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PUBLIC LAW 97-219—JULY 22, 1982 96 STAT.

217 Public Law 97-219 97th Congress An Act To amend the Small Business Act to strengthen the role of the small, innovative firms in federally funded research and development, and to utilize Federal research and development as a base for technological innovation to meet agency needs and to contribute to the growth and strength of the Nation's economy.
July 22, 1982 [S. 881] Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.

SECTION 1.

This Act may be cited as the "Small Business Innova tion Development Act of 1982".

SEC.

2.
(a) The Congress finds that— (1) technological innovation creates jobs, increases productiv ity, competition, and economic growth, and is a valuable coun- terforce to inflation and the United States balance-of-pajinents deficit; (2) while small business is the principal source of significant innovations in the Nation, the vast majority of federally funded research and development is conducted by large businesses, universities, and Government laboratories; and (3) small businesses are among the most cost-effective per formers of research and development and are particularly capa ble of developing research and development results into new products.
GJ) Therefore, the purposes of the Act are— (1) to stimulate technological innovation; (2) to use smgdl business to meet Federal research and devel opment needs; (3) to foster and encourage participation by minority and disadvantaged persons in technological innovation; and (4) to increase private sector commercialization innovations derived from Federal research and development.

SEC.

3.
Section 9(b) of the Small Business Act is amended— (1) by striking out "and" at the end of paragraph (2); (2) by striking out the period at the end of paragraph (3) and inserting in lieu thereof "; and"; and (3) by adding at the end thereof the following: "(4) to develop and maintain a source file and an information program to assure each qualified and intere^ed small business concern the opportunity to participate in Federal agency small business innovation research programs; "(5) to coordinate with participating agencies a schedule for release of SBIR 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 programs within participating Federal agencies; and "(7) to report not less than annually to the Committee on Smedl Business of the Senate and the Committee on Small Business of the House of Representatives on the SBIR programs Small Business Innovation Development Act of 1982.
15 u se 631 note.

15 u se 638 note.

15 u se 638.

Report to congressional committees.

96 STAT.

218 PUBLIC LAW 97-219—JULY 22, 1982 of the Federal agencies and the Administration's information and monitoring efforts related to the SBIR programs,".

SEC.

4.
Section 9 of the Small Business Act is amended by adding at the end thereof the following new subsections: "(e) 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 Agency for International Development it shall not include amounts obli gated 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, United States Code, or a military department as defined in section 102 of such title, except that it does not include any agency within the Intelli gence 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 experi mental, 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 uni form process having— "(A) a first phase for determining, insofar as possible, the scientific and technical merit and feasibility of ideas sub mitted pursuant to SBIR program solicitations; "(B) a second phase to further develop the proposed ideas to meet the particular program needs, the awarding of which shall take into consideration the scientific and tech nical merit and feasibility evidenced by the first phase and, where two or more proposals are evaluated as being of approximately equal scientific and technical merit and feas ibility, special consideration shall be given to those propos als that have demonstrated
 third phase, non-Federal capital commitments; and "(C) where appropriate, a third phase in which non- Federal capital pursues commercial applications of the research or research and development and which may also involve follow-on non-SBIR funded production contracts with a Federgd agency for products or processes intended for use by the United States Government; and "(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 stud ied; (B) a systematic study directed specifically toward appl3ring new knowledge to meet a recognized need; or (C) a systematic application of knowledge toward the production of useful mate rials, devices, and systems or metho<fe, including design, devel opment, and improvement of protot3rpes and new processes to meet specific requirements.
"(fKD Each Federal sigency which has an extramural budget for research or research and development in excess of $100,000,000 for 15 use 638.

Definitions.

Research or research development, budget.

PUBLIC LAW 97-219—JULY 22, 1982 96 STAT.
219 research research or and development fiscal year 1982, or any fiscal year thereafter, shall expend not less than 0.2 per centum of its extramural budget in fiscal year 1983 or in such subsequent fiscal year as the agency has such budget, not less than 0.6 per centum of such budget in the second fiscsd year thereafter, not less than 1 per centum of such budget in the third fiscal year thereafter, and not less than 1.25 per centum of such budget in all subsequent fiscsJ years with small business concerns specifically in connection with a small business innovation research program which meets the requirements of the Small Business Inno vation Development Act of 1982 and regulations issued thereunder: Provided, That any Federal agency which has an extramural budget for excess of $10,000,000,000 for fiscal year 1982 shall expend not less than 0.1 per centum of its extramural budget in fiscal year 1983, not less than 0.3 per centum of such budget in the second fiscal year thereafter, not less than 0.5 per centum of such budget in the third fiscal year thereafter, not less than 1 per centum of such budget in the fourth fiscal year thereafter, and not less than 1.25 per centum of such budget in all subsequent fiscal years with small business concerns specifically in connection with a small business innovation research program which meets the requirements of the Small Business Inno vation Development Act of 1982 and regulations issued thereunder: Provided further.
That a Federal agency shall not make available for the purpose of meeting the requirements of this subsection an amount of its extramural budget for basic research or research and development which exceeds the percentages specified herein.
Fund ing agreements with small business concerns for research or research and development which result from competitive or single source selections other than under a small business innovation research program shall not be counted as meeting any portion of the percentEige requirements of this subsection.

in Small business innovation research program, requirements.
"(2) Amounts appropriated for atomic energy defense programs of the Department of Energy shedl for the purposes of paragraph (1) be excluded from the amount of the research or research and develop ment budget of that Department.
"(g) Each Federal agency required by subsection (f) to establish a small business innovation research program shall, in accordance with this Act 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 receive and evaluate proposals resulting from SBIR proposals; agreements; "(4) unilaterally select awardees for its SBIR funding "(5) administer its own SBIR funding agreements (or delegate such administration to another agency); "(6) make payments to recipients of SBIR funding agreements on the basis of progress toward or completion of the funding agreement requirements; and "(7) make an annual report on the SBIR program to the Small Business Administration and the Office of Science and Technol ogy Policy.
"(h) In addition to the requirements of subsection (f), each Federal agency which has a budget for research or research and develop- 96 STAT.

220 PUBLIC LAW 97-219—JULY 22, 1982 Policy directives.
ment in excess of $20,000,000 for any fiscal year beginning with fiscal year 1983 or subsequent fiscal year shall establish goals specifically for funding agreements for research or research and development to smsill business concerns, and no goal established under this subsection shall be less than the percentage of the agency's research or research and development budget expended under funding agreements with small business concerns in the immediately preceding fiscal year, "(i) Each Federal agency required by this section to have an SBIR program or to establish goals shall report annually to the Small Business Administration the number of awards pursuant to grants, contracts, or cooperative agreements over $10,000 in amount and the dollar value of all such awards, identif3dng SBIR awards and comparing the number and amount of such awards with awards to other than small business concerns.
"(j) 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 the enactment of the Small Business Innovation Development Act of 1982, issue policy directives for the general conduct of the SBIR programs within the Federal Government, including providing for— "(1) simplified, standardized, and timely SBIR solicitations; "(2) a simplified, standardized funding process which provides for (A) the timely receipt and review of proposals; (B) outside peer review for at least phase two proposals, if appropriate; (C) protection of proprietary information provided in proposals; (D) selection of awardees; (E) retention of rights in data generated in the performance of the contract by the small business con cern; (F) 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; (G) cost sharing; and (H) cost principles and payment schedules; "(3) exemptions from the regulations under paragraph (2) if national security or intelligence functions clearly would be jeopardized; "(4) minimizing regulatory burden associated with participa tion in the SBIR program for the smeill 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; and "(5) simplified, standardized, and timely annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy, "(k) The Director of the Office of Science and Technology Policy, in consultation with the Federal Coordinating Council for Science, Engineering and Research, shall, in addition to such other responsi bilities imposed upon him by the Small Business Innovation Devel opment Act of 1982— "(1) independently survey and monitor all phases of the implementation and operation of SBIR programs within agen cies required to establish an SBIR program, including compli ance with the expenditures of funds according to the require ments of subsection (f) of this section; and PUBLIC LAW 97-219—JULY 22, 1982 96 STAT.
221 "(2) report not less than annually, and at such other times as the Director may deem appropriate, to the Committees on Small Business of the Senate and the House of Representatives on all phases of the implementation and operation of SBIR programs to establish an SBIR program, within agencies required together with such recommendations as the Director may deem appropriate.".

SEC.

5.
SEC.

5.

Effective October 1, 1988, paragraphs (4) through (7) of section 9(b) of the Small Business Act (as added by section 3) and subsections (e) through (k) of section 9 of the Small Business Act (as added by section 4) are repealed.

SEC.

6.
SEC.

6.

The Comptroller General shall, not more than five years after the date of enactment of this Act, transmit a report to the Senate and the House of Representatives on the implementation of, and nature of research conducted under this Act, including the judgments of the heads of Departments and agencies as to the effect of this Act on research programs.

Report to congressional committees.

15 u se 638.

Report to Congress.

15 u se 638 note.

Approved July 22, 1982.

LEGISLATIVE HISTORY—S.


881 (H.R.

4326): HOUSE REPORTS: No.

97-349, Pts.

1-7 accompanying H. R. 4326 (Comms.

on Small Business; Energy and eommerce; Veterans' Affairs; Science and Technology; Foreign Affairs; Armed Services; and Permanent Select eommittee on Intelligence), respectively.

SENATE REPORT No.

97-194 (Oomm.

on Small Business).

CONGRESSIONAL RECORD: Vol.

127 (1981): Dec. 7, 8, considered and passed Senate.

Vol.

128 (1982): June 17, 22, 23, H.R.


4326 considered and passed House; passage vacated and S. 881, amended, passed in lieu.

June 29, Senate concurred in House amendment.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS: Vol.

18, No.

29 (1982): July 22, Presidential statement.