89–010 

Calendar No. 349 

115TH CONGRESS REPORT " ! SENATE 2d Session 115–450 

SBIR AND STTR OVERSIGHT AND PILOT PROGRAM 

EXTENSION ACT OF 2017 

DECEMBER 20, 2018.—Ordered to be printed 

Mr. RISCH, from the Committee on Small Business and 

Entrepreueurship, submitted the following 

R E P O R T 

[To accompany S. 1061] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Small Business and Entrepreneurship, to 

which was referred the bill (S. 1961) to amend the Small Business 

Act to temporarily reauthorize certain pilot programs under the 

Small Business Innovation Research Program and the Small Business Technology Transfer Program, and for other purposes, having 

considered the same, reports favorably thereon with an amendment 

in the nature of a substitute and recommends that the bill, as 

amended, do pass. 

I. INTRODUCTION

The SBIR and STTR Oversight and Pilot Program Extension Act 

of 2017 (S. 1961) was introduced by Senator James E. Risch, the 

Committee’s Chairman, for himself, and Senator Jeanne Shaheen 

on October 16, 2017. 

This bill, as introduced would have extended, through September 

30, 2018, four pilot programs that were enacted as part of the 

Small Business Innovation Research/Small Business Technology 

Transfer (SBIR/STTR) Reauthorization Act of 2011. These programs include the ‘‘Phase Flexibility Pilot Program,’’ the ‘‘Phase 0 

Proof of Concept Partnership Pilot Program,’’ ‘‘Commercialization 

Readiness Pilot Program for Civilian Agencies Pilot Program,’’ and 

the ‘‘SBIR/STTR Administrative Funding Pilot Program’’. 

For the markup of the bill, the Chairman filed a substitute 

amendment that extends the reauthorization of the pilot programs 

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in this bill through September 30, 2019. By authority of the Cordon 

Rule, there was also a technical correction to the name of the 

EPSCoR program, which will read, ‘‘Established Program to Stimulate Competitive Research.’’ 

The bill, as amended, was approved unanimously by a roll call 

vote as part of a manager’s package. 

II. HISTORY (PURPOSE & NEED FOR LEGISLATION)

The Small Business Technology Research (SBIR) program was 

authorized by the Small Business Innovation Development Act of 

1982. A sister program, the Small Business Technology Transfer 

(STTR) program, was authorized by the Small Business Research 

and Development Enhancement Act of 1992. The SBIR program requires federal agencies with extramural research and development 

budgets of $100 million or more to allocate at least 3.2 percent of 

their extramural funds for research awards to small businesses. 

Awards are competitive and merit-based, given to small businesses 

that have proposals or technology that could benefit the awarding 

agency: Phase I awards are given to determine the feasibility of an 

idea; Phase II awards are generally given to Phase I awardees— 

though there are exceptions—for technology that is particularly 

promising but needs further development; and Phase III allows the 

small business to pursue commercialization objectives resulting 

from the Phase I/II research and development (R&D) activities. The 

SBIR program does not fund Phase III. This Phase may involve follow-on non-SBIR federal R&D funding or production contracts for 

products, processes or services for the federal government. Currently, eleven federal agencies participate in the SBIR program. 

The STTR program has a similar three phase award structure, but 

focuses on public-private partnerships in which small businesses 

partner with research institutions with the intention of eventually 

commercializing their ideas. The STTR program requires federal 

agencies with an extramural research and development budget of 

$1 billion or more to allocate at least 0.45 percent of their extramural funds for STTR awards. Currently, five federal agencies participate in the STTR program. 

In the 112th Congress, the SBIR/STTR Reauthorization Act of 

2011 was reported favorably by the Committee and was later incorporated into the National Defense Authorization Act for Fiscal Year 

2012 (P.L. 112–81). This bill, among other things, reauthorized the 

SBIR and STTR programs through September 30, 2017 and created 

four new pilot programs. These four pilots including the Phase 

Flexibility Pilot Program, the Phase 0 Proof of Concept Partnership 

Pilot Program, the Commercialization Readiness Pilot Program for 

Civilian Agencies, and the SBIR/STTR Administrative Funding 

Pilot Program—were agreed to after lengthy discussion and negotiation and the inclusion of reporting requirements to provide insight into the success of the programs at the agencies, including information about how funds are being spent. Congress has yet to receive sufficient or complete information from the agencies or SBA 

on the pilot programs. The pilots programs expired on October 1, 

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1The Administrative Funding Pilot Program first expired in 2015, but was extended for two 

years, through September 20, 2017, as part of the National Defense Authorization Act for Fiscal 

Year 2016 (P.L. 114–92). 

2017,1 in spite of several legislative efforts to temporarily extend 

them. 

In the 114th Congress, the Improving Small Business Innovation 

and Technologies Research Act of 2015 (S. 2136), introduced by 

Chairman David Vitter and Senator Mike Enzi, was reported favorably by the Committee. This bill extended the SBIR/STTR Administrative Funding Pilot Program. It also modified that pilot program 

by allowing a portion of the administrative funds to establish the 

Regional SBIR State Collaborative Initiative Pilot Program. The 

Regional Collaborative was designed to increase competiveness in 

the proposal and selection process for states which fall in the bottom half of states receiving SBIR awards, and to increase technology transfer and commercialization of their projects. Finally, the 

legislation reauthorized the Federal and State Technology Partnership (FAST) Program. This bill did not receive consideration by the 

full Senate, but the language extending the Administration Funding Pilot through September 30, 2017, was incorporated into the 

National Defense Authorization Act for Fiscal Year 2016 (P.L. 114– 

92). 

In the same Congress, the Committee favorably reported the 

SBIR and STTR Reauthorization and Improvement Act of 2016 (S. 

2812), introduced by Ranking Member Shaheen, Chairman David 

Vitter, and Senators Kelly Ayotte and Ed Markey. This bill would 

have made comprehensive changes to the SBIR and STTR programs, including making permanent the SBIR and STTR programs 

and the Commercialization Readiness Pilot Program for Civilian 

Agencies. Of note, this legislation incorporated the Improving 

Small Business Innovative Research and Technologies Act of 2015 

(S. 2136). The legislation never received consideration by the full 

Senate as a free-standing bill, but the most essential portion of the 

bill—extension of the SBIR and STTR programs was—enacted as 

part of the National Defense Authorization Act for Fiscal Year 2016 

(P.L. 114–92), a full year ahead of expiration. The final version extended the programs for five years, through September 30, 2022. 

Because an extension of the pilot programs was not included in 

the five-year reauthorization for the SBIR and STTR programs last 

Congress, and attempts earlier this Congress to extend the programs through expedited consideration have not been possible, the 

pilot programs expired on October 1, 2017. Several agencies that 

robustly participated in the pilot programs would like to see the pilots extended. They contend that their agencies and awardees have 

been or will be adversely affected by the lapse of these pilots. Collectively, these pilots attempt to improve the commercialization 

outcomes of awardees, allow for more program flexibility, improve 

program outreach and efficiency, as well as improve the administration of the programs and support for awardees. This bill strikes 

a compromise by extending the pilots long enough for the agencies 

to get the programs back up and running as the agencies work 

through the backlog of reports due to Congress on the performance 

of these pilots. 

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III. HEARINGS & ROUNDTABLES

In the 112th Congress, the Committee held a hearing on February 17, 2011 entitled, ‘‘Reauthorization of the SBIR and STTR 

Programs.’’ Dr. Charles Wessner, Director of the Technology, Innovation, and Entrepreneurship program at the National Academy of 

Sciences, expressed his concern that good ideas were being lost in 

between Phase awards. Dr. Wessner also observed that shortening 

the award process time would be beneficial for the program. Several senators and witnesses endorsed a stronger relationship between universities and the SBIR program, as well as improved program outreach. 

In the 113th Congress, the Committee held a roundtable on December 18, 2013 entitled, ‘‘SBIR/STTR Measuring the Effectiveness 

of the Reauthorization Act and Maximizing Research Dollars to 

America’s Small Businesses.’’ Dr. Charles Wessner, Director of the 

Technology, Innovation, and Entrepreneurship program at the National Academy of Sciences, expressed support for strengthening 

ties between universities and the SBIR program. Mr. Manny Oliver, Director of the SBIR and STTR programs at the Department 

of Energy, also expressed support for greater cooperation between 

universities and the SBIR program. All of the participants expressed support for more program outreach. 

In the 114th Congress, the Committee held a hearing on January 

28, 2016 entitled, ‘‘Reauthorization of the SBIR/STTR Program: 

The Importance of Small Business Innovation to National and Economic Security.’’ During this hearing, Chairman Vitter and Ranking Member Shaheen expressed strong support for the SBIR/STTR 

Program. Chairman Vitter expressed support for a Regional SBIR 

State Collaborative Initiative Pilot Program, whose aim is to increase competiveness in the proposal and selection process for 

states who fall in the bottom half of states receiving SBIR awards. 

Mr. Robert L. Smith, Director of the Department of the Navy SBIR 

and STTR Programs expressed support for the Admin Funding 

Pilot Program, which he said helped to reduce Phase II award processing times, though these times are still too long. Overall, members were supportive of improved outreach, prompt reporting, and 

the reauthorization of the SBIR/STTR programs. 

IV. DESCRIPTION OF BILL

This bill extends, through September 30, 2019, four pilot programs that were included in the SBIR/STTR Reauthorization Act 

of 2011. 

The bill also would require the SBA and the relevant agencies to 

comply with reporting requirements. As passed out of Committee, 

agencies would have a hard deadline of December 31, 2018, to provide their data to the SBA, and the SBA would be required to submit all the reports and evaluation data to the Congress by March 

30, 2019. SBA and the agencies are required to report to Congress 

on how the funds are being used and whether the pilots are meeting their objectives. However, the reports have not been submitted, 

and what information has been provided to Congress has been incomplete. This information would help Congress decide if the pilots 

should be continued, improved or ended. 

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The Phase Flexibility Pilot Program allows firms receiving research funds from the National Institutes of Health (NIH), Department of Defense (DoD), and the Department of Education to bypass 

the Phase I award process and become a Phase II awardee if the 

agency finds that the firm has already met the Phase I standards. 

The Phase 0 Proof of Concept Partnership Pilot Program allows 

the NIH to use $5 million of its annual STTR funds to make 

awards to research institutions. These awards cannot exceed $1 

million per university, and grants to researchers cannot exceed 

$100,000. This pilot is designed to help researchers demonstrate 

which of their federally funded projects are commercially viable, 

while encouraging researchers to start businesses and apply for 

SBIR/STTR awards. 

The Commercialization Readiness Pilot Program for Civilian 

Agencies allows any SBIR agency, other than DoD, to use up to 10 

percent of its SBIR/STTR funding for follow-on awards to SBIR and 

STTR firms for technology development, testing, evaluation, and 

commercialization assistance. The purpose is to help small firms 

get over the valley of death and inserted into a government product 

or process, or commercialized in the private sector. The size of 

these awards may be up to $3 million. 

The SBIR/STTR Administrative Funding Pilot Program allows an 

agency to set aside three percent of its SBIR funding for administrative needs to operate the programs. These funds may be used to 

conduct outreach to under-served states, shorten award review 

timelines, streamline reporting, and reduce waste, fraud, and 

abuse. The pilot requires SBA to establish performance criteria to 

measure the effectiveness of the activities by the agencies and report to Congress on how the funds are used. The pilot originally expired in 2015, but was extended through September 30, 2017, as 

previously noted as part of P.L. 114–328. 

This legislation also includes language that passed the Committee last Congress to direct 15 percent of the SBIR/STTR Administrative Funding Pilot Program funds to SBA to support regional, 

multi-state collaboratives to increase participation by small firms 

located in the states that receive fifty percent or less of SBIR 

awards. 

V. COMMITTEE VOTE

In compliance with rule XXVI (7)(b) of the Standing Rules of the 

Senate, the following vote was recorded on March 14, 2018. 

A motion to adopt the SBIR and STTR Oversight and Pilot Program Extension Act of 2017, a bill to amend the Small Business 

Act to temporarily reauthorize certain pilot programs under the 

Small Business Innovation Research Program and the Small Business Technology Transfer Program, and for other purposes, was approved unanimously by a roll call vote as part of a manager’s package. Senators Risch, Rubio, Paul, Scott, Ernst, Inhofe, Young, Enzi, 

Rounds, Kennedy, Cardin, Cantwell, Shaheen, Heitkamp, Markey, 

Booker, Coons, Hirono, and Duckworth voted for the bill. 

VI. COST ESTIMATE

In compliance with rule XXVI (11)(a)(1) of the Standing Rules of 

the Senate, the Committee estimates the cost of the legislation will 

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be equal to the amounts discussed in the following letter from the 

Congressional Budget Office: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, August 21, 2018. 

Hon. JAMES E. RISCH, 

Chairman, Committee on Small Business and Entrepreneurship, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1961, the SBIR and STTR 

Oversight and Pilot Program Extension Act of 2018. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Stephen Rabent. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 

S. 1961—SBIR and STTR Oversight and Pilot Program Extension 

Act of 2017 

S. 1961 would direct the Small Business Association (SBA) to develop a one-year pilot program to provide grants to research institutions and small businesses that collaborate, to improve those 

small businesses’ ability to compete for awards under the Small 

Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Using information from several 

participating agencies, CBO estimates that implementing the bill 

would cost $6 million over the 2019–2023 period; such spending 

would be subject to the availability of appropriated funds. 

Under current law, the SBIR program requires federal agencies 

with annual extramural research and development (R&D) budgets 

of more than $100 million to set aside 3.2 percent for small-business contracts. The STTR program requires agencies with more 

than $1 billion in their annual extramural R&D budgets to set 

aside 0.45 percent to fund cooperative research between small businesses and federal laboratories or nonprofit research institutions. 

Eleven agencies currently participate in at least one of those programs. Under an existing pilot program for administrative spending, agencies that participate in the SBIR program may use up to 

3 percent of their SBIR funds—instead of general operating 

funds—to pay for some of the activities of program administration. 

That pilot program is authorized through 2022. 

S. 1961 would direct agencies participating in that pilot program 

to transfer a portion of the funds to the SBA for grants under the 

bill’s pilot program. The SBA could spend any transferred amounts 

above $5 million on administrative costs, additional grants, or another SBA grant program. 

Based on the historical use of the 3 percent set-aside by participating agencies, CBO estimates that transferring a portion of that 

amount to the SBA would require agencies to use additional funds 

to cover the costs of administering their SBIR and STTR programs. 

Using information from the SBA and several participating agencies 

about the size of their extramural R&D budgets, their respective 

administrative costs, and amounts historically set aside under the 

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administrative-spending pilot program, CBO estimates that implementing that provision of S. 1961 would cost $6 million over the 

2019–2020 period; such spending would be subject to the availability of appropriated funds. That amount consists of $5 million to 

be transferred to the SBA and $1 million for the SBA to administer 

and report on the pilot program. 

CBO estimates that implementing other provisions of S. 1961, 

such as updating agency rules and regulations related to the SBIR 

and STTR programs, would cost less than $500,000 over the 2019– 

2020 period; such spending would be subject to the availability of 

appropriated funds. 

Enacting S. 1961 would not affect direct spending or revenues; 

therefore pay-as-you-go procedures do not apply. 

CBO estimates that enacting S. 1961 would not increase net direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2029. 

S. 1961 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

VII. EVALUATION OF REGULATORY IMPACT

In compliance with rule XXVI (11)(b) of the Standing Rules of the 

Senate, it is the opinion of the Committee that no significant additional regulatory impact will be incurred in carrying out the provisions of this legislation. There will be no additional impact on the 

personal privacy of companies or individuals who utilize the services provided. 

VIII. SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

This section provides the short title for the Act, the ‘‘SBIR and 

STTR Oversight and Pilot Program Extension Act of 2017.’’ 

Sec. 2. Pilot extensions and reporting compliance; Pilot program 

This section extends four SBIR/STTR Pilot Programs through fiscal year 2019. These include the ‘‘Phase Flexibility Pilot Program,’’ 

‘‘Phase 0 Proof of Concept Partnership Pilot Program,’’ ‘‘Commercialization Readiness Pilot Program for Civilian Agencies Pilot Program,’’ and the ‘‘SBIR/STTR Administrative Funding Pilot Program.’’ This section also creates the ‘‘Regional SBIR State Collaborative Initiative Pilot Program’’ within the SBIR/STTR Administrative Funding Pilot Program. This pilot redirects 15 percent of the 

funds from this pilot program for SBA to be used to coordinate 

state participation in multi-state collaboratives, which aim to increase applications and awards to small businesses located in 

states that received fifty percent or less of SBIR awards. 

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