U.S Code last checked for updates: Apr 29, 2026
All TitlesTitle 15Chapter 14A
§ 638.
Research and development
(a)
Declaration of policy
(b)
Assistance to small-business concerns
It shall be the duty of the Administration, and it is empowered—
(1)
to assist small-business concerns to obtain Government contracts for research and development;
(2)
to assist small-business concerns to obtain the benefits of research and development performed under Government contracts or at Government expense;
(3)
to provide technical assistance to small-business concerns to accomplish the purposes of this section;
(4)
to develop and maintain a source file and an information program to assure each qualified and interested small business concern the opportunity to participate in Federal agency small business innovation research programs and small business technology transfer programs;
(5)
to coordinate with participating agencies a schedule for release of SBIR and STTR solicitations, and to prepare a master release schedule so as to maximize small businesses’ opportunities to respond to solicitations;
(6)
to independently survey and monitor the operation of SBIR and STTR programs within participating Federal agencies;
(7)
to report not less than annually to the Committee on Small Business of the Senate, and to the Committee on Science and the Committee on Small Business of the House of Representatives, on the SBIR and STTR programs of the Federal agencies and the Administration’s information and monitoring efforts related to the SBIR and STTR programs, including—
(A)
the data on output and outcomes collected pursuant to subsections (g)(8) and (o)(9);
(B)
the number of proposals received from, and the number and total amount of awards to, HUBZone small business concerns and firms with venture capital, hedge fund, or private equity firm investment (including those majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms) under each of the SBIR and STTR programs;
(C)
a description of the extent to which each Federal agency is increasing outreach and awards to firms owned and controlled by women or by socially or economically disadvantaged individuals under each of the SBIR and STTR programs;
(D)
general information about the implementation of, and compliance with the allocation of funds required under, subsection (dd) for firms owned in majority part by venture capital operating companies, hedge funds, or private equity firms and participating in the SBIR program;
(E)
a detailed description of appeals of Phase III awards and notices of noncompliance with the SBIR Policy Directive and the STTR Policy Directive filed by the Administrator with Federal agencies;
(F)
an accounting of funds, initiatives, and outcomes under the Commercialization Readiness Program;
(G)
a description of the extent to which Federal agencies are providing in a timely manner information needed to maintain the database described in subsection (k);
(H)
with respect to a Federal agency to which subsection (f)(1) or (n)(1) applies, whether the Federal agency has complied with the applicable subsection for the year covered by the report;
(I)
the number of applications submitted to each Federal agency participating in the SBIR or STTR program in innovation open topics as compared to conventional topics, and how many small business concerns receive funding from open topics compared to conventional topics;
(J)
the total number and dollar amount, and average size, of awards made by each Federal agency participating in the SBIR or STTR program, by phase, from—
(i)
open topics; and
(ii)
conventional topics;
(K)
the minimum performance standards established under subsection (qq), including any applicable modifications under paragraph (3) of such subsection, and the number of small business concerns that did not meet those minimum performance standards, provided that the Administrator does not publish any personally identifiable information, the identity of each such small business concern, or any otherwise sensitive information; and
(L)
the aggregate number and dollar amount of SBIR and STTR awards made pursuant to waivers under subsection (qq)(3)(E), provided that the Administrator does not publish any personally identifiable information, the identity of each such small business concern, or any otherwise sensitive information;
(8)
to provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(9)
to coordinate the implementation of electronic databases at each of the Federal agencies participating in the SBIR program or the STTR program, including the technical ability of the participating agencies to electronically share data; and
(10)
to consult, where appropriate, with personnel from the relevant Federal agency to assist small business concerns participating in a SBIR or STTR program with commercializing research developed under such a program before such small business concern is awarded a contract from such Federal agency.
(c)
Consultation and cooperation with Government agencies; studies and recommendations
(d)
Joint programs; approval of agreements; withdrawal of approval; publication in Federal Register
(1)
The Administrator is authorized to consult with representatives of small-business concerns with a view to assisting and encouraging such firms to undertake joint programs for research and development carried out through such corporate or other mechanism as may be most appropriate for the purpose. Such joint programs may, among other things, include the following purposes:
(A)
to construct, acquire, or establish laboratories and other facilities for the conduct of research;
(B)
to undertake and utilize applied research;
(C)
to collect research information related to a particular industry and disseminate it to participating members;
(D)
to conduct applied research on a protected, proprietary, and contractual basis with member or nonmember firms, Government agencies, and others;
(E)
to prosecute applications for patents and render patent services for participating members; and
(F)
to negotiate and grant licenses under patents held under the joint program, and to establish corporations designed to exploit particular patents obtained by it.
(2)
The Administrator may, after consultation with the Attorney General and the Chairman of the Federal Trade Commission, and with the prior written approval of the Attorney General, approve any agreement between small-business firms providing for a joint program of research and development, if the Administrator finds that the joint program proposed will maintain and strengthen the free enterprise system and the economy of the Nation. The Administrator or the Attorney General may at any time withdraw his approval of the agreement and the joint program of research and development covered thereby, if he finds that the agreement or the joint program carried on under it is no longer in the best interests of the competitive free enterprise system and the economy of the Nation. A copy of the statement of any such finding and approval intended to be within the coverage of this subsection, and a copy of any modification or withdrawal of approval, shall be published in the Federal Register. The authority conferred by this subsection on the Administrator shall not be delegated by him.
(3)
No act or omission to act pursuant to and within the scope of any joint program for research and development, under an agreement approved by the Administrator under this subsection, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act [15 U.S.C. 41 et seq.]. Upon publication in the Federal Register of the notice of withdrawal of his approval of the agreement granted under this subsection, either by the Administrator or by the Attorney General, the provisions of this subsection shall not apply to any subsequent act or omission to act by reason of such agreement or approval.
(e)
Definitions
For the purpose of this section—
(1)
the term “extramural budget” means the sum of the total obligations minus amounts obligated for such activities by employees of the agency in or through Government-owned, Government-operated facilities, except that for the Department of Energy it shall not include amounts obligated for atomic energy defense programs solely for weapons activities or for naval reactor programs, and except that for the Agency for International Development it shall not include amounts obligated solely for general institutional support of international research centers or for grants to foreign countries;
(2)
the term “Federal agency” means an executive agency as defined in section 105 of title 5 or a military department as defined in section 102 of such title, except that it does not include any agency within the Intelligence Community (as the term is defined in section 3.4(f) of Executive Order 12333 or its successor orders);
(3)
the term “funding agreement” means any contract, grant, or cooperative agreement entered into between any Federal agency and any small business for the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government;
(4)
the term “Small Business Innovation Research Program” or “SBIR” means a program under which a portion of a Federal agency’s research or research and development effort is reserved for award to small business concerns through a uniform process having—
(A)
a first phase for determining, insofar as possible, the scientific and technical merit and feasibility of ideas that appear to have commercial potential, as described in subparagraph (B), submitted pursuant to SBIR program solicitations;
(B)
a second phase, which shall not include any invitation, pre-screening, or pre-selection process for eligibility for Phase II, that will further develop proposals which meet particular program needs, in which awards shall be made based on the scientific and technical merit and feasibility of the proposals, as evidenced by the first phase, considering, among other things, the proposal’s commercial potential, as evidenced by—
(i)
the small business concern’s record of successfully commercializing SBIR or other research;
(ii)
the existence of second phase funding commitments from private sector or non-SBIR funding sources;
(iii)
the existence of third phase, follow-on commitments for the subject of the research; and
(iv)
the presence of other indicators of the commercial potential of the idea; and
(C)
where appropriate, a third phase for work that derives from, extends, or completes efforts made under prior funding agreements under the SBIR program—
(i)
in which commercial applications of SBIR-funded research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-SBIR Federal funding awards; or
(ii)
for which awards from non-SBIR Federal funding sources are used for the continuation of research or research and development that has been competitively selected using peer review or merit-based selection procedures;
(5)
the term “research” or “research and development” means any activity which is (A) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (B) a systematic study directed specifically toward applying new knowledge to meet a recognized need; or (C) a systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development, and improvement of prototypes and new processes to meet specific requirements;
(6)
the term “Small Business Technology Transfer Program” or “STTR” means a program under which a portion of a Federal agency’s extramural research or research and development effort is reserved for award to small business concerns for cooperative research and development through a uniform process having—
(A)
a first phase, to determine, to the extent possible, the scientific, technical, and commercial merit and feasibility of ideas submitted pursuant to STTR program solicitations;
(B)
a second phase, which shall not include any invitation, pre-screening, or pre-selection process for eligibility for Phase II, that will further develop proposals that meet particular program needs, in which awards shall be made based on the scientific, technical, and commercial merit and feasibility of the idea, as evidenced by the first phase and by other relevant information; and
(C)
where appropriate, a third phase for work that derives from, extends, or completes efforts made under prior funding agreements under the STTR program—
(i)
in which commercial applications of STTR-funded research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-STTR Federal funding awards; and
(ii)
for which awards from non-STTR Federal funding sources are used for the continuation of research or research and development that has been competitively selected using peer review or scientific review criteria;
(7)
the term “cooperative research and development” means research or research and development conducted jointly by a small business concern and a research institution in which not less than 40 percent of the work is performed by the small business concern, and not less than 30 percent of the work is performed by the research institution;
(8)
the term “research institution” means a nonprofit institution, as defined in section 3703(5) 1
1
 See References in Text note below.
of this title, and includes federally funded research and development centers, as identified by the National Scientific Foundation in accordance with the governmentwide Federal Acquisition Regulation issued in accordance with section 1303(a)(1) of title 41 (or any successor regulation thereto);
(9)
the term “commercial applications” shall not be construed to exclude testing and evaluation of products, services, or technologies for use in technical or weapons systems, and further, awards for testing and evaluation of products, services, or technologies for use in technical or weapons systems may be made in either Phase II or Phase III of the Small Business Innovation Research Program and of the Small Business Technology Transfer Program, as defined in this subsection;
(10)
the term “commercialization” means—
(A)
the process of developing products, processes, technologies, or services; and
(B)
the production and delivery (whether by the originating party or by others) of products, processes, technologies, or services for sale to or use by the Federal Government or commercial markets;
(11)
the term “Phase I” means—
(A)
with respect to the SBIR program, the first phase described in paragraph (4)(A); and
(B)
with respect to the STTR program, the first phase described in paragraph (6)(A);
(12)
the term “Phase II” means—
(A)
with respect to the SBIR program, the second phase described in paragraph (4)(B); and
(B)
with respect to the STTR program, the second phase described in paragraph (6)(B);
(13)
the term “Phase III” means—
(A)
with respect to the SBIR program, the third phase described in paragraph (4)(C); and
(B)
with respect to the STTR program, the third phase described in paragraph (6)(C);
(14)
the term “senior procurement executive” means an official designated under section 1702(c) of title 41 as the senior procurement executive of a Federal agency participating in a SBIR or STTR program;
(15)
the term “covered individual” means an individual who—
(A)
contributes in a substantive, meaningful way to the scientific development or execution of a research and development project proposed to be carried out with a research and development award from a Federal research agency; and
(B)
is designated as a covered individual by the Federal research agency concerned;
(16)
the term “foreign affiliation” means a funded or unfunded academic, professional, or institutional appointment or position with a foreign government or government-owned entity, whether full-time, part-time, or voluntary (including adjunct, visiting, or honorary);
(17)
the term “foreign country of concern” means the People’s Republic of China, the Democratic People’s Republic of Korea, the Russian Federation, the Islamic Republic of Iran, or any other country determined to be a country of concern by the Secretary of State;
(18)
the term “malign foreign talent recruitment program” has the meaning given such term in section 19237 of title 42;
(19)
the term “federally funded award” means a Phase I, Phase II (including a Phase II award under subsection (cc)), or Phase III SBIR or STTR award made using a funding agreement; and
(20)
the term “agency acquisition workforce” means the employees of a Federal agency that have procurement or acquisition responsibilities, including—
(A)
employees described in section 1703 of title 41; and
(B)
individuals that are part of the acquisition workforce, as defined in section 101(a) of title 10.
(f)
Federal agency expenditures for SBIR program
(1)
Required expenditure amounts
Except as provided in paragraph (2)(B), each Federal agency which has an extramural budget for research or research and development in excess of $100,000,000 for fiscal year 1992, or any fiscal year thereafter, shall expend with small business concerns—
(A)
not less than 1.5 percent of such budget in each of fiscal years 1993 and 1994;
(B)
not less than 2.0 percent of such budget in each of fiscal years 1995 and 1996;
(C)
not less than 2.5 percent of such budget in each of fiscal years 1997 through 2011;
(D)
not less than 2.6 percent of such budget in fiscal year 2012;
(E)
not less than 2.7 percent of such budget in fiscal year 2013;
(F)
not less than 2.8 percent of such budget in fiscal year 2014;
(G)
not less than 2.9 percent of such budget in fiscal year 2015;
(H)
not less than 3.0 percent of such budget in fiscal year 2016; and
(I)
not less than 3.2 percent of such budget in fiscal year 2017 and each fiscal year thereafter,
specifically in connection with SBIR programs which meet the requirements of this section, policy directives, and regulations issued under this section.
(2)
Limitations
A Federal agency shall not—
(A)
use any of its SBIR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses; or
(B)
make available for the purpose of meeting the requirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentages specified in paragraph (1).
(3)
Exclusion of certain funding agreements
(4)
Rule of construction
(g)
Administration of small business innovation research programs by Federal agencies required to establish such programs
Each Federal agency required by subsection (f) to establish a small business innovation research program shall, in accordance with this chapter and regulations issued hereunder—
(1)
unilaterally determine categories of projects to be in its SBIR program;
(2)
issue small business innovation research solicitations in accordance with a schedule determined cooperatively with the Small Business Administration;
(3)
unilaterally determine research topics within the agency’s SBIR solicitations, giving special consideration to broad research topics and to topics that further 1 or more critical technologies, as identified by—
(A)
the National Critical Technologies Panel (or its successor) in the 1991 report required under section 6683 1 of title 42, and in subsequent reports issued under that authority; or
(B)
the Secretary of Defense, in the 1992 report issued in accordance with section 2522 1 of title 10, and in subsequent reports issued under that authority;
(4)
(A)
unilaterally receive and evaluate proposals resulting from SBIR proposals; and
(B)
make a final decision on each proposal submitted under the SBIR program—
(i)
not later than 1 year after the date on which the applicable solicitation closes, if with respect to the National Institutes of Health or the National Science Foundation, or 90 days after the date on which the applicable solicitation closes, if with respect to any other participating agency; or
(ii)
if the Administrator authorizes an extension with respect to a solicitation, not later than 90 days after the date that would otherwise be applicable to the agency under clause (i);
(5)
subject to subsection (l), unilaterally select awardees for its SBIR funding agreements and inform each awardee under such an agreement, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement;
(6)
administer its own SBIR funding agreements (or delegate such administration to another agency);
(7)
make payments to recipients of SBIR funding agreements on the basis of progress toward or completion of the funding agreement requirements and, in all cases, make payment to recipients under such agreements in full, subject to audit, on or before the last day of the 12-month period beginning on the date of completion of such requirements;
(8)
collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from awardees as is necessary to assess the SBIR program, including information necessary to maintain the database described in subsection (k), including—
(A)
whether an awardee—
(i)
has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and, if so—
(I)
the amount of venture capital, hedge fund, or private equity firm investment that the awardee has received as of the date of the award; and
(II)
the amount of additional capital that the awardee has invested in the SBIR technology;
(ii)
has an investor that—
(I)
is an individual who is not a citizen of the United States or a lawful permanent resident of the United States and, if so, the name of any such individual; or
(II)
is a person that is not an individual and is not organized under the laws of a State or the United States and, if so, the name of any such person;
(iii)
is owned by a woman or has a woman as a principal investigator; 2
2
 So in original. Probably should be “investor;”.
(iv)
is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 2
(v)
is a faculty member or a student of an institution of higher education, as that term is defined in section 1001 of title 20; or
(vi)
is located in a State described in subsection (u)(3);
(B)
a justification statement from the agency, if an awardee receives an award in an amount that is more than the award guidelines under this section; and
(C)
data with respect to the Federal and State Technology Partnership Program (FAST Program);
(9)
make an annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy;
(10)
include, as part of its annual performance plan as required by subsections (a) and (b) of section 1115 of title 31, a section on its SBIR program, which section shall describe whether or not the Federal agency complied with the requirements of subsection (f) for the year covered by that plan and include a justification for failure to comply (if applicable),,3
3
 So in original.
and shall submit such section to the Committee on Small Business of the Senate, and the Committee on Science and the Committee on Small Business of the House of Representatives;
(11)
provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(12)
provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the SBIR program of the Federal agency;
(13)
require each small business concern submitting a proposal or application for a federally funded award to disclose in the proposal or application—
(A)
the identity of all owners and covered individuals of the small business concern who are a party to any foreign talent recruitment program of any foreign country of concern, including the People’s Republic of China;
(B)
the existence of any joint venture or subsidiary of the small business concern that is based in, funded by, or has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
(C)
any current or pending contractual or financial obligation or other agreement specific to a business arrangement, or joint venture-like arrangement with an enterprise owned by a foreign state or any foreign entity;
(D)
whether the small business concern is wholly owned in the People’s Republic of China or another foreign country;
(E)
the percentage, if any, of venture capital or institutional investment by an entity that has a general partner or individual holding a leadership role in such entity who has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
(F)
any technology licensing or intellectual property sales to a foreign country of concern, including the People’s Republic of China, during the 5-year period preceding submission of the proposal; and
(G)
any foreign business entity, offshore entity, or entity outside the United States related to the small business concern;
(14)
after reviewing the disclosures of a small business concern under paragraph (13), and if determined appropriate by the head of such Federal agency, request such small business concern to provide true copies of any contractual or financial obligation or other agreement specific to a business arrangement, or joint-venture like arrangement with an enterprise owned by a foreign state or any foreign entity in effect during the 5-year period preceding submission of the proposal with respect to which such small business concern made such disclosures;
(15)
evaluate whether a small business concern presents a security risk for any reason, through measures including—
(A)
the due diligence process required under subsection (vv);
(B)
disclosures submitted under this subsection; or
(C)
coordination with the intelligence community, as defined in section 3003 of title 50, Federal law enforcement, and other counterintelligence capabilities of the Federal Government;
(16)
not make an award under the SBIR program of the Federal agency to a small business concern if the head of the Federal agency determines that the small business concern submitting the proposal or application—
(A)
has an owner or covered individual that is party to a malign foreign talent recruitment program;
(B)
has a business entity, parent company, or subsidiary located in the People’s Republic of China or another foreign country of concern;
(C)
has an owner or covered individual that has a foreign affiliation with a research institution located in the People’s Republic of China or another foreign country of concern;
(D)
has a security risk connecting the small business concern to an entity, including any affiliates of the entity, or individual on—
(i)
the UFLPA Entity List maintained by the Department of Homeland Security;
(ii)
the Non-SDN Chinese Military-Industrial Complex Companies List of the Office of Foreign Assets Control maintained by the Department of the Treasury;
(iii)
the Section 889 Prohibition List established under section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Public Law 115–232; 132 Stat. 1917) and maintained by the Department of Defense;
(iv)
the list of Chinese Military companies required under section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note) and maintained by the Department of Defense;
(v)
the Military End User List maintained by the Bureau of Industry and Security of the Department of Commerce;
(vi)
the Entity List maintained by the Bureau of Industry and Security of the Department of Commerce;
(vii)
the List of Equipment and Services maintained by the Federal Communications Commission; or
(viii)
the Withhold Release Orders and Findings List maintained by U.S. Customs and Border Protection;
(E)
has a security risk with a primary source that is classified; or
(F)
has a security risk that the Federal agency determines warrants a denial;
(17)
provide for—
(A)
a process under which, upon making an award decision to deny an application on the basis of a determination under paragraph (16), or upon making a determination under paragraph (16) that a small business concern has a security risk described in that paragraph, the Federal agency provides to the small business concern, as appropriate pursuant to the discretion of the Federal agency and in a manner that does not compromise national security, a notification—
(i)
advising the small business concern of such determination; and
(ii)
identifying the basis for such determination; and
(B)
a policy that clarifies that receipt of an award decision denying an application does not prohibit the small business concern from being eligible for an award in a subsequent award cycle;
(18)
require a small business concern receiving an award under its SBIR program to repay all amounts received from the Federal agency under the award if—
(A)
the small business concern makes a material misstatement that the Federal agency determines poses a risk to national security; or
(B)
there is a change in ownership, change to entity structure, or other substantial change in circumstances of the small business concern that the Federal agency determines poses a risk to national security; and
(19)
require a small business concern receiving an award under its SBIR program to regularly report to the Federal agency and the Administration throughout the duration of the award on—
(A)
any change to a disclosure required under subparagraphs (A) through (G) of paragraph (13);
(B)
any material misstatement made under paragraph (18)(A); and
(C)
any change described in paragraph (18)(B).
(h)
Establishment of goals for funding agreements for research or research and development to small business concerns by agencies having budg­ets for research and development
(i)
Annual reporting
(1)
In general
(2)
Calculation of extramural budget
(A)
Methodology
(B)
Administrator’s analysis
(j)
Small Business Administration policy directives for the general conduct of small business innovation research programs
(1)
Policy directives
The Small Business Administration, after consultation with the Administrator of the Office of Federal Procurement Policy, the Director of the Office of Science and Technology Policy, and the Intergovernmental Affairs Division of the Office of Management and Budget, shall, within one hundred and twenty days of July 22, 1982, issue policy directives for the general conduct of the SBIR programs within the Federal Government, including providing for—
(A)
simplified, standardized, and timely SBIR solicitations;
(B)
a simplified, standardized funding process which provides for (i) the timely receipt and review of proposals; (ii) outside peer review for at least Phase II proposals, if appropriate; (iii) protection of proprietary information provided in proposals; (iv) selection of awardees; (v) retention of rights in data generated in the performance of the contract by the small business concern; (vi) transfer of title to property provided by the agency to the small business concern if such a transfer would be more cost effective than recovery of the property by the agency; (vii) cost sharing; and (viii) cost principles and payment schedules;
(C)
exemptions from the regulations under paragraph (2) 4
4
 So in original. Probably should be “subparagraph (B)”.
if national security or intelligence functions clearly would be jeopardized;
(D)
minimizing regulatory burden associated with participation in the SBIR program for the small business concern which will stimulate the cost-effective conduct of Federal research and development and the likelihood of commercialization of the results of research and development conducted under the SBIR program;
(E)
simplified, standardized, and timely annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy;
(F)
standardized and orderly withdrawal from program participation by an agency having a SBIR program; at the discretion of the Administration, such directives may require a phased withdrawal over a period of time sufficient in duration to minimize any adverse impact on small business concerns; and
(G)
the voluntary participation in a SBIR program by a Federal agency not required to establish such a program pursuant to subsection (f).
(2)
Modifications
Not later than 90 days after October 28, 1992, the Administrator shall modify the policy directives issued pursuant to this subsection to provide for—
(A)
retention by a small business concern of the rights to data generated by the concern in the performance of an SBIR award for a period of not less than 4 years;
(B)
continued use by a small business concern participating in Phase III of the SBIR program, as a directed bailment, of any property transferred by a Federal agency to the small business concern in Phase II of an SBIR program for a period of not less than 2 years, beginning on the initial date of the concern’s participation in Phase III of such program;
(C)
procedures to ensure, to the extent practicable, that an agency which intends to pursue research, development, or production of a technology developed by a small business concern under an SBIR program enters into follow-on, non-SBIR funding agreements with the small business concern for such research, development, or production;
(D)
an increase to $150,000 in the amount of funds which an agency may award in Phase I of an SBIR program, and to $1,000,000 in Phase II of an SBIR program, and an adjustment of such amounts every year for inflation;
(E)
a process for notifying the participating SBIR agencies and potential SBIR participants of the 1991, 1992, and the current critical technologies, as identified—
(i)
by the National Critical Technologies Panel (or its successor), in accordance with section 6683 1 of title 42; or
(ii)
by the Secretary of Defense, in accordance with section 2522 1 of title 10;
(F)
enhanced outreach efforts to increase the participation of socially and economically disadvantaged small business concerns, as defined in section 637(a)(4) of this title, and the participation of small businesses that are 51 percent owned and controlled by women in technological innovation and in SBIR programs, including Phase III of such programs, and the collection of data to document such participation;
(G)
technical and programmatic guidance to encourage agencies to develop gap-funding programs to address the delay between an award for Phase I of an SBIR program and the application for and extension of an award for Phase II of such program;
(H)
procedures to ensure that a small business concern that submits a proposal for a funding agreement for Phase I of an SBIR program and that has received more than 15 Phase II SBIR awards during the preceding 5 fiscal years is able to demonstrate the extent to which it was able to secure Phase III funding to develop concepts resulting from previous Phase II SBIR awards; and
(I)
procedures to ensure that agencies participating in the SBIR program retain the information submitted under subparagraph (H) at least until the Government Accountability Office submits the report required under section 105 of the Small Business Research and Development Enhancement Act of 1992.
(3)
Additional modifications
Not later than 120 days after December 21, 2000, the Administrator shall modify the policy directives issued pursuant to this subsection—
(A)
to clarify that the rights provided for under paragraph (2)(A) apply to all Federal funding awards under this section, including Phase I, Phase II, and Phase III;
(B)
to provide for the requirement of a succinct commercialization plan with each application for a Phase II award that is moving toward commercialization;
(C)
to require agencies to report to the Administration, not less frequently than annually, all instances in which an agency pursued research, development, or production of a technology developed by a small business concern using an award made under the SBIR program of that agency, and determined that it was not practicable to enter into a follow-on non-SBIR program funding agreement with the small business concern, which report shall include, at a minimum—
(i)
the reasons why the follow-on funding agreement with the small business concern was not practicable;
(ii)
the identity of the entity with which the agency contracted to perform the research, development, or production; and
(iii)
a description of the type of funding agreement under which the research, development, or production was obtained; and
(D)
to implement subsection (v), including establishing standardized procedures for the provision of information pursuant to subsection (k)(3).
(4)
Modifications relating to procurement center representatives
(k)
Database
(1)
Public database
Not later than 180 days after December 21, 2000, the Administrator shall develop, maintain, and make available to the public a searchable, up-to-date, electronic database that includes—
(A)
the name, size, location, and an identifying number assigned by the Administrator, of each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency;
(B)
a description of each Phase I or Phase II SBIR or STTR award received by that small business concern, including—
(i)
an abstract of the project funded by the award, excluding any proprietary information so identified by the small business concern;
(ii)
the Federal agency making the award; and
(iii)
the date and amount of the award;
(C)
an identification of any business concern or subsidiary established for the commercial application of a product or service for which an SBIR or STTR award is made;
(D)
information regarding mentors and Mentoring Networks, as required by section 657e(d) of this title;
(E)
with respect to assistance under the STTR program only—
(i)
whether the small business concern or the research institution initiated their collaboration on each assisted STTR project;
(ii)
whether the small business concern or the research institution originated any technology relating to the assisted STTR project;
(iii)
the length of time it took to negotiate any licensing agreement between the small business concern and the research institution under each assisted STTR project; and
(iv)
how the proceeds from commercialization, marketing, or sale of technology resulting from each assisted STTR project were allocated (by percentage) between the small business concern and the research institution;
(F)
for each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency, whether the small business concern—
(i)
has venture capital, hedge fund, or private equity firm investment and, if so, whether the small business concern is registered as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms as required under subsection (dd)(3);
(ii)
is owned by a woman or has a woman as a principal investigator; 2
(iii)
is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 2
(iv)
is owned by a faculty member or a student of an institution of higher education, as that term is defined in section 1001 of title 20; or
(v)
received assistance under the Federal and State Technology Partnership Program (FAST Program); and
(G)
for each award granted, whether the award is classified or designated as—
(i)
direct to Phase II, under subsection (cc);
(ii)
subsequent Phase II, under subsection (bb)(1);
(iii)
a strategic breakthrough award under subsection (ff)(3);
(iv)
a Phase III prime contract award; or
(v)
a Phase III subcontract award.
(2)
Government database
Not later than 90 days after December 31, 2011, the Administrator, in consultation with Federal agencies required to have an SBIR program pursuant to subsection (f)(1) or an STTR program pursuant to subsection (n)(1), shall develop and maintain a database to be used exclusively for SBIR and STTR program evaluation that—
(A)
contains for each small business concern that applies for, submits a proposal for, or receives an award under Phase I or Phase II of the SBIR program or the STTR program—
(i)
the name, size, and location of, and the identifying number assigned by the Administration to, the small business concern;
(ii)
an abstract of the applicable project;
(iii)
the specific aims of the project;
(iv)
the number of employees of the small business concern;
(v)
the names and titles of the key individuals that will carry out the project, the position each key individual holds in the small business concern, and contact information for each key individual;
(vi)
the percentage of effort each individual described in clause (v) will contribute to the project;
(vii)
whether the small business concern is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and
(viii)
the Federal agency to which the application is made and contact information for the person or office within the Federal agency that is responsible for reviewing applications and making awards under the SBIR program or the STTR program;
(B)
contains for each Phase II award made by a Federal agency—
(i)
information collected in accordance with paragraph (3) on revenue from the sale of new products or services resulting from the research conducted under the award;
(ii)
information collected in accordance with paragraph (3) on additional investment from any source, other than Phase I or Phase II SBIR or STTR awards, to further the research and development conducted under the award; and
(iii)
any other information received in connection with the award that the Administrator, in conjunction with the SBIR and STTR program managers of Federal agencies, considers relevant and appropriate;
(C)
includes any narrative information that a small business concern receiving a Phase II award voluntarily submits to further describe the outputs and outcomes of its awards;
(D)
includes, for each awardee—
(i)
the name, size, and location of, and any identifying number assigned by the Administrator to, the awardee;
(ii)
whether the awardee has venture capital, hedge fund, or private equity firm investment and, if so—
(I)
the amount of venture capital, hedge fund, or private equity firm investment as of the date of the award;
(II)
the percentage of ownership of the awardee held by a venture capital operating company, hedge fund, or private equity firm, including whether the awardee is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and
(III)
the amount of additional capital that the awardee has invested in the SBIR or STTR technology, which information shall be collected on an annual basis;
(iii)
the names and locations of any affiliates of the awardee;
(iv)
the number of employees of the awardee;
(v)
the number of employees of the affiliates of the awardee; and
(vi)
the names of, and the percentage of ownership of the awardee held by—
(I)
any individual who is not a citizen of the United States or a lawful permanent resident of the United States; or
(II)
any person that is not an individual and is not organized under the laws of a State or the United States;
(E)
includes any other data collected by or available to any Federal agency that such agency considers may be useful for SBIR or STTR program evaluation;
(F)
is available for use solely for program evaluation purposes by the Federal Government or, in accordance with policy directives issued by the Administration, by other authorized persons who are subject to a use and nondisclosure agreement with the Federal Government covering the use of the database; and
(G)
includes a timely and accurate list of any individual or small business concern that has participated in the SBIR program or STTR program that has been—
(i)
convicted of a fraud-related crime involving funding received under the SBIR program or STTR program; or
(ii)
found civilly liable for a fraud-related violation involving funding received under the SBIR program or STTR program.
(3)
Updating information for database
(A)
In general
(B)
Annual updates upon termination
A small business concern receiving a Phase II award under this section shall—
(i)
update information in the database concerning that award at the termination of the award period; and
(ii)
be requested to voluntarily update such information annually thereafter for a period of 5 years.
(C)
Government database
(4)
Protection of information
(5)
Rule of construction
(l)
(1)
Single proposal
(2)
Multiple awards
(3)
Critical technology awards
(m)
Termination
(n)
Required expenditures for STTR by Federal agencies
(1)
Required expenditure amounts
(A)
In general
(B)
Expenditure amounts
The percentage of the extramural budget required to be expended by an agency in accordance with subparagraph (A) shall be—
(i)
0.15 percent for each fiscal year through fiscal year 2003;
(ii)
0.3 percent for each of fiscal years 2004 through 2011;
(iii)
0.35 percent for each of fiscal years 2012 and 2013;
(iv)
0.40 percent for each of fiscal years 2014 and 2015; and
(v)
0.45 percent for fiscal year 2016 and each fiscal year thereafter.
(2)
Limitations
A Federal agency shall not—
(A)
use any of its STTR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses, or, in the case of a small business concern or a research institution, costs associated with salaries, expenses, and administrative overhead (other than those direct or indirect costs allowable under guidelines of the Office of Management and Budget and the governmentwide Federal Acquisition Regulation issued in accordance with section 1303(a)(1) of title 41); or
(B)
make available for the purpose of meeting the requirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentage specified in paragraph (1).
(3)
Exclusion of certain funding agreements
(o)
Federal agency STTR authority
Each Federal agency required to establish an STTR program in accordance with subsection (n) and regulations issued under this chapter, shall—
(1)
unilaterally determine categories of projects to be included in its STTR program;
(2)
issue STTR solicitations in accordance with a schedule determined cooperatively with the Administration;
(3)
unilaterally determine research topics within the agency’s STTR solicitations, giving special consideration to broad research topics and to topics that further 1 or more critical technologies, as identified—
(A)
by the National Critical Technologies Panel (or its successor) in reports required under section 6683 1 of title 42; or
(B)
by the Secretary of Defense, in accordance with section 2522 1 of title 10;
(4)
(A)
unilaterally receive and evaluate proposals resulting from STTR solicitations; and
(B)
make a final decision on each proposal submitted under the STTR program—
(i)
not later than 1 year after the date on which the applicable solicitation closes, if with respect to the National Institutes of Health or the National Science Foundation, or 90 days after the date on which the applicable solicitation closes, if with respect to any other participating agency; or
(ii)
if the Administrator authorizes an extension for a solicitation, not later than 90 days after the date that would be applicable to the agency under clause (i);
(5)
unilaterally select awardees for its STTR funding agreements and inform each awardee under such an agreement, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement;
(6)
administer its own STTR funding agreements (or delegate such administration to another agency);
(7)
make payments to recipients of STTR funding agreements on the basis of progress toward or completion of the funding agreement requirements and, in all cases, make payment to recipients under such agreements in full, subject to audit, on or before the last day of the 12-month period beginning on the date of the completion of such requirements;
(8)
include, as part of its annual performance plan as required by subsections (a) and (b) of section 1115 of title 31, a section on its STTR program, which section shall describe whether or not the Federal agency complied with the requirements of subsection (n) for the year covered by that plan and include a justification for failure to comply (if applicable),,3 and shall submit such section to the Committee on Small Business of the Senate, and the Committee on Science and the Committee on Small Business of the House of Representatives;
(9)
collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from applicants and awardees as is necessary to assess the STTR program outputs and outcomes, including information necessary to maintain the database described in subsection (k), including—
(A)
whether an applicant or awardee—
(i)
has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and, if so—
(I)
the amount of venture capital, hedge fund, or private equity firm investment that the applicant or awardee has received as of the date of the application or award, as applicable; and
(II)
the amount of additional capital that the applicant or awardee has invested in the STTR technology;
(ii)
has an investor that—
(I)
is an individual who is not a citizen of the United States or a lawful permanent resident of the United States and, if so, the name of any such individual; or
(II)
is a person that is not an individual and is not organized under the laws of a State or the United States and, if so, the name of any such person;
(iii)
is owned by a woman or has a woman as a principal investigator; 2
(iv)
is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 2
(v)
is a faculty member or a student of an institution of higher education, as that term is defined in section 1001 of title 20; or
(vi)
is located in a State in which the total value of contracts awarded to small business concerns under all STTR programs is less than the total value of contracts awarded to small business concerns in a majority of other States, as determined by the Administrator in biennial fiscal years, beginning with fiscal year 2008, based on the most recent statistics compiled by the Administrator;
(B)
if an awardee receives an award in an amount that is more than the award guidelines under this section, a statement from the agency that justifies the award amount; and
(C)
data with respect to the Federal and State Technology Partnership Program (FAST Program);
(10)
submit an annual report on the STTR program to the Administration and the Office of Science and Technology Policy;
(11)
adopt the agreement developed by the Administrator under subsection (w) as the agency’s model agreement for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
(12)
develop, in consultation with the Office of Federal Procurement Policy and the Office of Government Ethics, procedures to ensure that federally funded research and development centers (as defined in subsection (e)(8)) that participate in STTR agreements—
(A)
are free from organizational conflicts of interests relative to the STTR program;
(B)
do not use privileged information gained through work performed for an STTR agency or private access to STTR agency personnel in the development of an STTR proposal; and
(C)
use outside peer review, as appropriate;
(13)
not later than July 31, 1993, develop procedures for assessing the commercial merit and feasibility of STTR proposals, as evidenced by—
(A)
the small business concern’s record of successfully commercializing STTR or other research;
(B)
the existence of Phase II funding commitments from private sector or non-STTR funding sources;
(C)
the existence of Phase III follow-on commitments for the subject of the research; and
(D)
the presence of other indicators of the commercial potential of the idea;
(14)
implement an outreach program to research institutions and small business concerns for the purpose of enhancing its STTR program, in conjunction with any such outreach done for purposes of the SBIR program;
(15)
provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(16)
provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the STTR program of the Federal agency;
(17)
require each small business concern submitting a proposal or application for a federally funded award to disclose in the proposal or application—
(A)
the identity of all owners and covered individuals of the small business concern who are a party to any foreign talent recruitment program of any foreign country of concern, including the People’s Republic of China;
(B)
the existence of any joint venture or subsidiary of the small business concern that is based in, funded by, or has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
(C)
any current or pending contractual or financial obligation or other agreement specific to a business arrangement, or joint venture-like arrangement with an enterprise owned by a foreign state or any foreign entity;
(D)
whether the small business concern is wholly owned in the People’s Republic of China or another foreign country;
(E)
the percentage, if any, of venture capital or institutional investment by an entity that has a general partner or individual holding a leadership role in such entity who has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
(F)
any technology licensing or intellectual property sales to a foreign country of concern, including the People’s Republic of China, during the 5-year period preceding submission of the proposal; and
(G)
any foreign business entity, offshore entity, or entity outside the United States related to the small business concern;
(18)
after reviewing the disclosures of a small business concern under paragraph (17), and if determined appropriate by the head of such Federal agency, request such small business concern to provide true copies of any contractual or financial obligation or other agreement specific to a business arrangement, or joint-venture like arrangement with an enterprise owned by a foreign state or any foreign entity in effect during the 5-year period preceding submission of the proposal with respect to which such small business concern made such disclosures;
(19)
evaluate whether a small business concern presents a security risk for any reason, through measures including—
(A)
the due diligence process required under subsection (vv);
(B)
disclosures submitted under this subsection; or
(C)
coordination with the intelligence community, as defined in section 3003 of title 50, Federal law enforcement, and other counterintelligence capabilities of the Federal Government;
(20)
not make an award under the STTR program of the Federal agency to a small business concern if the head of the Federal agency determines that the small business concern submitting the proposal or application—
(A)
has an owner or covered individual that is party to a malign foreign talent recruitment program;
(B)
has a business entity, parent company, or subsidiary located in the People’s Republic of China or another foreign country of concern;
(C)
has an owner or covered individual that has a foreign affiliation with a research institution located in the People’s Republic of China or another foreign country of concern;
(D)
has a foreign risk connecting the small business concern to an entity, including any affiliates of the entity, or individual on—
(i)
the UFLPA Entity List maintained by the Department of Homeland Security;
(ii)
the Non-SDN Chinese Military-Industrial Complex Companies List of the Office of Foreign Assets Control maintained by the Department of the Treasury;
(iii)
the Section 889 Prohibition List established under section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Public Law 115–232; 132 Stat. 1917) and maintained by the Department of Defense;
(iv)
the list of Chinese Military companies required under section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note) and maintained by the Department of Defense;
(v)
the Military End User List maintained by the Bureau of Industry and Security of the Department of Commerce;
(vi)
the Entity List maintained by the Bureau of Industry and Security of the Department of Commerce;
(vii)
the List of Equipment and Services maintained by the Federal Communications Commission; or
(viii)
the Withhold Release Orders and Findings List maintained by U.S. Customs and Border Protection;
(E)
has a security risk with a primary source that is classified; or
(F)
has a security risk that the Federal agency determines warrants a denial;
(21)
provide for—
(A)
a process under which, upon making an award decision to deny an application on the basis of a determination under paragraph (20), or upon making a determination under paragraph (20) that a small business concern has a security risk described in that paragraph, the Federal agency provides to the small business concern, as appropriate pursuant to the discretion of the Federal agency and in a manner that does not compromise security, a notification—
(i)
advising the small business concern of such determination; and
(ii)
identifying the basis for such determination; and
(B)
a policy that clarifies that receipt of an award decision denying an application does not prohibit the small business concern from being eligible for an award in a subsequent award cycle;
(22)
require a small business concern receiving an award under its STTR program to repay all amounts received from the Federal agency under the award if—
(A)
the small business concern makes a material misstatement that the Federal agency determines poses a risk to national security; or
(B)
there is a change in ownership, change to entity structure, or other substantial change in circumstances of the small business concern that the Federal agency determines poses a risk to national security; and
(23)
require a small business concern receiving an award under its STTR program to regularly report to the Federal agency and the Administration throughout the duration of the award on—
(A)
any change to a disclosure required under subparagraphs (A) through (G) of paragraph (17);
(B)
any material misstatement made under paragraph (22)(A); and
(C)
any change described in paragraph (22)(B).
(p)
STTR policy directive
(1)
Issuance
The Administrator shall issue a policy directive for the general conduct of the STTR programs within the Federal Government. Such policy directive shall be issued after consultation with—
(A)
the heads of each of the Federal agencies required by subsection (n) to establish an STTR program;
(B)
the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office; and
(C)
the Director of the Office of Federal Procurement Policy.
(2)
Contents
The policy directive required by paragraph (1) shall provide for—
(A)
simplified, standardized, and timely STTR solicitations;
(B)
a simplified, standardized funding process that provides for—
(i)
the timely receipt and review of proposals;
(ii)
outside peer review, if appropriate;
(iii)
protection of proprietary information provided in proposals;
(iv)
selection of awardees;
(v)
retention by a small business concern of the rights to data generated by the concern in the performance of an STTR award for a period of not less than 4 years;
(vi)
continued use by a small business concern, as a directed bailment, of any property transferred by a Federal agency to the small business concern in Phase II of the STTR program for a period of not less than 2 years, beginning on the initial date of the concern’s participation in Phase III of such program;
(vii)
cost sharing;
(viii)
cost principles and payment schedules; and
(ix)
1-year awards for Phase I of an STTR program, generally not to exceed $150,000, and 2-year awards for Phase II of an STTR program, generally not to exceed $1,000,000, (each of which the Administrator shall adjust for inflation annually) greater or lesser amounts to be awarded at the discretion of the awarding agency, and shorter or longer periods of time to be approved at the discretion of the awarding agency where appropriate for a particular project;
(C)
minimizing regulatory burdens associated with participation in STTR programs;
(D)
guidelines for a model agreement, to be used by all agencies, for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
(E)
procedures to ensure that—
(i)
a recipient of an STTR award is a small business concern, as defined in section 632 of this title and the regulations promulgated thereunder; and
(ii)
such small business concern exercises management and control of the performance of the STTR funding agreement pursuant to a business plan providing for the commercialization of the technology that is the subject matter of the award;
(F)
procedures to ensure, to the extent practicable, that an agency which intends to pursue research, development, or production of a technology developed by a small business concern under an STTR program enters into follow-on, non-STTR funding agreements with the small business concern for such research, development, or production; and
(G)
procedures to ensure that procurement center representatives (as described in section 644(l) of this title)—
(i)
consult with the appropriate personnel from the relevant Federal agency, to assist small business concerns participating in the STTR program, particularly in Phase III;
(ii)
provide technical assistance to such concerns to submit a bid for an award of a Federal contract; and
(iii)
consult with the appropriate personnel from the relevant Federal agency in providing the assistance described in clause (i).
(3)
Modifications
(q)
Discretionary technical and business assistance
(1)
In general
Each Federal agency required by this section to conduct an SBIR program or STTR program shall authorize recipients of awards under the SBIR program or the STTR program to select, if desired, technical and business assistance provided under subparagraph (A) or (B) of paragraph (2) with respect to SBIR or STTR projects, such as access to a network of scientists and engineers engaged in a wide range of technologies, assistance with product sales, intellectual property protections, cybersecurity assistance, market research, market validation, and development of regulatory plans and manufacturing plans, or access to technical and business literature available through on-line data bases, for the purpose of assisting such recipients in—
(A)
making better technical decisions concerning such projects;
(B)
solving technical problems which arise during the conduct of such projects;
(C)
minimizing technical risks associated with such projects;
(D)
developing and commercializing new commercial products and processes resulting from such projects, including intellectual property protections; and
(E)
screening for potential foreign involvement in technology development or commercialization activities.
(2)
Eligible uses of funds
(A)
Selection by small business concern
(B)
Staff
(3)
Additional technical assistance
(A)
Phase I
A Federal agency described in paragraph (1) shall authorize a recipient of a Phase I SBIR or STTR award to use not more than $6,500 per project, included as part of the award of the recipient or in addition to the amount of the award of the recipient as determined appropriate by the head of the Federal agency, for the services described in paragraph (1)—
(i)
provided through a vendor selected by the small business concern under paragraph (2)(A); or
(ii)
achieved through the activities described in paragraph (2)(B).
(B)
Phase II
A Federal agency described in paragraph (1) shall authorize a recipient of a Phase II SBIR or STTR award to utilize not more than $50,000 per project, included as part of the award of the recipient or in addition to the amount of the award of the recipient as determined appropriate by the head of the Federal agency, for the services described in paragraph (1)—
(i)
provided through a vendor selected by the small business concern under paragraph (2)(A); or
(ii)
achieved through the activities described in paragraph (2)(B).
(C)
Flexibility
(D)
Limitation
A Federal agency may not—
(i)
use the amounts authorized under subparagraph (A) or (B) unless 1 or more vendors selected under paragraph (2)(A) provides the technical or business assistance to the recipient; or
(ii)
enter a contract with a vendor under paragraph (2)(A) under which the amount provided for technical or business assistance is based on total number of Phase I or Phase II awards.
(E)
Multiple award recipients
(4)
Annual reporting
(A)
In general
(B)
Use of existing reporting mechanism
(5)
Targeted review
(r)
Phase III agreements, competitive procedures, and justification for awards
(1)
In general
(2)
Definition
(3)
Intellectual property rights
(4)
Competitive procedures and justification for awards
To the greatest extent practicable, Federal agencies and Federal prime contractors shall—
(A)
consider an award under the SBIR program or the STTR program to satisfy the requirements under sections 3201 through 3205 of title 10 and any other applicable competition requirements;
(B)
issue, without further justification, Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients that developed the technology;
(C)
develop simplified and standardized procedures and model contracts for Phase I, Phase II, and Phase III SBIR awards and report to the Administrator on actions taken by the Federal agency in support of these objectives; and
(D)
as applicable, issue standardized solicitation provisions and contract clauses that provide clear guidance on the information that small business concerns participating in SBIR or STTR programs can be expected to provide as part of market research or as part of a proposal by those small business concerns to establish eligibility for Phase III awards.
(5)
Workforce training
(A)
In general
(B)
Training topics
The training activities required under subparagraph (A) shall include training on—
(i)
the missions, goals, and authorities of the SBIR and STTR programs;
(ii)
the use of Phase III agreements;
(iii)
Phase III data rights; and
(iv)
the execution of Phase III sole source award contracts.
(C)
Funding
(s)
Competitive selection procedures for SBIR and STTR programs
(t)
Inclusion in strategic plans
(u)
Coordination of technology development programs
(1)
In this subsection, the term “technology development program” means—
(A)
the Experimental Program to Stimulate Competitive Research of the National Science Foundation, as established under section 1862g of title 42;
(B)
the Defense Experimental Program to Stimulate Competitive Research of the Department of Defense;
(C)
the Experimental Program to Stimulate Competitive Research of the Department of Energy;
(D)
the Experimental Program to Stimulate Competitive Research of the Environmental Protection Agency;
(E)
the Experimental Program to Stimulate Competitive Research of the National Aeronautics and Space Administration;
(F)
the Institutional Development Award Program of the National Institutes of Health; and
(G)
the National Research Initiative Competitive Grants Program of the Department of Agriculture.
(2)
Coordination requirements
Each Federal agency that is subject to subsection (f) and that has established a technology development program may, in each fiscal year, review for funding under that technology development program—
(A)
any proposal to provide outreach and assistance to one or more small business concerns interested in participating in the SBIR program, including any proposal to make a grant or loan to a company to pay a portion or all of the cost of developing an SBIR proposal, from an entity, organization, or individual located in—
(i)
a State that is eligible to participate in that program; or
(ii)
a State described in paragraph (3); or
(B)
any proposal for Phase I of the SBIR program, if the proposal, though meritorious, is not funded through the SBIR program for that fiscal year due to funding restraints, from a small business concern located in—
(i)
a State that is eligible to participate in a technology development program; or
(ii)
a State described in paragraph (3).
(3)
Additionally eligible State
(v)
Reducing paperwork and compliance burden
(1)
Standardization of reporting requirements
(2)
Simplification of application and award process
(w)
STTR model agreement for intellectual property rights
(1)
In general
(2)
Opportunity for comment
(x)
Research and development focus
(1)
Revision and update of criteria and procedures of identification
(2)
Utilization of plans
The criteria and procedures described in paragraph (1) shall be developed through the use of the most current versions of the following plans:
(A)
The Joint Warfighting Science and Technology Plan required under section 270 of the National Defense Authorization Act for Fiscal Year 1997 (Public Law 104–201; 10 U.S.C. 2501 note).1
(B)
The Defense Technology Area Plan of the Department of Defense.
(C)
The Basic Research Plan of the Department of Defense.
(3)
Input in identification of areas of effort
(y)
Commercialization Readiness Program
(1)
In general
(2)
Identification of research programs for accelerated transition to acquisition process
In carrying out the Commercialization Readiness Program, the Secretary of Defense and the Secretary of each military department shall—
(A)
identify research programs of the Small Business Innovation Research Program or Small Business Technology Transfer Program, including small business concerns with an award from the strategic breakthrough allocation (as defined in subsection (ff)(3)(A),5
5
 So in original. Another closing parenthesis probably should precede the comma.
that have the potential for rapid transitioning to Phase III and into the acquisition process;
(B)
ensure, in collaboration with SBIR program managers of each component, that research programs identified under subparagraph (A) are analyzed within the programming and budgeting process as budget requests are developed; and
(C)
provide to the Committee on Small Business and Entrepreneurship of the Senate and the Committees on Small Business and Science, Space, and Technology of the House of Representatives information on the integration of SBIR and STTR awardees in budget rollouts for research, development, testing, and evaluation activities.
(3)
Funding
(A)
In general
(B)
Limitations
The funds described in subparagraph (A)—
(i)
shall not be subject to the limitations on the use of funds in subsection (f)(2); and
(ii)
shall not be used to make Phase III awards.
(4)
Insertion incentives
For any contract with a value of not less than $100,000,000, the Secretary of Defense is authorized to—
(A)
establish goals for the transition of Phase III technologies in subcontracting plans; and
(B)
require a prime contractor on such a contract to report the number and dollar amount of contracts entered into by that prime contractor for Phase III SBIR or STTR projects.
(5)
Goal for SBIR and STTR technology insertion
The Secretary of Defense shall—
(A)
set a goal to increase the number of Phase II SBIR contracts and the number of Phase II STTR contracts awarded by the Secretary that lead to technology transition into programs of record or fielded systems;
(B)
use incentives in effect on December 31, 2011, or create new incentives, to encourage agency program managers and prime contractors to meet the goal under subparagraph (A);
(C)
establish a mechanism to provide small business concerns with direct access to program and requirements offices that may purchase technology from the small business concern under Phase III of the SBIR program; and
(D)
submit to the Administrator for inclusion in the annual report under subsection (b)(7)—
(i)
the number and percentage of Phase II SBIR and STTR contracts awarded by the Secretary that led to technology transition into programs of record or fielded systems;
(ii)
information on the status of each project that received funding through the Commercialization Readiness Program and efforts to transition those projects into programs of record or fielded systems; and
(iii)
a description of each incentive that has been used by the Secretary under subparagraph (B) and the effectiveness of that incentive with respect to meeting the goal under subparagraph (A).
(z)
Encouraging innovation in energy efficiency
(1)
Federal agency energy-related priority
In carrying out its duties under this section relating to SBIR and STTR solicitations by Federal departments and agencies, the Administrator shall—
(A)
ensure that such departments and agencies give high priority to small business concerns that participate in or conduct energy efficiency or renewable energy system research and development projects; and
(B)
include in the annual report to Congress under subsection (b)(7) a determination of whether the priority described in subparagraph (A) is being carried out.
(2)
Consultation required
(3)
Guidelines
(4)
Definitions
In this subsection—
(A)
the term “biomass”—
(i)
means any organic material that is available on a renewable or recurring basis, including—
(I)
agricultural crops;
(II)
trees grown for energy production;
(III)
wood waste and wood residues;
(IV)
plants (including aquatic plants and grasses);
(V)
residues;
(VI)
fibers;
(VII)
animal wastes and other waste materials; and
(VIII)
fats, oils, and greases (including recycled fats, oils, and greases); and
(ii)
does not include—
(I)
paper that is commonly recycled; or
(II)
unsegregated solid waste;
(B)
the term “energy efficiency project” means the installation or upgrading of equipment that results in a significant reduction in energy usage; and
(C)
the term “renewable energy system” means a system of energy derived from—
(i)
a wind, solar, biomass (including biodiesel), or geothermal source; or
(ii)
hydrogen derived from biomass or water using an energy source described in clause (i).
(aa)
Limitation on size of awards
(1)
Limitation
(2)
Maintenance of information
Participating agencies shall maintain information on awards exceeding the guidelines established under this section, including—
(A)
the amount of each award;
(B)
a justification for exceeding the guidelines for each award;
(C)
the identity and location of each award recipient; and
(D)
whether an award recipient has received any venture capital, hedge fund, or private equity firm investment and, if so, whether the recipient is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
(3)
Reports
(4)
Waiver for specific topic
Upon the receipt of an application from a Federal agency, the Administrator may grant a waiver from the requirement under paragraph (1) with respect to a specific topic (but not for the agency as a whole) for a fiscal year if the Administrator determines, based on the information contained in the application from the agency, that—
(A)
the requirement under paragraph (1) will interfere with the ability of the agency to fulfill its research mission through the SBIR program or the STTR program; and
(B)
the agency will minimize, to the maximum extent possible, the number of awards that do not satisfy the requirement under paragraph (1) to preserve the nature and intent of the SBIR program and the STTR program.
(5)
Rule of construction
(6)
Strategic breakthrough allocation
(bb)
Subsequent Phase II awards
(1)
Agency flexibility
(2)
SBIR and STTR program flexibility
(3)
Preventing duplicative awards
(cc)
Phase flexibility
(dd)
Participation of small business concerns majority-owned by venture capital operating companies, hedge funds, or private equity firms in the SBIR program
(1)
Authority
Upon providing a written determination described in paragraph (2) to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, not later than 30 days before the date on which any such award is made—
(A)
the Director of the National Institutes of Health, the Secretary of Energy, and the Director of the National Science Foundation may award not more than 25 percent of the funds allocated for the SBIR program of the applicable Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns; and
(B)
the head of a Federal agency other than a Federal agency described in subparagraph (A) that participates in the SBIR program may award not more than 15 percent of the funds allocated for the SBIR program of the Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns.
(2)
Determination
A written determination described in this paragraph is a written determination by the head of a Federal agency that explains how the use of the authority under paragraph (1) will—
(A)
induce additional venture capital, hedge fund, or private equity firm funding of small business innovations;
(B)
substantially contribute to the mission of the Federal agency;
(C)
demonstrate a need for public research; and
(D)
otherwise fulfill the capital needs of small business concerns for additional financing for SBIR projects.
(3)
Registration
A small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and qualified for participation in the program authorized under paragraph (1) shall—
(A)
register with the Administrator on the date that the small business concern submits an application for an award under the SBIR program; and
(B)
indicate in any SBIR proposal that the small business concern is registered under subparagraph (A) as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
(4)
Compliance
(A)
In general
(B)
Annual reporting
(5)
Enforcement
(6)
Final decisions on applications under the SBIR program
(A)
Definition
In this paragraph, the term “covered small business concern” means a small business concern that—
(i)
was not majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms on the date on which the small business concern submitted an application in response to a solicitation under the SBIR programs; and
(ii)
on the date of the award under the SBIR program is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
(B)
In general
If a Federal agency does not make an award under a solicitation under the SBIR program before the date that is 9 months after the date on which the period for submitting applications under the solicitation ends—
(i)
a covered small business concern is eligible to receive the award, without regard to whether the covered small business concern meets the requirements for receiving an award under the SBIR program for a small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, if the covered small business concern meets all other requirements for such an award; and
(ii)
the head of the Federal agency shall transfer an amount equal to any amount awarded to a covered small business concern under the solicitation to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency, not later than 90 days after the date on which the Federal agency makes the award.
(7)
Evaluation criteria
(ee)
Collaborating with Federal laboratories and research and development centers
(1)
Authorization
Subject to the limitations under this section, the head of each participating Federal agency may make SBIR and STTR awards to any eligible small business concern that—
(A)
intends to enter into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award; or
(B)
has entered into a cooperative research and development agreement (as defined in section 3710a(d) of this title) with a Federal laboratory.
(2)
Prohibition
No Federal agency shall—
(A)
condition an SBIR or STTR award upon entering into agreement with any Federal laboratory or any federally funded laboratory or research and development center for any portion of the activities to be performed under that award;
(B)
approve an agreement between a small business concern receiving an SBIR or STTR award and a Federal laboratory or federally funded laboratory or research and development center, if the small business concern performs a lesser portion of the activities to be performed under that award than required by this section and by the SBIR Policy Directive and the STTR Policy Directive of the Administrator; or
(C)
approve an agreement that violates any provision, including any data rights protections provision, of this section or the SBIR and the STTR Policy Directives.
(3)
Implementation
Not later than 180 days after December 31, 2011, the Administrator shall modify the SBIR Policy Directive and the STTR Policy Directive issued under this section to ensure that small business concerns—
(A)
have the flexibility to use the resources of the Federal laboratories or federally funded research and development centers; and
(B)
are not mandated to enter into agreement with any Federal laboratory or any federally funded laboratory or research and development center as a condition of an award.
(4)
Advance payment
(ff)
Additional SBIR and STTR awards
(1)
Express authority for awarding a sequential Phase II award
(2)
Preventing duplicative awards
(3)
Strategic breakthrough awards
(A)
Strategic breakthrough allocation defined
(B)
Award
(C)
Fund parameters
In the case of a Phase II agreement that is awarded to a small business concern by a Federal agency using funds made available under a strategic breakthrough allocation, the following requirements shall apply:
(i)
Award size and period of performance
(ii)
Small business concern requirements
The small business concern shall—
(I)
have been awarded not less than 1 prior Phase II award under the SBIR or STTR program;
(II)
demonstrate not less than 100 percent matching funds from—
(aa)
new private capital as a result of an award using funds made available under a strategic breakthrough allocation;
(bb)
new funding awarded by a government agency under a program other than Phase I or II of the SBIR or STTR program as a result of an award using funds made available under a strategic breakthrough allocation; or
(cc)
a combination of funds described in items (aa) and (bb);
(III)
demonstrate a technology that is an effective solution, as determined by market research; and
(IV)
only be eligible for an award from the strategic breakthrough allocation at the Department of Defense if the small business concern—
(aa)
provides a product, process, or technology that meets a necessary level of readiness and has a commitment for inclusion in a program objective memorandum from an official with the rank of program acquisition executive or higher in an acquisition organization of the Department of Defense;
(bb)
provides a product, process, or technology that will meet high priority requirements or operational needs of a military department through a successful transition and into the acquisition process; and
(cc)
demonstrates not less than 20 percent of the required matching funds under subclause (II) come from new funding awarded by the Department of Defense under a program other than Phase I or II of the SBIR or STTR program as a result of an award using funds made available under a strategic breakthrough allocation.
(iii)
Deadline
(iv)
Eligible activities
(v)
Selection criteria
In making awards using funds made available under a strategic breakthrough allocation, the Federal agency shall consider—
(I)
the potential of the small business concern to advance the national security capabilities of the United States;
(II)
the potential of the small business concern to provide new technologies or processes, or new applications of existing technologies, that will enable new alternatives to existing programs;
(III)
whether a customer in a Federal agency has expressed an intent to purchase and integrate technology from the small business concern into its operations; or
(IV)
whether a particular technology area is undercapitalized by private investment.
(D)
Use of streamlined contracting mechanisms
(gg)
Pilot program
(1)
Authorization
The head of each covered Federal agency may allocate not more than 10 percent of the funds allocated to the SBIR program and the STTR program of the covered Federal agency—
(A)
for awards for technology development, testing, evaluation, and commercialization assistance for SBIR and STTR Phase II technologies; or
(B)
to support the progress of research, research and development, and commercialization conducted under the SBIR or STTR programs to Phase III.
(2)
Application by Federal agency
(A)
In general
(B)
Determination
The Administrator shall—
(i)
make a determination regarding an application submitted under subparagraph (A) not later than 30 days before the first day of the fiscal year for which the application is submitted;
(ii)
publish the determination in the Federal Register; and
(iii)
make a copy of the determination and any related materials available to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.
(3)
Maximum amount of award
(4)
Registration
(5)
Award criteria or consideration
(6)
Report
(7)
Termination
(8)
Definitions
In this subsection—
(A)
the term “covered Federal agency”—
(i)
means a Federal agency participating in the SBIR program or the STTR program; and
(ii)
does not include the Department of Defense; and
(B)
the term “pilot program” means each program established under paragraph (1).
(hh)
Timing of release of funding
(1)
In general
(2)
Pilot program to accelerate Department of Defense SBIR and STTR awards
(A)
In general
Not later than 1 year after August 13, 2018, the Under Secretary of Defense for Research and Engineering, acting through the Director of Defense Procurement and Acquisition Policy of the Department of Defense, shall establish a pilot program to reduce the time for awards under the SBIR and STTR programs of the Department of Defense, under which the Department of Defense shall—
(i)
develop simplified and standardized procedures and model contracts throughout the Department of Defense for Phase I, Phase II, and Phase III SBIR awards;
(ii)
for Phase I SBIR and STTR awards, reduce the amount of time between solicitation closure and award;
(iii)
for Phase II SBIR and STTR awards, reduce the amount of time between the end of a Phase I award and the start of the Phase II award;
(iv)
for Phase II SBIR and STTR awards that skip Phase I, reduce the amount of time between solicitation closure and award;
(v)
for sequential Phase II SBIR and STTR awards, reduce the amount of time between Phase II awards; and
(vi)
reduce the award times described in clauses (ii), (iii), (iv), and (v) to be as close to 90 days as possible.
(B)
Consultation
(C)
Termination
(ii)
Reporting on timing
(1)
In general
(2)
Comptroller General reports
The Comptroller General of the United States shall submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Armed Services of the Senate, the Committee on Small Business of the House of Representatives, and the Committee on Armed Services of the House of Representatives—
(A)
not later than 1 year after August 13, 2018, and every year thereafter for 3 years, a report that—
(i)
provides the average and median amount of time that each component of the Department of Defense with an SBIR or STTR program takes to review and make a final decision on proposals submitted under the program; and
(ii)
compares that average and median amount of time with that of other Federal agencies participating in the SBIR or STTR program; and
(B)
not later than December 5, 2021, a report that—
(i)
includes the information described in subparagraph (A);
(ii)
assesses where each Federal agency participating in the SBIR or STTR program needs improvement with respect to the proposal review and award times under the program;
(iii)
identifies best practices for shortening the proposal review and award times under the SBIR and STTR programs, including the pros and cons of using contracts compared to grants; and
(iv)
analyzes the efficacy of the pilot program established under subsection (hh)(2).
(jj)
Phase 0 Proof of Concept Partnership pilot program
(1)
In general
(2)
Definitions
In this subsection—
(A)
the term “Director” means the Director of the National Institutes of Health;
(B)
the term “pilot program” refers to the Proof of Concept Partnership pilot program; and
(C)
the terms “qualifying institution” and “institution” mean a university or other research institution that participates in the National Institutes of Health’s STTR program.
(3)
Proof of Concept Partnerships
(A)
In general
(B)
Award guidelines
The administrator of a Proof of Concept Partnership program shall award grants in accordance with the following guidelines:
(i)
The Proof of Concept Partnership shall use a market-focused project management oversight process, including—
(I)
a rigorous, diverse review board comprised of local experts in translational and proof of concept research, including industry, start-up, venture capital, technical, financial, and business experts and university technology transfer officials;
(II)
technology validation milestones focused on market feasibility;
(III)
simple reporting effective at redirecting projects; and
(IV)
the willingness to reallocate funding from failing projects to those with more potential.
(ii)
Not more than $100,000 shall be awarded towards an individual proposal.
(C)
Educational resources and guidance
(4)
Awards
(A)
Size of award
(B)
Award criteria
In determining which qualifying institutions receive pilot program grants, the Director shall consider, in addition to any other criteria the Director determines necessary, the extent to which qualifying institutions—
(i)
have an established and proven technology transfer or commercialization office and have a plan for engaging that office in the program’s implementation;
(ii)
have demonstrated a commitment to local and regional economic development;
(iii)
are located in diverse geographies and are of diverse sizes;
(iv)
can assemble project management boards comprised of industry, start-up, venture capital, technical, financial, and business experts;
(v)
have an intellectual property rights strategy or office; and
(vi)
demonstrate a plan for sustainability beyond the duration of the funding award.
(5)
Limitations
The funds for the pilot program shall not be used—
(A)
for basic research, but to evaluate the commercial potential of existing discoveries, including—
(i)
proof of concept research or prototype development; and
(ii)
activities that contribute to determining a project’s commercialization path, to include technical validations, market research, clarifying intellectual property rights, and investigating commercial and business opportunities; or
(B)
to fund the acquisition of research equipment or supplies unrelated to commercialization activities.
(6)
Evaluative report
The Director shall submit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate an evaluative report regarding the activities of the pilot program. The report shall include—
(A)
a detailed description of the institutional and proposal selection process;
(B)
an accounting of the funds used in the pilot program;
(C)
a detailed description of the pilot program, including incentives and activities undertaken by review board experts;
(D)
a detailed compilation of results achieved by the pilot program, including the number of small business concerns included and the number of business packages developed, and the number of projects that progressed into subsequent STTR phases; and
(E)
an analysis of the program’s effectiveness with supporting data.
(7)
Sunset
(kk)
Phase III reporting
The annual SBIR or STTR report to Congress by the Administration under subsection (b)(7) shall include, for each Phase III award—
(1)
the name of the agency or component of the agency or the non-Federal source of capital making the Phase III award;
(2)
the name of the small business concern or individual receiving the Phase III award; and
(3)
the dollar amount of the Phase III award.
(ll)
Consent to release contact information to organizations
(1)
Enabling concern to give consent
Each Federal agency required by this section to conduct an SBIR program or an STTR program shall enable a small business concern that is an SBIR applicant or an STTR applicant to indicate to the Federal agency whether the Federal agency has the consent of the concern to—
(A)
identify the concern to appropriate local and State-level economic development organizations as an SBIR applicant or an STTR applicant; and
(B)
release the contact information of the concern to such organizations.
(2)
Rules
(mm)
Assistance for administrative, oversight, and contract processing costs
(1)
In general
Subject to paragraph (3) and until September 30, 2031, the Administrator shall allow each Federal agency required to conduct an SBIR program to use not more than 3 percent of the funds allocated to the SBIR program of the Federal agency for—
(A)
the administration of the SBIR program or the STTR program of the Federal agency;
(B)
the provision of outreach and technical assistance relating to the SBIR program or STTR program of the Federal agency, including technical assistance site visits, personnel interviews, and national conferences;
(C)
the implementation of commercialization and outreach initiatives that were not in effect on December 31, 2011;
(D)
carrying out the program under subsection (y);
(E)
activities relating to oversight and congressional reporting, including waste, fraud, and abuse prevention activities;
(F)
targeted reviews of recipients of awards under the SBIR program or STTR program of the Federal agency that the head of the Federal agency determines are at high risk for fraud, waste, or abuse to ensure compliance with requirements of the SBIR program or STTR program, respectively;
(G)
the implementation of oversight and quality control measures, including verification of reports and invoices and cost reviews;
(H)
carrying out subsection (dd);
(I)
contract processing costs relating to the SBIR program or STTR program of the Federal agency;
(J)
funding for additional personnel and assistance with application reviews;
(K)
funding for improvements that increase commonality across data systems, reduce redundancy, and improve data oversight and accuracy; and
(L)
contracting officer and acquisition workforce training activities pursuant to subsection (r)(5).
(2)
Outreach and technical assistance
(A)
In general
(B)
Waiver
(3)
Performance criteria
(4)
Rules
(5)
Coordination with IG
(6)
Reporting
(nn)
Annual report on SBIR and STTR program goals
(1)
Development of metrics
The head of each Federal agency required to participate in the SBIR program or the STTR program shall develop metrics to evaluate the effectiveness and the benefit to the people of the United States of the SBIR program and the STTR program of the Federal agency that—
(A)
are science-based and statistically driven;
(B)
reflect the mission of the Federal agency; and
(C)
include factors relating to the economic impact of the programs.
(2)
Evaluation
The head of each Federal agency described in paragraph (1) shall conduct an annual evaluation using the metrics developed under paragraph (1) of—
(A)
the SBIR program and the STTR program of the Federal agency; and
(B)
the benefits to the people of the United States of the SBIR program and the STTR program of the Federal agency.
(3)
Report
(A)
In general
(B)
Public availability of report
(C)
Definition
In this paragraph, the term “appropriate committees of Congress” means—
(i)
the Committee on Small Business and Entrepreneurship of the Senate; and
(ii)
the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.
(oo)
Competitive selection procedures for SBIR and STTR programs
(pp)
Limitation on pilot programs
(1)
Existing pilot programs
(2)
New pilot programs
The Administrator may only carry out a covered pilot program established after December 31, 2011—
(A)
during the 3-year period beginning on the date on which such program is established; and
(B)
if such program does not continue and is not based on, in any manner, a previously established covered pilot program.
(3)
Covered pilot program defined
In this subsection, the term “covered pilot program” means any initiative, project, innovation, or other activity—
(A)
established by the Administrator;
(B)
relating to an SBIR or STTR program; and
(C)
not specifically authorized by law.
(qq)
Minimum standards for participation
(1)
Progress to Phase II success
(A)
Establishment of system and minimum commercialization rate
Not later than 1 year after December 31, 2011, the head of each Federal agency participating in the SBIR or STTR program shall—
(i)
establish a system to measure, where appropriate, the success of small business concerns with respect to the receipt of Phase II SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards;
(ii)
establish a minimum performance standard for small business concerns with respect to the receipt of Phase II SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards; and
(iii)
begin evaluating, each fiscal year, whether each small business concern that received a Phase I SBIR or STTR award from the agency meets the minimum performance standard established under clause (ii).
(B)
Consequence of failure to meet minimum commercialization rate
(2)
Progress to Phase III success
(A)
Establishment of system and minimum commercialization rate
Not later than 2 years after December 31, 2011, the head of each Federal agency participating in the SBIR or STTR program shall—
(i)
establish a system to measure, where appropriate, the success of small business concerns with respect to the receipt of Phase III SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards;
(ii)
establish a minimum performance standard for small business concerns with respect to the receipt of Phase III SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards; and
(iii)
begin evaluating, each fiscal year, whether each small business concern that received a Phase I SBIR or STTR award from the agency meets the minimum performance standard established under clause (ii).
(B)
Consequence of failure to meet minimum commercialization rate
(3)
Increased minimum performance standards for experienced firms
(A)
Progress to Phase II success
(i)
In general
(ii)
Consequence of failure to meet standard
(iii)
Covered period defined
(B)
Progress to Phase III success
(i)
In general
Each minimum performance standard established under paragraph (2)(A)(ii) shall—
(I)
with respect to a small business concern that received or receives more than 50 Phase II awards during a covered period, require an average of $250,000 of aggregate sales and investments per Phase II award received during such covered period; and
(II)
with respect to a small business concern that received or receives more than 100 Phase II awards during a covered period, require an average of $450,000 of aggregate sales and investments per Phase II award received during such covered period.
(ii)
Consequence of failure to meet standard
(iii)
Documentation
(I)
In general
(II)
Covered sale defined
In this clause, the term “covered sale” means a sale by a small business concern—
(aa)
that the small business concern claims to be attributable to an SBIR or STTR award;
(bb)
for which no amount of the payment was or is made using Federal funds;
(cc)
which the small business concern uses to meet an applicable increased minimum performance standard under clause (i); and
(dd)
that was or is received during the 5 fiscal years immediately preceding the fiscal year in which the small business concern uses the sale to meet the increased minimum performance standard.
(iv)
Covered period defined
(C)
Patents for increased minimum performance standards
(D)
Effective date
(E)
Waiver
(i)
In general
The Administrator may, upon the request of a senior official of a Federal agency, grant a waiver with respect to a topic for the SBIR or STTR program of the Federal agency if—
(I)
the topic is critical to the mission of the Federal agency or relates to national security; and
(II)
the official submits to the Administrator a request for the waiver in accordance with clause (iii).
(ii)
Waiver effects
(iii)
Agency request and congressional notification
(iv)
Administrator determination and congressional notification
(v)
Definitions
In this subparagraph:
(I)
Covered small business concern
(II)
Senior official
(F)
Reporting
(i)
In general
Not later than July 1, 2023, and annually thereafter, the Administrator shall submit to Congress a list of the small business concerns that did not meet—
(I)
an applicable minimum performance standard established under paragraph (1)(A)(ii) or (2)(A)(ii); or
(II)
an applicable increased minimum performance standard.
(ii)
Waivers
(iii)
Confidentiality
(G)
Implementation
(H)
Rules of construction
Nothing in this paragraph shall be construed—
(i)
to prohibit a small business concern from participating in a Phase I (or Phase II if under the authority of subsection (cc)) of an SBIR or STTR program under paragraph (1)(B) or (2)(B) solely on the basis of a determination by the head of a Federal agency that the small business concern is not meeting an increased minimum performance standard; or
(ii)
to prevent the head of a Federal agency from implementing more restrictive limitations on the number of federally funded Phase I awards and direct to Phase II awards under subsection (cc) that may be awarded to a small business concern than the limitations described in subparagraphs (A)(ii) and (B)(ii).
(I)
Termination
(4)
Administration oversight
(A)
Approval and publication of systems and minimum performance standards
(B)
Submission of evaluation results by agency
(5)
Requirement of notice and comment
(6)
Inspector general audit
Not later than 1 year after the date on which the Administrator implements the increased minimum performance standards under paragraph (3), and periodically thereafter, the Inspector General of the Administration shall—
(A)
conduct an audit on whether the small business concerns subject to increased minimum performance standards under paragraph (3)(B) verified—
(i)
the sales by and investments in the small business concerns—
(I)
during the 5 fiscal years immediately preceding the fiscal year in which the small business concern used such sales and investments to meet an applicable increased performance standard; and
(II)
as a direct result of a Phase I award or Phase II award made under subsection (cc) during the covered period (as defined in paragraph (3)(B)(iv)), consistent with the definition of Phase III, as applicable;
(ii)
any third-party revenue the small business concerns list as investments or incomes to meet the increased minimum performance standard—
(I)
is a direct result of a Phase I award or Phase II award made under subsection (cc) during the covered period (as defined in paragraph (3)(B)(iv)); and
(II)
consistent with the requirements of the Administrator as in effect on September 30, 2022, or any successor requirements; and
(iii)
any dollar amounts such small business concerns list as investments or income to meet such increased minimum performance standard the providence of which is unclear and that is not directly attributable to a Phase I award or Phase II award made under subsection (cc) during the covered period (as defined in paragraph (3)(B)(iv)), consistent with the definition of Phase III, as applicable;
(B)
assess the self-certification requirements for the minimum performance standards established under paragraph (2)(A)(ii) and the increased minimum performance standards under paragraph (3)(B); and
(C)
submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives a report on the audit conducted under subparagraph (A) and the assessment conducted under subparagraph (B).
(7)
Increased minimum performance standard defined
(rr)
Publication of certain information
(ss)
Report on enhancement of manufacturing activities
Not later than October 1, 2013, and annually thereafter, the head of each Federal agency that makes more than $50,000,000 in awards under the SBIR and STTR programs of the agency combined shall submit to the Administrator, for inclusion in the annual report required under subsection (b)(7), information that includes—
(1)
a description of efforts undertaken by the head of the Federal agency to enhance United States manufacturing activities;
(2)
a comprehensive description of the actions undertaken each year by the head of the Federal agency in carrying out the SBIR or STTR program of the agency in support of Executive Order 13329 (69 Fed. Reg. 9181; relating to encouraging innovation in manufacturing);
(3)
an assessment of the effectiveness of the actions described in paragraph (2) at enhancing the research and development of United States manufacturing technologies and processes;
(4)
a description of efforts by vendors selected to provide discretionary technical assistance under subsection (q)(1) to help SBIR and STTR concerns manufacture in the United States; and
(5)
recommendations that the program managers of the SBIR or STTR program of the agency consider appropriate for additional actions to increase the effectiveness of enhancing manufacturing activities.
(tt)
Outstanding reports and evaluations
(1)
In general
Not later than March 30, 2019, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Small Business of the House of Representatives, and the Committee on Science, Space, and Technology of the House of Representatives—
(A)
each report, evaluation, or analysis, as applicable, described in subsection (b)(7), (g)(9), (o)(10), (y)(6)(C), (gg)(6), (jj)(6), and (mm)(6); and
(B)
metrics regarding, and an evaluation of, the authority provided to the National Institutes of Health, the Department of Defense, and the Department of Education under subsection (cc).
(2)
Information required
(uu)
Commercialization assistance pilot programs
(1)
Pilot programs implemented
(A)
In general
(B)
Exception
(2)
Percent of agency funds
(3)
Termination
(4)
Application
To be selected to receive a subsequent Phase II SBIR award under a commercialization assistance pilot program, an eligible entity shall submit to the covered agency implementing such pilot program an application at such time, in such manner, and containing such information as the covered agency may require, including—
(A)
an updated Phase II commercialization plan; and
(B)
the source and amount of the matching funding required under paragraph (5).
(5)
Matching funding
(A)
In general
(B)
Ineligible sources
(6)
Award
A subsequent Phase II SBIR award made to an eligible entity under this subsection—
(A)
may not exceed the limitation described under subsection (aa)(1); and
(B)
shall be disbursed during Phase II.
(7)
Use of funds
(8)
Selection
In selecting eligible entities to participate in a commercialization assistance pilot program under this subsection, the head of a covered agency shall consider—
(A)
the extent to which such award could aid the eligible entity in commercializing the research funded under the eligible entity’s Phase II program;
(B)
whether the updated Phase II commercialization plan submitted under paragraph (4) provides a sound approach for establishing technical feasibility that could lead to commercialization of such research;
(C)
whether the proposed activities to be conducted under such updated Phase II commercialization plan further improve the likelihood that such research will provide societal benefits;
(D)
whether the small business concern has progressed satisfactorily in Phase II to justify receipt of a subsequent Phase II SBIR award;
(E)
the expectations of the eligible third-party investor that provides matching funding under paragraph (5); and
(F)
the likelihood that the proposed activities to be conducted under such updated Phase II commercialization plan using matching funding provided by such eligible third-party investor will lead to commercial and societal benefit.
(9)
Evaluation report
Not later than 6 years after August 13, 2018, the Comptroller General of the United States shall submit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives, and the Committee on Small Business and Entrepreneurship of the Senate, a report including—
(A)
a summary of the activities of commercialization assistance pilot programs carried out under this subsection;
(B)
a detailed compilation of results achieved by such commercialization assistance pilot programs, including the number of eligible entities that received awards under such programs;
(C)
the rate at which each eligible entity that received a subsequent Phase II SBIR award under this subsection commercialized research of the recipient;
(D)
the growth in employment and revenue of eligible entities that is attributable to participation in a commercialization assistance pilot program;
(E)
a comparison of commercialization success of eligible entities participating in a commercialization assistance pilot program with recipients of an additional Phase II SBIR award under subsection (ff);
(F)
demographic information, such as ethnicity and geographic location, of eligible entities participating in a commercialization assistance pilot program;
(G)
an accounting of the funds used at each covered agency that implements a commercialization assistance pilot program under this subsection;
(H)
the amount of matching funding provided by eligible third-party investors, set forth separately by source of funding;
(I)
an analysis of the effectiveness of the commercialization assistance pilot program implemented by each covered agency; and
(J)
recommendations for improvements to the commercialization assistance pilot program.
(10)
Definitions
For purposes of this subsection:
(A)
Covered agency
(B)
Eligible entity
(C)
Eligible third-party investor
(D)
Ineligible sources
The term “ineligible sources” means the following:
(i)
The eligible entity’s internal research and development funds.
(ii)
Funding in forms other than cash, such as in-kind or other intangible assets.
(iii)
Funding from the owners of the eligible entity, or the family members or affiliates of such owners.
(iv)
Funding attained through loans or other forms of debt obligations.
(E)
Subsequent Phase II SBIR award
(vv)
Due diligence program to assess security risks
(1)
Establishment
(2)
Risks
Each program established under paragraph (1) shall—
(A)
assess, using a risk-based approach as appropriate—
(i)
the cybersecurity practices of a small business concern;
(ii)
patent analysis;
(iii)
employee analysis;
(iv)
foreign ownership of a small business concern seeking an award, including the financial ties and obligations (which shall include surety, equity, and debt obligations) of the small business concern and employees of the small business concern to a foreign country, foreign person, or foreign entity;
(v)
foreign affiliations of a covered individual, owner, or other key personnel of a small business concern with an entity in a foreign country of concern;
(vi)
investment relationships of a small business concern with an individual or entity in a foreign country of concern;
(vii)
technology licensing agreements or joint ventures (including joint venture-like agreements) with an individual or entity in a foreign country of concern; and
(viii)
business relationships between a covered individual, owner, or other key personnel of a small business concern and an individual or entity in a foreign country of concern;
(B)
assess awards and proposals or applications, as applicable, using a risk-based approach as appropriate, including through the use of open-source analysis and analytical tools, for the nondisclosures of information required under (g)(13); 7
7
 So in original. Probably should be preceded by “subsection”.
and
(C)
examine any relationship of a small business concern seeking an award to any entity or individual included on the lists described in subsections (g)(16)(D) and (o)(20)(D).
(3)
Administrative costs
(A)
In general
(B)
Reporting
(i)
In general
Not later than December 31 of the year in which this subparagraph is enacted, and not later than December 31 of each year thereafter, the head of a Federal agency that exercises the authority under subparagraph (A) shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, the Committee on Small Business and Entrepreneurship of the Senate, and the Administrator, for the covered year—
(I)
the total funds allowed to be allocated for the cost of establishing the due diligence program required under this subsection;
(II)
the total amount of funds obligated or expended under subparagraph (A); and
(III)
the due diligence activities carried out or to be carried out using amounts allocated under subparagraph (A).
(ii)
Annual report inclusion
(iii)
Covered year
(C)
Termination date
(ww)
Program on innovation open topics
(1)
Establishment
Not later than 180 days after September 30, 2022, the Secretary of Defense shall establish innovation open topic activities using the SBIR and STTR programs of the Department of Defense in order to—
(A)
increase the transition of commercial technology to the Department of Defense;
(B)
expand the small business nontraditional industrial base;
(C)
increase commercialization derived from investments of the Department of Defense; and
(D)
expand the ability for qualifying small business concerns to propose technology solutions to meet the needs of the Department of Defense.
(2)
Frequency
(3)
Briefing
Not later than 180 days after September 30, 2022, the Secretary of Defense shall provide a briefing on the establishment of the program required under paragraph (1) to—
(A)
the Committee on Armed Services and the Committee on Small Business and Entrepreneurship of the Senate; and
(B)
the Committee on Small Business, the Committee on Armed Services, and the Committee on Science, Space, and Technology of the House of Representatives.
(xx)
Additional provisions relating to solicitation topics
(1)
In general
(2)
Referral
(yy)
Pilot program for the participation of military research and educational institutions in the STTR program
(1)
In general
(2)
Sunset
(zz)
Budget calculation pilot program
(1)
Pilot
(A)
In general
(B)
SBIR program
(C)
STTR program
(2)
Allocations
(3)
Sunset
(aaa)
Reducing administrative burden
(1)
In general
With respect to fiscal year 2027 and each fiscal year thereafter, the Director of the SBIR or STTR program office of each Federal agency shall, pursuant to authority that may not be delegated, set equally for all small business concerns a limit on the maximum number of proposals that a small business concern may submit in response to Phase I solicitations and Phase II solicitations under subsection (cc), published by that Federal agency, including all components of that Federal agency, in a single fiscal year. In establishing such a limitation, the Director of the SBIR or STTR program office of each Federal agency shall use 1 of the following methods:
(A)
A limit for any small business concern on a fiscal year basis.
(B)
A limit for any small business concern on a solicitation basis.
(C)
A limit for any small business concern on a topic basis.
(2)
Waiver
(A)
In general
(B)
Written justification
(C)
Timing
(D)
Nondelegation
(E)
Waiver effects
(F)
Record requirement
(G)
Limitation
(3)
Reporting
(A)
In general
(B)
Written notification
(4)
Timing
(bbb)
I–Corps participation
(1)
In general
Each Federal agency with an Innovation Corps program (commonly known as “I–Corps”) that is required to conduct an SBIR or STTR program shall—
(A)
provide an option for requesting participation in an I–Corps teams course, I–Corps bootcamp, or another equivalent training program to recipients of an award under the SBIR or STTR program; and
(B)
authorize the recipients described in subparagraph (A) to use amounts authorized under subsection (q) to participate in the I–Corps teams course, I–Corps bootcamp, or another equivalent training program.
(2)
Cost of participation
The cost of participation by a recipient described in paragraph (1)(A) in an I–Corps course, I–Corps bootcamp, or another equivalent training program may be provided by—
(A)
an I–Corps team SBIR or STTR grant;
(B)
funds awarded to the recipient under subsection (q);
(C)
funds made available to carry out subsection (mm);
(D)
the participating teams or other sources as appropriate; or
(E)
any combination of sources described in subparagraphs (A), (B), (C), and (D).
(Pub. L. 85–536, § 2[9], July 18, 1958, 72 Stat. 391; Pub. L. 97–219, §§ 3–5, July 22, 1982, 96 Stat. 217, 218, 221; Pub. L. 99–443, §§ 1, 2, Oct. 6, 1986, 100 Stat. 1120; Pub. L. 100–590, title I, § 108, Nov. 3, 1988, 102 Stat. 2994; Pub. L. 102–484, div. D, title XLII, § 4237(d), Oct. 23, 1992, 106 Stat. 2692; Pub. L. 102–564, title I, §§ 103, 104, title II, § 202(a)–(c), title III, §§ 301(a), 305, Oct. 28, 1992, 106 Stat. 4250, 4254, 4256, 4257, 4261, 4262; Pub. L. 103–403, title VI, § 607, Oct. 22, 1994, 108 Stat. 4204; Pub. L. 104–208, div. D, title I, § 110, Sept. 30, 1996, 110 Stat. 3009–733; Pub. L. 105–135, title V, § 501, Dec. 2, 1997, 111 Stat. 2620; Pub. L. 106–113, div. B, § 1000(a)(9) [title IV, § 4732(b)(5)], Nov. 29, 1999, 113 Stat. 1536, 1501A–583; Pub. L. 106–554, § 1(a)(9) [title I, §§ 103–107, 109, 110, 111(c), 113, 114(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–669, 2763A–673, 2763A–679, 2763A–681; Pub. L. 107–50, §§ 2, 3(a), 4–7, Oct. 15, 2001, 115 Stat. 263–265; Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814; Pub. L. 109–163, div. A, title II, § 252, Jan. 6, 2006, 119 Stat. 3177; Pub. L. 110–140, title XII, § 1203(e), Dec. 19, 2007, 121 Stat. 1771; Pub. L. 111–84, div. A, title VIII, §§ 847(a), (b), 848, Oct. 28, 2009, 123 Stat. 2420, 2421; Pub. L. 111–383, div. A, title X, § 1075(l), Jan. 7, 2011, 124 Stat. 4378; Pub. L. 112–17, §§ 3, 4, June 1, 2011, 125 Stat. 221, 222; Pub. L. 112–81, div. A, title X, § 1067(a), div. E, title LI, §§ 5101–5107(a), 5108–5111, 5121–5123, 5125–5127, 5131–5135, 5138, 5140, 5141(a), (b)(1), (3), 5144, 5161, 5162, 5164–5167, Dec. 31, 2011, 125 Stat. 1589, 1824–1827, 1832–1836, 1838–1842, 1844–1847, 1851–1854, 1857–1861; Pub. L. 112–239, div. A, title X, § 1076(a)(20)(A), title XVI, § 1615(a), (b), Jan. 2, 2013, 126 Stat. 1949, 2066; Pub. L. 114–92, div. A, title VIII, § 873(h), formerly § 873(e), Nov. 25, 2015, 129 Stat. 940, renumbered § 873(h), Pub. L. 114–328, div. A, title VIII, § 896(3), Dec. 23, 2016, 130 Stat. 2326; Pub. L. 114–328, div. A, title XVIII, § 1834, Dec. 23, 2016, 130 Stat. 2661; Pub. L. 115–91, div. A, title XVII, § 1709(a), (b)(1), Dec. 12, 2017, 131 Stat. 1809; Pub. L. 115–232, div. A, title VIII, §§ 854(a)–(c)(1), 860, Aug. 13, 2018, 132 Stat. 1886–1888, 1893; Pub. L. 116–92, div. A, title VIII, § 880(a)–(c), Dec. 20, 2019, 133 Stat. 1531, 1532; Pub. L. 116–283, div. A, title VIII, § 865, Jan. 1, 2021, 134 Stat. 3785; Pub. L. 117–81, div. A, title XVII, § 1702(e)(3), Dec. 27, 2021, 135 Stat. 2157; Pub. L. 117–183, §§ 3, 4(a), (b)(1), (c), (d), 5(a), (b), 7(a), 8, 9(a), Sept. 30, 2022, 136 Stat. 2180, 2181, 2183–2186, 2188, 2189, 2193; Pub. L. 117–263, div. A, title VIII, § 872(a), Dec. 23, 2022, 136 Stat. 2739; Pub. L. 118–159, div. A, title VIII, §§ 871, 872, Dec. 23, 2024, 138 Stat. 2007; Pub. L. 119–83, §§ 2(a), 3(a), (b), (d)(2), 4–6(a)(1), (b)–8(a), 9(a), 10(a)–(j), Apr. 13, 2026, 140 Stat. 755, 759, 761–768.)
cite as: 15 USC 638
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