Overview of the Small Business Innovation Research and Small Business Technology Transfer Programs (House Small Business Committee hearing, March 8, 2022)

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The printed record of a House Committee on Small Business hearing, Small Business Committee Document Number 117-048, titled Overview of the Small Business Innovation Research and Small Business Technology Transfer Programs, held March 8, 2022 in the 117th Congress, with Chairwoman Nydia Velázquez presiding at 10:01 a.m. The witness is John Williams, Director of Innovation and Technology in the Office of Investment and Innovation of the U.S. Small Business Administration. The appendix holds his prepared statement, questions and answers for the record from Velázquez, Luetkemeyer, Fitzgerald and Van Duyne, a Bipartisan Policy Center item and a letter from multiple organizations to Congressional Leaders.

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“Overview of the Small Business Innovation Research and Small Business Technology Transfer Programs (House Small Business Committee hearing, March 8, 2022).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/overview-of-the-small-business-innovation-research-and-small-business-b7fc123a5e/, SHA-256 06d3312caefd7de6dc95478f1a0799640bd9355edb660bfd8f9c36d4756b4bf9.

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OVERVIEW OF THE SMALL BUSINESS INNOVATION
RESEARCH AND SMALL BUSINESS TECHNOLOGY
TRANSFER PROGRAMS

HEARING
BEFORE THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION

HEARING HELD
MARCH 8, 2022

Small Business Committee Document Number 117–048
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
46–932 WASHINGTON : 2022

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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin

MELISSA JUNG, Majority Staff Director
ELLEN HARRINGTON, Majority Deputy Staff Director
DAVID PLANNING, Staff Director

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CONTENTS
OPENING STATEMENTS
Page
Hon. Nydia Velázquez ............................................................................................. 1
Hon. Blaine Luetkemeyer ....................................................................................... 2

WITNESS
Mr. John Williams, Director of Innovation and Technology, Office of Invest-
ment and Innovation, United States Small Business Administration, Wash-
ington, DC ............................................................................................................. 4

APPENDIX
Prepared Statement:
Mr. John Williams, Director of Innovation and Technology, Office of
Investment and Innovation, United States Small Business Administra-
tion, Washington, DC ................................................................................... 33
Questions and Answers for the Record:
Questions from Hon. Velázquez to Mr. Williams and Responses from
Mr. Williams .................................................................................................. 44
Questions from Hon. Luetkemeyer to Mr. Williams and Responses from
Mr. Williams .................................................................................................. 48
Questions from Hon. Fitzgerald to Mr. Williams and Responses from
Mr. Williams .................................................................................................. 52
Questions from Hon. Van Duyne to Mr. Williams and Responses from
Mr. Williams .................................................................................................. 53
Additional Material for the Record:
Bipartisan Policy Center .................................................................................. 38
Letter from multiple organizations to Congressional Leaders ..................... 41

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OVERVIEW OF THE SMALL BUSINESS
INNOVATION RESEARCH AND SMALL
BUSINESS TECHNOLOGY TRANSFER
PROGRAMS

TUESDAY, MARCH 8, 2022

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The committee met, pursuant to call, at 10:01 a.m., in Room
2360, Rayburn House Office Building and via Zoom, Hon. Nydia
Velázquez [Chairwoman of the Committee] presiding.
Present: Representatives Velázquez, Golden, Davids, Mfume,
Phillips, Bourdeaux, Chu, Evans, Houlahan, Kim of New Jersey,
Craig, Luetkemeyer, Williams, Stauber, Meuser, Tenney,
Garbarino, Young Kim of California, Van Duyne, and Fitzgerald.
Chairwoman VELÁZQUEZ. Good morning. I call this hearing to
order.
Without objection, the Chair is authorized to declare a recess at
any time.
I would like to begin by noting some important requirements.
Standing House and Committee rules will continue to apply during
hybrid proceedings. All Members are reminded that they are ex-
pected to adhere to these rules, including decorum.
House regulations require Members to be visible through a video
connection throughout the proceeding, so please keep your cameras
on. Also, remember to remain muted until you are recognized to
minimize background noise.
In the event a Member encounters technical issues that prevent
them from being recognized for their questioning, I will move to the
next available Member of the same party and I will recognize that
Member at the next appropriate time slot provided they have re-
turned to the proceeding.
For those Members and staff physically present in the Com-
mittee room today, in accordance with the attending physician’s
most recent guidance, masks are optional and no longer required.
Thank you to everyone for being here for this timely hearing.
Today, we will be discussing the SBIR and STTR programs, two of
the federal government’s most important initiatives when it comes
to driving innovation. This is our third in a series of hearings on
this topic.
SBIR and STTR create partnerships between federal agencies,
public research institutions, and our nation’s best and brightest
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small businesses to develop technologies that are important to our
country and later have commercial application.
The SBIR and STTR programs meet these goals by leveraging a
small percentage of extramural federal R&D spending through
highly competitive awards. For fiscal year 2020, the most complete
year of SBIR and STTR data, these programs resulted in nearly
$3.9 billion out of an extramural federal R&D budget of about
$108.5 billion going to small, high-technology firms.
Over the years, SBIR and STTR have leveraged this small
amount of federal R&D funding to launch some of our nation’s
most innovative enterprises and develop products that have become
household names.
Companies like iRobot, Sonicare electric toothbrushes, 23andMe,
LASIK Eye Surgery, and Qualcomm wireless communications were
all helped along by SBIR and STTR.
More promising ideas are in the works. In fiscal year 2020 alone,
11 agencies leveraged SBIR and STTR awards to back more than
4,000 small businesses and 7,200 projects.
Given the importance of SBIR/STTR to our innovation economy,
I am pleased that we are working together to reauthorize these
programs before they expire on September 30th. A program lapse
would have severe implications for American entrepreneurs.
Even a short-term disruption would deliver a substantial setback
to R&D-focused small firms and potentially delay groundbreaking
technological innovations. Small innovators operating on the cut-
ting edge of their industries need more certainty and stability to
invest time, money, and staff in applying for SBIR or STTR awards
and carrying out the research.
To avoid these consequences, it is my greatest hope that we can
extend and reauthorize the programs in a timely manner. I look
forward to working with the Ranking Member and our Senate
counterparts to take these steps.
At the same time, this moment allows us to make improvements
to streamline and strengthen the programs, as well as encourage
more participation by minorities and women.
Innovation is at the heart of the American economy. Making
SBIR/STTR permanent and working to improve the program is
vital to holding our position as one of the most innovative countries
in the world. Today, I look forward to discussing the importance of
these programs and what Congress must do to ensure they move
forward.
I would now like to yield to the Ranking Member, Mr. Luetke-
meyer, for his opening statement.
Mr. LUETKEMEYER. Thank you, Madam Chair.
Before I get started I would like to just take a moment of point
of personal privilege to inquire of the Chair, now that we no longer
have a mask requirement and we are no longer social distancing,
is it going to be your position that we continue with hybrid meet-
ings for the rest of the year or do you at some point believe we will
go back to just strictly in-person meetings? Just for clarification
purposes, please.
Chairwoman VELÁZQUEZ. I hope that soon we will all be able
to come to Committee hearings and we are going to be discussing
that with the leadership. I hope that pretty soon we will be back.

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Mr. LUETKEMEYER. Okay, great. Thank you for that. I just am
curious because we are making progress towards that end. I just
would like to see where we are at.
I appreciate that clarification. And good morning. And thank you,
Madam Chair, for holding this important hearing on the Small
Business Innovation Research (SBIR) and small business tech-
nology transfer (STTR) programs. SBIR and STTR’s mission is to
support scientific excellence and technological innovation for small
businesses. These programs are vital to the success of many small
entities and have helped create thousands of new jobs by fostering
innovation and stimulating the economy through new, cutting-edge
research.
SBIR and STTR facilitate public-private partnerships so that
firms have the funding they need to develop new technologies that
help federal agencies meet the research and development needs.
These programs not only create jobs, but they also lead to a path
of commercialization for many participating firms.
SBIR and STTR are funding awards are behind the technology
in products like iRobot, LASIK Eye Surgery, Qualcomm Wireless
Communications, 23andMe, and rapid improvements to COVID-19
vaccines. These programs are not only essential for America’s com-
petitiveness, but also for our national security. From B-2 bomber
technology to threat warning systems, SBIR firms have played a
role in critical technologies used by our servicemen and women
every day.
Further, SBIR and STTR programs are good investment for
American taxpayers returning $22 to the economy for every $1
spent on projects at DoD and $33 for every dollar spent at National
Cancer Institute.
I see Mr. Williams is nodding his head here so that is good news.
As many of you know, Congress last reauthorized the programs
in 2017 for a period of 5 years. The programs are currently set to
expire on September 30, 2022. While these programs are not per-
fect, reauthorizing them will ensure stability and continued eco-
nomic growth while Congress works to streamline and improve the
programs. It is our job to better understand and address the chal-
lenges to the program’s effectiveness and guarantee that American
taxpayer dollars are being spent efficiently, effectively, and in a re-
sponsible manner.
I am looking forward to hearing from Mr. Williams on ways to
improve SBIR and STTR for small businesses and participating
agencies alike.
Now for a couple housekeeping items. Number one, while I am
glad Mr. Williams is here today to discuss these important pro-
grams, the Biden administration is still overlooking the Members
of this Committee. We are now 318 days past the April 26th dead-
line for Secretary Yellen to testify before this Committee. We must
hold Secretary Yellen accountable for the decision to blatantly
break the law.
Furthermore, in yesterday’s Washington Post, we have a picture,
an advertisement of Ms. Yellen who is wanting to have either
webinar or some kind of visual discussion with regards to, and one
of the topics is to discuss the COVID hit to our economy. Would

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not the PPP program be something that you want to discuss? If
that is the case, why are we not here? Why can we not get here?
Madam Chair, we have got by law, supposed to have Ms. Yellen
here twice this year. Twice in 2022. I would hope that she is work-
ing with your staff to find a way to schedule those two events. I
am looking forward to it.
Item number two. The Committee is still waiting on responses
from questions for the record submitted to SBA officials over 9
months ago. I talked about this with Ms. Guzman in a personal
one-on-one conversation I had with the director about 2 weeks ago
and we still have not got those responses back. Again, I would urge
SBA, and Mr. Williams, I hope you take these measures back to
your administration hierarchy to respond to these questions quick-
ly. These are not gotcha questions. These are informational re-
quests that actually round out the things that we are trying to find
in these hearings so it is very important we get this done.
And with that, Madam Chair, I yield back the balance of my
time and look forward to today’s discussion.
Chairwoman VELÁZQUEZ. Thank you, Mr. Ranking Member.
The gentleman yields back.
With that, I would like to introduce our witness, Mr. John Wil-
liams, the director of Innovation and Technology for the Office of
Investment and Innovation within the Small Business Administra-
tion. Prior to joining the SBA in 2014, Mr. Williams served as the
Director of the Navy SBIR and STTR programs, building a reputa-
tion for running the most successful SBIR and STTR programs in
government.
Welcome, Mr. Williams. You now have 5 minutes to make your
opening statement.
STATEMENT OF JOHN WILLIAMS, DIRECTOR OF INNOVATION
AND TECHNOLOGY, OFFICE OF INVESTMENT AND INNOVA-
TION, UNITED STATES SMALL BUSINESS ADMINISTRATION
Mr. WILLIAMS. Good morning, Chairman Velázquez, Ranking
Member Luetkemeyer, and distinguished Members of the Com-
mittee. Thank you for the invitation to discuss the nation’s Small
Business Innovation Research (SBIR) and Small Business Tech-
nology Transfer (STTR) Programs, and the role SBA has in leading
them.
I have had the personal pleasure of devoting 35 years to public
service, including 15 years as the director of the Navy’s SBIR/
STTR, and Technology Transfer program offices.
During my time at the Navy, my primary focus was on helping
SBIR firms transition their technology and commercialize it into
Navy platforms. I am proud to note that the Navy lead the DoD
in Phase III funding throughout my tenure.
In December 2014, I excitedly accepted the opportunity to serve
as the Director of Innovation and Technology at SBA. My office
supports SBA’s mission and our nation by ensuring that U.S.-based
innovative startups have the tools, resources, and support to start,
grow, and expand.
Our role is to build a national innovation ecosystem that sup-
ports all innovators wherever they live so that the best and bright-
est have the opportunities to succeed. The SBIR and STTR pro-

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grams, which we like to refer to as America’s Seed Fund, function
as the heart of this ecosystem.
America’s Seed Fund provides competitive opportunities for small
businesses to pursue high risk, research, and development with a
focus on commercialization. These programs are a critical compo-
nent to our national innovation ecosystem. They facilitate job cre-
ation, de-risking of technologies, while also addressing significant
societal and national defense needs.
America’s Seed Fund represents the nation’s largest source of
nondilutive seed funding, meaning these investments do not re-
quire companies to sacrifice equity. Annually, across the 11 partici-
pating agencies, more than $4 billion is provided through competi-
tive awards to U.S.-owned and operated companies with less than
500 employees. There are winners in every state. The structure re-
quires that 3.2 percent of an extramural R&D appropriation of an
agency is applied to SBIR, and for agencies with an R&D exceeding
$1 billion, an additional .45 percent for STTR. The program’s struc-
ture means that the SBIR and STTR programs do not require a
separate appropriation and therefore, do not result in additional
costs to the taxpayer.
The funding is provided in phases with multiple layers of com-
petition. Importantly, over the last year, nearly 46 percent of the
participating firms were first-time award winners. Bringing in new
entrants, especially from underserved geographic and demographic
communities is a priority. Since I started at SBA, the percentages
of new entrants has increased by 30 percent, and multi-award win-
ners has gone down by 25 percent.
For nearly 40 years, the SBIR and STTR programs have served
as a critical need funding source for the U.S.-based advanced tech-
nology firms. The National Academies of Sciences have completed
20 studies and continue to document that these programs are high-
ly competitive and a critical tool that converts America’s research
into next-generation technologies. The program increases competi-
tion within the federal research and development community as it
creates a level playing field for small businesses to participate.
Companies such as Qualcomm, Intuitive Surgical, Illumina,
23andMe, Sonicare have all received funding and the Department
of Defense has also found a 22:1 return on investment from their
SBIR investments.
Under the current law, the program expires on September 30.
The time for solicitation opening to the time of awards being made
is 6 to 12 months. We are now within 7 months. My concern is if
Congress does not extend these programs soon, agencies will start
to delay solicitations and awards. Due to the potential program ex-
piration with no fiscal year 2023 funding clearly available under
those programs. The impact results from this uncertainty and in-
stability will fall most heavily on small business innovators, espe-
cially those new to the program. Through an extension of the pro-
grams, you will provide stability and certainty around America’s
Seed Fund and provide time or Congress to develop and implement
a comprehensive reauthorization. America’s Seed Fund attracts
and supports some of the brightest innovators and provides innova-
tive cost-saving capabilities to the public and our national defense.

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I thank you for the opportunity to appear today and I thank the
Committee, especially Chairwoman Velázquez and Ranking Mem-
ber Luetkemeyer to the support to ensure that SBIR and STTR
programs and their current pilots are extended as is while the
Committee continues to work on a full reauthorization. Thank you
for your time.
Chairwoman VELÁZQUEZ. Thank you, Mr. Williams.
Now I will recognize myself for 5 minutes.
Basically, you almost ended your opening statement with my
concern regarding the effects of a long-term impact of a program
lapse, or the threat of a lapse on small businesses and the agen-
cies, particularly given the data that you are just providing where
there has been an increase in new participants into the program.
What effect will a lapse or a threat will have?
Mr. WILLIAMS. So a lapse would be catastrophic. It would mean
$4.2 billion to the fund, 4,000 companies actively, 7,000 awards
would really go to large prime contractors, the big universities,
back to the federal labs. So, it would really decrease competition
in federal R&D funding. And I would not result in cost savings and
that is the big thing because, again, this is appropriated money
that is already there. It is just being made sure that it goes to
small businesses.
I think the threat of that lapse then is the agencies are going to
start to gear back, start to not put out new solicitations because
it will be next year when those things take place and they really
should not be getting companies involved in something that they
do not have funding for.
Chairwoman VELÁZQUEZ. So the lack of certainty provided by
continuing resolutions will have an impact on the agency?
Mr. WILLIAMS. Absolutely.
Chairwoman VELÁZQUEZ. I will ask unanimous consent to sub-
mit for the record letters of support from 117 small businesses, uni-
versities, and economic development groups supporting the clean
extension of the SBIR and STTR programs.
Without objection, so ordered.
One of my top priorities for the upcoming reauthorization, Mr.
Williams, is to improve the participation of minority and disadvan-
taged persons in SBIR and STTR and to increase the geographic
diversity in this program that has been my quest for the last 20
years.
In your experience, what strategies have worked and what chal-
lenges remain?
Mr. WILLIAMS. Sure. So, increasing geographic and demo-
graphic diversity is a priority of mine. It is the mission of SBA. It
is certainly a priority for Administrator Guzman. My experience is
that the leveraging and coordinating of a variety of private and
public partnerships really works. There is not a ‘‘one size fits all.’’
You need support locally. I think we can push national programs
and education, but then locally you want to have programs like our
Fast and Growth Accelerator really make a difference and so more
of that I think will allow us to help more people at that local level
in those areas.
Chairwoman VELÁZQUEZ. Okay. NSF and NIH offer supple-
mental grants to SBIR and STTR to provide paid fellowships for

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underserved students. Can you briefly explain how these fellow-
ships work and the impact they have had?
Mr. WILLIAMS. Sure. So, NIH has a program where they use
a supplement to the award and they give it to the company to bring
in a diverse researcher. And then with NSF, they use a third party
that then finds and connects post-docs with small businesses.
Chairwoman VELÁZQUEZ. Do you think this approach is worth
expanding to other agencies?
Mr. WILLIAMS. So I think the approach is worth expanding. But
I think also there is a lot we can do, and should be doing to try
to link students as young as possible to the excitement of what and
small business does in tech. And so, I think there is a lot of oppor-
tunities. I have seen companies really get excited in bringing in
students and summer hires and things like that even at the high
school level. I think it gets people involved in STEM.
Chairwoman VELÁZQUEZ. Where should funds for fellowships
come from? For example, should we use the base SBIR and STTR
funds like NIH, those? Or the 3 percent administrative dollars?
Mr. WILLIAMS. So the current legislation allows both and I
think there is flexibility in having that flexibility for the agencies.
Chairwoman VELÁZQUEZ. Have the staff and budget for the Of-
fice of Innovation kept pace with the growth of the program over
the years?
Mr. WILLIAMS. The total funding for the SBIR programs has in-
creased as we have noted, as has the responsibilities for SBA. The
resources at SBA have not increased. I have got an amazing team
that does treat stuff with what they have but, yes, if we had addi-
tional resources I am confident that we could do a lot more to help,
and especially the underserved communities in getting out there
and bringing on more——
Chairwoman VELÁZQUEZ. If Congress legislated SBIR agencies
to transfer a portion of their 3 percent administrative funds to
SBA, how would that help your office administer the program?
Mr. WILLIAMS. So it would expand a lot of the things we do.
More outreach, more train the trainer, more coordinating with our
Growth Accelerator and our FAST to provide information. More
getting them together, building out our website. So again, it is easi-
er to get access, better data handling so that we could push out in-
formation. So, there are a lot of areas. I think mentor networks.
There are a lot of areas and I would be glad to talk to you about
them.
Chairwoman VELÁZQUEZ. Thank you. My time has now ex-
pired.
The Ranking Member is now recognized for 5 minutes.
Mr. LUETKEMEYER. Thank you, Madam Chair.
Mr. Williams, you indicated you had some service in the military
with the Navy. Thank you for your service, sir, to our country. The
programs that you oversee seem to have been very successful the
last several years and I thank you for your leadership on that.
Along those lines though I have got a couple of questions here.
In 2011, to address Congress’s concerns, the SBA created a com-
mercialization benchmark to better determine the eligibility for the
SBIR and STTR programs or awards I should say. However, ac-
cording to GAO, SBA and I quote, ‘‘The SBA and the participating

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agencies assessed small businesses against the commercialization
benchmark only once in 2014 because of challenges in collecting
and verifying the accuracy of data.’’
I guess let me start with this. Whose responsibility is it to pro-
vide the assessment and why did the SBA measuring small busi-
nesses against the benchmark only occur once in the last 10 year
span?
Mr. WILLIAMS. Well, we do do it now. But I will go back to the
history. So, the legislation came forward. There are performance
metrics. One is Phase I to Phase II transition and then the other
commercialization Phase II to Phase III. Phase III information is
cumbersome and DoD does collect it or had been collecting it for
many, many years. And so, what we wanted to do was to move to
a single source. We did not want to have 11 agencies collecting the
same data and putting the burden on small businesses. DoD was
the primary one but other agencies also collected that information.
And the legislation really required that those agencies implement
a standard.
And what is important to note is that even without that, the po-
tential to commercialize the past history of Phase IIs, that goes in
every proposal and every agency evaluates in one of the main three
criteria on the potential to commercialize. So, has that company
done a good job with that in the past? That is what they are meas-
ured on. And so, the information is being looked at on every pro-
posal and has been. Now we have actually implemented, we have
taken over the DoD system and we have a central system at SBA
starting in 2020 that all firms now have to put, and it is a single
source for all Phase III information.
Mr. LUETKEMEYER. So basically what you are saying, it has
been the responsibility of other agencies to collect this information
and do the benchmarking up to this point?
Mr. WILLIAMS. So we have transitioned to that because it just
did not make sense. So, we set the requirement of what a transi-
tion benchmark would be with coordination across all the agencies.
And then as we work to do it, they were then evaluating on wheth-
er they felt these firms——
Mr. LUETKEMEYER. Okay. So, we can anticipate in the future
this information is going to get to us?
Mr. WILLIAMS. Yes. Yes.
Mr. LUETKEMEYER. That is necessary for our oversight.
Mr. WILLIAMS. Absolutely.
Mr. LUETKEMEYER. I mean, it is not something that is, you
know, it is in law. It is supposed to be addressed.
Mr. WILLIAMS. Yes. No, we have a system that does and we can
provide that information.
Mr. LUETKEMEYER. Okay. All right. Great.
In your testimony, you mentioned some stats about 46 percent
increase in the last few years with new people coming into the pro-
gram. And that is a 30 percent increase from when you took over.
So, can you explain to me just a little bit about how this works
from the standpoint that existing businesses are getting repeat
awards? Is there a point in time when they get weaned off of this
assistance? Why are the existing businesses continuing to get these

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awards and maybe pushing out some new businesses? Can you ex-
plain the situation?
Mr. WILLIAMS. Sure. So, I am going to go back to my Navy
days. And this is not an assistance program. This program is de-
signed to make sure that when we develop R&D by an agency and
so it is the DoD and I have specific R&D’s needs, I have to go to
a small business instead of the major primes that typically is what
happened. So, in the DoD, it is——
Mr. LUETKEMEYER. So you are soliciting that individual busi-
ness yourself rather than them coming to DoD with a bid to bid
on their project; is that what you are saying?
Mr. WILLIAMS. So I will give you an example. Progeny Systems
had I think over 300 awards over a 20-something year period. They
now build all the torpedoes for the Navy. They are still a small
business. That is not a capability that really existed. So, the SBIR
program, by awarding companies multiple times, we are bringing
in companies into a program. As you probably know, the DoD,
there are only a few big players now. And so, when we were in the
Navy, when I was at the Navy, we used the program to bring in
competition. And it was not that a company would get one or two
or three or five awards and then we would never need to continue
to fund the R&D. We continued to fund them because we wanted
that additional capability. And sometimes in areas that no one was
interested in because it is not economically viable to develop some
circuit board for us because there was only five of them needed.
Same with NASA. You are building three products. One to blow up,
one to put on the space shuttle, and one to have as a backup.
So, I think it is important to understand that it is not the same
for all. Now, NSF is different where they would not do that. They
do look at funding companies a couple times and then they want
to see those transitions. So, it is not a ‘‘one size fits all.’’
Mr. LUETKEMEYER. I appreciate the clarification. Thank you,
sir.
Mr. WILLIAMS. Thank you.
Mr. LUETKEMEYER. With that I yield back.
Ms. DAVIDS. I will now recognize myself for 5 minutes.
First of all, thank you to the Chairwoman and to our Ranking
Member for holding this hearing today.
The reauthorization of the SBIR and STTR programs is definitely
one of the most important tasks in front of the Committee this year
and is, of course, of critical importance. The SBIR, STTR, and the
FAST partnership program, as well as the Growth Accelerator
Fund competition offer critical opportunities for innovators and en-
trepreneurs to develop their technologies and to build their busi-
nesses as we have been hearing today. But especially in the tech
space. And I know it can be hard for entrepeneurs outside of tech
hubs on the coast to find investors and partners and we heard the
Chairman earlier reference geographic diversity as being kind of
critical to the work we are doing here.
So, Mr. Williams, I would love to hear from you how the various
programs we are talking about today are able to reach more
entrepeneurs or businesses and research institutions outside of
those tech hubs in places like the Midwest or the Kansas 3rd. We
do have a couple of SBDC, women’s business centers and those

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sorts of things, but I am just curious how you all are thinking
about it and what we can be doing.
Mr. WILLIAMS. Sure. You know what is unique about the pro-
grams that have been funded that I manage with FAST and
Growth Accelerator is that they really target the unique needs of
a tech entrepreneur which is very different than kind of a tradi-
tional company. They are non-revenue generating at that time.
They cannot really get loans. And so, I think what we found is it
is not a ‘‘one size fits all.’’ It is really about bringing connections.
And so, we want our FAST and Growth Accelerators to leverage
the SBDCs and their capabilities. Reach out to the district offices.
And so, we do a lot of training to the SBDCs and others to let them
know about the program and that there is a group out there. And
it is usually at a research innovation hub outside the university
that has really taken that university research that we would then
fund. They will bring in venture capital. And again, there is more
money out there that is small that is teaming with these accelera-
tors and innovators and so we see that as kind of, it is not a one
size. It is bringing all these parties together.
Ms. DAVIDS. And then I am curious, this is actually to follow
on from Mr. Luetkemeyer’s questions about the data collection. You
kind of started to talk about the new system that you are imple-
menting where the SBA is kind of the repository of information
versus the various agencies. I am curious how you are looking at
that and how are you taking into account demographic information
and geographic information?
Mr. WILLIAMS. So, there are a couple of pieces of information.
We gather information on Phase III directly is what I was talking
about there. But then all the information from the awardees comes
to us by each agency and in that the company is supposed to tell
us, woman-owned, demographic data, and then we track that. So,
in our annual reports, we list the awards per state, the awards by
women, the proposals by women, the awards by women. We are
also starting to now link to SAM so that we can kind of validate
that. So that is a role that we play is to gather all that data to-
gether and then look across. And absolutely, that is one of the
areas we measure.
Ms. DAVIDS. And I think I will stop there. I do not have enough
time to get into the next set of things.
Mr. WILLIAMS. And I will just say that data is available on our
website at all times. It does not have to be in the annual report.
Our data is current on fiscal year 2021. We are probably 80 percent
full and you can pull down woman-owned and you can sort and it
is Excel. And so that information is always available and we are
trying to push it out.
Ms. DAVIDS. Okay. Thank you, Mr. Williams. And thank you for
the work you all are doing. It is certainly an improvement over the
years. So, thank you.
Mr. WILLIAMS. I appreciate that. Thank you.
Ms. DAVIDS. I yield back.
I am yielding back. The Ranking Member—oh, sorry about that.
Mr. Fitzgerald is now recognized for 5 minutes.
Mr. FITZGERALD. Thank you, Madam Chair.
Mr. Williams, thanks for being here today.

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Fiscal year 2022, the NDAA extended the pilot program for
streamlining the awards for innovative technology projects, such as
awards under SBIR, until 2024. Under the pilot program, and
maybe you can give me a little bit more detail, any contract or sub-
contract valued at less than $7.5 million is exempt from certain
costs. So, I am not sure why the $7.5 million was the magic num-
ber. It could be just congressional wisdom. I am not sure. But we
could not track that down. But there is no pricing data disclosures
per se.
So as this Committee kind of does its due diligence on this before
we vote to extend on SBIR and STTR, is there any better metrics
that you are aware of or is there any better way of measuring this,
especially when you get down into that, below that threshold? It
seems like it should be a critical piece of legislation before we
would actually take that step and reauthorize.
Mr. WILLIAMS. So unfortunately, I am not as aware with that
piece of legislation on the NDAA.
Mr. FITZGERALD. Yeah, I think because some of the pilot pro-
grams were part of the NDAA, and I think ultimately that final,
when that final appropriation package comes before us that there
is going to be kind of this question about I think the level of fund-
ing. And that is why I was just looking if there is some better
metrics that we should be looking at, or better set of numbers.
Mr. WILLIAMS. So, I will be glad to follow up and really get into
it because I want to make sure I give you a proper answer. The
amount for a Phase II is set at like $1.8 million. They can go above
that by 50 percent. Anything past that they have to come to SBA
for a waiver request. And then we approve those on a case by case
basis. And so, there are certain agencies, the Air Force to be an ex-
ample, where they were coming in with additional matching dollars
from a Department of Defense weapon system, so non-SBR being
added to SBR money. And even outside money. And that encour-
aged me to then allow them to make higher awards. And we did
that on a pilot. So, there have been some pilots to experiment that
certain technologies just takes more money and they need it
quicker. Instead of doing six Phase IIs over a 3-year period, would
it be better to do a larger Phase II if other dollars came in during
that development process? And that is what we have been approv-
ing. And it has to come through SBA to approve those waivers.
Mr. FITZGERALD. I gotcha.
I will put something together and make sure that you get it. I
have very specific questions.
Mr. WILLIAMS. Yeah, absolutely. I would appreciate that.
Mr. FITZGERALD. The second question I had was in and around
semiconductors. And I think the chip stuff. So, I think that is going
to come up, and I know there are other Members who are going
to talk about that. So, I would yield back. Thank you.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentlelady from Pennsylvania, Ms.
Houlahan, for 5 minutes.
Ms. HOULAHAN. Thank you, Madam Chair. And thank you, Mr.
Williams, for your testimony today and for your role administering
the SBIR and STTR programs.

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I am an entrepreneur and an engineer myself, and I, as a result,
do understand how important America’s Seed Fund is to all aspir-
ing innovators and small businesses and to research institutions
across our country.
I believe this Committee must have an eye for consistently im-
proving the SBIR and STTR programs, particularly when it comes
to commercialization. Across the 11 participating agencies, only
about half of the SBIR and STTR awards result in products that
are commercially sold. Furthermore, delays in decisions and dis-
bursement of funds or patents can present particular challenges for
small businesses who are seeking to translate their investments
into marketable products and services.
To address these challenges, I have worked across the aisle with
my colleague, Representative Balderson, to introduce the Research
Advancing Market Production (RAMP) for Innovators Act. This bi-
partisan and bicameral piece of legislation would ensure that our
federal government is prioritizing research with the highest com-
mercialization potential, significantly reducing the time agencies
must take to make a final decision on proposals and establishing
an annual commercialization impact assessment at every agency to
monitor the program’s success and more.
So, Mr. Williams, I was hoping that you might be able to speak
to the importance of enhancing commercialization outcomes
through SBIR and STTR programs, and particularly, I am inter-
ested in hearing from you about how changes, such as those that
might be provided by RAMP, would allow American entrepreneurs
the support that they need to get their products on shelves and in-
crease the economic impact of the programs at large.
Mr. WILLIAMS. So anything we can do to help on the commer-
cialization side is obviously important. And that was a big thing
that I did at the DoD. And again, I think some of the challenges,
like I mentioned, the commercialization of DoD is very different.
Sometimes we do not want anyone selling products of the DoD. So,
it is a criteria for evaluation. So, there are basically three criteria.
The value of the technology; the team, how good they are at it; and
then the potential to commercialize that. And so, I think it is al-
ways valuable, that those are important factors and that they are
all there. And I think some of the RAMP Act, make sure that the
right people are helping in that evaluation process and there are
some resources with USPTO who we work with very closely. Pat-
ents are an issue, so things that can reduce the cost of patents. All
those things can help small businesses and those are challenges
they run into.
Ms. HOULAHAN. I 100 percent agree with you having struggled
through those kinds of processes myself. It is a race in many cases
to get something to a shelf or into a store or into somebody’s hands
and I think that time matters and expertise matters. So, I appre-
ciate your insight into that.
Given that the proven value delivered by SBIR and STTR is de-
monstrable, I have heard from a lot of stakeholders and businesses
who have asked that Congress should address the uncertainty that
is associated with what I have seen here in my few years, frequent
and very sporadic reauthorization of programs. They have shared
that it would be better if we would be able to have a more reliable

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stream of reauthorization and it would result in less fraud, waste,
and abuse. So, from your experience in the ONR, the Office of
Naval Research, could you please speak a little bit about how the
SBIR and STTR programs have delivered valuable research back to
the 11 participating agencies and how would a longer term author-
ization or permanency of the program allow for relationships and
benefits for the American people to be able to continue and grow?
Mr. WILLIAMS. Sure. Anything that creates continuity. And so,
there is a lot of, especially in commercialization, people relying on
that part. So, the DoD, if we were going to be part of a missile sys-
tem that was a 10-year program and we were funding it for 4 years
and that went away and they was not sure that it was going to be
after that, they would not include that as part of the program. That
is a design risk that just would not be done. So, the goal is to try
to get these systems, especially the DoD, which is half the pro-
gram, into these weapon systems, into these programs. And if there
is not a guarantee then that is a risk. And the same with the pri-
vate sectors. Investors are not willing to invest. But we have seen
more incubators and others established that are using the SBIR
program funds as a tool, which we want them to do, but if it is not
going to be there, are they going to provide the resources to train
people to really understand what the program is, to build the rela-
tionships with the program managers? So, there are a lot of pieces
to this and stability in longer term just creates more stability that
we can plan for. And at program offices, you cannot hire people and
things like that if it is a 2-year program. So, it feeds it in a lot of
different ways.
Ms. HOULAHAN. Thank you. I have run out of time and I yield
back, Madam Chair.
Mr. WILLIAMS. Thank you.
Chairwoman VELÁZQUEZ. The gentlelady yields back.
Now we recognize the gentleman from Pennsylvania, Ranking
Member of the Subcommittee on Economic Growth, Tax, and Cap-
ital Access, Mr. Meuser, for 5 minutes.
Mr. MEUSER. Thank you very much, Madam Chair. And thank
you, Mr. Williams, for being with us. And as Ranking Member
Luetkemeyer said, thank you for your service, your work for our
country, and in your work you clearly have the knowhow and dedi-
cation. So that is great to see.
First, Madam Chair, I do want to bring up what Ranking Mem-
ber Luetkemeyer has mentioned a number of times and that is the
absence of Secretary of Treasury, Janet Yellen. It is kind of inex-
plicable that the law states and the requirements are to appear be-
fore this Committee within timeframes and yet the requests seem
ignored. And so, I just want to go on the record saying that is real-
ly irresponsible and kind of hard to believe, actually.
But moving on. Moving on. So, Mr. Williams, hearing you out, it
sounds like you have got a very focused plan and you are there for
all the right reasons, to figure this out. It is a pretty bit operation
you are running. What are your goals for this year? What are your
macro or micro goals, within 60 seconds if possible for the year?
Mr. WILLIAMS. Sure. I am an office of four. I am not a big orga-
nization. So, my goal would be to actually grow that and be able
to provide more resources. Really, on the underserved, there is,

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again, this trick, goal is to get legislation making sure because,
again, that is something that now I have to spend a lot of time on.
And then if we know there is FAST and Growth Accelerators, be-
cause those will be the programs that we really believe we can get
to underserved states, if we have those funds that we would then
need to manage and execute and get those awards out quickly.
So potentially on the 11th, I am going to have a budget of some
type, and then once I get that, my job is to execute that as quickly
as possible because the money does not do any good in Treasury.
It has got to get to helping small businesses.
Mr. MEUSER. You have an office of four. So, but you have how
many clients? How many——
Mr. WILLIAMS. Well, I have a lot of clients. I guess it depends
on how you look at it. I consider you my client. We have the small
businesses, the agencies.
Mr. MEUSER. Business clients.
Mr. WILLIAMS. So we deal less directly with the companies.
Our goal is to build this national innovation ecosystem so we have
84 Growth Accelerators that we work with that are funded this
year. We have 33 FAST awardees. So those are groups that we
work with, that we have contracts with, and that we monitor. And
then we have an ecosystem. We just have calls and we connect
with people we do not fund but that we try to provide information
to them. Our goal is to kind of share the information in one place
and push it to those that need it.
Mr. MEUSER. Is it possible for me to get a list of the number
of businesses that have accessed and utilized and gained support
from——
Mr. WILLIAMS. So, I mean, there are 7,000 awards made,
33,000 proposals submitted every year, about 4,000 to 5,000 compa-
nies. Our website is over a million hits every year. But I can give
you any more detail.
Mr. MEUSER. In Pennsylvania or just in my district for that
matter?
Mr. WILLIAMS. Yeah, I can give you that information. Actually,
it is on our website. SBIR.gov. You can pull up each year, each
agency. But I can get you that, too. Absolutely.
Mr. MEUSER. All right. Good. I will do that. Thanks.
So, you do see, and I am sure you are aware of this and are fo-
cused on doing everything you can to change it in a reasonable
way. But certain areas of the country utilize the program far more
than others, such as the northeast and the West Coast, as well as
some companies receive upwards of 50 Phase I awards in a single
year. That is not necessarily a bad thing. It could be a good thing.
But how would you explain that? It seems a little lopsided?
Mr. WILLIAMS. I will have to look into the 50 Phase I awards.
I mean there are a couple reasons why certain places in the coun-
try do not get as much awards. VC funding goes to five states, 80
percent of it. There are infrastructure issues that exist and so that
is why we really believe there are great universities throughout the
country, that that is a good place for us to lock into. FAST and
Growth Accelerated established, they are now much more focused
in transitioning to research that they were not really years ago and
it is that forming of a kind of translational side of NSF where we

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are really going to start funding more of that basic research. The
small businesses are the glue to that. Those are the ones that are
going to be motivated to take that and then they will stay locally.
And so, I think that is what we need to do is more programs to
put some boots on the ground in those places and help them get
access to this program. It is still a government program. Govern-
ment programs are not always the easiest and so we want to train
new people.
Mr. MEUSER. Real quick. You probably will not have time to an-
swer this, but provide us, or me, any specific recommendations you
have that we can help you improve the program because it sounds
important.
Mr. WILLIAMS. Stability. And I think some of these resource
programs that we talked about so we can do more would help.
Mr. MEUSER. I yield back, Madam Chair.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Minnesota, Chairman of
the Subcommittee on Oversight, Investigations, and Regulations,
Mr. Phillips.
Mr. PHILLIPS. Thank you, Madam Chairwoman. And thank
you, sir, for being with us today.
Both SBIR and STTR are examples of government policy that in
my estimation aid, not obstruct, private sector initiatives, which I
celebrate, specifically for R&D. They are programs that drive com-
petition between small businesses to develop innovation in both
products and services. We all know that every large enterprise
began as a small startup, including such iconic Minnesota compa-
nies like 3M and Medtronic just to name a few. They were
innovators which developed new technologies in their industries
and grew into two of the world leaders in both medical devices and
manufacturing. They are the types of successes to which America
should aspire and which we, in Congress, have to support. And of
course, they did not do it alone. No business does it alone. Federal
investment in R&D and commercialization of new technologies
plays a really meaningful role in generating success. So good gov-
ernment policy should incentivize those best practices in the pri-
vate sector.
So, Mr. Williams, you well know, many countries around the
globe are rapidly increasing their investment in government fund-
ing dedicated to small business R&D. I know you have worked with
SBIR and STTR and the small businesses that have used them for
many years during your career. So, I would like to get a sense from
you, what is the ROI on every dollar that both SBIR and STTR dis-
tributes?
Mr. WILLIAMS. So the only measures that we have are a DoD
study. And I am going to get the years wrong but it was a 10-year
timeframe that I think ended in—well, I will not quote it. But it
was a 10-year timeframe. And that was the 22:1 ROI. And then the
Cancer Institute was the other major one. Navy has done a study
but the Cancer was 33:1. These studies are expensive and so there
have not been a ton of ROI studies but those are two landmark
ones. And then the Academy of Sciences has done some studies
that have all shown substantial ROI. But I think one has to be
careful of not just focusing on ROI because, again, this program is

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designed to address the mission needs of that agency, and to that
agency, having the research done, and sometimes having research
fail is of value.
Mr. PHILLIPS. Yeah, agree.
But fair to say that increasing the percentage of R&D budget set
aside for both SBIR and STTR would surely help drive innovation
in small business; true?
Mr. WILLIAMS. I think so. Yes.
Mr. PHILLIPS. Yeah. I think it is also fair to say that programs
like these really have a complementary relationship with VCs. Ms.
Tung, VP of Research at 23andMe, a company that was aided by
SBIR, described that in a hearing that we hosted last spring. Are
there ways that you believe we can encourage more public-private
sector collaboration in both programs?
Mr. WILLIAMS. So I think if we had some more resources. I do
not know if you know but we have a program in my sister office,
the SBIC program. Certainly, that is a program that could look at
investing. But we work with the National Venture Capital Associa-
tion. So, I think our ability to get out there more and to be able
to help document the technologies and where they are in building
those bridges would help to kind of bring that network together.
Mr. PHILLIPS. Okay. Venture capital and SBIR investments are
often directed at different industries and different types of small
businesses, of course. How can SBA more clearly distinguish be-
tween existing small businesses and new high-growth startups?
Mr. WILLIAMS. Well, the ones all listed under the SBIR pro-
gram on SBIR.gov I would consider all high growth. And so, they
are available on that site. We are always looking at better ways to
provide more information but there is a lot of information on our
website that talks about those companies. So, I think that is the
best place.
Mr. PHILLIPS. Okay. And lastly, something on all of our minds
is fraud and abuse in all federal programs. Is there anything that
you might share with the Committee on how we could aid both
oversight and fraud prevention in these programs?
Mr. WILLIAMS. I think the legislation that came out in 2011 set
into motion a couple of things that we have done. Setting up these
10 requirements that each agency must implement. I worked close-
ly with the IGs. We developed that with the IGs. We post fraud,
waste, and abuse issues on our website. We have training on fraud,
waste, and abuse. So, I think a lot of the things are out there and
they are being implemented.
Mr. PHILLIPS. All right. Well, thank you, sir. That is all I had
and I appreciate your time with us today.
Mr. WILLIAMS. Thank you, sir.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize Mr. Williams, Vice Ranking Member of the
Committee from Texas.
Mr. WILLIAMS of Texas. Thank you, Madam Chairman. I appre-
ciate that promotion. And there are more Williamses in here than
not in here today. I appreciate that.
In 2017, I helped pass the Tax Cuts and Jobs Act which provided
historic relief for small businessowners and Americans across the
country. This bill revitalized the U.S. economy, making it more

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globally competitive, and unfortunately, a critical provision of this
bill expired at the beginning of 2022, and now businesses will no
longer be able to deduct the cost of research and development from
their taxable income in the year they incur the cost. This will re-
duce tax benefits for companies investing in R&D and will result
in less domestic innovation, fewer jobs, and SBIR and STTR pro-
grams were established to increase participation of smaller compa-
nies and fairly funded research and development. So, without this
tax benefit, there will be a dramatic reduction in business incen-
tives to invest in R&D.
So, Mr. Williams, do you agree that allowing the R&D tax credit
to expire will negatively impact small businesses and
entrepeneurs? And how could less R&D affect American innovation
and competitiveness?
Mr. WILLIAMS. So this is not an issue that I am really familiar
with. It is not something that comes up to small businesses that
they have expressed their concern on this.
Mr. WILLIAMS of Texas. Well, I will just tell you, as a small
business owner, too, any time that you can get a positive cash flow
to invest in R&D or even buy equipment it helps. So, we need to
do everything we can to get that back in the program and put more
cash in the hands of main street.
Now, secondly, during the pandemic, various federal agencies
were tasked with getting money to the American people as fast as
possible. Unfortunately, the SBA was by far the worst at distrib-
uting business savings funds for the last 2 years and now we are
hearing that the Biden administration is calling for more COVID-
19 money even as inflation soars and billions have gone unspent
from his last partisan COVID bill. The administration should be fo-
cusing on alleviating the supply chain crisis, solving the worker
shortage, and lowering regulatory costs because these are the
major concerns for small business owners across the country.
So, my question to you would be part of your responsibility as a
director at the SBA is to advise businesses on how to grow and suc-
ceed. I think the SBA should be totally pro main street. How do
we create businesses to be successful? And so, what advice would
you give to small business owners right now who are concerned
about the high inflation and the effect it will have on their busi-
nesses?
Mr. WILLIAMS. The one thing that I think helps is that every
year we adjust the amount that they can get in an SBIR and STTR
award based on inflation. So, we are always making sure that that
amount goes up every year. And then——
Mr. WILLIAMS of Texas. It is going up this year, is it not?
Mr. WILLIAMS. It will probably go up this year. Yes, sir.
Mr. WILLIAMS of Texas. Yeah.
Mr. WILLIAMS. And so our goal is really to just get, I mean, my
role is to get more people involved in it and get more money to
them. That is the R&D program funding of the SBIR and STTR.
Mr. WILLIAMS of Texas. Let me ask you another question from
a tax standpoint. Do you think that lowering taxes benefits small
businesses like those in the SBA or raising taxes would be good for
small business?

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Mr. WILLIAMS. So the program I work with is SBIR and the
issue of taxes is not one that is raised to me.
Mr. WILLIAMS of Texas. Okay. All right.
Madam Chairman, I yield my time back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Pennsylvania, Mr. Evans,
for 5 minutes.
Mr. EVANS. Thank you, Madam Chairperson. Thank you for this
hearing. This is very valuable.
Increasing diversity in entrepreneurship in technical startups is
important to me coming from Philadelphia, a city that has nearly
50 percent Black. And Black and Brown citizens make up most of
the 25 percent of Philadelphians in poverty. Entrepreneurship is a
tool in the economic toolbox to lift people out of poverty. SBA still
has the same level of diversity in the Small Business Innovative
Research and the Small Business Technology Transfer program as
it did 10 years ago. Does SBA coordinate with historical Black col-
leges and minority services to expand awareness of these programs
to help applications? Can you respond?
Mr. WILLIAMS. Yes. Thank you, sir. Great question.
So, we have done a couple things. And again, this is an area that
is a high priority to me. We just actually got some funding from
NSF to award a contract with Howard University that is on an
SBR Inclusion Study to really better understand the barriers that
underserved founders have with getting access to SBIR and STTR.
So that is an ongoing program and we are going to learn from that
and share that information with not just the agencies but other
schools. We have a longstanding working relationship with MBDA.
They were part of our conference this year. They have been the last
couple of years but when we had this virtual conference, 41 percent
of those registrants were from underserved representatives. And
that was the biggest event that MBDA has had.
I also, about 2 years ago, signed a memorandum of agreement
with MSRDC, so that is the MSI STEM R&D Consortium that is
made up of 60 MSI and HBCU research schools. And we feel that
that is a really good group because, again, trying to get SBIR
awareness to those communities. And so, I think the next big step
really though is to have some funding like there would be poten-
tially in Growth Accelerators in FAST so we can have offices at
those HBCUs to provide that direct training and bring more people
into the program.
Mr. EVANS. There are nine such institutions in Pennsylvania,
four which are in my home city of Philadelphia. So, I am interested
to hear does SBA work with them?
Mr. WILLIAMS. So we work with all universities. Now, with
SBIR and STTR, in my role we will mainly just work with tech-
nical schools that are developing the types of clients that we be-
lieve would apply. But yes.
Mr. EVANS. I thank the gentleman. I yield back the balance of
my time, Madam Chair.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentlelady from California, Ranking Mem-
ber of the Subcommittee on Innovation, Entrepreneurship, and
Workforce Development, Ms. Young Kim, for 5 minutes.

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Ms. YOUNG KIM. Thank you, Chairwoman. And I want to thank
Mr. John Williams for joining us today to discuss the SBIR and
STTR programs.
The SBIR and STTR programs are critical tools for small busi-
nesses to research, develop, and commercialize innovative tech-
nologies and help create good-paying jobs.
China and other nations are taking considerable steps to bridge
the innovation gap with the United States and knock us down as
the world leader in innovation. While we must not relent our coun-
try’s position as the leading innovator and developer of emerging
technologies, Congress must ensure that programs like SBIR and
STTR are adhering to their allocation requirements meeting timeli-
ness guidelines and safeguarding taxpayers by successfully com-
mercializing technologies and getting them off the program.
So, Mr. Williams, the Small Business Act requires the SBA to re-
port annually to Congress on the SBIR and STTR programs. Unfor-
tunately, SBA compliance with this requirement has been an ongo-
ing issue. Without the timely reports, it is difficult for Congress to
legislate and improve the programs.
So, in your view, what steps is SBA taking to meet the reporting
requirements as mandated by law?
Mr. WILLIAMS. Sure. Thank you for the question.
So, what we have really focused on since I have come is getting
the quality of the data up, making sure we are getting complete
data from all the agencies that first collected from the individual
companies, and then get that on the site. And so, the second an
agency submits their information on awards to SBA, it is posted on
our SBIR.gov website. That site allows for downloads. It has got
over 170,000 awards on that site from the beginning of 1982. We
really focused on the last 10 years, making sure that that data was
as accurate as possible. So, our push was really to make sure the
data is there, can be downloaded and looked at in real time, and
also looked at in trend form and things like that.
For the current 2021 report, the data is due by March 15th from
the agencies so we have not started on that. We are working on
the 2020 report and we have got that in paper form and that will
then start the external review process then before it gets to Con-
gress. But I would stress that really all that information is out
there and we make sure it is available, transparent, downloadable,
and it is a massive amount of data. Each award has over 80
records and so there is a lot of information on that website about
what we do.
Ms. YOUNG KIM. Thank you.
You know, I am concerned that the effectiveness of the programs
vary by agency and some agencies are more successful in others in
responding to requests in a timely manner. Do you believe it might
make sense to standardize some of the paperwork requirements
across agencies to improve timeliness? And do you think SBA has
a role to play in helping agencies standardize proposal review pro-
cedures?
Mr. WILLIAMS. So, timeliness is in the legislation and we then
measure the time from a solicitation closing to the selection to the
award and then the gap between Phase I and Phase II. Different
agencies based on FAR and DFAR and some of the regulations

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have different timelines that have been established by Congress.
And so, we work with those. And so, our role is to measure those.
Measure the agencies. Measure what they are doing on every
award and then to document that and provide that information to
Congress.
Ms. YOUNG KIM. Thank you.
One more question. Some companies have received upwards of
like 50 Phase I awards in a single year. What can we do differently
to make sure other companies have a fair shot in receiving the
awards? Because it does not seem fair that a few companies are re-
ceiving the bulk of the awards.
Mr. WILLIAMS. The numbers on multi-award winners, which is
over 15 awards that they have ever received, is down 25 percent
in the last 5 years and the percent of first-time applicants is at 46
percent currently right now. So that is about 2,000 companies
every year new to the program year over year. So, I think it is real-
ly up to the agencies then to determine why are you awarding to
the same company. And again, the goal of the program is to solve
the mission needs of that agency and to pick the best technology
solution for that. And so that is what the agencies do. They under-
stand the transition. All that information is in the proposal for
them to evaluate.
Chairwoman VELÁZQUEZ. The gentlelady’s time has expired.
Now we recognize the gentleman from New Jersey, Mr. Kim, for
5 minutes.
Mr. KIM. Thank you. Thank you for taking the time to be able
to come talk with us, Mr. Williams.
I wanted to ask you about something that I came across in the
district. So, I have a joint base, McGuire-Dix-Lakehurst in my dis-
trict, and as I have been talking to them about entrepreneurship
and innovation and kind of bringing in the work of small busi-
nesses, they talked about how they did a pitch day when it came
to SBIR/STTR. I know as I dug into it more, the Air Force has been
moved forward on a number of these types of ditch days in which
they have been able to streamline the process and often even be
able to make initial awards on that same day.
So, I guess I wanted to ask you just what you thought of that
process, how it has been working and whether or not there is some-
thing there that the other departments and agencies might be able
to pick up on, have been intrigued by this model.
Mr. WILLIAMS. Sure. So, Lakehurst is great. When I was at
Navy they did pretty much all our contracting and we went to a
central single source of contracting which I think was one of the
more valuable tools than just about anything that the Navy did.
And I know the Air Force has done some of that because, again,
when you spread contracting out you get different types of contract
shells and things like that. And so, standardization of those kind
of things, centralizing it, at least at the Navy, created great value
and it allowed us to make awards more quickly.
There are pros and cons to pitch days. There is a lot of time and
effort that goes into some of those things but they have shown
some interesting results on awarding instantaneously and so I
think I am a big proponent of we experiment. We allow the flexi-
bility that the legislation allows and we measure the time it takes.

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And so, when things work well, again, we have monthly meetings
with all the program managers, that we share that information and
we learn from best practices and what we are seeing the Air Force
and others do is tweak some of those things. So, they take what
works and continue. So, anything that accelerates the time to
award is absolutely something we are supportive of.
Mr. KIM. Yeah. And so, you are saying that you are actively
keeping track of this process.
Mr. WILLIAMS. Yes.
Mr. KIM. And analyzing how it has been working for Air Force.
And what are some of the other departments and agencies? Which
other ones are utilizing this model right now?
Mr. WILLIAMS. The Air Force is the lead in the pitch day but
I know a couple of the other Department of Defense ones are look-
ing at it. I personally do not think it is a ‘‘one size fits all’’ in this
area because some of them are in person. But yes, that is the main
one, is the Air Force.
Mr. KIM. Well, one other aspect of this, and I think this kind of
gets at some of what you were saying about pros and cons and see
how it goes and track it, there have been some concerns raised
though about the diversity of those that are participating when it
comes to pitch days as well as the reviewers. I think there are
some concerns that we are not necessarily hitting the kind of racial
diversity and the diversity that we want to through these types of
efforts right now.
So, I guess my question to you is, is that kind of demographic
tracking happening in terms of understanding who is gaining ac-
cess to this, whether through pitch days or other types of proc-
esses? I just want to make sure that we are thinking through
things in that kind of whole way.
Mr. WILLIAMS. So demographics are measured from the pro-
posals and awards made and we even are now moving to breaking
down that in SAM to really understand because the challenges of
an African American are different than an Asian American. And so,
yes, those things are tracked. And so, I think what needs to be un-
derstood is there is a low percent of African American tech compa-
nies that exist today. Our woman-owned companies in tech are 15
percent. We get about 15 percent of the proposals, make about 15
percent of the awards. So, the issue is we need to figure out how
to get more African Americans to start a tech company and then
that again is probably boots on the ground, FAST programs,
Growth Accelerators to kind of really figure out what works, and
that is why we are excited about this project we are doing with
Howard to really understand what are those barriers? Why are
they choosing not to start a high tech company and instead maybe
going to work for a big defense contractor or something else.
Mr. KIM. Okay. Great. Well, thank you for talking to me about
this and we will follow up on some of this.
I will yield back my time.
Mr. WILLIAMS. I appreciate that. Thank you.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from New York, Mr. Garbarino,
for 5 minutes.

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Mr. GARBARINO. Thank you, Madam Chair. Thank you very
much for holding this hearing, and to the Ranking Member.
I have some questions about the SBIR and STTR. Federal agen-
cies need to, when they invest they have the extramural research
budgets. The SBIR, I believe they use 3.2 percent of those budgets
have to go to small businesses and to the STTR, .45 percent of
those agencies’ budgets are extramural research budgets have to go
to small businesses. Where did those numbers come from, the per-
centages? Is that said in law? Can we raise that so more small
businesses can participate in these programs?
Mr. WILLIAMS. Yes, it is in the law and it is up to Congress
to determine those levels.
Mr. GARBARINO. Is there enough demand that we should in-
crease these levels, the percentages?
Mr. WILLIAMS. When you say is there enough demand are
there enough high-quality proposals?
Mr. GARBARINO. Applications. Could we fulfill more participa-
tion——
Mr. WILLIAMS. So the only data that I have is that the Acad-
emies of Science and others have studied and looked at, and this
exists with other federal funding, too. So, it is not unique to SBIR.
But they do not get to fund all the high-quality proposals. So that
is the case with SBIR but it is also the case with other programs.
Mr. GARBARINO. So you are saying that they do not get to fund
everything they want to, so increasing that number would help
them with that? Can they spend more than the 3.2 or is it required
that they only spend 3.2 percent to the SBIR?
Mr. WILLIAMS. It is a minimum floor.
Mr. GARBARINO. It is a minimum floor. So, they can spend
more if they want to?
Mr. WILLIAMS. Yes.
Mr. GARBARINO. Okay. Do they spend more?
Mr. WILLIAMS. No.
Mr. GARBARINO. Okay. So, they are doing the bare minimum.
Okay. And that is the same thing for the STTR as well?
Mr. WILLIAMS. And I think actually there are one or two agen-
cies. I think Homeland in the past has spent more but that is prob-
ably one of the few.
Mr. GARBARINO. Okay. How do you ensure that they do spend
the minimum amount of money? Because I have had some——
Mr. WILLIAMS. We spend a lot of time measuring that. That is
one of the reasons our reports take so long.
Mr. GARBARINO. Okay.
Mr. WILLIAMS. But that is a big part of the measurement is to
determine the total extramural R&D spend that year compared to
then that is the denominator, the numerator of what they spent
and obligated. Yes. And that is part of the reports.
Mr. GARBARINO. So I have had some complaints from some
contractors in my district, military contractors that say that DoD
does not keep up their spending and I do not have any way to say
that they are wrong or they are right so that is my question to you.
So, every year you make sure that your reports ensure that these
agencies are spending the minimum amount that is required?

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Mr. WILLIAMS. No, our reports report what they are spending
as we measure it and we compare it to other things.
Mr. GARBARINO. Have any of these agencies missed the mark,
the amount that they are supposed to?
Mr. WILLIAMS. The answer in the way we report it, the answer
is yes. The challenge with the DOD is they have 2-year funding.
Their funding continues to go up. They typically spend SBIR. They
spend a percent of the SBIR in the second year so we are trying
to get more transparency in understanding the year of the funding
and the year of the obligations which is challenging but I do believe
that all agencies are spending the minimum amount. It is just not
in that year and the way we measure. And we measure it based
on the way the legislation is written.
Mr. GARBARINO. Okay. So, what happens if they do not spend
the money. You think they are but they might not be. The numbers
say they are supposed to be spending this minimum amount, what
happens if they do not?
Mr. WILLIAMS. So I think they are. I think it is over time but
the legislation does not address that issue. We report it.
Mr. GARBARINO. They are required to spend it but there is
nothing to hold their feet to the fire if they do not?
Mr. WILLIAMS. Well, there is Congress. We report it to Con-
gress.
Mr. GARBARINO. Oh, Congress. Yeah, there is us. Okay.
A separate question. How many companies or small businesses,
and you might have mentioned this before. I know somebody was
asking about the return on investment from the dollars invested.
How many companies or small businesses make it all the way to
Phase III?
Mr. WILLIAMS. So there is reports, and I would really reference
the National Academies of Sciences reports. So, it is in the 50 to
65. It depends on the agencies. And again, you do not want it to
be 100 percent. You do not probably want it to be much more than
it is because it is cutting edge R&D that you do not expect all to
transition. But that data is in the Academy of Sciences reports.
Mr. GARBARINO. I appreciate it. I am running out of time so
I thank you for your answers and I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Maryland, Mr. Mfume, for
5 minutes.
Mr. MFUME. Madam Chair, thank you very much for the oppor-
tunity to both you and the Ranking Member.
Director Williams, hello.
Mr. WILLIAMS. How are you doing?
Mr. MFUME. I am pretty good. And I appreciate your time here
as something that we do not take for granted but it is part of our
responsibility to do oversight and to follow up, particularly on pro-
grams such as the two we are talking about today.
I know your authorization runs through September 30th. I think
it is fair to say that this Committee wants to make sure that reau-
thorization occurs because of our concern for innovation, tech-
nology, and research. I do want to at some point follow up on the
gentleman from Minnesota’s comments about ROI. Return on in-
vestment is important to me. I happen to Chair a Subcommittee on

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Contracting and Infrastructure and perhaps I will take that up in
that Committee.
But what I would like to turn my attention to right now is to go
back to the comments offered up by the gentleman from Pennsyl-
vania regarding diversity, specifically with HBCUs.
Director Williams, in 1982, the gentleman whose picture hangs
on the wall here behind me, Parren Mitchell, was very instru-
mental in creating the programs that we are here talking about
today and very insistent at the time of that creation on diversity.
Ten years later, in 1992, I Chaired the Subcommittee of this Com-
mittee on Minority and Women Business Enterprise. And I reiter-
ated 10 years later the concerns that Congressman Mitchell had,
the founder, that we really needed to see a reduction in multi-
awards, that we wanted to see increase in access to a number of
ways to get organizations and people applied, and that we wanted
to make sure that there was real diversity with woman-owned, mi-
nority-owned businesses. And at that time the emphasis was spe-
cifically in 1992 on Black, Latino, and woman-owned businesses.
So, it is ironic we are 30 years after I held those hearings. We
are talking about the same two very important programs. And for
me, the irony here is that there is such a similarity of what the
hearing 30 years ago dealt with to where we are today. So, the fact
that we have real concerns about diversity, the fact that there are
still many, many multi-awards that are taking place. I think you
said around 46 percent; is that correct?
Mr. WILLIAMS. No, 46 percent are brand new awardees.
Mr. MFUME. Awardees. Yeah.
Mr. WILLIAMS. I think it is 27 percent have won more than 15
awards.
Mr. MFUME. Yeah. So that is why I can appreciate your 8 years
in your position. I have got a longer view on this. A longer perspec-
tive that goes back 30 years and remembering the 10 years before
that. We really need to get beyond where we are. Because if not,
I think the next time around for reauthorization, you and the agen-
cy are probably going to face a real bulwark of resistance by those
of us who do not understand why we cannot find a way to do what
we say we are going to do 40 years ago when it was begun and 30
years ago when I held hearings on this. There has got to be some
sort of way, particularly with HBCUs and MSIs, not to go to one
college or one university or one consortium but to ask the question,
why are we not doing more here and what are the keys? The key
in many respects is where you are going I think and where you
have to go are schools that have engineering programs, STEM pro-
grams, and R2 colleges and universities that will give you the peo-
ple who can, in fact, apply. I think there has to be increased access
to early stage technical assistance to facilitate greater diversity
among the program participants. And we have heard concerns in
the past about the barriers that women and minorities faced then
in 1992 and now today women, minorities, and those in rural areas
just to be able to get matching funds because of where they are.
So, there are real concerns. I do not have more than 5 minutes to
discuss my agony here if I can use that term, having lived and
watched this. I am not here to condemn you or to blame you but
I am condemning the process and what may have preceded you be-

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cause this is, as Yogi Berra once said, deja vu all over again. We
have not moved an inch from where we were.
So, my time has expired. I want to thank the Chair for allowing
me to have the opportunity to chime in. I hope, sir, that you would
take these concerns so that this time next year when we are talk-
ing about reauthorization, some of the answers then will go far be-
yond where they are now, particularly in terms of increased partici-
pation and diversity for women, minority-owned businesses, and
others.
Thank you, Madam Chair. I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Minnesota, Mr. Stauber,
for 5 minutes.
Mr. STAUBER. Thank you, Madam Chair, and to the Member
who just spoke. I really appreciate some of the things you brought
up and the perspective that you come at these issues with.
As with every government program, finding success is not always
easy. When I first got to Congress, I assisted a small business, ob-
tained feedback from the Air Force regarding the SBIR applicant
denial. They were never able to get a straight answer before my
involvement, but I was certainly happy to help get things cleared
up for them.
Mr. Williams, can you speak to requirements, if any, of providing
feedback to SBIR and STTR applicants when their applications are
denied?
Mr. WILLIAMS. I know at Navy we had a process where we
would provide electronic feedback on all of them and then follow
up. So, I will have to get back to you on the specific rules because
the rules really are not associated with SBIR and STTR. They are
associated with how an agency runs a grant and/or a contract and
how they go out. So, they follow the same rules that they do for
any types of proposal situations and grant situations.
Mr. STAUBER. Will you get those to our office or get it to
Madam Chair for us so she can distribute it?
Mr. WILLIAMS. Sure.
Mr. STAUBER. Thank you very much.
And then we talked about standardization of paperwork across
the agencies which would help increase participation. And you even
alluded to the timeliness. Are there any things that you can sug-
gest to us on the timeliness or change of the timeframes from your
experience? Because a couple of questions you had answered, well,
it is Congress’s role. Can you give us some ideas on specifically the
timing from your expertise that we should be looking at reference
legislation change?
Mr. WILLIAMS. So I think all agencies are committed to reduc-
ing timeliness and it is something we measure; we talk about a lot.
There are restrictions and a lot of them are FAR, DFAR, policies
at those agencies. And so, it is hard for me to speak on one or two.
And I know the GAO has done a study to look at that and they
have kind of looked at some of these things. So, I would be really
glad to work with the offices and really bring in different, because
it has got to be brainstormed. And it is really the procurement and
contracting organizations, not the SBIR shops that need to get in-
volved because that is where it happens. Those are the regulations

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that control these things. And there is a good reason for some regu-
lations. And so, we always want to balance doing things too fast
and making sure we are checking everything.
Mr. STAUBER. What other barriers to entry have you identified
in your time as director?
Mr. WILLIAMS. I think a lot of it is, again, I am really proud
that we have got 46 percent of the awardees every year are new.
I am not proud that we do not do that across the country, espe-
cially with some of the underserved. So, I think we need to do more
and it is really a resource-based thing of getting systems in place
where training on SBIR and STTR is available. Access to wet lands
is available. Mentors are available to help those that are under-
served that are not getting access or understanding of this program
so they can write proposals and win awards. I am a big fan of try-
ing to do that.
In the post-doc there was a hearing here. One of the post-doc in-
dividuals, an African American, he got access to one of our Growth
Accelerator funds that helped them pivot a little bit but it while
he had some other programs going on and funding. So post-docs are
a great place because they are getting funded to be there anyway.
They are used to eating Ramen and things like that so that is a
good time to get them to write proposals, win awards, and start
new companies.
Mr. STAUBER. You talked about some of the things that needed
to be changed to help the program become successful and we talked
about some of the barriers for some small businesses that want to
come into these programs. Would you say that this administration’s
$201 billion in additional regulations in year 1 and the $130 mil-
lion of new compliance hours are barriers to entry for startups?
Mr. WILLIAMS. I have not seen any of those affect what we do.
The barriers that startups talk about are barriers that have been
in place for a long time.
Mr. STAUBER. The $201 billion in additional regulations in one
year, is that good or bad for small businesses?
Mr. WILLIAMS. So I have not heard any of my small businesses
that I work with reference any specific, but if there are certain
ones that I should be aware of, I would be glad to work with you
on that and try to figure that out.
Mr. STAUBER. My time is expired. Madam Chair, back to you.
Thank you.
Mr. WILLIAMS. Thank you.
Chairwoman VELÁZQUEZ. The gentlelady from California, Ms.
Chu, is recognized for 5 minutes.
Ms. CHU. Mr. Williams, I am fortunate to represent California’s
most prolific research institution, the California Institute of Tech-
nology, Caltech. Caltech has partnered on more STTR grants than
any other research institution in California. I believe that is a
major reason why my district in Pasadena, California, in par-
ticular, has become such a hub for technology-focused startups and
small businesses. This includes companies like iRobot which you
mentioned in your testimony.
In your experience working with these programs, how do sur-
rounding communities benefit from proximity to qualified research
institutions that participate in SBIR and STTR? What are the sec-

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ond order investment, employment, and innovation impacts sup-
ported by SBIR and STTR?
Mr. WILLIAMS. I do not have specific numbers on that. I believe
that SBIR and STTR can really accelerate economic development
in areas that are underserved because if you get that, those are
high-growth companies that rapidly grow and then they can sup-
port another layer of small businesses that are providing supplies
and support and things like that. So, I certainly think it is a great
way to get economic growth by investing in that and the university
systems. And there are many universities that should be playing
a bigger role in the program and we are starting to see that.
Ms. CHU. Thank you.
And Mr. Williams, I would like to follow up on your reference in
the testimony that you provided on efforts to increase participation
by woman-owned small businesses and SBIR and STTR. A study
conducted by the National Women’s Business Council found that
across the 11 agencies that participate in these agencies, only 14
percent of Phase I awards were made to woman-owned businesses.
And while some agencies, such as the Department of Education are
awarding nearly 40 percent of their grants to woman-owned small
businesses, agencies that focus on STEM fields, such as the De-
partment of Energy, still only award 10 percent of their grants to
woman-owned small businesses. Although this is an improvement
over the dismal 3.5 percent they were awarding to woman-owned
small businesses in 2011, it is still not enough.
Can you talk about the direct work that you are doing at SBA
to encourage more woman-owned small businesses to participate in
these programs? And in particular, I want to know, how are you
measuring success in increasing women’s participation? Is it just
that the number of awards granted or are you also measuring the
number of woman-owned small businesses that apply to the pro-
gram? Are you increasing the number of women who serve on peer
review panels?
Mr. WILLIAMS. So the study I am very familiar with because
we performed that study for the National Women’s Business Coun-
cil. And the data that it also showed was that woman-owned STEM
companies was pretty close, was in that 15 percent range of the
amount proposing and the amount winning. It did vary. So, as you
mentioned, certain agencies, and a lot of that seemed to be tied
back to the pipeline, in STEM areas, in physics and things like
that were lower in women than they were in education and they
were in other areas. And so, we saw a lot of correlation with that.
Now, that said, I certainly think what I would like to see more
of is finding grad students, women while they are in college and
figuring out what the barriers are for them to start a small busi-
ness and take the risk. And so, we have seen some success. Okla-
homa FAST has done a great job of having cohorts of just women
first-time applicants and been very successful at getting them to
win and thus starting the process of forming new minority, new
woman-owned companies, and that is where we really need to put
more time and effort. And yes, we do measure all those things
though that you mentioned.
Ms. CHU. But how about increasing the number of women who
serve on peer review panels? Or do you even track that?

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Mr. WILLIAMS. So we have not measured that. It would not be
easy to measure. But what we have seen though and we do meas-
ure is do we see a bias? So, do we see the percent of proposals
being much different than the percent of awards? And we have not
seen that.
Ms. CHU. And also, on peer review panels for participants of
color, do you track that?
Mr. WILLIAMS. So again, everything data we get has to be kind
of a requirement. We are not required, nor do we ask for that data
from the individual agencies. I think some of the agencies have
looked at that on their own but no, that is not a required data ele-
ment to submit to us.
Chairwoman VELÁZQUEZ. The gentlelady’s time has expired.
Now we recognize the gentlelady from Texas, Ms. Van Duyne, for
5 minutes.
Ms. VAN DUYNE. Thank you very much, Chairwoman
Velázquez, and Ranking Member Luetkemeyer.
Mr. Williams, thank you very much for coming and testifying in
front of our Committee today.
One of the main issues of SBIR and STTR programs are their
slow timelines. A GAO report last October stated that just 9 of 29
agencies were consistently on time on making their awards within
the required 6 months which some argue is too long of a timeline
already. So how is the SBA working to streamline the bureaucratic
barriers to expedite these award timelines?
Mr. WILLIAMS. There are a couple of things SBA does. We
measure and we document that information and really, the focus
on that measurement has been more of a concentration after Sen-
ator Carden added some legislation into the DoD bill. So, we cer-
tainly measure all those types of things and we report back on
that. We meet monthly with all the program offices, I mean, with
all the agencies’ leads and we talk about what is working well and
what is not working well, sharing best practices. Are there certain
red tape issues that could be removed by us? Or is it certain policy
things, FAR and DFAR regulations that they would need to work
more together with us to remove?
But at this point, our main focus is sharing best practices, put-
ting a light on the issue because we certainly would love to see up
from proposal to award and gaps between awards go down as much
as possible.
Ms. VAN DUYNE. I really appreciate you bringing up the red
tape issue because I have heard that from a number of our small
businesses that we have been having roundtable discussions.
So how can Congress eliminate some of the red tape, some of the
paperwork for these small businesses that are trying to participate
in these programs? Do you have anything specific? I appreciate you
trying to put a light on it but what specifically can Congress do to
eliminate some of these paperwork hassles?
Mr. WILLIAMS. I am comfortable answering that. It is a lot of
certain regulation, FAR, DFAR that are again structured for over-
all contracting and grants processing to make sure that the federal
government spends money in a way that is efficient and effective
and gets the best for the taxpayer. So, there is always a balance
between those things.

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Ms. VAN DUYNE. Do you believe it might make sense to stand-
ardize some of the paperwork requirements across agencies? Could
that help speed up the process?
Mr. WILLIAMS. I think we have standardized what we can and
what right now, there is pushback. Well, it is not pushback. They
are working in own environment that says this is how a proposal
needs to come in to us. This is the tool. Grants.gov was a big tool.
NSF had a system. So, they have certain systems that everything
comes through. SBIR is just one of their systems.
Ms. VAN DUYNE. So when you say ‘‘they,’’ ‘‘they are working in
their own, in their own system’’ who are you talking about?
Mr. WILLIAMS. Yeah, the agencies.
Ms. VAN DUYNE. Okay.
Mr. WILLIAMS. Each agency has rules on how they accept pro-
posals.
Ms. VAN DUYNE. And I understand that the agencies have dif-
ferent rules. But as Congress, we can actually help to set up some
of these standardized templates; right? I mean, like having a
standardized contract template, for example, that all agencies could
use that might aid the agencies and have each of their own. I know
when I worked at HUD, we had problems when we were respond-
ing to some of these disasters because HUD had a different re-
quirement than FEMA had a different requirement and so on and
so forth and it was burdensome for the user.
Mr. WILLIAMS. Yes. So, I do not disagree that standardizing,
simplifying our valuable. I think a lot of it also goes on that the
workforce at those facilities to be able to put the time and effort
on those contracts also is a challenge. So, more staffing in the
grants and contracts shops to get these things out.
Ms. VAN DUYNE. So that would help them if it was one. Staff
was not having to work on individual as well?
Mr. WILLIAMS. So it could help. I mean, I know I worked to do
standardization at the Navy and the more we streamlined and
combined contracting into single shops it helped us accelerate.
Ms. VAN DUYNE. I appreciate that.
What metrics does the SBA use to measure the overall success
of these programs? And besides overall amounts of funding and
success stories, how do you know the program is achieving its in-
tended goal of promoting commercialization?
Mr. WILLIAMS. Of commercialization success. Okay, because we
measure a lot of different things. But commercialization, so compa-
nies are required to submit Phase III information, non-SBIR fund-
ed information on any Phase II award they had when they are ap-
plying to the program. We ask them to update that for 5 years. We
also though go out and look at all the awards that have been made.
Is there other information we can gather on them? There is no
legal requirement for us to gather Phase III information so a lot
of it is success story but there are certainly better tools out there
today. But certain tools out there that financial industry uses to be
able to gather information. But commercialization success is not
the same across the board so I am concerned with just measuring
the follow-on investment as opposed to this was a product that
went into a military system or into the NASA row that we sold two

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of. It was not ‘‘commercialization’’ but it was very, very valuable re-
search that was done.
Ms. VAN DUYNE. And I am sorry; my time is up. I yield back.
Thank you.
Mr. WILLIAMS. That was my fault.
Chairwoman VELÁZQUEZ. The gentlelady’s time has expired.
I just would like to share with the gentlelady regarding the fed-
eral Acquisition Regulations that she made reference to—they do
not fall under the jurisdiction of the Small Business Committee.
Mr. WILLIAMS. Correct. Thank you.
Now we recognize the gentlelady from New York, Ms. Tenney, for
5 minutes.
Ms. TENNEY. Thank you, Chairwoman Velázquez, and Ranking
Member Luetkemeyer, for holding this important hearing today.
And thank you to the witness for your time and your insight.
I am honored to currently represent New York’s 22nd Congres-
sional District which stretches from the shores of Lake Ontario all
the way to Pennsylvania border. This region has a strong innova-
tion heritage for centuries as a pioneer of the Industrial Revolution
in the United States, as well as the birthplace of IBM—many find
that hard to believe—in Binghamton, New York. And current head-
quarters for Rome Lab, the Air Force Research Directorate. The
area around Rome Lab especially hosts a vibrant ecosystem of up-
start companies solving a wide range of issues from cybersecurity
to artificial intelligence to the future of drones and their potential
to improve our lives and national security. Many of these compa-
nies have benefitted from the Small Business Innovation Research
and Small Business Technology programs and the financial assist-
ance they provide to small businesses to develop and commercialize
innovative technologies.
Even with these successes, however, we cannot ignore the need
to improve on this program. Currently in the SBIR program, a
mere 95 firms account for more than 20 percent of all award fund-
ing. Surprising, however, these companies provide some of the
worst returns on investments of any beneficiaries in the program.
In addition, among Air Force SBIT and STTR Phase II contracts,
researchers found that there was an inverse relationship between
federal dollars awarded and commercial success.
And finally, there is a need to increase the return on these public
investments to American technological and industry prosperity.
This includes prioritizing companies that are working to expand
production domestically in the United States and are developing
new products and technologies that shore up and secure our domes-
tic supply chains. We also need to focus on companies that have
the highest potential at commercializing their technology and pro-
viding the taxpayers with the best return on investment. These
programs were not created to be a competition of which companies
can create the best white paper. It is essential we return them to
their original purpose of ensuring the federal government and the
American people have access to world class domestic innovation.
So, Mr. Williams, with that being said, are you aware of this
small group of companies who dominate the SBIR/STTR programs
taking up 20 percent of the funding awarded every year? And what
are your thoughts on an annual cap potentially?

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Mr. WILLIAMS. So we report all that to Congress and that is
part of our report. We list out any company that is awarded more
than 15. We break out the percentages and stuff. So yes, that is
part of my job in being aware of it.
My experience at the Navy would argue against caps because we
are looking to have the best technology available to address a need.
And the reason that my program office is going to put it on a weap-
on system is because they know it is the best technology. The com-
panies that we funded at the Navy actually were the best, even
with the large primes. We were funded the best of the best and I
think that is a really important feature. So, the role of the program
is to address the mission of that agency. It is not an economic de-
velopment program or a VC program to kind of advance it but
some agencies that is their role. So, I think it is not a ‘‘one size
fits all’’ when it would come to a cap and that would be my con-
cern.
Ms. TENNEY. How would you improve the caps? Obviously,
caps, there might be a great program and a cap would prevent us
from having a great program. I think I understand maybe that is
what your mission would be, but how would you get around that
and make sure that we really are focusing on the mission, getting
back to the mission and making sure that we are focusing on, for
example, the domestic side of it and then the ability to commer-
cialize these innovations that are coming out? We have amazing in-
novation around our Air Force research lab. I mean, just the com-
panies that are coming up with tremendous technology in cyber
and drone technology. How would you do that in a way that we can
sort of prioritize where this money goes?
I only have a minute left.
Mr. WILLIAMS. So, yeah, I think that is what the agencies do.
So, the agencies are evaluated on commercialization potential. Is it
going to insert into whether it is a weapon system or the National
Science Foundation, the private sector. So, it is a major part of the
proposal and it is a major part of the evaluation factor to look at
the potential to commercialize.
Ms. TENNEY. So quickly, and so commercializing and maintain-
ing sort of an onshore critical supply chain, do you think that is
something we can do? Can we restrict some of the foreign invest-
ment and limit say China and other companies from getting access
that have received some of this funding? And is there a way that
we can do that, to prioritize and really bring the commercialization
and our supply chain back here, especially in a de-industrialized
region of upstate New York where my district is?
Mr. WILLIAMS. Sure. I would probably argue that small busi-
nesses are more likely to do things in the U.S. and keep things in
the U.S. and they are going to help. So SBIR is helping to advance
the supply chain in the U.S. because it is investing in technologies
that will be built here.
Ms. TENNEY. Great. Thank you so much. I am out of time. I
yield it back. Thank you.
Mr. WILLIAMS. Thank you.
Chairwoman VELÁZQUEZ. Mr. Williams, you have to have a
U.S. company to get money.
Mr. WILLIAMS. Yes. U.S. owned and operated. Absolutely.

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Chairwoman VELÁZQUEZ. Okay. Thank you.
Well, thank you, Mr. Williams, for being here today and for shar-
ing your expertise in this area. Today’s hearing has provided many
concrete examples of the way SBIR/STTR help small businesses
and our country as a whole. It has also shed light on the impor-
tance of reauthorizing these programs. As these companies pursue
groundbreaking research that will benefit our society, they need as-
surance that the federal government will support them in their ef-
forts. We can provide that by passing legislation to make these pro-
grams permanent and codifying the central tenets of the program.
Without objection, Members have 5 legislative days to submit
statements and supporting materials for the record.
If there is no further business to come before the Committee,
without objection, we are adjourned. Thank you.
[Whereupon, at 11:42 a.m., the committee was adjourned.]

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APPENDIX

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