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Deal Clears Way for ‘Long Term’ SBIR/STTR Reauthorization

on December 19, 2011 Source: Policy Dialogue on Entrepreneurship

Following years of temporary extensions, it looks as though the SBIR and STTR programs are going to have a bit of stability. The U.S. House and Senate recently came to an agreement that would reauthorize the Small Business Innovation Research and Small Business Technology Transfer programs for six years.

While the reauthorization had passed through the Senate again, support in the House wasn’t certain. The deal was pushed through by Rep. Sam Graves (R-MO), chair of the House Committee on Small Business, and Rep. Ralph Hall (R-TX), chair of the House Committee on Science, Space and Technology.

Key points in the agreement according to an announcement by Congressman Graves include:

  • Allows for greater participation among small businesses with significant private capital support, increasing venture capital participation to 25% for the National Institute of Health, the Department of Energy, and the National Science Foundation and 15% for the other participating federal agencies;
  • Increases both Phase I and Phase II award levels, which have not been raised since 1982. The award guidelines for SBIR and STTR awards are increased from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II, allowing for an additional Phase II on the same project should it be especially promising;
  • Increases the SBIR program allocation from 2.5 to 3.2 percent and the STTR allocation from .3 percent to .45 percent over the course of the reauthorization, which allows more access for small businesses to compete for R&D funds;
  • Standardizes some of the application process across agencies to allow for greater ease of use for small businesses;
  • Requires greater coordination between the SBA and the participating agencies to combat waste, fraud, and abuse within the SBIR and STTR programs;
  • Requires most agencies to complete their review process for applicants within 90 days (or 180 days if the agency is granted an extension by the SBA). This gives small businesses more certainty as to when they can expect a decision on their awards; and,
  • Introduces performance-based standards to encourage companies to focus on commercialization through phase III of the program.

The agreement was contained in the National Defense Authorization Act that is expected to be signed by President Obama—after he recently rescinded threats to veto it—before the end of the year.

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