The Senate on Tuesday unanimously approved a measure to extend the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for another three years, as both initiatives are set to expire at the end of the month.
The House is likely to take up the bill soon, as Congress aims to reauthorize both programs which the Pentagon has used to help fund small businesses’ research and development of technologies in emerging capability areas.
“Small businesses will be required to disclose business relationships and financial arrangements before receiving an SBIR or STTR award. Agencies shall not make an award if they determine existence of improper business ties to or affiliations with foreign countries of concern, or if agency-supported activities, or national security are deemed to be at risk,” Sen. Ben Cardin (D-Md.), chair of the Senate Small Business Committee, said in a statement.
Cardin introduced the measure along with Sen. Joni Ernst (R-Iowa), with the bill including several provisions aimed at reducing the risk of partnering with firms that have ties to foreign governments and additional benchmarks for ensuring the viability of both programs.
More specifically, federal agencies participating in the SBIR and STTR programs would be required to “establish a due diligence program to assess the potential risk posed by foreign ties and obligations” within 270 days of the bill’s final passage.
“Small businesses will be required to disclose business relationships and financial arrangements before receiving an SBIR or STTR award. Agencies shall not make an award if they determine existence of improper business ties to or affiliations with foreign countries of concern, or if agency-supported activities, or national security are deemed to be at risk,” lawmakers write in a summary of the bill.
The bill also directs the DoD and other federal agencies to submit a report to Congress “on the national security and research and integrity risks in the SBIR and STTR programs as well as the agency’s capability to identify and mitigate such risks.”
To ensure SBIR and STTR are yielding tangible results from agencies’ investments, the bill directs the Government Accountability Office to provide a report on firms that have received dozens of Phase 2 awards over the last several years.
Heidi Shyu, under secretary of defense for research and engineering, has detailed her interest in reforming the SBIR program to allow DoD to fund multiple tranches of Phase 2 SBIR grants at the same time (Defense Daily, Jan. 19).
Shyu said the adjustment would allow for greater flexibility if innovative companies need additional dollars to complete prototyping work.
“A lot of times you’re provided, let’s say, $1.5 million to build a prototype. Well, what if that wasn’t enough money. So that means you’re halfway through a prototype but you need additional money to finish it. So I want to give an opportunity to provide additional funding within the SBIR program to help them complete the prototype,” Shyu has said.