPORT ON ENHANCEMENT OF MANUFACTURING ACTIVITIES.—
Not later than October 1, 2013, and annually thereafter, the head
of each Federal agency that makes more than $50,000,000 in
awards under the SBIR and STTR programs of the agency com-
bined shall submit to the Administrator, for inclusion in the annual
report required under subsection (b)(7), information that includes—
(1) a description of efforts undertaken by the head of the
Federal agency to enhance United States manufacturing activi-
ties;
(2) a comprehensive description of the actions undertaken
each year by the head of the Federal agency in carrying out
the SBIR or STTR program of the agency in support of Execu-
tive Order 13329 (69 Fed. Reg. 9181; relating to encouraging
innovation in manufacturing);
(3) an assessment of the effectiveness of the actions de-
scribed in paragraph (2) at enhancing the research and devel-
opment of United States manufacturing technologies and proc-
esses;
(4) a description of efforts by vendors selected to provide dis-
cretionary technical assistance under subsection (q)(1) to help
SBIR and STTR concerns manufacture in the United States;
and
(5) recommendations that the program managers of the
SBIR or STTR program of the agency consider appropriate for
additional actions to increase the effectiveness of enhancing
manufacturing activities.
(tt) OUTSTANDING REPORTS AND EVALUATIONS.—
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(1) IN GENERAL.—Not later than March 30, 2019, the Admin-
istrator shall submit to the Committee on Small Business and
Entrepreneurship of the Senate, the Committee on Small Busi-
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56
ness of the House of Representatives, and the Committee on
Science, Space, and Technology of the House of Representa-
tives—
(A) each report, evaluation, or analysis, as applicable,
described in subsection (b)(7), (g)(9), (o)(10), (y)(6)(C),
(gg)(6), (jj)(6), and (mm)(6); and
(B) metrics regarding, and an evaluation of, the author-
ity provided to the National Institutes of Health, the De-
partment of Defense, and the Department of Education
under subsection (cc).
(2) INFORMATION REQUIRED.—Not later than December 31,
2018, the head of each agency that is responsible for carrying
out a provision described in subparagraph (A) or (B) of para-
graph (1) shall submit to the Administrator any information
that is necessary for the Administrator to carry out the respon-
sibilities of the Administrator under that paragraph.
(uu) COMMERCIALIZATION ASSISTANCE PILOT PROGRAMS.—
(1) PILOT PROGRAMS IMPLEMENTED.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), not later than one year after the date of the enactment
of this subsection, a covered agency shall implement a
commercialization assistance pilot program, under which
an eligible entity may receive a subsequent Phase II SBIR
award.
(B) EXCEPTION.—If the Administrator determines that a
covered agency has a program that is sufficiently similar
to the commercialization assistance pilot program estab-
lished under this subsection, such covered agency shall not
be required to implement a commercialization assistance
pilot program under this subsection.
(2) PERCENT OF AGENCY FUNDS.—The head of each covered
agency may allocate not more than 5 percent of the funds allo-
cated to the SBIR program of the covered agency for the pur-
pose of making a subsequent Phase II SBIR award under the
commercialization assistance pilot program.
(3) TERMINATION.—A commercialization assistance pilot pro-
gram established under this subsection shall terminate on
øSeptember 30, 2025¿ September 30, 2026.
(4) APPLICATION.—To be selected to receive a subsequent
Phase II SBIR award under a commercialization assistance
pilot program, an eligible entity shall submit to the covered
agency implementing such pilot program an application at
such time, in such manner, and containing such information as
the covered agency may require, including—
(A) an updated Phase II commercialization plan; and
(B) the source and amount of the matching funding re-
quired under paragraph (5).
(5) MATCHING FUNDING.—
(A) IN GENERAL.—The Administrator shall require, as a
condition of any subsequent Phase II SBIR award made to
an eligible entity under this subsection, that a matching
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amount (excluding any fees collected by the eligible entity
receiving such award) equal to the amount of such award
be provided from an eligible third-party investor.
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(B) INELIGIBLE SOURCES.—An eligible entity may not use
funding from ineligible sources to meet the matching re-
quirement of subparagraph (A).
(6) AWARD.—A subsequent Phase II SBIR award made to an
eligible entity under this subsection—
(A) may not exceed the limitation described under sub-
section (aa)(1); and
(B) shall be disbursed during Phase II.
(7) USE OF FUNDS.—The funds awarded to an eligible entity
under this subsection may only be used for research and devel-
opment activities that build on eligible entity’s Phase II pro-
gram and ensure the research funded under such Phase II is
rapidly progressing towards commercialization.
(8) SELECTION.—In selecting eligible entities to participate in
a commercialization assistance pilot program under this sub-
section, the head of a covered agency shall consider—
(A) the extent to which such award could aid the eligible
entity in commercializing the research funded under the
eligible entity’s Phase II program;
(B) whether the updated Phase II commercialization
plan submitted under paragraph (4) provides a sound ap-
proach for establishing technical feasibility that could lead
to commercialization of such research;
(C) whether the proposed activities to be conducted
under such updated Phase II commercialization plan fur-
ther improve the likelihood that such research will provide
societal benefits;
(D) whether the small business concern has progressed
satisfactorily in Phase II to justify receipt of a subsequent
Phase II SBIR award;
(E) the expectations of the eligible third-party investor
that provides matching funding under paragraph (5); and
(F) the likelihood that the proposed activities to be con-
ducted under such updated Phase II commercialization
plan using matching funding provided by such eligible
third-party investor will lead to commercial and societal
benefit.
(9) EVALUATION REPORT.—Not later than 6 years after the
date of the enactment of this subsection, the Comptroller Gen-
eral of the United States shall submit to the Committee on
Science, Space, and Technology and the Committee on Small
Business of the House of Representatives, and the Committee
on Small Business and Entrepreneurship of the Senate, a re-
port including—
(A) a summary of the activities of commercialization as-
sistance pilot programs carried out under this subsection;
(B) a detailed compilation of results achieved by such
commercialization assistance pilot programs, including the
number of eligible entities that received awards under
such programs;
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(C) the rate at which each eligible entity that received
a subsequent Phase II SBIR award under this subsection
commercialized research of the recipient;
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58
(D) the growth in employment and revenue of eligible
entities that is attributable to participation in a commer-
cialization assistance pilot program;
(E) a comparison of commercialization success of eligible
entities participating in a commercialization assistance
pilot program with recipients of an additional Phase II
SBIR award under subsection (ff);
(F) demographic information, such as ethnicity and geo-
graphic location, of eligible entities participating in a com-
mercialization assistance pilot program;
(G) an accounting of the funds used at each covered
agency that implements a commercialization assistance
pilot program under this subsection;
(H) the amount of matching funding provided by eligible
third-party investors, set forth separately by source of
funding;
(I) an analysis of the effectiveness of the commercializa-
tion assistance pilot program implemented by each covered
agency; and
(J) recommendations for improvements to the commer-
cialization assistance pilot program.
(10) DEFINITIONS.—For purposes of this subsection:
(A) COVERED AGENCY.—The term ‘‘covered agency’’
means a Federal agency required to have an SBIR pro-
gram.
(B) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’ means
a small business concern that has received a Phase II
award under an SBIR program and an additional Phase II
SBIR award under subsection (ff) from the covered agency
to which such small business concern is applying for a sub-
sequent Phase II SBIR award.
(C) ELIGIBLE THIRD-PARTY INVESTOR.—The term ‘‘eligible
third-party investor’’ means a small business concern other
than an eligible entity, a venture capital firm, an indi-
vidual investor, a non-SBIR Federal, State or local govern-
ment, or any combination thereof.
(D) INELIGIBLE SOURCES.—The term ‘‘ineligible sources’’
means the following:
(i) The eligible entity’s internal research and devel-
opment funds.
(ii) Funding in forms other than cash, such as in-
kind or other intangible assets.
(iii) Funding from the owners of the eligible entity,
or the family members or affiliates of such owners.
(iv) Funding attained through loans or other forms
of debt obligations.
(E) SUBSEQUENT PHASE II SBIR AWARD.—The term ‘‘sub-
sequent Phase II SBIR award’’ means an award granted to
an eligible entity under this subsection to carry out further
commercialization activities for research conducted pursu-
ant to an SBIR program.
(vv) DUE DILIGENCE PROGRAM TO ASSESS SECURITY RISKS.—
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(1) ESTABLISHMENT.—The head of each Federal agency re-
quired to establish an SBIR or STTR program, in coordination
with the Administrator, shall establish and implement a due
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59
diligence program to assess security risks presented by small
business concerns seeking a federally funded award.
(2) RISKS.—Each program established under paragraph (1)
shall—
(A) assess, using a risk-based approach as appropriate,
the cybersecurity practices, patent analysis, employee
analysis, and foreign ownership of a small business con-
cern seeking an award, including the financial ties and ob-
ligations (which shall include surety, equity, and debt obli-
gations) of the small business concern and employees of
the small business concern to a foreign country, foreign
person, or foreign entity; and
(B) assess awards and proposals or applications, as ap-
plicable, using a risk-based approach as appropriate, in-
cluding through the use of open-source analysis and ana-
lytical tools, for the nondisclosures of information required
under (g)(13).
(3) ADMINISTRATIVE COSTS.—
(A) IN GENERAL.—In addition to the amount allocated
under subsection (mm)(1), each Federal agency required to
establish an SBIR program may allocate not more than 2
percent of the funds allocated to the SBIR program of the
Federal agency for the cost of establishing the due dili-
gence program required under this subsection.
(B) REPORTING.—
(i) IN GENERAL.—Not later than December 31 of the
year in which this subparagraph is enacted, and not
later than December 31 of each year thereafter, the
head of a Federal agency that exercises the authority
under subparagraph (A) shall submit to the Com-
mittee on Small Business and the Committee on
Science, Space, and Technology of the House of Rep-
resentatives, the Committee on Small Business and
Entrepreneurship of the Senate, and the Adminis-
trator, for the covered year—
(I) the total funds allowed to be allocated for the
cost of establishing the due diligence program re-
quired under this subsection;
(II) the total amount of funds obligated or ex-
pended under subparagraph (A); and
(III) the due diligence activities carried out or to
be carried out using amounts allocated under sub-
paragraph (A).
(ii) ANNUAL REPORT INCLUSION.—The Administrator
shall include the information submitted by head of a
Federal agency under clause (i) in the next annual re-
port submitted under subsection (b)(7) after the Ad-
ministrator receives such information.
(iii) COVERED YEAR.—In this subparagraph, the term
‘‘covered year’’ means, with respect to the information
required under clause (i), the year covered by the an-
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nual report submitted under subsection (b)(7) in which
the Administrator is required to include such informa-
tion by clause (ii).
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(C) TERMINATION DATE.—This paragraph shall terminate
on øSeptember 30, 2025¿ September 30, 2026.
(ww) PROGRAM ON INNOVATION OPEN TOPICS.—
(1) ESTABLISHMENT.—Not later than 180 days after the date
of enactment of this subsection, the Secretary of Defense shall
establish innovation open topic activities using the SBIR and
STTR programs of the Department of Defense in order to—
(A) increase the transition of commercial technology to
the Department of Defense;
(B) expand the small business nontraditional industrial
base;
(C) increase commercialization derived from investments
of the Department of Defense; and
(D) expand the ability for qualifying small business con-
cerns to propose technology solutions to meet the needs of
the Department of Defense.
(2) FREQUENCY.—The Secretary of Defense shall conduct not
less than 1 open topic announcement at each component of the
Department of Defense per fiscal year.
(3) BRIEFING.—Not later than 180 days after the date of en-
actment of this subsection, the Secretary of Defense shall pro-
vide a briefing on the establishment of the program required
under paragraph (1) to—
(A) the Committee on Armed Services and the Com-
mittee on Small Business and Entrepreneurship of the
Senate; and
(B) the Committee on Small Business, the Committee on
Armed Services, and the Committee on Science, Space, and
Technology of the House of Representatives.
(xx) ADDITIONAL PROVISIONS RELATING TO SOLICITATION TOP-
ICS.—
(1) IN GENERAL.—A Federal agency required to establish an
SBIR or STTR program shall implement a multi-level review
and approval process within the Federal agency for solicitation
topics to ensure adequate competition and that no private indi-
vidual or entity is shaping the requirements for eligibility for
the solicitation topic after the selection of the solicitation topic,
except that the Federal agency may amend the requirements
to clarify the solicitation topic.
(2) REFERRAL.—A Federal agency that does not comply with
paragraph (1) shall be referred to the Inspector General of the
Administration for further investigation.
(yy) PILOT PROGRAM FOR THE PARTICIPATION OF MILITARY RE-
SEARCH AND EDUCATIONAL INSTITUTIONS IN THE STTR PROGRAM.—
(1) IN GENERAL.—Not later than 180 days after the date of
enactment of this subsection, the Secretary of Defense shall es-
tablish a pilot program to enable any undergraduate, graduate,
or postgraduate degree-granting military research or edu-
cational institution established under title 10, United States
Code, to participate in the STTR program of the Department
of Defense.
(2) SUNSET.—The authority to carry out the pilot program
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under this subsection shall end on øSeptember 30, 2025¿ Sep-
tember 30, 2026.
(zz) BUDGET CALCULATION PILOT PROGRAM.—
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61
(1) PILOT.—
(A) IN GENERAL.—In order to more rapidly estimate allo-
cations for the SBIR and STTR programs of the Depart-
ment of Defense, the Secretary of Defense shall conduct a
budget calculation pilot program that requires the calcula-
tion of total expenditures for the SBIR and STTR pro-
grams in the Department of Defense and determination of
related allocations in accordance with subparagraphs (B)
and (C), and paragraph (2), respectively.
(B) SBIR PROGRAM.—Beginning in fiscal year 2025, the
Department of Defense shall calculate required budget ex-
penditures for its SBIR program as not less than 3.25 per-
cent of the average of the total research, development, test,
and evaluation extramural budget of the Department for
the 2 most recent fully obligated fiscal year budgets.
(C) STTR PROGRAM.—Beginning in fiscal year 2025, the
Department of Defense shall calculate required budget ex-
penditures for its STTR program as not less than 0.46 per-
cent of the average of the total research, development, test,
and evaluation extramural budget of the Department for
the 2 most recent fully obligated fiscal year budgets.
(2) ALLOCATIONS.—Not later than 30 days after the date of
enactment of an appropriations bill for the Department of De-
fense for a fiscal year, the Department shall determine and
make adjustments for actual allocations related to the SBIR
and STTR programs of the Department.
(3) SUNSET.—The pilot program under this subsection shall
terminate on øSeptember 30, 2025¿ September 30, 2026.
* * * * * * *
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XIX. MINORITY VIEWS
BACKGROUND
The Small Business Innovation Research (SBIR) and Small Busi-
ness Technology Transfer (STTR) programs were established in
1982 and 1992 respectively to stimulate innovation, utilize small
businesses to meet federal research and development (R&D) needs,
encourage participation by minority and disadvantaged businesses
in technological innovation, and increase private sector commer-
cialization of innovations derived from federal R&D objectives. The
SBIR program funds startups and small businesses across 11 fed-
eral agencies with extramural research and development (R&D)
budgets above $100 million. Similarly, the STTR program funds
small businesses in partnerships with universities and research in-
stitutions across five federal agencies with extramural R&D budg-
ets over $1 billion. Since 2017, participating agencies have been re-
quired to set aside 3.2 percent of extramural funding for SBIR and
0.45 percent of extramural funding for STTR.
The program is divided into three phases:
• Phase I is the pre-prototype phase used to explore the
technical merit or feasibility of an idea, concept, or technology.
These awards are generally between $50,000 and $250,000 for
6 months.1
• Phase II is the prototype phase to expand on Phase I re-
sults. During this phase, R&D work is implemented, and com-
mercialization potential is evaluated. These awards are typi-
cally only available for phase I awardees and range from
$750,000 to $1.8 million for a two year performance period.2
• Phase III is the commercialization phase to move the tech-
nology from the laboratory into the marketplace or into federal
procurement. SBIR funding is not provided in Phase III, in-
stead, companies raise private sector capital to expand oper-
ations or win ‘‘follow on’’ contracts with federal agencies.3
The SBA is the lead coordinating agency responsible for estab-
lishing policy, procedure, and regulations, collecting and publishing
program-wide data, and monitoring implementation. Each partici-
pating agency manages their own program and maintains a sub-
stantial degree of flexibility in the execution of its program in
alignment with its overall mission and priorities.
The Program Cannot Expire
The SBIR and STTR programs have a proven track record of suc-
cess over the past 40 years. The SBIR/STTR programs account for
1 Marcy E Gallo, R43695, CONG. RESEARCH SERV., Small Business Research Programs: SBIR
and STTR (2022).
2 Id.
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3 Id.
(64)
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a small sliver of the federal government’s extramural research and
development (R&D) budgets, in total accounting for nearly $5 bil-
lion per year. However, the innovation, economic growth, and job
creation it has accounted for over its history are disproportionate
to the level of funding it receives. Over the past 40 years, the SBIR
and STTR programs have played a role in firms like iRobot,
23&Me, Sonicare electric toothbrush, and Qualcomm wireless com-
munications. Participating firms are behind the technology that
made the condensation trail of the B–2 bomber invisible, the sec-
ond generation of LASIK eye surgery, bio-degradable packaging
material made from mushrooms to reduce Styrofoam that piles up
in landfills, and rapid innovations used to fight COVID–19.
Economic analyses of the program has routinely demonstrated its
outsized importance in generating important innovations and eco-
nomic growth. For instance, between 1996 and 2020, 99 new drug
approvals (12 percent of all new drugs approved) were developed by
SBIR/STTR firms.4 In addition, another study found that SBIR
Phase II awards show a return on investment between $22 and $33
for every dollar invested, depending on the agency.5 A study from
the National Cancer Institute found that for every dollar invested
resulted in 11 dollars of commercial sales.6 Throughout its lifetime,
829 SBIR firms have gone public, and 2,120 have been acquired.7
Finally, 10 percent of all venture capital investments go to SBIR
firms.8
Even a short lapse in the program would put ongoing projects in
the ecosystem at risk and end the ability of past award recipients
to get Phase III follow-on contracts. Federal agencies could see
their research and technology development stalled, and the U.S.
economy would face a severe setback in emerging technology. More-
over, given the ongoing investments the Chinese Communist Party
in their research and development, it would make the U.S. less
competitive on the world stage.
One Year Reauthorization
H.R. 5100, to extend the SBIR and STTR programs, provides a
clean, one-year extension to the SBIR and STTR programs along-
side the existing pilot programs. This extension would give the
Committee more time to negotiate a comprehensive, bipartisan
package without the threat of the program expiring.
NYDIA M. VELÁZQUEZ,
Ranking Member.
Æ
4 Exploring SBA Programs: Reviewing the SBIC and SBIR Programs’ Impact on Small Busi-
nesses. Before the H. Comm. On Small Business, 118th Cong. (2023) (Statement of Jere Glover,
Executive Director, Small Business Technology Council)
5 Id.
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6 Id.
7 Id.
8 Id.
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File and source
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