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December 14, 2011

Ranking Member Johnson Applauds Inclusion of SBIR Provisions in National Defense Authorization Act

(Washington, DC) – Recently, Ranking Member Eddie Bernice Johnson (D-TX) was appointed as a member of the conference committee of Senate and House lawmakers selected to reconcile the House and Senate versions of the National Defense Authorization Act (NDAA) and come up with a final compromise version of the legislation.  Monday night, the conference committee approved its conference report. The conference report is expected to be voted on by the House and Senate later this week.     

Following extensive bipartisan negotiations between the relevant committees in the House and the Senate, a long-term reauthorization of the Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR) program, which are currently set to expire on December 16, 2011, is included in the final version of the defense bill.  The programs require federal agencies to use a portion of their annual extramural research budgets to stimulate the development of innovative new technologies by small businesses to help meet their research and development needs. 

“We all recognize the important role that small businesses play in fueling technological innovation and creating jobs in the United States, said Ranking Member Johnson.  That being the case, we should be doing what we can to foster a vibrant small business community and give our small businesses the tools that they need to succeed.  The SBIR and STTR programs are such tools - they have been critically important programs for fostering innovation by small businesses.  As we continue our efforts to keep our economy on the path to recovery, it is more important than ever that we make these programs more efficient, effective, and more responsive to the ever-changing high-tech sector and the demands of the global economy.  I think the provisions we have included in the NDAA will have a positive impact on both programs.”

The final SBIR/STTR reauthorization bill includes several Democratic priorities highlighted during the Science, Space, and Technology (SS&T) Committee’s markup of the Creating Jobs Through Small Business Innovation Act of 2011 (H.R. 1425), the House version of the SBIR/STTR reauthorization bill. 

  • Outreach to underrepresented small businesses.  The NDAA conference report includes language requiring agencies that opt to participate in the pilot program for administrative expenses to use a portion of those funds for targeted outreach to small businesses owned and operated by socially and economically disadvantaged small businesses and those that are owned and controlled by women.  The final provision is similar to an amendment offered by Ranking Member Johnson and Rep. Frederica Wilson (D-FL) at the SS&T Committee markup.   One of the four stated congressional objectives for the SBIR program is to increase participation by woman- and minority-owned small businesses.  In its 2008 evaluation of the SBIR program, the National Research Council found that the program was not achieving this objective and recommended that targeted outreach be developed to improve the participation rates of woman- and minority-owned small businesses. 
  • Evaluation of STTR.  The conference report includes an amendment offered at the Committee markup by Rep. Ben Luján (D-NM) that requires the National Academy of Sciences to conduct a comprehensive evaluation of the STTR program.
  • Proof of Concept Research.  The conference report includes a program proposed by Rep. Dan Lipinski (D-IL) to establish a proof of concept pilot program at the National Institutes of Health. 
  • Addressing Waste, Fraud, and Abuse.  The conference report includes a provision offered by Rep. Donna Edwards (D-MD) enhancing the ability of agencies to combat waste, fraud, and abuse in the programs. 
  • Award Size Waiver.  The conference report also includes language to allow the Small Business Administration to grant waivers from new award size caps if such caps interfere with the ability of the agency to fulfill its research mission through the programs. 

A provision in the conference report also gradually increases the percentage of the extramural research budget that each agency must set aside for the SBIR program from 2.5% to 3.2% and for the STTR program from 0.3% to 0.45%.  The House version of the bill did not provide for any increase.      

“While I support efforts to provide more research funding to small businesses, I am concerned about the effect that this increase may have on our research agencies, particularly at a time when overall research budgets are being cut or remaining stagnant,” said Ranking Member Johnson.  “We have a responsibility to closely monitor the implementation of these allocation increases and ensure that it does not have a detrimental and unintended impact on the ability of our Federal research agencies to carry out their missions effectively.”